Table of Contents

FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549

Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934	
For the Quarterly Period Ended September 30, 2002
Commission File Number 1-8918
SUNTRUST BANKS, INC.
(Exact name of registrant as specified in its charter)

Georgia	 	58-1575035	
(State or other jurisdiction of incorporation or organization)	 	(I.R.S. Employer Identification No.)	
 	 	 	
303 Peachtree Street, N.E., Atlanta, Georgia	 	30308	
(Address of principal executive offices)	 	(Zip Code)	
 	 	 	
(404) 588-7711	
(Registrant’s telephone number, including area code)	
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes	x	No	o	
At October 31, 2002, 283,648,214 shares of the Registrant’s Common Stock, $1.00 par value, were outstanding.

Table of Contents
TABLE OF CONTENTS

 	Page	
 		
PART I    FINANCIAL INFORMATION	 	
 	 	
 	Item 1.	Financial Statements (Unaudited)	 	
 	 	Consolidated Statements of Income	3	
 	 	Consolidated Balance Sheets	4	
 	 	Consolidated Statements of Cash Flows	5	
 	 	Consolidated Statements of Shareholders’ Equity	6	
 	 	Notes to Consolidated Financial Statements	7-18	
 	 	 	 	
 	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19-42	
 	 	 	 	
 	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42	
 	 	 	 	
 	Item 4.	Controls and Procedures	42	
 	 	 	 	
PART II   OTHER INFORMATION	 	
 	 	
 	Item 1.	Legal Proceedings	43	
 	 	 	 	
 	Item 2.	Changes in Securities	43	
 	 	 	 	
 	Item 3.	Defaults Upon Senior Securities	43	
 	 	 	 	
 	Item 4.	Submission of Matters to a Vote of Security Holders	43	
 	 	 	 	
 	Item 5.	Other Information	43	
 	 	 	 	
 	Item 6.	Exhibits and Reports on Form 8-K	43	
 	 	 	 	
SIGNATURES	43	
 	 	
CERTIFICATIONS	43-47	
 	 	
PART I - FINANCIAL INFORMATION
The following unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and accordingly do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair statement have been included. Operating results for the three and nine months ended September 30, 2002 are not necessarily indicative of the results that may be expected for the full year 2002.
2

Table of Contents
Consolidated Statements of Income

 	 	Three Months
Ended September 30	 	Nine Months
Ended September 30	 	
 	 		 		 	
(Dollars in thousands except per share data) (Unaudited)	 	2002	 	2001	 	2002	 	2001	 	
	 			 			 			 			 	
Interest Income	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Interest and fees on loans	 	$	994,062	 	$	1,173,182	 	$	2,988,385	 	$	3,841,287	 	
 	Interest and fees on loans held for sale	 	 	63,109	 	 	57,466	 	 	188,102	 	 	145,954	 	
 	Interest and dividends on securities available for sale	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Taxable interest	 	 	177,812	 	 	231,374	 	 	578,031	 	 	745,180	 	
 	Tax-exempt interest	 	 	5,163	 	 	7,173	 	 	16,217	 	 	21,809	 	
 	Dividends (1)	 	 	15,286	 	 	17,548	 	 	47,124	 	 	51,907	 	
 	Interest on funds sold and securities purchased under agreements to resell	 	 	6,615	 	 	11,601	 	 	18,466	 	 	43,904	 	
 	Interest on deposits in other banks	 	 	1,746	 	 	3,258	 	 	4,748	 	 	4,464	 	
 	Other interest	 	 	6,924	 	 	8,342	 	 	19,185	 	 	33,971	 	
 	 	 			 			 			 			 	
 	Total interest income	 	 	1,270,717	 	 	1,509,944	 	 	3,860,258	 	 	4,888,476	 	
 	 	 			 			 			 			 	
Interest Expense	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Interest on deposits	 	 	273,407	 	 	417,337	 	 	857,989	 	 	1,486,464	 	
 	Interest on funds purchased and securities sold under agreements to repurchase	 	 	34,252	 	 	84,812	 	 	103,909	 	 	365,126	 	
 	Interest on other short-term borrowings	 	 	3,478	 	 	14,596	 	 	11,620	 	 	54,617	 	
 	Interest on long-term debt	 	 	154,466	 	 	189,370	 	 	470,132	 	 	549,680	 	
 	 	 			 			 			 			 	
 	Total interest expense	 	 	465,603	 	 	706,115	 	 	1,443,650	 	 	2,455,887	 	
 	 	 			 			 			 			 	
Net Interest Income	 	 	805,114	 	 	803,829	 	 	2,416,608	 	 	2,432,589	 	
Provision for loan losses	 	 	98,699	 	 	80,157	 	 	373,292	 	 	187,072	 	
 	 			 			 			 			 	
Net interest income after provision for loan losses	 	 	706,415	 	 	723,672	 	 	2,043,316	 	 	2,245,517	 	
 	 			 			 			 			 	
Noninterest Income	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Trust and investment management income	 	 	123,861	 	 	119,786	 	 	385,119	 	 	368,880	 	
 	Service charges on deposit accounts	 	 	156,955	 	 	129,142	 	 	456,722	 	 	374,753	 	
 	Other charges and fees	 	 	76,578	 	 	61,316	 	 	222,524	 	 	174,386	 	
 	Mortgage production related income	 	 	54,252	 	 	43,058	 	 	111,912	 	 	127,755	 	
 	Mortgage servicing related income	 	 	(36,476	)	 	829	 	 	(42,001	)	 	4,868	 	
 	Credit card and other fees	 	 	27,448	 	 	28,655	 	 	90,058	 	 	84,211	 	
 	Retail investment services	 	 	35,087	 	 	26,802	 	 	103,704	 	 	78,845	 	
 	Investment banking income	 	 	39,835	 	 	33,422	 	 	137,438	 	 	66,925	 	
 	Trading account profits and commissions	 	 	23,553	 	 	30,048	 	 	73,444	 	 	84,637	 	
 	Other noninterest income	 	 	33,964	 	 	41,183	 	 	118,055	 	 	111,867	 	
 	Securities gains	 	 	45,813	 	 	36,161	 	 	165,000	 	 	121,006	 	
 	 	 			 			 			 			 	
 	Total noninterest income	 	 	580,870	 	 	550,402	 	 	1,821,975	 	 	1,598,133	 	
 	 	 			 			 			 			 	
Noninterest Expense	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Salaries and other compensation	 	 	395,136	 	 	401,846	 	 	1,207,784	 	 	1,161,342	 	
 	Employee benefits	 	 	72,188	 	 	45,527	 	 	235,431	 	 	150,608	 	
 	Net occupancy expense	 	 	57,578	 	 	55,080	 	 	167,515	 	 	156,862	 	
 	Equipment expense	 	 	42,784	 	 	49,907	 	 	129,736	 	 	138,796	 	
 	Outside processing and software	 	 	59,941	 	 	51,639	 	 	168,199	 	 	142,122	 	
 	Marketing and customer development	 	 	15,713	 	 	25,320	 	 	59,152	 	 	71,308	 	
 	Merger-related expenses	 	 	—  	 	 	—  	 	 	15,998	 	 	—  	 	
 	Amortization of intangible assets	 	 	17,455	 	 	8,413	 	 	41,443	 	 	37,697	 	
 	Other noninterest expense	 	 	147,344	 	 	139,080	 	 	438,627	 	 	424,612	 	
 	 	 			 			 			 			 	
 	Total noninterest expense	 	 	808,139	 	 	776,812	 	 	2,463,885	 	 	2,283,347	 	
 	 			 			 			 			 	
Income before provision for income taxes and extraordinary loss	 	 	479,146	 	 	497,262	 	 	1,401,406	 	 	1,560,303	 	
Provision for income taxes	 	 	136,153	 	 	163,118	 	 	409,847	 	 	523,664	 	
 	 			 			 			 			 	
Income before extraordinary loss	 	 	342,993	 	 	334,144	 	 	991,559	 	 	1,036,639	 	
Extraordinary loss, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	17,824	 	
 	 			 			 			 			 	
 	Net Income	 	$	342,993	 	$	334,144	 	$	991,559	 	$	1,018,815	 	
 	 			 			 			 			 	
Average common shares - diluted	 	 	285,991,438	 	 	289,601,031	 	 	286,879,874	 	 	292,347,478	 	
Average common shares - basic	 	 	282,309,551	 	 	285,570,284	 	 	283,212,739	 	 	288,394,870	 	
Net income per average common share - diluted	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Income before extraordinary loss	 	$	1.20	 	$	1.15	 	$	3.46	 	$	3.54	 	
 	Extraordinary loss, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	0.06	 	
 	 	 			 			 			 			 	
 	Net income	 	$	1.20	 	$	1.15	 	$	3.46	 	$	3.48	 	
 	 			 			 			 			 	
Net income per average common share - basic	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Income before extraordinary loss	 	$	1.21	 	$	1.17	 	$	3.50	 	$	3.59	 	
 	Extraordinary loss, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	0.06	 	
 	 	 			 			 			 			 	
 	Net income	 	$	1.21	 	$	1.17	 	$	3.50	 	$	3.53	 	
 	 			 			 			 			 	
(1)	Includes dividends on common stock of The Coca-Cola Company	 	 	9,653	 	 	8,688	 	 	28,960	 	 	26,064	 	
																	
See notes to consolidated financial statements
3

Table of Contents
Consolidated Balance Sheets

(Dollars in thousands) (Unaudited)	 	September 30
2002	 	December 31
2001	 	September 30
2001	 	
	 			 			 			 	
Assets	 	 	 	 	 	 	 	 	 	 	
 	Cash and due from banks	 	$	3,819,192	 	$	4,229,074	 	$	3,608,003	 	
 	Interest-bearing deposits in other banks	 	 	782,141	 	 	185,861	 	 	104,627	 	
 	Funds sold and securities purchased under agreements to resell	 	 	1,442,842	 	 	1,495,109	 	 	1,415,846	 	
 	Trading account	 	 	1,889,206	 	 	1,343,602	 	 	1,550,883	 	
 	Securities available for sale (1)	 	 	20,699,819	 	 	19,656,391	 	 	18,493,304	 	
 	Loans held for sale	 	 	4,745,817	 	 	4,319,594	 	 	3,254,854	 	
 	Loans	 	 	72,604,893	 	 	68,959,222	 	 	69,630,249	 	
 	Allowance for loan losses	 	 	(929,320	)	 	(867,059	)	 	(866,353	)	
 	 			 			 			 	
 	Net loans	 	 	71,675,573	 	 	68,092,163	 	 	68,763,896	 	
 	Premises and equipment	 	 	1,628,267	 	 	1,584,869	 	 	1,589,726	 	
 	Goodwill	 	 	956,090	 	 	440,497	 	 	465,236	 	
 	Intangible assets	 	 	649,357	 	 	370,779	 	 	392,837	 	
 	Customers’ acceptance liability	 	 	37,513	 	 	55,171	 	 	64,468	 	
 	Other assets	 	 	4,096,209	 	 	2,967,534	 	 	3,558,355	 	
 	 			 			 			 	
 	Total assets	 	$	112,422,026	 	$	104,740,644	 	$	103,262,035	 	
 	 	 			 			 			 	
Liabilities and Shareholders’ Equity	 	 	 	 	 	 	 	 	 	 	
 	Noninterest-bearing consumer and commercial deposits	 	$	16,558,287	 	$	16,369,823	 	$	13,023,697	 	
 	Interest-bearing consumer and commercial deposits	 	 	51,433,993	 	 	45,911,419	 	 	44,192,944	 	
 	 			 			 			 	
 	Total consumer and commercial deposits	 	 	67,992,280	 	 	62,281,242	 	 	57,216,641	 	
 	Brokered deposits	 	 	2,394,791	 	 	2,829,687	 	 	2,544,652	 	
 	Foreign deposits	 	 	3,420,890	 	 	2,425,493	 	 	3,364,761	 	
 	 			 			 			 	
 	Total deposits	 	 	73,807,961	 	 	67,536,422	 	 	63,126,054	 	
 	Funds purchased and securities sold under agreements to repurchase	 	 	10,204,195	 	 	10,104,287	 	 	10,242,725	 	
 	Other short-term borrowings	 	 	1,598,484	 	 	1,651,639	 	 	2,924,641	 	
 	Long-term debt	 	 	10,213,445	 	 	11,010,580	 	 	12,293,390	 	
 	Guaranteed preferred beneficial interests in debentures	 	 	1,650,000	 	 	1,650,000	 	 	1,050,000	 	
 	Acceptances outstanding	 	 	37,513	 	 	55,171	 	 	64,468	 	
 	Other liabilities	 	 	6,062,034	 	 	4,372,977	 	 	5,360,858	 	
 	 			 			 			 	
 	Total liabilities	 	 	103,573,632	 	 	96,381,076	 	 	95,062,136	 	
 	 			 			 			 	
 	Preferred stock, no par value; 50,000,000 shares authorized; none issued	 	 	—  	 	 	—  	 	 	—  	 	
 	Common stock, $1.00 par value	 	 	294,163	 	 	294,163	 	 	294,163	 	
 	Additional paid in capital	 	 	1,276,633	 	 	1,259,609	 	 	1,262,518	 	
 	Retained earnings	 	 	6,103,364	 	 	5,479,951	 	 	5,238,398	 	
 	Treasury stock, at cost, and other	 	 	(483,005	)	 	(329,408	)	 	(316,709	)	
 	 			 			 			 	
 	Realized shareholders’ equity	 	 	7,191,155	 	 	6,704,315	 	 	6,478,370	 	
 	Accumulated other comprehensive income	 	 	1,657,239	 	 	1,655,253	 	 	1,721,529	 	
 	 			 			 			 	
 	Total shareholders’ equity	 	 	8,848,394	 	 	8,359,568	 	 	8,199,899	 	
 	 			 			 			 	
 	Total liabilities and shareholders’ equity	 	$	112,422,026	 	$	104,740,644	 	$	103,262,035	 	
 	 			 			 			 	
Common shares outstanding	 	 	285,042,697	 	 	288,601,607	 	 	288,741,890	 	
Common shares authorized	 	 	750,000,000	 	 	750,000,000	 	 	750,000,000	 	
Treasury shares of common stock	 	 	9,120,060	 	 	5,561,150	 	 	5,420,867	 	
(1) Includes net unrealized gains on securities available for sale	 	$	2,616,382	 	$	2,632,266	 	$	2,761,050	 	
													
See notes to consolidated financial statements
4

Table of Contents
Consolidated Statements of Cash Flows

 	 	Nine Months Ended September 30	 	
 	 		 	
(Dollars in thousands) (Unaudited)	 	2002	 	2001	 	
	 		 		 	
Cash flows from operating activities:	 	 	 	 	 	 	 	
 	Net income	 	$	991,559	 	$	1,018,815	 	
 	Adjustments to reconcile net income to net cash provided by (used in) operating activities:	 	 	 	 	 	 	 	
 	Extraordinary loss on early extinguishment of debt	 	 	—  	 	 	17,824	 	
 	Depreciation, amortization and accretion	 	 	407,629	 	 	260,841	 	
 	Origination of mortgage servicing rights	 	 	(143,048	)	 	(106,493	)	
 	Provisions for loan losses and foreclosed property	 	 	373,803	 	 	187,350	 	
 	Amortization of compensation element of restricted stock	 	 	2,562	 	 	4,027	 	
 	Securities gains	 	 	(165,000	)	 	(121,006	)	
 	Net gain on sale of assets	 	 	(12,187	)	 	(6,025	)	
 	Originated loans held for sale	 	 	(18,339,857	)	 	(14,862,981	)	
 	Sales of loans held for sale	 	 	17,913,634	 	 	13,367,408	 	
 	Net increase in accrued interest receivable, prepaid expenses and other assets	 	 	(1,763,540	)	 	(1,509,691	)	
 	Net increase in accrued interest payable, accrued expenses and other liabilities	 	 	1,654,488	 	 	1,326,561	 	
 	 			 			 	
 	Net cash provided by (used in) operating activities	 	 	920,043	 	 	(423,370	)	
 	 			 			 	
Cash flows from investing activities:	 	 	 	 	 	 	 	
 	Proceeds from maturities of securities available for sale	 	 	2,980,925	 	 	2,175,430	 	
 	Proceeds from sales of securities available for sale	 	 	4,655,097	 	 	4,404,963	 	
 	Purchases of securities available for sale	 	 	(8,553,436	)	 	(4,539,749	)	
 	Net increase in loans	 	 	(2,037,600	)	 	(196,404	)	
 	Proceeds from sale of loans	 	 	646,303	 	 	667,734	 	
 	Capital expenditures	 	 	(100,848	)	 	(60,691	)	
 	Proceeds from the sale of other assets	 	 	23,689	 	 	28,370	 	
 	Loan recoveries	 	 	48,349	 	 	39,457	 	
 	Acquisition of Huntington	 	 	1,160,333	 	 	—  	 	
 	 			 			 	
 	Net cash (used in) provided by investing activities	 	 	(1,177,188	)	 	2,519,110	 	
 	 			 			 	
Cash flows from financing activities:	 	 	 	 	 	 	 	
 	Net increase in consumer and commercial deposits	 	 	1,237,939	 	 	580,314	 	
 	Net increase (decrease) in foreign and brokered deposits	 	 	560,501	 	 	(6,987,597	)	
 	Net (decrease) increase in funds purchased and other short-term borrowings	 	 	(99,963	)	 	509,437	 	
 	Proceeds from the issuance of long-term debt	 	 	951,245	 	 	6,413,281	 	
 	Repayment of long-term debt	 	 	(1,751,165	)	 	(2,033,145	)	
 	Proceeds from the exercise of stock options and stock compensation expense	 	 	10,384	 	 	16,187	 	
 	Proceeds from stock issuance	 	 	32,884	 	 	17,497	 	
 	Acquisition of treasury stock	 	 	(179,798	)	 	(526,230	)	
 	Restricted stock activity	 	 	(2,605	)	 	—  	 	
 	Dividends paid	 	 	(368,146	)	 	(348,360	)	
 	 			 			 	
 	Net cash provided by (used in) financing activities	 	 	391,276	 	 	(2,358,616	)	
 	 			 			 	
Net increase (decrease) in cash and cash equivalents	 	 	134,131	 	 	(262,876	)	
Cash and cash equivalents at beginning of year	 	 	5,910,044	 	 	5,391,352	 	
 	 			 			 	
Cash and cash equivalents at end of period	 	$	6,044,175	 	$	5,128,476	 	
 	 			 			 	
Supplemental Disclosure	 	 	 	 	 	 	 	
Interest paid	 	$	1,466,355	 	$	2,512,141	 	
Income taxes paid	 	 	265,616	 	 	117,646	 	
Non-cash impact of securitizing loans	 	 	—  	 	 	1,903,518	 	
Non-cash impact of STAR Systems Inc. sale	 	 	—  	 	 	52,919	 	
											
See notes to consolidated financial statements
5

Table of Contents
Consolidated Statements of Shareholders’ Equity

(Dollars in thousands) (Unaudited)	 	Common
Stock	 	Additional
Paid in
Capital	 	Retained
Earnings	 	Treasury
Stock and
Other*	 	Accumulated
Other
Comprehensive
Income	 	Total	 	
	 			 			 			 			 			 			 	
Balance, January 1, 2001	 	$	323,163	 	$	1,274,416	 	$	6,312,044	 	$	(1,613,189	)	$	1,942,774	 	$	8,239,208	 	
Net income	 	 	—  	 	 	—  	 	 	1,018,815	 	 	—  	 	 	—  	 	 	1,018,815	 	
Other comprehensive income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adoption of SFAS No. 133	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	(10,560	)	 	(10,560	)	
Change in unrealized gains (losses) on derivatives, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	(62,602	)	 	(62,602	)	
Change in unrealized gains (losses) on securities, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	(148,083	)	 	(148,083	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 			 	
Total comprehensive income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	797,570	 	
Cash dividends declared, $1.20 per share	 	 	—  	 	 	—  	 	 	(348,360	)	 	—  	 	 	—  	 	 	(348,360	)	
Exercise of stock options	 	 	—  	 	 	(12,528	)	 	—  	 	 	28,715	 	 	—  	 	 	16,187	 	
Acquisition of treasury stock	 	 	—  	 	 	—  	 	 	—  	 	 	(526,230	)	 	—  	 	 	(526,230	)	
Retirement of treasury stock	 	 	(29,000	)	 	—  	 	 	(1,744,101	)	 	1,773,101	 	 	—  	 	 	—  	 	
Restricted stock activity	 	 	—  	 	 	(249	)	 	—  	 	 	249	 	 	—  	 	 	—  	 	
Amortization of compensation element of restricted stock	 	 	—  	 	 	—  	 	 	—  	 	 	4,027	 	 	—  	 	 	4,027	 	
Issuance of stock for employee benefit plans	 	 	—  	 	 	879	 	 	—  	 	 	16,618	 	 	—  	 	 	17,497	 	
 	 			 			 			 			 			 			 	
Balance, September 30, 2001	 	$	294,163	 	$	1,262,518	 	$	5,238,398	 	$	(316,709	)	$	1,721,529	 	$	8,199,899	 	
 	 			 			 			 			 			 			 	
Balance, January 1, 2002	 	$	294,163	 	$	1,259,609	 	$	5,479,951	 	$	(329,408	)	$	1,655,253	 	$	8,359,568	 	
Net income	 	 	—  	 	 	—  	 	 	991,559	 	 	—  	 	 	—  	 	 	991,559	 	
Other comprehensive income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Change in unrealized gains (losses) on derivatives, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	3,160	 	 	3,160	 	
Change in unrealized gains (losses) on securities, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	(1,174	)	 	(1,174	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 			 	
Total comprehensive income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	993,545	 	
Cash dividends declared, $1.29 per share	 	 	—  	 	 	—  	 	 	(368,146	)	 	—  	 	 	—  	 	 	(368,146	)	
Exercise of stock options and stock compensation expense	 	 	—  	 	 	(5,997	)	 	—  	 	 	16,381	 	 	—  	 	 	10,384	 	
Acquisition of treasury stock	 	 	—  	 	 	—  	 	 	—  	 	 	(179,798	)	 	—  	 	 	(179,798	)	
Restricted stock activity	 	 	—  	 	 	17,390	 	 	—  	 	 	(19,995	)	 	—  	 	 	(2,605	)	
Amortization of compensation element of restricted stock	 	 	—  	 	 	—  	 	 	—  	 	 	2,562	 	 	—  	 	 	2,562	 	
Issuance of stock for employee benefit plans	 	 	—  	 	 	5,631	 	 	—  	 	 	27,253	 	 	—  	 	 	32,884	 	
 	 			 			 			 			 			 			 	
Balance, September 30, 2002	 	$	294,163	 	$	1,276,633	 	$	6,103,364	 	$	(483,005	)	$	1,657,239	 	$	8,848,394	 	

*	Balance at September 30, 2001 includes $280,267 for treasury stock and $36,442 for compensation element of restricted stock.	
 	Balance at September 30, 2002 includes $451,880 for treasury stock and $31,125 for compensation element of restricted stock.	
6

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Notes to Consolidated Financial Statements (Unaudited)
Note 1 – Accounting Policies
 The consolidated interim financial statements of SunTrust Banks, Inc. (“SunTrust” or “Company”) are unaudited. All significant intercompany accounts and transactions have been eliminated. Certain reclassifications have been made to prior year amounts to conform with the current year presentation.
          These financial statements should be read in conjunction with the Annual Report on Form 10-K/A for the year ended December 31, 2001.  There have been no significant changes to the Company’s Accounting Policies as disclosed in the Annual Report on Form 10-K/A for the year ended December 31, 2001 with the exception of the Company’s accounting policy for stock options.  Historically, SunTrust applied the intrinsic value method permitted under SFAS No. 123, “Accounting for Stock Based Compensation”, as defined in APB Opinion No. 25, “Accounting for Stock Issued to Employees”, in accounting for our stock option plans.  Accordingly, no compensation cost has been recognized for our stock option plans in the past.  During the third quarter of 2002, SunTrust adopted the fair value method of recording stock options contained in SFAS No. 123.  The adoption of the accounting provisions of SFAS No. 123 is prospective, commencing with awards made in the fiscal year of adoption.  This method is considered the preferable accounting method for stock-based employee compensation. Grants, awards, or modifications made in 2002 and beyond will be expensed over the option vesting period based on the fair value as calculated using the Black-Scholes option pricing model.  The impact to date for 2002 is less than $0.01 per diluted share.
          The Company has a commercial paper conduit relationship with one special purpose entity (“SPE”), Three Pillars Funding Corporation (“Three Pillars”).  See “Liquidity Management” on page 39 for further discussion of Three Pillars.  Based on the requirements of SFAS No. 140: Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, Accounting Research Bulletin 51: Consolidated Financial Statements, SFAS No. 94: Consolidation of All Majority-Owned Subsidiaries, Emerging Issues Task Force (“EITF”) D-14: Transactions involving Special-Purpose Entities and other generally accepted accounting principles, the Company is currently not required to consolidate Three Pillars.  The FASB is currently reviewing the rules pertaining to consolidation of special purpose entities.  It is not known at this time what impact, if any, changes to these rules would have on the financial statements of the Company.
          In determining whether to consolidate an SPE, the Company considers if a third party has made a substantive equity investment in the SPE; which party has voting rights, if any; who makes decisions about the assets in the SPE; and who is at risk for loss.  A SPE is consolidated if the Company retains or acquires control over the risks and rewards of the assets in the SPE.
Note 2 – Acquisitions
 The Company completed the acquisition of the Florida banking franchise of Huntington Bancshares, Inc. (“Huntington”) on February 15, 2002.  This acquisition expands the Company’s position in the growth markets of eastern and western Florida and enhanced its presence as a leading financial services provider in the state of Florida.
          The consolidated statement of income includes the results of operations for Huntington from the February 15, 2002 acquisition date.  The transaction resulted in $524 million of goodwill, $255 million of core deposit intangibles and $13 million of other intangibles, all of which are deductible for tax purposes.  The amount allocated to the core deposit intangible was determined by an independent valuation and is being amortized over the estimated useful life of seven years using the sum-of-years-digits method.  The amount allocated to other intangibles represents the identifiable intangible assets for trust and brokerage customer lists.  These intangible assets are being amortized over the estimated useful life of seven years using the straight-line method.
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Notes to Consolidated Financial Statements  (Unaudited) – continued
          The following condensed balance sheet discloses the amounts assigned to each major asset and liability caption at the acquisition date, net of amounts sold to FloridaFirst Bancorp, Inc.:

(Dollars in thousands) (Unaudited)	 	 	 	 	
	 	 	 	 	
Assets	 	 	 	 	
 	Cash and due from banks	 	$	1,160,333	 	
 	Loans	 	 	2,684,384	 	
 	Allowance for loan losses	 	 	(15,531	)	
 	 			 	
 	Net loans	 	 	2,668,853	 	
 	Goodwill	 	 	523,694	 	
 	Intangible assets	 	 	267,559	 	
 	Other assets	 	 	73,927	 	
 	 			 	
 	   Total assets	 	$	4,694,366	 	
 	 			 	
Liabilities	 	 	 	 	
 	Total deposits	 	$	4,495,210	 	
 	Short term borrowings	 	 	146,716	 	
 	Other liabilities	 	 	52,440	 	
 	 			 	
 	   Total liabilities	 	$	4,694,366	 	

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Notes to Consolidated Financial Statements   (Unaudited) – continued
     The following condensed income statement discloses the pro forma results of the Company as though the Huntington acquisition had occurred at the beginning of the respective periods:

 	 	Nine Months Ended September 30, 2002	 	
 	 		 	
(Dollars in thousands) (Unaudited)	 	SunTrust
Banks, Inc.	1	Huntington	2	Pro Forma
Adjustments	3	Pro Forma
Combined	 	
	 			 			 			 			 	
Interest and dividend income	 	$	3,860,258	 	$	27,369	 	$	(1,731	)	$	3,885,896	 	
Interest expense	 	 	1,443,650	 	 	15,002	 	 	(6,317	)	 	1,452,335	 	
 	 			 			 			 			 	
Net interest income	 	 	2,416,608	 	 	12,367	 	 	4,586	 	 	2,433,561	 	
Provision for loan losses	 	 	373,292	 	 	1,723	 	 	—  	 	 	375,015	 	
 	 			 			 			 			 	
Net interest income after provision for loan losses	 	 	2,043,316	 	 	10,644	 	 	4,586	 	 	2,058,546	 	
Noninterest income	 	 	1,821,975	 	 	5,522	 	 	—  	 	 	1,827,497	 	
Noninterest expense	 	 	2,463,885	 	 	14,714	 	 	10,924	 	 	2,489,523	 	
 	 			 			 			 			 	
Income before provision for income taxes	 	 	1,401,406	 	 	1,452	 	 	(6,338	)	 	1,396,520	 	
Provision for income taxes	 	 	409,847	 	 	465	 	 	(2,218	)	 	408,094	 	
 	 			 			 			 			 	
 	Net income	 	$	991,559	 	$	987	 	$	(4,120	)	$	988,426	 	
 	 			 			 			 			 	
Net income per average common share:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Diluted	 	$	3.46	 	 	 	 	 	 	 	$	3.46	 	
 	Basic	 	 	3.50	 	 	 	 	 	 	 	 	3.50	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Nine Months Ended September 30, 2001	 	
 	 		 	
 	 	SunTrust
Banks, Inc.	4	Huntington	5	Pro Forma
Adjustments	6	Pro Forma
Combined	 	
 	 			 			 			 			 	
Interest and dividend income	 	$	4,888,476	 	$	200,791	 	$	(7,791	)	$	5,081,476	 	
Interest expense	 	 	2,455,887	 	 	129,865	 	 	(28,428	)	 	2,557,324	 	
 	 			 			 			 			 	
Net interest income	 	 	2,432,589	 	 	70,926	 	 	20,637	 	 	2,524,152	 	
Provision for loan losses	 	 	187,072	 	 	11,679	 	 	—  	 	 	198,751	 	
 	 			 			 			 			 	
Net interest income after provision for loan losses	 	 	2,245,517	 	 	59,247	 	 	20,637	 	 	2,325,401	 	
Noninterest income	 	 	1,598,133	 	 	35,975	 	 	—  	 	 	1,634,108	 	
Noninterest expense	 	 	2,283,347	 	 	82,758	 	 	65,156	 	 	2,431,261	 	
 	 			 			 			 			 	
Income before provision for income taxes and extraordinary loss	 	 	1,560,303	 	 	12,464	 	 	(44,519	)	 	1,528,248	 	
Provision for income taxes	 	 	523,664	 	 	3,988	 	 	(15,582	)	 	512,070	 	
 	 			 			 			 			 	
Income before extraordinary loss	 	 	1,036,639	 	 	8,476	 	 	(28,937	)	 	1,016,178	 	
Extraordinary loss, net of taxes	 	 	17,824	 	 	—  	 	 	—  	 	 	17,824	 	
 	 			 			 			 			 	
 	Net income	 	$	1,018,815	 	$	8,476	 	$	(28,937	)	$	998,354	 	
 	 			 			 			 			 	
Net income per average common share:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Diluted	 	$	3.48	 	 	 	 	 	 	 	$	3.42	 	
 	Basic	 	 	3.53	 	 	 	 	 	 	 	 	3.46	 	

1	The reported results of SunTrust Banks, Inc. for the nine months ended September 30, 2002 include the results of the acquired Florida franchise of Huntington from the February 15, 2002 acquisition date.  Also included is a one-time provision for loan losses of $45.3 million related to Huntington.	
2	The estimated results of the acquired Florida franchise of Huntington from January 1, 2002 through February 14, 2002.	
3	Pro Forma adjustments include the following items: amortization of core deposit and other intangibles of $10.9 million, amortization of loan purchase accounting adjustment of $1.7 million, and accretion of time deposit purchase accounting adjustment of $6.3 million.	
4	The reported results of SunTrust Banks, Inc. for the nine months ended September 30, 2001.	
5	The estimated results of the acquired Florida franchise of Huntington for the nine months ended September 30, 2001.	
6	Pro Forma adjustments include the following items: merger related expenses of $16.0 million, amortization of core deposit and other intangibles of $49.2 million, amortization of loan purchase accounting adjustment of $7.8 million, and accretion of time deposit purchase accounting adjustment of $28.4 million.	
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Notes to Consolidated Financial Statements   (Unaudited) – continued
Note 3 – Recent Accounting Developments
 In June of 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets.”  SFAS No. 141 establishes accounting and reporting standards for business combinations.  This Statement eliminates the use of the pooling-of-interest method of accounting for business combinations, requiring future business combinations to be accounted for using the purchase method of accounting.  Additionally, SFAS No. 141 enhances the disclosures related to business combinations, which are included in Note 2, and requires that all intangible assets acquired in a business combination be reported separately from goodwill.  These intangible assets must then be assigned to a specifically identified reporting unit and assigned a useful life.  The provisions of this Statement apply to all business combinations initiated after June 30, 2001.  This Statement also applies to all business combinations accounted for using the purchase method for which the date of acquisition is July 1, 2001 or later.
          SFAS No. 142 establishes accounting and reporting standards for goodwill and other intangible assets. With the adoption of this Statement, goodwill is no longer subject to amortization over its estimated useful life. Earnings for the three and nine months ended September 30, 2001 included net-of-tax amortization of goodwill totaling $6.9 and $29.2 million, respectively.  Goodwill will be subject to, at least, an annual assessment for impairment by applying a two step fair-value based test.  Additionally, SFAS No. 142 enhances the disclosures related to goodwill and intangible assets, which are included in Note 4.  SunTrust adopted SFAS No. 142 effective January 1, 2002.  Goodwill currently carried on the balance sheet was subject to an initial assessment for impairment.  The Company has completed its initial assessment review and determined that there is no impairment of goodwill as of January 1, 2002.  The adoption of this Statement did not have a material impact on the Company’s financial position or results of operations with the exception of no longer amortizing goodwill.
          In June of 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.”  This Statement amends SFAS No. 19, “Financial Accounting and Reporting by Oil and Gas Producing Companies.” SFAS No. 143 applies to all entities and addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs.  All asset retirement obligations that fall within the scope of this Statement and their related asset retirement costs will be accounted for consistently, resulting in comparability among financial statements of different entities.  This Statement is effective for financial statements issued for fiscal years beginning after June 15, 2002.  The Company will adopt SFAS No. 143 on January 1, 2003.  The adoption of this Statement is not expected to have a material impact on the Company’s financial position or results of operations.
          SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” was issued during the third quarter of 2001.  SFAS No. 144 supercedes both SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” which previously governed impairment of long-lived assets, and the portions of Accounting Practice Bulletin (“APB”) Opinion No. 30, “Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions,” which addressed the disposal of a business segment.  This Statement improves financial reporting by requiring one accounting model be used for long-lived assets to be disposed of by sale and by broadening the presentation of discontinued operations to include more disposal transactions.  The Company adopted SFAS No. 144 effective January 1, 2002, and it did not have a material impact on the Company’s financial position or results of operations.
          In May of 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections as of April 2002.”  This Statement rescinds SFAS No. 4 and 64, “Reporting Gains and Losses from Extinguishment of Debt” and “Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements,” respectively, and restricts the classification of early extinguishment of debt as an extraordinary item to the provisions of APB Opinion No. 30, “Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
10

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Notes to Consolidated Financial Statements   (Unaudited) – continued
Occurring Events and Transactions.”  The Statement also rescinds SFAS No. 44, “Accounting for Intangible Assets of Motor Carriers,” which is no longer necessary because the transition to the provisions of the Motor Carrier Act of 1980 is complete.  The Statement also amends SFAS No. 13, “Accounting for Leases,” to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions.  Finally, the Statement makes various technical corrections to existing pronouncements which are not considered substantive.
          The provisions of this Statement relating to the rescission of SFAS No. 4 and 64 are effective for fiscal years beginning after May 15, 2002.  The provisions relating to amendments of SFAS No. 13 are effective for transactions initiated after May 15, 2002, and all other provisions are effective for financial statements issued after May 15, 2002.  Additionally, there is retroactive application for any gain or loss on extinguishment of debt that was classified as extraordinary in a prior period that does not meet the criteria in APB Opinion No. 30, requiring reclassification of this gain or loss.  With the exception of the rescission of SFAS No. 4 and 64, the Company adopted the provisions of this Statement, and it did not have a material impact on the Company’s financial position or results of operations.  The provisions relating to the rescission of SFAS No. 4 and 64, which will eliminate the requirement that extinguishment of debt be accounted for as an extraordinary item, will be adopted January 1, 2003.  The Company does not expect the remaining provisions of this Statement to have a material impact on the Company’s financial position or results of operations.
          In June 2002, the FASB issued SFAS No. 146,  “Accounting for Costs Associated with Exit or Disposal Activities.”  SFAS No. 146 provides guidance on the recognition and measurement of liabilities for costs associated with exit or disposal activities.  SFAS No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002.  The adoption of this Statement is not expected to have a material impact on the Company’s financial position or results of operations.
          In July 2002, the FASB issued SFAS No. 147, “Acquisitions of Certain Financial Institutions, an amendment of FASB Statements No. 72 and 144 and Interpretation No. 9.”  Except for transactions between two or more mutual enterprises, this Statement removes financial institutions from the scope of both Statement No. 72 and Interpretation No. 9 and requires that those transactions be accounted for in accordance with SFAS No. 141 and 142.  Additionally, this Statement amends SFAS No. 144 to include in its scope long-term customer-relationship intangible assets of financial institutions.  The Company adopted this Statement effective October 1, 2002, and it did not have a material impact on the Company’s financial position or results of operations.
          On October 4, 2002, the FASB issued an exposure draft to amend the transition and disclosure provisions of SFAS No. 123.  Under this exposure draft three alternatives would be allowed for transitioning to SFAS No. 123.  The amendment is effective for financial statements ending after December 15, 2002.  The Company is in the process of analyzing the impact that this exposure draft would have on the results of operations given these transition alternatives.
Note 4 – Intangible Assets
 Under the provisions of SFAS No. 142, goodwill was subjected to an initial assessment for impairment.  The Company completed its initial assessment review and determined that there was no impairment of goodwill as of January 1, 2002.  The Company will review goodwill on an annual basis for impairment and as events occur or circumstances change that would more likely than not reduce fair value of a reporting unit below its carrying amount.  The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2001 and 2002 are as follows:
11

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Notes to Consolidated Financial Statements (Unaudited) – continued

(Dollars in thousands) (Unaudited)	 	Retail	 	Commercial	 	Corporate and
Investment
 Banking	 	Mortgage	 	Private Client
 Services	 	Corporate/
 Other	 	Total	 	
	 			 			 			 			 			 			 			 	
Balance, January 1, 2001	 	$	337,283	 	$	16,951	 	$	118,180	 	$	2,014	 	$	—  	 	$	—  	 	$	474,428	 	
Amortization	 	 	(28,418	)	 	(746	)	 	(4,026	)	 	(953	)	 	(406	)	 	—  	 	 	(34,549	)	
AMA Holdings, Inc. acquisition	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	22,172	 	 	—  	 	 	22,172	 	
Robinson-Humphrey acquisition	 	 	—  	 	 	—  	 	 	5,903	 	 	—  	 	 	—  	 	 	—  	 	 	5,903	 	
Purchase price adjustment	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	(1,798	)	 	—  	 	 	(1,798	)	
Contingent consideration	 	 	—  	 	 	1,738	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	1,738	 	
Reclassification	 	 	(2,658	)	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	(2,658	)	
 	 			 			 			 			 			 			 			 	
Balance, September 30, 2001	 	$	306,207	 	$	17,943	 	$	120,057	 	$	1,061	 	$	19,968	 	$	—  	 	$	465,236	 	
 	 			 			 			 			 			 			 			 	
Balance, January 1, 2002	 	$	299,984	 	$	20,781	 	$	93,442	 	$	1,859	 	$	24,431	 	$	—  	 	$	440,497	 	
Huntington acquisition	 	 	523,694	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	523,694	 	
Reallocation	 	 	744	 	 	—  	 	 	—  	 	 	(744	)	 	—  	 	 	—  	 	 	—  	 	
Purchase price adjustment	 	 	(9,526	)	 	15	 	 	1,410	 	 	—  	 	 	—  	 	 	—  	 	 	(8,101	)	
 	 			 			 			 			 			 			 			 	
Balance, September 30, 2002	 	$	814,896	 	$	20,796	 	$	94,852	 	$	1,115	 	$	24,431	 	$	—  	 	$	956,090	 	
 	 			 			 			 			 			 			 			 	
The Company adopted SFAS No. 142, in its entirety, effective January 1, 2002.  The following presents the net income that would have been reported had SFAS No. 142 been implemented January 1, 2001.

 	 	Three Months Ended	 	
 	 		 	
(Dollars in thousands) (Unaudited)	 	September 30, 2002	 	September 30, 2001	 	
	 			 			 	
Reported net income	 	$	342,993	 	$	334,144	 	
Add:   Goodwill amortization, net of taxes	 	 	—  	 	 	6,941	 	
 	 			 			 	
Adjusted net income	 	$	342,993	 	$	341,085	 	
 	 			 			 	
Reported diluted earnings per share	 	$	1.20	 	$	1.15	 	
Add:   Goodwill amortization, net of taxes	 	 	—  	 	 	0.02	 	
 	 			 			 	
Adjusted diluted earnings per share	 	$	1.20	 	$	1.17	 	
 	 			 			 	
Reported basic earnings per share	 	$	1.21	 	$	1.17	 	
Add:   Goodwill amortization, net of taxes	 	 	—  	 	 	0.02	 	
 	 			 			 	
Adjusted basic earnings per share	 	$	1.21	 	$	1.19	 	

 	 	 	 	 	 	 	 	
 	 	Nine Months Ended	 	
 	 		 	
(Dollars in thousands) (Unaudited)	 	September 30, 2002	 	September 30, 2001	 	
	 			 			 	
Reported net income	 	$	991,559	 	$	1,018,815	 	
Add:   Goodwill amortization, net of taxes	 	 	—  	 	 	29,188	 	
 	 			 			 	
Adjusted net income	 	$	991,559	 	$	1,048,003	 	
 	 			 			 	
Reported diluted earnings per share	 	$	3.46	 	$	3.48	 	
Add:   Goodwill amortization, net of taxes	 	 	—  	 	 	0.10	 	
 	 			 			 	
Adjusted diluted earnings per share	 	$	3.46	 	$	3.58	 	
 	 			 			 	
Reported basic earnings per share	 	$	3.50	 	$	3.53	 	
Add:   Goodwill amortization, net of taxes	 	 	—  	 	 	0.10	 	
 	 			 			 	
Adjusted basic earnings per share	 	$	3.50	 	$	3.63	 	
 	 			 			 	
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Notes to Consolidated Financial Statements   (Unaudited) – continued
The changes in the carrying amounts of other intangible assets for the nine months ended September 30, 2001 and 2002 are as follows:

(Dollars in thousands) (Unaudited)	 	Core Deposit 
Intangible	 	Mortgage
Servicing 
Rights	 	Other	 	Total	 	
	 			 			 			 			 	
Balance, January 1, 2001	 	$	20,878	 	$	314,996	 	$	558	 	$	336,432	 	
Amortization	 	 	(3,046	)	 	(80,606	)	 	(102	)	 	(83,754	)	
Servicing rights acquired	 	 	—  	 	 	31,008	 	 	—  	 	 	31,008	 	
Servicing rights originated	 	 	—  	 	 	106,493	 	 	—  	 	 	106,493	 	
Reclassification	 	 	2,658	 	 	—  	 	 	—  	 	 	2,658	 	
 	 			 			 			 			 	
Balance, September 30, 2001	 	$	20,490	 	$	371,891	 	$	456	 	$	392,837	 	
 	 			 			 			 			 	
Balance, January 1, 2002	 	$	19,158	 	$	351,200	 	$	421	 	$	370,779	 	
Amortization	 	 	(40,291	)	 	(143,342	)	 	(1,152	)	 	(184,785	)	
Servicing rights acquired	 	 	—  	 	 	52,756	 	 	—  	 	 	52,756	 	
Servicing rights originated	 	 	—  	 	 	143,048	 	 	—  	 	 	143,048	 	
Huntington acquisition	 	 	254,959	 	 	—  	 	 	12,600	 	 	267,559	 	
 	 			 			 			 			 	
Balance, September 30, 2002	 	$	233,826	 	$	403,662	 	$	11,869	 	$	649,357	 	
 	 			 			 			 			 	
The estimated amortization expense for intangible assets, excluding amortization of mortgage servicing rights, for 2002 and the subsequent five years is as follows:

(Dollars in thousands) (Unaudited)	 	Core Deposit
Intangible	 	Other	 	Total	 	
	 			 			 			 	
2002	 	$	57,261	 	$	1,637	 	$	58,898	 	
2003	 	 	60,287	 	 	1,937	 	 	62,224	 	
2004	 	 	50,432	 	 	1,920	 	 	52,352	 	
2005	 	 	39,948	 	 	1,827	 	 	41,775	 	
2006	 	 	30,618	 	 	1,800	 	 	32,418	 	
2007	 	 	21,515	 	 	1,800	 	 	23,315	 	
Thereafter	 	 	14,056	 	 	2,100	 	 	16,156	 	
 	 			 			 			 	
 	Total	 	$	274,117	 	$	13,021	 	$	287,138	 	
 	 	 			 			 			 	
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Notes to Consolidated Financial Statements   (Unaudited) –  continued
Note 5 – Comprehensive Income
 Comprehensive income for the nine months ended September 30, 2002 and 2001 is calculated as follows:

(Dollars in thousands) (Unaudited)	 	2002	 	2001	 	
	 			 			 	
Unrealized loss on available for sale securities, net, recognized in other comprehensive income:	 	 	 	 	 	 	 	
 	Before income tax	 	$	(1,806	)	$	(227,820	)	
 	Income tax	 	 	(632	)	 	(79,737	)	
 	 	 			 			 	
 	Net of income tax	 	$	(1,174	)	$	(148,083	)	
 	 			 			 	
Amounts reported in net income:	 	 	 	 	 	 	 	
 	Gain on sale of securities	 	$	165,000	 	$	121,006	 	
 	Net amortization (accretion)	 	 	23,102	 	 	(11,310	)	
 	 	 			 			 	
 	Reclassification adjustment	 	 	188,102	 	 	109,696	 	
 	Income tax	 	 	(65,836	)	 	(38,394	)	
 	 	 			 			 	
 	Reclassification adjustment, net of tax	 	$	122,266	 	$	71,302	 	
 	 	 			 			 	
 	Unrealized gain (loss) on available for sale securities arising during period, net of tax	 	$	121,092	 	$	(76,781	)	
 	Reclassification adjustment, net of tax	 	 	(122,266	)	 	(71,302	)	
 	 			 			 	
 	Net unrealized loss on available for sale securities recognized in other comprehensive income	 	$	(1,174	)	$	(148,083	)	
 	 	 			 			 	
Unrealized gain (loss) on derivative financial instruments, net, recognized in other comprehensive income:	 	 	 	 	 	 	 	
 	Before income tax	 	$	4,862	 	$	(112,557	)	
 	Income tax	 	 	(1,702	)	 	39,395	 	
 	 	 			 			 	
 	Net of income tax	 	$	3,160	 	$	(73,162	)	
 	 	 			 			 	
Cumulative effect of change in accounting principle	 	$	—  	 	$	(16,246	)	
 	Income tax	 	 	—  	 	 	5,686	 	
 	 	 			 			 	
 	Cumulative effect of change in accounting principle, net of tax	 	$	—  	 	$	(10,560	)	
 	 	 			 			 	
Reclassification of losses from other comprehensive income to earnings	 	$	4,343	 	$	9,109	 	
Income tax	 	 	(1,520	)	 	(3,188	)	
 	 			 			 	
Reclassification adjustment, net of tax	 	$	2,823	 	$	5,921	 	
 	 			 			 	
Unrealized gain (loss) on derivative financial instruments arising during period, net of tax	 	$	337	 	$	(68,523	)	
Reclassification adjustment, net of tax	 	 	2,823	 	 	5,921	 	
 	 			 			 	
 	Net unrealized gain (loss) on derivative instruments recognized in other comprehensive income	 	$	3,160	 	$	(62,602	)	
 	 	 			 			 	
Total unrealized gains (losses) recognized in other comprehensive income	 	$	1,986	 	$	(221,245	)	
Net income	 	 	991,559	 	 	1,018,815	 	
 	 			 			 	
Total comprehensive income	 	$	993,545	 	$	797,570	 	

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Notes to Consolidated Financial Statements   (Unaudited) –  continued
Note 6 – Earnings Per Share Reconciliation
 Net income is the same in the calculation of basic and diluted earnings per share (“EPS”).  Shares of 6.6 million and 3.2 million for the periods ended September 30, 2002 and 2001, respectively, were excluded in the computation of diluted EPS because they would have been antidilutive.  A reconciliation of the difference between average basic common shares outstanding and average diluted common shares outstanding for the three and nine months ended September 30, 2002 and 2001 is included in the following table:

 	 	Three Months
 Ended September 30	 	Nine Months
 Ended September 30	 	
 	 		 		 	
(Dollars in thousands, except per share data) (Unaudited)	 	2002	 	2001	 	2002	 	2001	 	
	 			 			 			 			 	
Diluted	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before extraordinary loss	 	$	342,993	 	$	334,144	 	$	991,559	 	$	1,036,639	 	
Extraordinary loss, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	17,824	 	
 	 			 			 			 			 	
Net income	 	$	342,993	 	$	334,144	 	$	991,559	 	$	1,018,815	 	
 	 			 			 			 			 	
Average common shares outstanding	 	 	282,310	 	 	285,570	 	 	283,213	 	 	288,395	 	
Effect of dilutive securities:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Stock options	 	 	1,710	 	 	2,103	 	 	1,639	 	 	2,054	 	
 	Performance restricted stock	 	 	1,971	 	 	1,928	 	 	2,028	 	 	1,898	 	
 	 			 			 			 			 	
Average diluted common shares	 	 	285,991	 	 	289,601	 	 	286,880	 	 	292,347	 	
 	 			 			 			 			 	
Earnings per common share - diluted:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Income before extraordinary loss	 	$	1.20	 	$	1.15	 	$	3.46	 	$	3.54	 	
 	Extraordinary loss, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	0.06	 	
 	 	 			 			 			 			 	
 	Net income	 	$	1.20	 	$	1.15	 	$	3.46	 	$	3.48	 	
 	 			 			 			 			 	
Basic	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before extraordinary loss	 	$	342,993	 	$	334,144	 	$	991,559	 	$	1,036,639	 	
Extraordinary loss, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	17,824	 	
 	 			 			 			 			 	
Net income	 	$	342,993	 	$	334,144	 	$	991,559	 	$	1,018,815	 	
 	 			 			 			 			 	
Average common shares	 	 	282,310	 	 	285,570	 	 	283,213	 	 	288,395	 	
 	 			 			 			 			 	
Earnings per common share - basic:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Income before extraordinary loss	 	$	1.21	 	$	1.17	 	$	3.50	 	$	3.59	 	
 	Extraordinary loss, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	0.06	 	
 	 			 			 			 			 	
 	Net income	 	$	1.21	 	$	1.17	 	$	3.50	 	$	3.53	 	

Note 7 – Business Segment Reporting
 Unlike financial accounting, there is no comprehensive authoritative body of guidance for management accounting practices equivalent to generally accepted accounting principles.  Therefore, the disclosure of business segment performance is not necessarily comparable with similar information presented by any other financial institution.
          The Company utilizes a matched maturity funds transfer pricing methodology to transfer interest rate risk of all assets and liabilities to the Corporate Treasury area which manages the interest rate risk of the Company. Differences in the aggregate amounts of transfer priced funds charges and credits are reflected in the Corporate/Other line of business segment.  A system of internal credit transfers is utilized to recognize supportive business services across lines of business.  The net results of these credits are reflected in each line of
15

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Notes to Consolidated Financial Statements   (Unaudited) - continued
business segment.  The cost of operating office premises is charged to the lines of business by use of an internal cost transfer process.  Allocations of certain administrative support expenses and customer transaction processing expenses are also reflected in each line of business segment.  The offset to these expense allocations, as well as the amount of any unallocated expenses, is reported in the Corporate/Other line of business segment.
          The Company also utilizes an internal credit risk transfer methodology (the “credit risk premium”) which creates a current period financial charge against interest income to each line of business based on the estimated credit risk-adjusted return on loans.  The offset to the aggregate credit risk premium charges is matched against the Company’s current provision for loan losses with any difference reported in the Corporate/Other line of business segment.  The provision for income taxes is also reported in the Corporate/Other line of business segment.
          The Company is currently in the process of building and implementing further enhancements to its internal management reporting system that are expected to be implemented throughout 2002 and beyond.  Once complete, the items reported for each line of business segment are expected to include: assets, liabilities and attributed economic capital; matched maturity funds transfer priced net interest revenue, net of credit risk premiums; direct noninterest income; internal credit transfers between lines of business for supportive business services; and fully absorbed expenses.  The internal management reporting system and the business segment disclosures for each line of business do not currently include attributed economic capital, nor fully absorbed expenses.  Any amounts not currently reported in each line of business segment are reported in the Corporate/Other line of business segment. The implementation of these enhancements to the internal management reporting system is expected to materially affect the net income disclosed for each segment.  Whenever significant changes to management reporting methodologies take place, the impact of these changes is quantified and prior period information is restated.
          The tables on page 17-18 disclose selected financial information for SunTrust’s reportable business segments for the three and nine months ended September 30, 2002 and 2001.
16

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Notes to Consolidated Financial Statements (Unaudited) – continued

 	 	Three Months Ended September 30, 2002	 	
 	 		 	
(Dollars in thousands) (Unaudited)	 	Retail	 	Commercial	 	Corporate and
Investment
Banking	 	Mortgage	 	Private Client
Services	 	Corporate/Other	 	Consolidated	 	
	 			 			 			 			 			 			 			 	
Average total assets	 	$	23,851,461	 	$	22,446,816	 	$	20,059,512	 	$	22,414,325	 	$	1,730,722	 	$	17,343,042	 	$	107,845,878	 	
Average total liabilities	 	 	52,213,684	 	 	10,076,160	 	 	5,160,530	 	 	1,202,418	 	 	1,525,951	 	 	28,723,812	 	 	98,902,555	 	
Average total equity	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	8,943,323	 	 	8,943,323	 	
 	 			 			 			 			 			 			 			 	
Net interest income (FTE) (1)	 	 	340,560	 	 	140,398	 	 	54,844	 	 	85,807	 	 	9,888	 	 	183,630	 	 	815,127	 	
Provision for loan losses (2)	 	 	26,576	 	 	8,935	 	 	39,907	 	 	1,609	 	 	507	 	 	21,165	 	 	98,699	 	
 	 			 			 			 			 			 			 			 	
Net interest revenue	 	 	313,984	 	 	131,463	 	 	14,937	 	 	84,198	 	 	9,381	 	 	162,465	 	 	716,428	 	
Noninterest revenue	 	 	189,192	 	 	74,588	 	 	124,114	 	 	25,462	 	 	160,287	 	 	7,227	 	 	580,870	 	
Noninterest expense	 	 	308,024	 	 	80,937	 	 	79,013	 	 	77,410	 	 	111,006	 	 	151,749	 	 	808,139	 	
 	 			 			 			 			 			 			 			 	
Total contribution before taxes and extraordinary items	 	 	195,152	 	 	125,114	 	 	60,038	 	 	32,250	 	 	58,662	 	 	17,943	 	 	489,159	 	
Provision for income taxes (3)	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	146,166	 	 	146,166	 	
 	 			 			 			 			 			 			 			 	
Income before extraordinary items	 	 	195,152	 	 	125,114	 	 	60,038	 	 	32,250	 	 	58,662	 	 	(128,223	)	 	342,993	 	
Extraordinary items, net of tax	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	
 	 			 			 			 			 			 			 			 	
Net income	 	$	195,152	 	$	125,114	 	$	60,038	 	$	32,250	 	$	58,662	 	$	(128,223	)	$	342,993	 	

 

 	 	Three Months Ended September 30, 2001	 	
 	 		 	
 	 	Retail	 	Commercial	 	Corporate and
Investment
Banking	 	Mortgage	 	Private Client
Services	 	Corporate/Other	 	Consolidated	 	
 	 			 			 			 			 			 			 			 	
Average total assets	 	$	19,935,336	 	$	20,584,379	 	$	20,598,378	 	$	22,399,691	 	$	1,518,675	 	$	16,209,545	 	$	101,246,004	 	
Average total liabilities	 	 	46,101,472	 	 	8,409,089	 	 	4,301,708	 	 	1,088,005	 	 	1,293,847	 	 	32,055,810	 	 	93,249,931	 	
Average total equity	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	7,996,073	 	 	7,996,073	 	
 	 			 			 			 			 			 			 			 	
Net interest income (FTE) (1)	 	 	344,061	 	 	134,158	 	 	77,575	 	 	66,516	 	 	10,516	 	 	181,054	 	 	813,880	 	
Provision for loan losses (2)	 	 	12,812	 	 	11,148	 	 	22,250	 	 	1,745	 	 	388	 	 	31,814	 	 	80,157	 	
 	 			 			 			 			 			 			 			 	
Net interest revenue	 	 	331,249	 	 	123,010	 	 	55,325	 	 	64,771	 	 	10,128	 	 	149,240	 	 	733,723	 	
Noninterest revenue	 	 	155,448	 	 	63,108	 	 	111,772	 	 	51,111	 	 	147,238	 	 	21,725	 	 	550,402	 	
Noninterest expense	 	 	296,511	 	 	92,184	 	 	104,267	 	 	82,248	 	 	98,942	 	 	102,660	 	 	776,812	 	
 	 			 			 			 			 			 			 			 	
Total contribution before taxes and extraordinary items	 	 	190,186	 	 	93,934	 	 	62,830	 	 	33,634	 	 	58,424	 	 	68,305	 	 	507,313	 	
Provision for income taxes (3)	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	173,169	 	 	173,169	 	
 	 			 			 			 			 			 			 			 	
Income before extraordinary items	 	 	190,186	 	 	93,934	 	 	62,830	 	 	33,634	 	 	58,424	 	 	(104,864	)	 	334,144	 	
Extraordinary items, net of tax	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	
 	 			 			 			 			 			 			 			 	
Net income	 	$	190,186	 	$	93,934	 	$	62,830	 	$	33,634	 	$	58,424	 	$	(104,864	)	$	334,144	 	

(1)	Net interest income is fully taxable equivalent and is presented on a matched maturity funds transfer price basis for the line of business.	
 	 	
(2)	Provision for loan losses includes a credit risk premium charge for the lines of business.	
 	 	
(3)	Includes regular income tax provision and taxable-equivalent income adjustment reversal of $10,013 and $10,051 for the three months ended September 30, 2002 and 2001, respectively.	
17

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Notes to Consolidated Financial Statements (Unaudited) - continued

 	 	Nine Months Ended September 30, 2002	 	
 	 		 	
(Dollars in thousands) (Unaudited)	 	Retail	 	Commercial	 	Corporate and
Investment
Banking	 	Mortgage	 	Private Client
Services	 	Corporate/Other	 	Consolidated	 	
	 			 			 			 			 			 			 			 	
Average total assets	 	$	22,925,778	 	$	22,067,201	 	$	20,097,984	 	$	22,590,092	 	$	1,723,490	 	$	16,984,616	 	$	106,389,161	 	
Average total liabilities	 	 	51,441,577	 	 	9,510,850	 	 	4,981,029	 	 	1,196,788	 	 	1,546,685	 	 	29,019,410	 	 	97,696,339	 	
Average total equity	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	8,692,822	 	 	8,692,822	 	
 	 			 			 			 			 			 			 			 	
Net interest income (FTE) (1)	 	 	1,046,646	 	 	414,566	 	 	178,625	 	 	264,301	 	 	30,119	 	 	511,633	 	 	2,445,890	 	
Provision for loan losses (2)	 	 	75,275	 	 	33,244	 	 	170,314	 	 	4,925	 	 	1,728	 	 	87,806	 	 	373,292	 	
 	 			 			 			 			 			 			 			 	
Net interest revenue	 	 	971,371	 	 	381,322	 	 	8,311	 	 	259,376	 	 	28,391	 	 	423,827	 	 	2,072,598	 	
Noninterest revenue	 	 	548,630	 	 	223,390	 	 	384,071	 	 	93,015	 	 	493,343	 	 	79,526	 	 	1,821,975	 	
Noninterest expense	 	 	959,453	 	 	271,364	 	 	266,889	 	 	242,140	 	 	353,710	 	 	370,329	 	 	2,463,885	 	
 	 			 			 			 			 			 			 			 	
Total contribution before taxes and extraordinary items	 	 	560,548	 	 	333,348	 	 	125,493	 	 	110,251	 	 	168,024	 	 	133,024	 	 	1,430,688	 	
Provision for income taxes (3)	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	439,129	 	 	439,129	 	
 	 			 			 			 			 			 			 			 	
Income before extraordinary items	 	 	560,548	 	 	333,348	 	 	125,493	 	 	110,251	 	 	168,024	 	 	(306,105	)	 	991,559	 	
Extraordinary items, net of tax	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	
 	 			 			 			 			 			 			 			 	
Net income	 	$	560,548	 	$	333,348	 	$	125,493	 	$	110,251	 	$	168,024	 	$	(306,105	)	$	991,559	 	

 

 	 	Nine Months Ended September 30, 2001	 	
 	 		 	
 	 	Retail	 	Commercial	 	Corporate and
Investment
Banking	 	Mortgage	 	Private Client
Services	 	Corporate/Other	 	Consolidated	 	
 	 			 			 			 			 			 			 			 	
Average total assets	 	$	19,685,272	 	$	20,362,479	 	$	21,726,836	 	$	22,022,335	 	$	1,409,258	 	$	17,341,774	 	$	102,547,954	 	
Average total liabilities	 	 	45,332,307	 	 	8,392,431	 	 	4,374,703	 	 	977,594	 	 	1,354,727	 	 	34,130,297	 	 	94,562,059	 	
Average total equity	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	7,985,895	 	 	7,985,895	 	
 	 			 			 			 			 			 			 			 	
Net interest income (FTE) (1)	 	 	1,051,500	 	 	413,038	 	 	218,752	 	 	162,144	 	 	32,232	 	 	585,583	 	 	2,463,249	 	
Provision for loan losses (2)	 	 	36,690	 	 	27,765	 	 	57,029	 	 	5,414	 	 	1,037	 	 	59,137	 	 	187,072	 	
 	 			 			 			 			 			 			 			 	
Net interest revenue	 	 	1,014,810	 	 	385,273	 	 	161,723	 	 	156,730	 	 	31,195	 	 	526,446	 	 	2,276,177	 	
Noninterest revenue	 	 	458,443	 	 	184,283	 	 	296,045	 	 	153,270	 	 	446,009	 	 	60,083	 	 	1,598,133	 	
Noninterest expense	 	 	868,070	 	 	282,398	 	 	271,433	 	 	228,315	 	 	298,472	 	 	334,659	 	 	2,283,347	 	
 	 			 			 			 			 			 			 			 	
Total contribution before taxes and extraordinary items	 	 	605,183	 	 	287,158	 	 	186,335	 	 	81,685	 	 	178,732	 	 	251,870	 	 	1,590,963	 	
Provision for income taxes (3)	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	554,324	 	 	554,324	 	
 	 			 			 			 			 			 			 			 	
Income before extraordinary items	 	 	605,183	 	 	287,158	 	 	186,335	 	 	81,685	 	 	178,732	 	 	(302,454	)	 	1,036,639	 	
Extraordinary items, net of tax	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	(17,824	)	 	(17,824	)	
 	 			 			 			 			 			 			 			 	
Net income	 	$	605,183	 	$	287,158	 	$	186,335	 	$	81,685	 	$	178,732	 	$	(320,278	)	$	1,018,815	 	

(1)	Net interest income is fully taxable equivalent and is presented on a matched maturity funds transfer price basis for the line of business.	
 	 	
(2)	Provision for loan losses includes a credit risk premium charge for the lines of business.	
 	 	
(3)	Includes regular income tax provision and taxable-equivalent income adjustment reversal of $29,282 and $30,660 for the nine months ended September 30, 2002 and 2001, respectively.	
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Item 2.
 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
SunTrust Banks, Inc., one of the nation’s largest commercial banking organizations, is a financial holding company with its headquarters in Atlanta, Georgia.  SunTrust’s principal banking subsidiary, SunTrust Bank, offers a full line of financial services for consumers and businesses through its branches located primarily in Alabama, Florida, Georgia, Maryland, Tennessee, Virginia and the District of Columbia.  In addition to traditional deposit, credit and trust and investment services offered by SunTrust Bank, other SunTrust subsidiaries provide mortgage banking, credit-related insurance, asset management, securities brokerage and capital market services.
SunTrust has 1,184 full-service branches, including supermarket branches, and continues to leverage technology to provide customers the convenience of banking on the Internet, through 2,285 automated teller machines and via twenty-four hour telebanking.
The following analysis of the financial performance of SunTrust for the third quarter and first nine months of 2002 should be read in conjunction with the financial statements, notes and other information contained in this document and the 2001 Annual Report found on Form 10-K/A.  In Management’s Discussion, net interest income, net interest margin and the efficiency ratio are presented on a fully taxable-equivalent (FTE) basis and the ratios are presented on an annualized basis.  The FTE basis adjusts for the tax-favored status of income from certain loans and investments.  Additionally, the Company presents a return on average realized shareholders’ equity, as well as a return on average total shareholders’ equity.  The return on average realized shareholders’ equity excludes net unrealized security gains.  Due to its ownership of 48 million shares of common stock of The Coca-Cola Company resulting in an unrealized net gain of $2.3 billion as of September 30, 2002, the Company believes that this measure is more indicative of its return on average shareholders’ equity when comparing performance to other companies.
The information provided herein may contain estimates of future operating results for SunTrust.  These estimates constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) which involve significant risks and uncertainties.  Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates, changes in accounting principles, policies, or guidelines, significant changes in the economic scenario, significant changes in legislation or regulatory requirements, changes in business conditions or the banking competitive environment, significant changes in securities markets, and litigation risks.  SunTrust does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
Effective January 1, 2002, in accordance with the provisions of SFAS No. 142, SunTrust will no longer amortize goodwill.  See Note 3 to the Consolidated Financial Statements “Recent Accounting Developments” on page 9 for further information.
CRITICAL ACCOUNTING POLICIES
The Company’s accounting policies are integral to understanding the results reported.  Accounting policies are described in detail in Note 1 to the consolidated financial statements in the 2001 Annual Report.  The Company’s most complex accounting policies require management’s judgment to ascertain the valuation of assets, liabilities, commitments and contingencies.  A variety of factors could affect the ultimate value that is obtained either when earning income, recognizing an expense, recovering an asset or relieving a liability.  In many instances, we use a
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discount factor to determine the present value of assets and liabilities.  A change in the discount factor could increase or decrease the values of those assets and liabilities.  That change could result in either a beneficial or adverse impact on our financial results.  The Company has established detailed policies and control procedures that are intended to ensure valuation methods are well controlled and applied consistently from period to period. In addition, the policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner.  The following is a brief description of the Company’s current accounting policies involving significant management valuation judgments.
Allowance for Loan Losses. The allowance for loan losses represents management’s best estimate of losses inherent in the existing loan portfolio.  The allowance for loan losses is increased by the provision for loan losses charged to expense and reduced by loans charged off, net of recoveries.  The provision for loan losses is determined based on management’s assessment of several factors: reviews and evaluations of specific loans, changes in the nature and volume of the loan portfolio, current economic conditions and the related impact on specific borrowers and industry groups, historical loan loss experiences, the level of classified and nonperforming loans and the results of regulatory examinations.
Loans are considered impaired if, based on current information and events, it is probable that SunTrust will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.  The measurement of impaired loans is based on either the fair value of the underlying collateral, the present value of the future cash flows discounted at the historical effective interest rate stipulated in the loan agreement, or the estimated market value of the loan.  In measuring the fair value of the collateral, management uses assumptions (e.g., discount rate) and methodologies (e.g., comparison to the recent selling price of similar assets) consistent with those that would be utilized by unrelated third parties.
Changes in the financial condition of individual borrowers, in economic conditions, in historical loss experience and in the condition of the various markets in which collateral may be sold may all affect the required level of the allowance for loan losses and the associated provision for loan losses.
Estimates of Fair Value. The estimation of fair value is significant to a number of SunTrust’s assets, including trading account assets, loans held for sale, available for sale investment securities, mortgage servicing rights (“MSR”), other real estate owned, as well as assets and liabilities associated with derivative financial instruments. These are all recorded at either fair value or at the lower of cost or fair value.  Fair values are volatile and may be influenced by a number of factors, including market interest rates, prepayment speeds and discount rates.
Fair values for trading account assets, most available for sale investment securities and most derivative financial instruments are based on quoted market prices.  If quoted market prices are not available, fair values are based on the quoted prices of similar instruments.  The fair values of loans held for sale are based on anticipated liquidation values, while the fair values of mortgage servicing rights are based on discounted cash flow analysis utilizing dealer consensus prepayment speeds and market discount rates.  The fair values of other real estate owned are typically determined based on appraisals by third parties, less estimated costs to sell.
Initial Adoption of Accounting Policy. Effective January 1, 2002, SunTrust adopted the fair value method of recording stock options contained in SFAS No. 123, “Accounting for Stock-Based Compensation”.  This method is considered the preferable accounting method for stock-based employee compensation.  Grants, awards, or modifications made in 2002 and beyond will be expensed over the option vesting period based on the fair value as calculated using the Black-Scholes option pricing model.  Based on the current accounting guidance, which is currently under review by the Financial Accounting Standards Board, SunTrust expects the financial impact in the current year from the adoption of SFAS No. 123 to be less than $0.01 per diluted share.  The number of options expected to be granted this year is substantially lower than in previous years.  In 2003 and beyond, assuming annual grants of 3.2 million shares at a fair value of $ 11.00 per share, the impact per share would increase
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annually over the next several years and level off at approximately $0.08 per share by 2005.  The actual impact per share would be different in the event the number of options granted or the fair value of options increases or decreases from the current estimate, or if the current accounting guidance changes.
On October 4, 2002, the FASB issued an exposure draft to amend the transition and disclosure provisions of SFAS No. 123.  Under this exposure draft three alternatives would be allowed for transitioning to SFAS No. 123. The amendment is effective for financial statements ending after December 15, 2002.  The Company is in the process of analyzing the impact that this exposure draft would have on the results of operations given these transition alternatives.
EARNINGS ANALYSIS
SunTrust reported earnings of $343.0 million and $991.6 million for the third quarter and first nine months of 2002, an increase of $8.8 million, or 2.6%, and a decrease of $27.3 million, or 2.7%, compared to $334.1 million and $1,018.8 million in the same periods last year.  Reported diluted earnings per share were $1.20 and $1.15 for the three months ended September 30, 2002 and 2001, respectively, and $3.46 and $3.48 for the nine months ended September 30, 2002 and 2001, respectively.  The third quarter of 2001 includes $20.2 million, or $0.07 per diluted share, in after-tax nonrecurring items associated with the Company’s proposal to acquire the former Wachovia Corporation.  Adjusting for these charges, operating diluted earnings per share were $1.22 for the third quarter of 2001.  Results for the first nine months of 2002 included $39.8 million after-tax in nonrecurring expenses associated with the Company’s acquisition of the Florida franchise of Huntington Bancshares, Inc. Adjusting for both the Huntington merger and Wachovia proposal charges, operating diluted earnings per share were $3.60 and $3.55 for the nine months ended September 30, 2002 and 2001, respectively.
Net interest income increased $1.2 million, or 0.2%, and decreased $17.4 million, or 0.7%, from the third quarter and first nine months of 2001 to the third quarter and first nine months of 2002.  The minimal increase compared to the third quarter of 2001 and decrease compared to the first nine months of 2001 were primarily due to lower loan related revenues associated with the weak economy as average loans, adjusted for securitizations and the impact of Huntington, were flat and down 2.9% from the third quarter and first nine months of 2001, respectively. Also negatively impacting the margin are the following factors.  First, the low interest rate environment and flattening of the yield curve during the third quarter 2002 have negatively impacted the margin with the Company’s balance sheet restructured to benefit from rising rates.  Secondly, the residential mortgage and mortgage backed securities portfolios have been affected by accelerated prepayments from mortgage refinancing, significantly lowering yields in these portfolios.  Finally, the Company’s direct consumer portfolio experienced a significant yield reduction.  A portion of this portfolio is student loans which reprice once a year, in July, using Treasury Bill (“T-Bill”) rates.  The 91 day May T-Bill rate decreased 193 basis points from 2001 to 2002.
The provision for loan losses was $98.7 million and $373.3 million in the third quarter and first nine months of 2002.  This represents an increase of $18.5 million, or 23.1%, and $186.2 million, or 99.5%, over the third quarter and first nine months of 2001.  The quarterly and year-to-date increases are primarily due to increased commercial charge-offs due to the weakened economy.  Additionally impacting the year-to-date increase was $45.3 million of additional, one-time provision expense in the first quarter of 2002 related to the Huntington acquisition in order to conform the Huntington portfolio to SunTrust’s credit standards.
Total noninterest income, excluding securities gains, increased $20.8 million, or 4.0%, to $535.1 million in the third quarter of 2002 and $179.8 million, or 12.2%, to $1,657.0 million in the first nine months of 2002. Contributing to the increases in the third quarter and year-to-date, service charges on deposit accounts and other charges and fees increased $43.1 million, or 22.6%, and $130.1 million, or 23.7%, due to increased usage of products and services, a more consistent pricing strategy throughout the Company’s markets and a lower earnings credit rate.  Additionally, the Company experienced $6.4 million, or 19.2%, and $70.5 million, or 105.4%, growth
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in investment banking income as the Company benefited from improvements in the performance of its capital markets business and the addition of the institutional business of Robinson-Humphrey.  The Company also benefited from a $4.1 million, or 3.4%, and $16.2 million, or 4.4%, increase in trust and investment management income from the third quarter and first nine months of 2001.  Negatively impacting noninterest income was a $37.3 million and $46.9 million decrease in mortgage servicing related income compared to the third quarter and first nine months of 2001, respectively.  This decline is due to the high volume of refinancing activity resulting in accelerated amortization of mortgage servicing rights related to increased prepayments.
Total noninterest expense was $808.1 million, an increase $31.3 million, or 4.0%, for the third quarter of 2002 over the same period last year and $2,463.9 million, an increase of $180.5 million, or 7.9%, for the first nine months of 2002 over the same period last year.  Personnel expenses in the third quarter and year-to-date increased $20.0 million, or 4.5%, and $131.3 million, or 10.0%, from prior periods due to increased benefits costs and the acquisitions of Huntington, the institutional business of Robinson-Humphrey and AMA Holdings, Inc.  The acquisition of Huntington resulted in $16.0 million of one-time merger-related charges for operations and systems integration and $38.2 million for amortization of related intangible assets for the nine months ended September 30, 2002.  In the third quarter and first nine months of 2001, the Company recorded $7.2 million and $34.6 million, respectively, of goodwill amortization that is no longer being amortized in conjunction with the provisions of SFAS No. 142.
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Selected Quarterly Financial Data	Table 1	

 	 	Quarters	 	
 	 		 	
 	 	2002	 	2001	 	
 	 		 		 	
(Dollars in millions except per share data) (Unaudited)	 	3	 	2	 	1	 	4	 	3	 	
	 		 		 		 		 		 	
Summary of Operations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest and dividend income	 	$	1,270.7	 	$	1,292.0	 	$	1,297.6	 	$	1,391.1	 	$	1,509.9	 	
Interest expense	 	 	465.6	 	 	478.6	 	 	499.5	 	 	571.1	 	 	706.1	 	
 	 	 			 			 			 			 			 	
Net interest income	 	 	805.1	 	 	813.4	 	 	798.1	 	 	820.0	 	 	803.8	 	
Provision for loan losses	 	 	98.7	 	 	111.0	 	 	163.6	 	 	88.1	 	 	80.2	 	
 	 	 			 			 			 			 			 	
Net interest income after provision for loan losses	 	 	706.4	 	 	702.4	 	 	634.5	 	 	731.9	 	 	723.6	 	
Noninterest income(1)	 	 	580.9	 	 	625.8	 	 	615.3	 	 	557.7	 	 	550.4	 	
Noninterest expense(2)(3)(4)	 	 	808.1	 	 	818.1	 	 	837.6	 	 	830.2	 	 	776.8	 	
 	 	 			 			 			 			 			 	
Income before provision for income taxes and extraordinary items	 	 	479.2	 	 	510.1	 	 	412.2	 	 	459.4	 	 	497.2	 	
Provision for income taxes	 	 	136.2	 	 	166.4	 	 	107.3	 	 	126.8	 	 	163.1	 	
 	 	 			 			 			 			 			 	
Income before extraordinary items	 	 	343.0	 	 	343.7	 	 	304.9	 	 	332.6	 	 	334.1	 	
Extraordinary gain, net of taxes(5)	 	 	—  	 	 	—  	 	 	—  	 	 	24.1	 	 	—  	 	
 	 	 			 			 			 			 			 	
Net income	 	$	343.0	 	$	343.7	 	$	304.9	 	$	356.7	 	$	334.1	 	
 	 			 			 			 			 			 	
Net interest income (taxable-equivalent)	 	$	815.1	 	$	823.1	 	$	807.7	 	$	830.1	 	$	813.9	 	
Per Common Share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Income before extraordinary items	 	$	1.20	 	$	1.20	 	$	1.06	 	$	1.16	 	$	1.15	 	
 	Extraordinary gain, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	0.08	 	 	—  	 	
 	 	 			 			 			 			 			 	
 	Net income	 	 	1.20	 	 	1.20	 	 	1.06	 	 	1.24	 	 	1.15	 	
Basic	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Income before extraordinary items	 	 	1.21	 	 	1.22	 	 	1.07	 	 	1.17	 	 	1.17	 	
 	Extraordinary gain, net of taxes	 	 	—  	 	 	—  	 	 	—  	 	 	0.08	 	 	—  	 	
 	 	 			 			 			 			 			 	
 	Net income	 	 	1.21	 	 	1.22	 	 	1.07	 	 	1.25	 	 	1.17	 	
Dividends declared	 	 	0.43	 	 	0.43	 	 	0.43	 	 	0.40	 	 	0.40	 	
Book value	 	 	31.04	 	 	31.41	 	 	29.97	 	 	28.97	 	 	28.40	 	
Market price	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	High	 	 	69.12	 	 	70.20	 	 	68.47	 	 	67.93	 	 	72.35	 	
 	Low	 	 	55.90	 	 	65.10	 	 	58.32	 	 	58.10	 	 	60.10	 	
 	Close	 	 	61.48	 	 	67.72	 	 	66.73	 	 	62.70	 	 	66.60	 	
Selected Average Balances	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total assets	 	$	107,845.9	 	$	106,492.0	 	$	104,796.1	 	$	103,882.0	 	$	101,246.0	 	
Earning assets	 	 	95,562.2	 	 	94,740.5	 	 	93,198.1	 	 	92,440.9	 	 	90,588.0	 	
Loans	 	 	71,695.6	 	 	70,985.1	 	 	69,694.6	 	 	69,547.1	 	 	69,024.0	 	
Consumer and commercial deposits	 	 	66,141.3	 	 	65,466.3	 	 	62,211.5	 	 	59,085.8	 	 	57,081.1	 	
Brokered and foreign deposits	 	 	4,956.7	 	 	5,179.8	 	 	5,432.4	 	 	6,268.1	 	 	6,086.6	 	
Realized shareholders’ equity	 	 	7,095.9	 	 	6,901.5	 	 	6,729.8	 	 	6,530.6	 	 	6,305.4	 	
Total shareholders’ equity	 	 	8,943.3	 	 	8,743.1	 	 	8,385.9	 	 	8,334.5	 	 	7,996.1	 	
Common shares - diluted (thousands)	 	 	285,991	 	 	287,288	 	 	287,375	 	 	289,319	 	 	289,601	 	
Common shares - basic (thousands)	 	 	282,310	 	 	283,293	 	 	284,055	 	 	285,645	 	 	285,570	 	
Financial Ratios (Annualized)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Return on average assets	 	 	1.30	%	 	1.33	%	 	1.21	%	 	1.40	%	 	1.34	%	
Return on average realized shareholders’ equity	 	 	19.18	 	 	19.97	 	 	18.37	 	 	21.67	 	 	21.02	 	
Return on average total shareholders’ equity	 	 	15.22	 	 	15.77	 	 	14.74	 	 	16.98	 	 	16.58	 	
Net interest margin	 	 	3.38	 	 	3.48	 	 	3.51	 	 	3.56	 	 	3.56	 	

(1)	Includes securities gains of $45.8, $55.7 and $63.5 million for the third, second and first quarters of 2002 and $32.1 and $36.2 million for the fourth and third quarters of 2001, respectively, related to the Company’s securities portfolio repositioning.	
(2)	Includes enhancements to customer based systems of $18.3, $9.4 and $16.8 million for the third, second and first quarters of 2002 and $15.5 and $17.5 million for the fourth and third quarters of 2001, respectively, related to the One Bank initiative.	
(3)	Includes merger-related expenses of $16.0 million for the first quarter of 2002 related to the acquisition of the Florida franchise of Huntington Bancshares.	
(4)	Includes Wachovia proposal expenses of $32.0 million for the third quarter of 2001.	
(5)	Represents the gain on the Company’s early extinguishment of long-term debt during the fourth quarter of 2001, net of $13.0 million in taxes.	
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Consolidated Daily Average Balances, Income/Expense
and Average Yields Earned and Rates Paid	Table 2	

 	 	Quarter Ended	 	
 	 		 	
 	 	September 30, 2002	 	June 30, 2002	 	
 	 		 		 	
(Dollars in millions; yields on taxable-equivalent basis) (Unaudited)	 	Average
Balances	 	Income/
Expense	 	Yields/
Rates	 	Average
Balances	 	Income/
Expense	 	Yields/
Rates	 	
	 		 		 		 		 		 		 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loans:(1)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Taxable	 	$	70,399.5	 	$	984.6	 	 	5.55	%	$	69,738.1	 	$	994.7	 	 	5.72	%	
 	Tax-exempt(2)	 	 	1,296.1	 	 	17.8	 	 	5.44	 	 	1,247.0	 	 	17.4	 	 	5.58	 	
 	 	 			 			 			 			 			 			 	
 	Total loans	 	 	71,695.6	 	 	1,002.4	 	 	5.55	 	 	70,985.1	 	 	1,012.1	 	 	5.72	 	
Securities available for sale:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Taxable	 	 	16,163.8	 	 	193.1	 	 	4.78	 	 	16,538.3	 	 	211.0	 	 	5.10	 	
 	Tax-exempt(2)	 	 	396.2	 	 	6.8	 	 	6.86	 	 	413.6	 	 	7.1	 	 	6.91	 	
 	 	 			 			 			 			 			 			 	
 	Total securities available for sale	 	 	16,560.0	 	 	199.9	 	 	4.83	 	 	16,951.9	 	 	218.1	 	 	5.15	 	
Funds sold	 	 	1,439.5	 	 	6.6	 	 	1.80	 	 	1,454.7	 	 	6.6	 	 	1.79	 	
Loans held for sale	 	 	3,858.1	 	 	63.1	 	 	6.54	 	 	3,454.7	 	 	57.4	 	 	6.65	 	
Interest-bearing deposits	 	 	377.5	 	 	1.7	 	 	1.83	 	 	352.6	 	 	1.5	 	 	1.70	 	
Trading account	 	 	1,631.5	 	 	7.0	 	 	1.69	 	 	1,541.5	 	 	6.0	 	 	1.57	 	
 	 	 			 			 			 			 			 			 	
 	Total earning assets	 	 	95,562.2	 	 	1,280.7	 	 	5.32	 	 	94,740.5	 	 	1,301.7	 	 	5.51	 	
Allowance for loan losses	 	 	(935.1	)	 	 	 	 	 	 	 	(934.0	)	 	 	 	 	 	 	
Cash and due from banks	 	 	3,255.9	 	 	 	 	 	 	 	 	3,196.7	 	 	 	 	 	 	 	
Premises and equipment	 	 	1,631.3	 	 	 	 	 	 	 	 	1,623.3	 	 	 	 	 	 	 	
Other assets	 	 	5,427.5	 	 	 	 	 	 	 	 	4,987.6	 	 	 	 	 	 	 	
Unrealized gains on securities available for sale	 	 	2,904.1	 	 	 	 	 	 	 	 	2,877.9	 	 	 	 	 	 	 	
 	 	 			 			 			 			 			 			 	
 	Total assets	 	$	107,845.9	 	 	 	 	 	 	 	$	106,492.0	 	 	 	 	 	 	 	
 	 			 			 			 			 			 			 	
Liabilities and Shareholders’ Equity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest-bearing deposits:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	NOW /money market	 	$	10,431.6	 	$	19.0	 	 	0.72	%	$	10,181.1	 	$	18.8	 	 	0.74	%	
 	Money Market - regular	 	 	20,843.0	 	 	83.0	 	 	1.58	 	 	20,369.5	 	 	84.4	 	 	1.66	 	
 	Savings	 	 	6,301.3	 	 	20.6	 	 	1.30	 	 	6,436.8	 	 	23.1	 	 	1.44	 	
 	Consumer time	 	 	9,481.9	 	 	85.3	 	 	3.57	 	 	9,683.0	 	 	91.6	 	 	3.80	 	
 	Other time	 	 	3,846.4	 	 	24.3	 	 	2.51	 	 	3,803.6	 	 	25.0	 	 	2.64	 	
 	 	 			 			 			 			 			 			 	
 	Total interest bearing consumer and commercial deposits	 	 	50,904.2	 	 	232.2	 	 	1.81	 	 	50,474.0	 	 	242.9	 	 	1.93	 	
 	Brokered deposits	 	 	2,394.8	 	 	29.9	 	 	4.89	 	 	2,394.8	 	 	28.6	 	 	4.72	 	
 	Foreign deposits	 	 	2,561.9	 	 	11.3	 	 	1.73	 	 	2,785.0	 	 	12.1	 	 	1.72	 	
 	 	 			 			 			 			 			 			 	
 	Total interest-bearing deposits	 	 	55,860.9	 	 	273.4	 	 	1.94	 	 	55,653.8	 	 	283.6	 	 	2.04	 	
Funds purchased	 	 	9,597.1	 	 	34.2	 	 	1.40	 	 	9,670.5	 	 	34.1	 	 	1.40	 	
Other short-term borrowings	 	 	867.0	 	 	3.5	 	 	1.59	 	 	783.7	 	 	3.4	 	 	1.71	 	
Long-term debt	 	 	11,950.0	 	 	154.5	 	 	5.13	 	 	11,889.9	 	 	157.5	 	 	5.31	 	
 	 	 			 			 			 			 			 			 	
 	Total interest-bearing liabilities	 	 	78,275.0	 	 	465.6	 	 	2.36	 	 	77,997.9	 	 	478.6	 	 	2.46	 	
Noninterest-bearing deposits	 	 	15,237.1	 	 	 	 	 	 	 	 	14,992.2	 	 	 	 	 	 	 	
Other liabilities	 	 	5,390.5	 	 	 	 	 	 	 	 	4,758.8	 	 	 	 	 	 	 	
Realized shareholders’ equity	 	 	7,095.9	 	 	 	 	 	 	 	 	6,901.5	 	 	 	 	 	 	 	
Accumulated other comprehensive income	 	 	1,847.4	 	 	 	 	 	 	 	 	1,841.6	 	 	 	 	 	 	 	
 	 	 			 			 			 			 			 			 	
 	Total liabilities and shareholders’ equity	 	$	107,845.9	 	 	 	 	 	 	 	$	106,492.0	 	 	 	 	 	 	 	
 	 			 			 			 			 			 			 	
Interest rate spread	 	 	 	 	 	 	 	 	2.96	%	 	 	 	 	 	 	 	3.05	%	
 	 	 			 			 			 			 			 			 	
Net Interest Income	 	 	 	 	$	815.1	 	 	 	 	 	 	 	$	823.1	 	 	 	 	
 	 	 			 			 			 			 			 			 	
Net Interest Margin(3)	 	 	 	 	 	 	 	 	3.38	%	 	 	 	 	 	 	 	3.48	%	

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 	 	Quarter Ended	 	
 	 		 	
 	 	September 30, 2001	 	
 	 		 	
 	 	Average
Balances	 	Income/
Expense	 	Yields/
Rates	 	
 	 		 		 		 	
Assets	 	 	 	 	 	 	 	 	 	 	
Loans:(1)	 	 	 	 	 	 	 	 	 	 	
 	Taxable	 	$	67,894.6	 	$	1,162.1	 	 	6.79	%	
 	Tax-exempt(2)	 	 	1,129.4	 	 	19.1	 	 	6.71	 	
 	 			 			 			 	
 	Total loans	 	 	69,024.0	 	 	1,181.2	 	 	6.79	 	
Securities available for sale:	 	 	 	 	 	 	 	 	 	 	
 	Taxable	 	 	15,152.8	 	 	248.9	 	 	6.57	 	
 	Tax-exempt(2)	 	 	447.8	 	 	9.1	 	 	8.17	 	
 	 			 			 			 	
 	Total securities available for sale	 	 	15,600.6	 	 	258.0	 	 	6.62	 	
Funds sold	 	 	1,271.6	 	 	11.6	 	 	3.57	 	
Loans held for sale	 	 	3,182.5	 	 	57.5	 	 	7.22	 	
Interest-bearing deposits	 	 	323.6	 	 	3.3	 	 	3.99	 	
Trading account	 	 	1,185.7	 	 	8.4	 	 	2.83	 	
 	 			 			 			 	
 	Total earning assets	 	 	90,588.0	 	 	1,520.0	 	 	6.66	 	
Allowance for loan losses	 	 	(872.8	)	 	 	 	 	 	 	
Cash and due from banks	 	 	3,315.2	 	 	 	 	 	 	 	
Premises and equipment	 	 	1,594.2	 	 	 	 	 	 	 	
Other assets	 	 	4,019.0	 	 	 	 	 	 	 	
Unrealized gains on securities available for sale	 	 	2,602.4	 	 	 	 	 	 	 	
 	 			 			 			 	
 	Total assets	 	$	101,246.0	 	 	 	 	 	 	 	
 	 	 			 			 			 	
Liabilities and Shareholders’ Equity	 	 	 	 	 	 	 	 	 	 	
Interest-bearing deposits:	 	 	 	 	 	 	 	 	 	 	
 	NOW /money market	 	$	8,328.6	 	$	23.9	 	 	1.14	%	
 	Money Market - regular	 	 	16,925.5	 	 	136.6	 	 	3.20	 	
 	Savings	 	 	6,004.6	 	 	40.1	 	 	2.65	 	
 	Consumer time	 	 	8,870.2	 	 	112.1	 	 	5.01	 	
 	Other time	 	 	3,783.0	 	 	47.2	 	 	4.95	 	
 	 			 			 			 	
 	Total interest bearing consumer and commercial deposits	 	 	43,911.9	 	 	359.9	 	 	3.25	 	
 	Brokered deposits	 	 	2,797.6	 	 	28.0	 	 	3.92	 	
 	Foreign deposits	 	 	3,289.0	 	 	29.4	 	 	3.50	 	
 	 			 			 			 	
 	Total interest-bearing deposits	 	 	49,998.5	 	 	417.3	 	 	3.31	 	
Funds purchased	 	 	10,616.7	 	 	84.8	 	 	3.13	 	
Other short-term borrowings	 	 	1,702.1	 	 	14.6	 	 	3.40	 	
Long-term debt	 	 	12,925.9	 	 	189.4	 	 	5.81	 	
 	 			 			 			 	
 	Total interest-bearing liabilities	 	 	75,243.2	 	 	706.1	 	 	3.72	 	
Noninterest-bearing deposits	 	 	13,169.2	 	 	 	 	 	 	 	
Other liabilities	 	 	4,837.5	 	 	 	 	 	 	 	
Realized shareholders’ equity	 	 	6,305.4	 	 	 	 	 	 	 	
Accumulated other comprehensive income	 	 	1,690.7	 	 	 	 	 	 	 	
 	 			 			 			 	
 	Total liabilities and shareholders’ equity	 	$	101,246.0	 	 	 	 	 	 	 	
 	 	 			 			 			 	
Interest rate spread	 	 	 	 	 	 	 	 	2.94	%	
 	 			 			 			 	
Net Interest Income	 	 	 	 	$	813.9	 	 	 	 	
 	 			 			 			 	
Net Interest Margin(3)	 	 	 	 	 	 	 	 	3.56	%	

 

 	 	Nine Months Ended	 	
 	 		 	
 	 	September 30, 2002	 	September 30, 2001	 	
 	 		 		 	
 	 	Average
Balances	 	Income/
Expense	 	Yields/
Rates	 	Average
Balances	 	Income/
Expense	 	Yields/
Rates	 	
 	 		 		 		 		 		 		 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loans:(1)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Taxable	 	$	69,544.1	 	$	2,959.7	 	 	5.69	%	$	69,076.1	 	$	3,805.7	 	 	7.37	%	
 	Tax-exempt(2)	 	 	1,255.0	 	 	52.7	 	 	5.62	 	 	1,107.2	 	 	59.8	 	 	7.22	 	
 	 			 			 			 			 			 			 	
 	Total loans	 	 	70,799.1	 	 	3,012.4	 	 	5.69	 	 	70,183.3	 	 	3,865.5	 	 	7.36	 	
Securities available for sale:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Taxable	 	 	16,215.9	 	 	625.2	 	 	5.14	 	 	15,940.5	 	 	797.1	 	 	6.67	 	
 	Tax-exempt(2)	 	 	411.3	 	 	21.3	 	 	6.91	 	 	451.1	 	 	27.9	 	 	8.24	 	
 	 			 			 			 			 			 			 	
 	Total securities available for sale	 	 	16,627.2	 	 	646.5	 	 	5.18	 	 	16,391.6	 	 	825.0	 	 	6.71	 	
Funds sold	 	 	1,357.6	 	 	18.5	 	 	1.79	 	 	1,269.4	 	 	43.9	 	 	4.56	 	
Loans held for sale	 	 	3,798.2	 	 	188.1	 	 	6.60	 	 	2,671.2	 	 	145.9	 	 	7.29	 	
Interest-bearing deposits	 	 	353.1	 	 	4.7	 	 	1.80	 	 	145.3	 	 	4.5	 	 	4.11	 	
Trading account	 	 	1,573.8	 	 	19.3	 	 	1.64	 	 	1,236.2	 	 	34.3	 	 	3.72	 	
 	 			 			 			 			 			 			 	
 	Total earning assets	 	 	94,509.0	 	 	3,889.5	 	 	5.50	 	 	91,897.0	 	 	4,919.1	 	 	7.16	 	
Allowance for loan losses	 	 	(922.3	)	 	 	 	 	 	 	 	(879.4	)	 	 	 	 	 	 	
Cash and due from banks	 	 	3,270.6	 	 	 	 	 	 	 	 	3,336.9	 	 	 	 	 	 	 	
Premises and equipment	 	 	1,622.6	 	 	 	 	 	 	 	 	1,604.2	 	 	 	 	 	 	 	
Other assets	 	 	5,117.2	 	 	 	 	 	 	 	 	3,912.9	 	 	 	 	 	 	 	
Unrealized gains on securities available for sale	 	 	2,792.1	 	 	 	 	 	 	 	 	2,676.4	 	 	 	 	 	 	 	
 	 			 			 			 			 			 			 	
 	Total assets	 	$	106,389.2	 	 	 	 	 	 	 	$	102,548.0	 	 	 	 	 	 	 	
 	 			 			 			 			 			 			 	
Liabilities and Shareholders’ Equity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest-bearing deposits:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	NOW /money market	 	$	10,080.6	 	$	55.9	 	 	0.74	%	$	8,319.7	 	$	81.0	 	 	1.30	%	
 	Money Market - regular	 	 	20,140.5	 	 	251.2	 	 	1.67	 	 	15,097.5	 	 	426.0	 	 	3.77	 	
 	Savings	 	 	6,336.8	 	 	67.4	 	 	1.42	 	 	6,092.7	 	 	143.1	 	 	3.14	 	
 	Consumer time	 	 	9,403.5	 	 	268.9	 	 	3.82	 	 	9,273.1	 	 	371.1	 	 	5.35	 	
 	Other time	 	 	3,715.2	 	 	80.0	 	 	2.88	 	 	3,947.5	 	 	162.1	 	 	5.49	 	
 	 			 			 			 			 			 			 	
 	Total interest bearing consumer and commercial deposits	 	 	49,676.6	 	 	723.4	 	 	1.95	 	 	42,730.5	 	 	1,183.3	 	 	3.70	 	
 	Brokered deposits	 	 	2,477.9	 	 	99.3	 	 	5.28	 	 	2,519.0	 	 	94.0	 	 	4.92	 	
 	Foreign deposits	 	 	2,710.0	 	 	35.3	 	 	1.72	 	 	5,788.1	 	 	209.2	 	 	4.77	 	
 	 			 			 			 			 			 			 	
 	Total interest-bearing deposits	 	 	54,864.5	 	 	858.0	 	 	2.09	 	 	51,037.6	 	 	1,486.5	 	 	3.89	 	
Funds purchased	 	 	9,834.0	 	 	103.9	 	 	1.39	 	 	11,601.9	 	 	365.1	 	 	4.15	 	
Other short-term borrowings	 	 	970.5	 	 	11.6	 	 	1.60	 	 	1,597.7	 	 	54.6	 	 	4.57	 	
Long-term debt	 	 	12,036.5	 	 	470.1	 	 	5.22	 	 	12,371.4	 	 	549.7	 	 	5.94	 	
 	 			 			 			 			 			 			 	
 	Total interest-bearing liabilities	 	 	77,705.5	 	 	1,443.6	 	 	2.48	 	 	76,608.6	 	 	2,455.9	 	 	4.29	 	
Noninterest-bearing deposits	 	 	14,944.2	 	 	 	 	 	 	 	 	13,266.5	 	 	 	 	 	 	 	
Other liabilities	 	 	5,046.7	 	 	 	 	 	 	 	 	4,687.0	 	 	 	 	 	 	 	
Realized shareholders’ equity	 	 	6,910.4	 	 	 	 	 	 	 	 	6,259.7	 	 	 	 	 	 	 	
Accumulated other comprehensive income	 	 	1,782.4	 	 	 	 	 	 	 	 	1,726.2	 	 	 	 	 	 	 	
 	 			 			 			 			 			 			 	
 	Total liabilities and shareholders’ equity	 	$	106,389.2	 	 	 	 	 	 	 	$	102,548.0	 	 	 	 	 	 	 	
 	 			 			 			 			 			 			 	
Interest rate spread	 	 	 	 	 	 	 	 	3.02	%	 	 	 	 	 	 	 	2.87	%	
 	 			 			 			 			 			 			 	
Net Interest Income	 	 	 	 	$	2,445.9	 	 	 	 	 	 	 	$	2,463.2	 	 	 	 	
 	 			 			 			 			 			 			 	
Net Interest Margin(3)	 	 	 	 	 	 	 	 	3.46	%	 	 	 	 	 	 	 	3.58	%	

(1)	Interest income includes net loan fees of $29.3, $31.8 and $36.9 million in the quarters ended September 30 and June 30, 2002 and September 30, 2001 and $90.5 and $108.5 million for the nine months ended September 30, 2002 and 2001, respectively.  Nonaccrual loans are included in average balances and income on such loans, if recognized, is recorded on a cash basis.	
(2)	Interest income includes the effects of taxable-equivalent adjustments (reduced by the nondeductible portion of interest expense) using a federal income tax rate of 35% and, where applicable, state income taxes, to increase tax-exempt interest income to a taxable-equivalent basis.  The net taxable-equivalent adjustment amounts included in the above table aggregated $10.0, $9.7 and $10.1 million in the quarters ended September 30 and June 30, 2002 and September 30, 2001 and $29.3 and $30.7 million for the nine months ended September 30, 2002 and 2001, respectively.	
(3)	Derivative instruments used to help manage SunTrust’s interest-sensitivity position decreased net interest income $11.5, $11.7 and $17.2 million in the quarters ended September 30 and June 30, 2002 and September 30, 2001, respectively, and decreased net interest income $44.5 and $20.6 million for the nine months ended September 30, 2002 and 2001, respectively.  Without these instruments, the net interest margin would have been 3.43%, 3.53%, and 3.64% in the quarters ended September 30 and June 30, 2002 and September 30, 2001, respectively, and 3.52% and 3.61% for the nine months ended September 30, 2002 and 2001, respectively.	
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Table of Contents
Business Segments. Prior to 2001, the Company’s segment disclosures were aligned with its geographic regions as defined by its former multiple bank charters.  During 2000, as a result of the consolidation of its multiple bank charters into a single legal entity, the Company began to redefine its operating model and created a line of business management structure to overlay its former multiple bank management structure.  Beginning in January 2001, the Company implemented significant changes to its internal management reporting system to begin to measure and manage certain business activities by line of business.  For more financial details on business segment disclosures, please see Note 7 – Business Segment Reporting in the Notes to the Financial Statements. The lines of business are defined as follows:
Retail
The Retail line of business includes loans, deposits, and other fee based services for consumer and private banking clients, as well as business clients with less than $5 million in sales.  Retail serves clients through an extensive network of traditional and in-store branches, ATMs, and SunTrust Online (STOLI), the telephone and Internet banking channel.  In addition to serving the retail market, the Retail line of business serves as a “port of entry” for new customers who are referred to other lines of business.  When client needs change and expand, Retail promotes existing clients into the Private Client Services and Commercial lines of business.
Commercial
The Commercial line of business provides enterprises with a full array of financial solutions including traditional commercial lending, treasury management, financial risk management products and corporate card services.  The primary customer segments served by this line of business include “Commercial” ($5 million to $50 million in annual revenues), “Middle Market”  ($50 million to $250 million in annual revenues), “Commercial Real Estate” (entities that specialize in Commercial Real Estate activities), “Financial Institutions” (correspondent banking entities), and “Government/Not-for-Profit” entities.  Also included in this segment are specialty groups that operate both within and outside of the SunTrust footprint such as Receivables Capital Management (factoring services), Affordable Housing (tax credits related to community development), and Premium Assignment Corporation (insurance premium financing).
Corporate and Investment Banking
Corporate and Investment Banking serves firms with over $250 million in annual revenues in a variety of industries both inside and outside the SunTrust footprint.  Industry Specialties include Media & Communications, Energy, Healthcare, Franchise & Distributor Finance, Restaurants, Agrifoods, Fabrics & Furnishings, Business Services, Retail & Consumer, and Technology.
Corporate and Investment Banking is comprised of the following units: Corporate Banking, Treasury Management, International Banking, SunTrust Leasing, SunTrust Robinson Humphrey Debt Capital Markets, SunTrust Robinson Humphrey Equity Capital Markets, and SunTrust Equity Partners.  These units offer commercial lending and treasury management services, as well as numerous products and services outside of the traditional commercial lending environment.
Mortgage
The Mortgage line of business originates mortgage loans through retail, broker and correspondent channels. These loans are securitized and sold in the secondary market with servicing rights retained or held in the Company’s residential loan portfolio.  The line of business services loans for its own residential mortgage portfolio as well as for others.
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Table of Contents
Private Client Services
Private Client Services (“PCS”) provides a full array of asset management products and professional services to both individual and institutional clients.  PCS’ primary segments include brokerage, individual wealth management, and institutional investment management and administration.  Individual clients seeking brokerage services may choose between PCS’ discount/online, mid-tier, or full service brokerage offerings.  PCS also offers professional investment management and trust services to clients seeking active management of their financial resources.  Institutional investment management and administration is comprised of Trusco Capital Management, Inc. (“Trusco”), Retirement Services, Endowment & Foundation Services, Corporate Trust, and Stock Transfer. Retirement Services provides administration and custody services for 401(k) and employee defined benefit plans. Endowment & Foundation Services also provides administration and custody services to non-profit organizations, including government agencies, colleges and universities, community charities and foundations, and hospitals. Corporate Trust targets issuers of tax-exempt and corporate debt and asset-based securities, as well as corporations and attorneys requiring escrow and custodial services.  Trusco is a registered investment advisor that acts as the investment manager for PCS’ institutional clients and the STI Classic Funds.
Corporate/Other
Corporate/Other (“Other”) includes the investment securities portfolio, long-term debt, capital, derivative instruments, short-term liquidity and funding activities, balance sheet risk management, office premises and certain support activities not currently allocated to the aforementioned lines of business.  The major components of the Other line of business include Enterprise Information Services, which is the primary data processing and operations group, the Corporate Real Estate group, which manages occupancy expense, Marketing, which handles advertising, product management and customer information functions, SunTrust Online, which handles customer phone inquiries and phone sales and manages the internet banking function, Human Resources, which includes the recruiting, training and employee benefit administration functions, Finance, which includes accounting, budgeting, planning, audit, tax, treasury, risk management and internal control.  Other functions included in the Other line of business are credit risk management, legal and compliance, corporate strategies development and the executive management group.  The Other line of business also contains certain expenses that have not been allocated to the primary lines of business, eliminations, and the residual offsets derived from matched-maturity funds transfer pricing and provision for loan losses/credit risk premium allocations.
The following table for SunTrust’s reportable business segments compares total income before taxes for the three and nine months ended September 30, 2002 to the same periods last year:
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Total Income Before Taxes and Extraordinary Items	Table 3	

 	 	Three Months Ended	 	
 	 			 	
(Dollars in thousands) (Unaudited)	 	September 30, 2002	 	 	September 30, 2001	 	
	 			 			 	
Retail	 	$	195,152	 	$	190,186	 	
Commercial	 	 	125,114	 	 	93,934	 	
Corporate and Investment Banking	 	 	60,038	 	 	62,830	 	
Mortgage	 	 	32,250	 	 	33,634	 	
Private Client Services	 	 	58,662	 	 	58,424	 	
Corporate/Other	 	 	17,943	 	 	68,305	 	
 	 			 			 	
 	Total Consolidated FTE Adjusted	 	 	489,159	 	 	507,313	 	
Less: FTE Adjustments	 	 	10,013	 	 	10,051	 	
 	 			 			 	
 	Total Consolidated	 	$	479,146	 	$	497,262	 	

 	 	Nine Months Ended	 	
 	 			 	
 	 	September 30, 2002	 	September 30, 2001	 	
 	 			 			 	
Retail	 	$	560,548	 	$	605,183	 	
Commercial	 	 	333,348	 	 	287,158	 	
Corporate and Investment Banking	 	 	125,493	 	 	186,335	 	
Mortgage	 	 	110,251	 	 	81,685	 	
Private Client Services	 	 	168,024	 	 	178,732	 	
Corporate/Other	 	 	133,024	 	 	251,870	 	
 	 			 			 	
 	Total Consolidated FTE Adjusted	 	 	1,430,688	 	 	1,590,963	 	
Less: FTE Adjustments	 	 	29,282	 	 	30,660	 	
 	 			 			 	
 	Total Consolidated	 	$	1,401,406	 	$	1,560,303	 	
 	 	 			 			 	
The following table for SunTrust’s reportable business segments compares average loans and  average deposits for the three and nine months ended September 30, 2002 to the same periods last year:
Table 4

(Dollars in thousands) (Unaudited)	 	Three Months Ended	 	
	 		 	
 	 	September 30, 2002	 	September 30, 2001	 	
 	 		 		 	
Lines of Business	 	Average loans	 	Average deposits	 	Average loans	 	Average deposits	 	
	 			 			 			 			 	
Retail	 	$	22,413,991	 	$	51,995,855	 	$	18,394,479	 	$	45,904,390	 	
Commercial	 	 	20,545,108	 	 	9,972,986	 	 	18,876,506	 	 	7,644,129	 	
Corporate and Investment Banking	 	 	15,072,829	 	 	1,383,168	 	 	16,600,242	 	 	1,411,073	 	
Mortgage	 	 	12,054,639	 	 	1,020,741	 	 	13,021,518	 	 	817,136	 	
Private Client Services	 	 	1,604,610	 	 	1,501,570	 	 	1,328,754	 	 	1,265,739	 	

 	 	Nine Months Ended	 	
 	 		 	
 	 	September 30, 2002	 	September 30, 2001	 	
 	 		 		 	
Lines of Business	 	Average loans	 	Average deposits	 	Average loans	 	Average deposits	 	
	 			 			 			 			 	
Retail	 	$	21,407,273	 	$	51,229,878	 	$	18,145,117	 	$	45,024,592	 	
Commercial	 	 	20,135,920	 	 	9,374,773	 	 	18,629,350	 	 	7,276,330	 	
Corporate and Investment Banking	 	 	15,402,532	 	 	1,400,209	 	 	17,876,077	 	 	1,482,367	 	
Mortgage	 	 	12,114,800	 	 	882,708	 	 	13,620,943	 	 	732,613	 	
Private Client Services	 	 	1,564,432	 	 	1,522,293	 	 	1,220,529	 	 	1,316,764	 	
The following analysis details the operating results for each line of business for the three and nine months ended September 30, 2002 and 2001.
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Retail
Retail’s third quarter of 2002 income before taxes was $195.2 million, which was $5.0 million, or 2.6%, higher than the third quarter of 2001.  The increase in income before taxes is attributable to higher noninterest revenue (primarily service charges resulting from improved consistent pricing and growth in deposit balances) combined with balance sheet growth in both loans and deposits.
Average loan balances for the third quarter of 2002 were $22.4 billion, a $4.0 billion, or 21.9%, increase from the third quarter of 2001.  Year to date average loan balances also showed strong growth, increasing $3.3 billion, or 18.0%, compared to the prior year.  Loan balances acquired from Huntington provided 36.2% of the quarter to date growth and 38.9% of the year to date growth.  Deposit balances also experienced double digit growth. Average deposit balances for the third quarter of 2002 were $52.0 billion, a $6.1 billion, or 13.3%, increase from the third quarter of 2001.  The year to date average deposit balances grew $6.2 billion, or 13.8%, compared to the prior year.  Deposit balances acquired from Huntington provided 59.8% of the quarter to date growth and 51.3% of the year to date growth.
Commercial
Commercial’s income before taxes increased $31.2 million, or 33.2%, for the third quarter of 2002 versus the third quarter of 2001.  Year to date income before taxes through September 30, 2002 grew $46.2 million, or 16.1%, from the comparable 2001 period.  Factoring fees have been prospectively reclassified into noninterest income in 2002.  Factoring fees of $6.0 million and $17.4 million for the third quarter and first nine months, respectively, were recorded in net interest income in 2001.  Adjusting for the factoring reclassification, third quarter 2002 net interest income grew $12.3 million, or 9.6%, while the year to date 2002 net interest income growth was $18.9 million, or 4.8%, over the comparable periods.
Net interest income from loans increased due to higher loan volumes and wider spreads.  Average loans, excluding Huntington, increased $957.8 million, or 5.1%, from the third quarter of 2001 and $896.8 million, or 4.8%, from year to date September 30, 2001. Average Huntington loan balances of $711.0 million and $609.8 million for the third quarter and nine months ended September 30, 2002, respectively, were excluded for comparison purposes.  Average deposits, excluding Huntington, increased $2.1 billion, or 27.8%, from the third quarter of 2001 and $1.9 billion, or 26.4%, from year to date September 30, 2001.  Average Huntington deposit balances of $207.3 million and $180.6 million for third quarter and nine months ended September 30, 2002, respectively, were excluded for comparison purposes.  The deposit growth reflects SunTrust’s commitment to raise core deposits.  Additionally, the increase in deposits reflects limited industrial investment opportunity among clients and prospects due to capacity concerns resulting from a depressed economic state.
Adjusting for the factoring reclassification, noninterest income grew $5.4 million, or 7.9%, and $21.7 million, or 10.8%, for the third quarter and nine months ended September 30, 2002, respectively, compared to prior periods. The year to date noninterest income growth was driven by an increase in service charges on deposit accounts resulting from reduced interest rates and, consequently, reduced compensating balance values.  Noninterest expenses decreased in total $11.2 million, or 12.2%, compared to the third quarter of 2001 and $11.0 million, or 3.9%, compared to the nine months ended September 30, 2001, despite increased staffing resulting from the Huntington acquisition.
Corporate and Investment Banking
Corporate and Investment Banking’s income before taxes decreased $2.8 million, or 4.4%, in the third quarter of 2002 compared to the third quarter of 2001.  Noninterest expense declined $25.3 million, or 24.2%, primarily the result of lower personnel related expenses.  This improvement was offset by a $17.7 million, or 79.4%, increase in
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credit risk premium expense.  On a year to date basis, income before taxes declined $60.8 million, or 32.7%, largely driven by a $113.3 million, or 198.6%, increase in the credit risk premium.  Year to date noninterest revenue was up $88.0 million, or 29.7%, versus the prior year, $71.1 million of which relates to SunTrust Robinson Humphrey Equity Capital Markets which was acquired during the third quarter of 2001.  Strong growth in deposit account service charges, loan fees and letters of credit fees also contributed to the growth in noninterest revenue.  In addition, year to date 2002 includes better management of expenses in a challenging operating environment.  Noninterest expense decreased $4.5 million, or 1.7%, compared to the nine months ended September 30, 2001.  For the quarter and year to date, average assets declined $538.9 million, or 2.6%, and $1,628.9 million, or 7.5%, respectively.  These decreases were driven by a reduction in loan balances associated with the significant level of public debt issuance, the lack of loan demand related to the current economic conditions, and a conscious effort to exit marginally profitable relationships.
Mortgage
The Mortgage line of business’ 2002 third quarter income before taxes was down $1.4 million, or 4.1%, from the comparable quarter last year primarily due to higher mortgage servicing rights amortization expense.  Income before taxes for the nine months ended September 30, 2002 was up $28.6 million, or 35.0%, over the same 2001 period.  Driven by record low interest rates, which sparked record high mortgage loan production of $8.1 billion in the third quarter of 2002, net interest income was up $19.3 million, or 29.0%, compared to the third quarter of 2001.  For the nine months ended September 30, 2002, mortgage loan production of $19.5 billion contributed to an increase in net interest income of $102.2 million, or 63.0%. The higher net interest income in both periods was primarily a result of wider spreads and higher mortgage loans held for sale volume resulting from record mortgage loan production.  Noninterest income was down $25.6 million in the third quarter of 2002 compared to the third quarter of 2001.  Higher mortgage servicing rights amortization expense resulting from record loan payoff levels as well as higher amortization expense on existing serviced loans offset gains in production income.  For the nine months ended September 30, 2002, noninterest income was down $60.3 million compared to the prior year to date primarily due to higher mortgage servicing rights amortization expense and costs related to holding mortgage loans prior to their sale in the secondary market.  Noninterest expense increased $13.8 million, or 6.1%, for the nine months ended September 30, 2002 over the comparable period of 2001 primarily due to increased commission-based compensation resulting from record levels of loan production.
Private Client Services
Private Client Services’ income before taxes increased $0.2 million, or 0.4%, for the third quarter of 2002 compared to the third quarter of 2001 and decreased $10.7 million, or 6.0%, for the nine month period ended September 30, 2002 compared to the same period in 2001.  Trust and investment management income increased 3.4% and 4.4% over the third quarter of 2001 and prior year to date, respectively.  Assets under management as of September 30, 2002 and September 30, 2001 were both approximately $88 billion.  Despite the significant decline in the equity markets, trust and investment management income has been able to moderately increase due to assets under management remaining relatively stable throughout 2002.  Assets under management did not decline to the same extent as the equity markets due to strong net new business and an appreciation in bond values.  Retained business is satisfactory given market conditions and is comparable with prior periods; however, new business is up significantly compared to 2001.  Assets under management include individually managed assets, the STI Classic Funds, institutional assets managed by Trusco Capital Management, and participant directed retirement accounts.  As of September 30, 2002 SunTrust’s total assets under advisement were approximately $161 billion, which included $26 billion held in non-managed corporate trust accounts and $16 billion in retail brokerage accounts, including $1 billion in Alexander Key.
Retail investment income increased 30.9% and 31.5% over the third quarter of 2001 and for the first nine months of 2001, respectively.  The increase is primarily due to an increase in broker production and the number of
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brokers.  The Company launched its full service brokerage division, Alexander Key, during the second quarter of 2002 and continued to build its broker network.  Thus far the division has generated nominal revenue.
Noninterest expense increased 12.2% and 18.5% over the third quarter of 2001 and for the first nine months of 2001, respectively.  The increase in noninterest expense is due to higher incentive expense associated with the increase in new business and the investment in the core business, new product capabilities, and new distribution channels.  The increase in assets and liabilities is due to loan and deposit growth.
Corporate/Other
The Corporate/Other line of business’ third quarter income before taxes decreased from $68.3 million in 2001 to $17.9 million in 2002.  The September year to date income before taxes decreased from $251.9 million in 2001 to $133.0 million in 2002.  Average total liabilities declined $3.3 billion, or 10.4%, in the third quarter of 2002 from the same quarter in 2001 and $5.1 billion, or 15.0%, in the first nine months of 2002 compared to the same period in 2001, primarily as a result of consumer and commercial deposit growth from the other business lines that eliminated the need for borrowings.  The year to date net interest income declined as a result of the balance sheet repositioning and the residual offsets derived from matched maturity funds transfer pricing.  Noninterest revenue decreased $14.5 million in the third quarter of 2002 compared to the same quarter in the prior year.  Noninterest revenue increased $19.4 million for the first nine months of 2002 compared to the first nine months of 2001 primarily due to security gains realized as a result of the Company repositioning its balance sheet for rising rates by shortening its maturity and changing the mix to more floating rate assets.  Noninterest expense increased $49.1 million in the third quarter of 2002 compared to the same quarter in the prior year and $35.7 million for the first nine months of 2002 compared to the same period in 2001.  This increase is primarily the result of increased amortization of intangibles expense from the Huntington acquisition.
Interest Rate and Market Risk. The normal course of business activity exposes SunTrust to interest rate risk. Fluctuations in interest rates may result in changes in the fair market value of the Company’s financial instruments, cash flows and net interest income.  SunTrust’s asset/liability management process manages the Company’s interest rate risk position.  The objective of this process is the optimization of the Company’s financial position, liquidity and net interest income, while limiting the volatility to net interest income from changes in interest rates.
SunTrust uses a simulation modeling process to measure interest rate risk and evaluate potential strategies.  These simulations incorporate assumptions regarding balance sheet growth and mix, pricing, and the repricing and maturity characteristics of the existing and projected balance sheet.  Other interest-rate-related risks such as prepayment, basis and option risk are also considered.  Simulation results quantify interest rate risk under various interest rate scenarios.  Senior management regularly reviews the overall interest rate risk position and develops and implements strategies to manage the risk.
Management estimates the Company’s net interest income for the next twelve months would increase 0.6% under a gradual increase (25 basis points per quarter) in interest rates of 100 basis points, versus the projection under stable rates.  Net interest income would decrease 0.8% under a gradual decrease (25 basis points per quarter) in interest rates of 100 basis points, versus the projection under stable rates.  The interest sensitivity levels were unchanged from June 30, 2002.
The projections of interest rate risk do not necessarily include certain actions that management may undertake to manage this risk in response to anticipated changes in interest rates.
Other sources of market risk include mortgage servicing rights (MSR’s), the risk associated with holding loans prior to selling them into the secondary market, primarily residential real estate, and risk from trading account activities.  The company does not specifically hedge the MSR asset, and the fair value determination of the
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MSR’s is discussed on page 33.  The company does hedge loans held for sale, and has set exposure limits on the risk associated with the changes in market value of the loans held for sale.  Trading account market risk is managed using a Value at Risk (VAR) approach.  VAR represents an estimation of the maximum amount that the Company has placed at risk of loss in the course of trading activities, using a specified degree of confidence.
Net Interest Income/Margin.  Net interest income for the first nine months of 2002 decreased 0.7% or $17.3 million to $2,445.9 million from the first nine months of 2001 and increased 0.2%, or $1.2 million, to $815.1 million for the third quarter 2002 compared to the third quarter 2001.  The decrease in net interest income for the nine months ended and the slight increase in third quarter were both adversely impacted by continued weak loan demand resulting from the sluggish economy.  Average loans adjusted for securitizations and the acquisition of Huntington, decreased 2.9% from the first nine months of 2001 and were flat compared to the third quarter of 2001.
In addition to weak loan demand, net interest income was negatively impacted by other factors.  The shift in the Company’s balance sheet to a slightly asset sensitive position in anticipation of rising interest rates has not produced the expected margin benefit since rates have not risen and the yield curve flattened during the third quarter of 2002.  Acceleration of prepayments in the mortgage industry reduced the yield on the residential mortgage loan and the mortgage-backed securities portfolios.  The direct consumer loan portfolio yield declined 137 basis points in third quarter 2002 compared to third quarter 2001 and declined 188 basis points for the nine months ended of 2002 compared to 2001.  These yield declines were primarily the result of the annual repricing in July of the student loan portfolio, which is tied to the 91-day May T-bill rate.  The T-bill rate decreased 193 basis points from 2001 to 2002.
Adjusting for Huntington, average earning assets decreased 0.4% and average interest-bearing liabilities decreased 3.3% compared to the first nine months of last year.  Including Huntington, average earning assets increased 2.8% and interest-bearing liabilities increased 1.4%.  The adverse impact of the declining rate environment more than offset the favorable increase due to higher volume.  The declining rate environment coupled with the factors described above resulted in the net interest margin declining 12 basis points to 3.46% for the first nine months of 2002 compared to 3.58% in the prior period.
SunTrust restructured its balance sheet throughout 2001 and into 2002 to shift interest rate risk from a liability sensitive position to a slightly asset sensitive position.  The restructuring has been concentrated in the investment portfolio and long term debt.  The Company believes it is now positioned to benefit from a rising interest rate environment.  However, the Company will continue to evaluate its present portfolio mix relative to market valuations and buy and sell securities that meet its overall interest rate strategies.
As part of its on going balance sheet management, the Company continues to take steps to obtain alternative lower cost funding sources such as developing initiatives to grow retail deposits to maximize net interest income. Campaigns to attract consumer deposits were implemented in the first quarter of 2001 and again in the second quarter of 2002.  The Company also believes deposit growth has benefited from the volatility in the financial markets.  Excluding the effects of Huntington, average money market deposits have grown 27.9%, NOW accounts 16.4% and demand deposits 9.2% compared to the first nine months of 2001.
Interest income that the Company was unable to recognize on nonperforming loans had a negative impact of three basis points for both the first nine months of 2002 and 2001.
Noninterest Income.   Noninterest income in the third quarter and first nine months of 2002 increased $30.5 million, or 5.5%, and $223.8 million, or 14.0%, from the comparable periods last year.  The favorable results are attributed to improvements in the equity and debt markets as the Company’s investment banking income increased $6.4 million, or 19.2%, to $39.8 million compared to the third quarter of 2001 and $70.5 million, or
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105.4%, to $137.4 million compared to the first nine months of 2001.  Also, the increase in investment banking income is a result of the enhanced sales force through the acquisition of the institutional business of Robinson-Humphrey in the third quarter of 2001.  Investment banking income decreased $12.9 million, or 24.5%, compared to the second quarter of 2002 primarily due to weaker equity markets in the third quarter compared to the second quarter of 2002.  Also impacting the decline was a $5.3 million loan syndication fee received in the second quarter of 2002.
In the third quarter of 2002, the Company substantially completed the repositioning of its securities portfolio to take strategic advantage of market price fluctuations by sales and reinvestment of securities.  This continued to shorten the average life of the securities portfolio from 4.2 years to 3.0 years as of September 30, 2001 and 2002, respectively.  In 2002, securities gains of $45.8 million and $165.0 million were recorded during the third quarter and the first nine months as a result of these actions.  Credit card and other fees includes debit card interchange income of $20.0 million for the third quarter of 2002 and $62.1 million for the first nine months of 2002.  This compares favorably to $15.4 million and $43.9 million for the same periods of 2001.  The increase in debit card income is a result of an ongoing marketing campaign for debit cards along with higher acceptance and utilization of the product by customers.  As compared to the third quarter and first nine months of 2001, service charges on deposits and other charges and fees increased a combined $43.1 million, or 22.6%, and $130.1 million, or 23.7%, respectively.  These income items improved due to the increased usage of products and services, a more consistent pricing strategy, and a lower earnings credit rate.
Negatively impacting noninterest income was a $37.3 million and $46.9 million decrease in mortgage servicing related income compared to the third quarter and first nine months of 2001, respectively.  This is due to the high volume of refinancing activity resulting in accelerated amortization of mortgage servicing rights related to increased prepayments.  This trend is expected to continue into the fourth quarter of 2002.  SunTrust, in accordance with its servicing asset capitalization policy, records the MSR assets at fair value.  Fair value is determined through a review of valuation assumptions that are supported by market and economic data collected from various outside sources.  SunTrust records amortization of the MSR based on two components; first, the Company writes-off the remaining balance of all unamortized MSRs relating to loans paid-in-full in recognition of the termination of future cash flow streams and second, the proportional expense related to surviving MSRs is recognized based on their estimated period of net servicing income which is assessed and updated monthly.
Trust and investment management income decreased 6.3% compared to the second quarter of 2002 and is 4.4% and 3.4% over prior year to date and the third quarter of 2001, respectively.  The decrease compared to prior quarter is attributable to the 17% decline in the equity markets, which resulted in assets under management declining 5.3% to approximately $88 billion as of September 30, 2002.  Compared to September 30, 2001, assets under management are flat.  Assets under management include individually managed assets, the STI Classic Funds, institutional assets managed by Trusco Capital Management, and participant directed retirement accounts. SunTrust’s total assets under advisement were approximately $161 billion, which included $26 billion held in non-managed corporate trust accounts and $16 billion in retail brokerage accounts, including $1 billion in Alexander Key.  Assets under management did not decline to the same extent as the equity markets due to net new business and an appreciation in bond values.  Lost business is comparable with prior periods; however, new business is up significantly compared to 2001 but declined moderately compared to the second quarter of 2002 primarily due to the uncertainty in the financial markets.  The equity markets have continued to be volatile subsequent to quarter end.  Continued volatility may have an adverse impact on trust and investment management income.
Retail investment income decreased 6.0% compared to the second quarter of 2002 and is 31.5% and 30.9% over prior year and the third quarter of 2001, respectively.  The decrease compared to prior quarter is due to the poor performance of the equity markets, which resulted in lower sales and lower fee based income.  The increase compared to 2001 is primarily due to an increase in broker production and the number of brokers.  The Company
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launched its full service brokerage division, Alexander Key, during the second quarter of 2002 and continued to build its broker network.  Thus far the division has generated nominal revenue.

Noninterest Income	 	 	 	 	 	 	 	 	 	 	 	 	 	Table 5	

 	 	Quarters	 	
 	 		 	
 	 	2002	 	2001	 	
 	 		 		 	
(Dollars in millions) (Unaudited)	 	3	 	2	 	1	 	4	 	3	 	
	 			 			 			 			 			 	
Service charges on deposit accounts	 	$	157.0	 	$	153.8	 	$	146.0	 	$	135.5	 	$	129.1	 	
Trust and investment management income	 	 	123.9	 	 	132.2	 	 	129.1	 	 	117.2	 	 	119.8	 	
Other charges and fees	 	 	76.6	 	 	75.6	 	 	70.4	 	 	65.9	 	 	61.3	 	
Investment banking income	 	 	39.8	 	 	52.8	 	 	44.8	 	 	41.6	 	 	33.4	 	
Trading account profits and commissions	 	 	23.6	 	 	24.2	 	 	25.7	 	 	11.0	 	 	30.0	 	
Retail investment services	 	 	35.1	 	 	37.3	 	 	31.3	 	 	28.9	 	 	26.8	 	
Credit card and other fees	 	 	27.4	 	 	31.4	 	 	31.2	 	 	29.4	 	 	28.7	 	
Mortgage production related income	 	 	54.3	 	 	27.1	 	 	30.6	 	 	58.4	 	 	43.1	 	
Mortgage servicing related income	 	 	(36.5	)	 	0.8	 	 	(6.3	)	 	(10.9	)	 	0.8	 	
Other income	 	 	33.9	 	 	34.9	 	 	49.0	 	 	48.6	 	 	41.2	 	
Securities gains	 	 	45.8	 	 	55.7	 	 	63.5	 	 	32.1	 	 	36.2	 	
 	 			 			 			 			 			 	
 	Total noninterest income	 	$	580.9	 	$	625.8	 	$	615.3	 	$	557.7	 	$	550.4	 	
 	 	 			 			 			 			 			 	
Noninterest Expense.   Noninterest expense increased $31.3 million, or 4.0%, and $180.5 million, or 7.9%, in the third quarter and first nine months of 2002 compared to the same periods last year.  Personnel expenses, consisting of salaries, other compensation and employee benefits, increased $20.0 million, or 4.5%, in the third quarter and $131.3 million, or 10.0%, in the first nine months of 2002 from earlier periods.  The increase resulted from increased employee benefits costs and increased headcount through the acquisitions of Huntington, the institutional business of Robinson-Humphrey, and AMA Holdings, Inc.  Included in personnel expenses for the third quarter of 2002 was $0.5 million related to stock option expense.  This was the first quarter that stock option expense was recorded by the Company using the fair value method.  All future employee stock option grants and modifications will be expensed over the stock option vesting period based on the fair value at the date the options are granted using the Black-Scholes valuation model in accordance with SFAS No. 123.
Also impacting noninterest expense was the One Bank initiative.  This initiative involves enhancements to customer based systems across the Company’s geographic footprint and is expected to yield operating efficiencies in the future.  One Bank expenses were $18.3 million and $17.5 million for the third quarter of 2002 and 2001, respectively.  For first nine months ended September 30, 2002 and 2001, One Bank expenses were $44.5 million and $39.1 million, respectively.  The One Bank project is expected to be largely completed by year-end 2002.
In the third quarter of 2002, the acquisition of Huntington resulted in an increase in noninterest expense of $38.1 million, including $16.4 million for the amortization of related intangibles.  In the first nine months of 2002, the acquisition of Huntington resulted in an increase in noninterest expense of $113.5 million.  The $113.5 million includes $16.0 million of one-time merger-related charges for operations and systems integration and $38.2 million for the amortization of related intangible assets.
The third quarter and first nine months of 2001 include $7.2 million and $34.6 million for amortization of goodwill.  Due to the issuance of SFAS No. 142, no goodwill amortization was recorded in 2002.  The Company assessed goodwill for impairment as of January 1, 2002 and it was determined that there was no impairment as of that date.
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The efficiency ratio increased to 57.9% in the third quarter of 2002 compared to 56.9% in the third quarter of 2001 due to the Company’s increased noninterest expenses primarily related to the acquisition of Huntington along with the slowdown in revenue growth, primarily net interest income.

Noninterest Expense	 	 	 	 	 	 	 	 	 	 	 	 	 	Table 6	

 	 	Quarters	 	
 	 		 	
 	 	2002	 	2001	 	
 	 		 		 	
(Dollars in millions) (Unaudited)	 	3	 	2	 	1	 	4	 	3	 	
	 			 			 			 			 			 	
Salaries	 	$	308.1	 	$	321.7	 	$	315.1	 	$	301.3	 	$	293.3	 	
Other compensation	 	 	87.1	 	 	96.7	 	 	79.1	 	 	125.8	 	 	108.5	 	
Employee benefits	 	 	72.2	 	 	72.5	 	 	90.8	 	 	42.4	 	 	45.5	 	
 	 			 			 			 			 			 	
 	Total personnel expense	 	 	467.4	 	 	490.9	 	 	485.0	 	 	469.5	 	 	447.3	 	
Net occupancy expense	 	 	57.6	 	 	55.9	 	 	54.0	 	 	53.6	 	 	55.1	 	
Outside processing and software	 	 	59.9	 	 	54.0	 	 	54.3	 	 	57.0	 	 	51.6	 	
Equipment expense	 	 	42.8	 	 	43.2	 	 	43.7	 	 	51.0	 	 	49.9	 	
Marketing and customer development	 	 	15.7	 	 	18.2	 	 	25.2	 	 	32.7	 	 	25.3	 	
Consulting and legal	 	 	21.6	 	 	21.8	 	 	22.6	 	 	32.4	 	 	25.0	 	
Credit and collection services	 	 	14.2	 	 	16.2	 	 	18.3	 	 	22.4	 	 	20.6	 	
Communications	 	 	16.6	 	 	17.5	 	 	16.7	 	 	16.8	 	 	15.0	 	
Postage and delivery	 	 	17.0	 	 	17.5	 	 	16.6	 	 	16.7	 	 	15.3	 	
Merger-related expenses	 	 	—  	 	 	—  	 	 	16.0	 	 	—  	 	 	—  	 	
Other staff expense	 	 	12.2	 	 	12.1	 	 	13.9	 	 	17.4	 	 	15.3	 	
Operating supplies	 	 	10.3	 	 	12.9	 	 	12.4	 	 	13.3	 	 	12.3	 	
Amortization of intangible assets	 	 	17.5	 	 	17.5	 	 	6.5	 	 	8.6	 	 	8.4	 	
FDIC premiums	 	 	4.4	 	 	4.6	 	 	4.1	 	 	2.7	 	 	2.6	 	
Other real estate (income) expense	 	 	(0.1	)	 	(0.4	)	 	—  	 	 	(0.4	)	 	0.1	 	
Other expense	 	 	51.0	 	 	36.2	 	 	48.3	 	 	36.5	 	 	33.0	 	
 	 			 			 			 			 			 	
 	Total noninterest expense	 	$	808.1	 	$	818.1	 	$	837.6	 	$	830.2	 	$	776.8	 	
 	 			 			 			 			 			 	
Efficiency ratio	 	 	57.9	%	 	56.5	%	 	58.9	%	 	57.1	%	 	56.9	%	
																			
Provision for Loan Losses and Allowance for Loan Losses.  Provision for loan losses totaled $98.7 million in the third quarter of 2002, an increase of $18.5 million, or 23.1%, compared to the third quarter of 2001.  The higher provision was primarily due to continued weakening in certain large corporate credits.
Provision for loan losses for the nine months ended September 30, 2002, totaled $373.3 million, an increase of $186.2 million, or 99.5%, compared to the same period of 2001.  The increase was driven by credit deterioration in the large corporate portfolio and the first quarter acquisition of the Huntington loan portfolio.  The Company added $45.3 million to the Allowance in the first quarter to bring the acquired Huntington loan portfolio into compliance with SunTrust’s credit quality standards.  Net charge-offs for the nine months ended September 30, 2002 were $326.6 million an increase of $141.5 million, or 76.5%, compared to the nine months ended September 30, 2001.  Over one-half of the increase in charge-offs was related to the bankruptcy of a large energy company.
The SunTrust Allowance for Loan Losses Committee meets at least quarterly to affirm the allowance methodology, analyze provision and charge-off trends and assess the adequacy of the allowance.  The allowance analysis is based on regulatory guidance concerning pooled loans and specifically analyzed loans, along with other internal and external factors that affect credit risk.  These other factors consider variables such as the economic environment, concentrations of credit exposure and administrative risks.  These factors are key elements in the assessment of the adequacy of the allowance because of their impact on borrowers’ repayment capacity.
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At September 30, 2002, SunTrust’s allowance for loan losses totaled $929.3 million, or 1.28% of total loans, compared to $867.1 million, or 1.26% of total loans at December 31, 2001.  The increase in the allowance was primarily related to the acquisition of Huntington in the first quarter of 2002.  The allowance as a percentage of total nonperforming loans increased from 155.4% at December 31, 2001 to 167.8% at September 30, 2002.  This improvement resulted from a slight decrease in nonperforming loans combined with the Huntington allowance addition.  The allowance as a percentage of annualized quarterly net charge-offs declined from 273% at September 30, 2001 to 238% at September 30, 2002 due to comparatively higher charge-offs in the third quarter of 2002.  The increase in charge-offs resulted from credit deterioration in several industry sectors, including telecom-related, energy and retail.

Summary of Loan Loss Experience	 	 	 	 	 	 	 	 	 	 	 	 	 	Table 7	

 	 	Quarters	 	
 	 		 	
 	 	2002	 	2001	 	
 	 		 		 	
(Dollars in millions) (Unaudited)	 	3	 	2	 	1	 	4	 	3	 	
	 			 			 			 			 			 	
Allowance for Loan Losses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Balances - beginning of quarter	 	$	928.9	 	$	927.6	 	$	867.1	 	$	866.4	 	$	866.1	 	
 	Allowance from acquisitions and  other activity - net	 	 	—  	 	 	—  	 	 	15.5	 	 	—  	 	 	—  	 	
 	Provision for loan losses	 	 	98.7	 	 	111.0	 	 	163.6	 	 	88.1	 	 	80.2	 	
Charge-offs:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Commercial	 	 	(73.1	)	 	(81.4	)	 	(90.7	)	 	(64.9	)	 	(65.1	)	
 	Real estate:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Construction	 	 	(0.3	)	 	(0.2	)	 	(0.2	)	 	(0.2	)	 	(0.1	)	
 	Residential mortgages	 	 	(3.7	)	 	(3.4	)	 	(2.5	)	 	(2.7	)	 	(2.3	)	
 	Other	 	 	(1.0	)	 	(7.1	)	 	(9.3	)	 	(5.0	)	 	(0.1	)	
 	Commercial credit card	 	 	(0.3	)	 	(0.4	)	 	(0.4	)	 	(1.3	)	 	(0.5	)	
 	Consumer loans	 	 	(36.1	)	 	(31.8	)	 	(33.0	)	 	(27.4	)	 	(23.9	)	
 	 	 			 			 			 			 			 	
 	Total charge-offs	 	 	(114.5	)	 	(124.3	)	 	(136.1	)	 	(101.5	)	 	(92.0	)	
 	 			 			 			 			 			 	
Recoveries:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Commercial	 	 	6.6	 	 	5.2	 	 	7.9	 	 	7.0	 	 	4.5	 	
 	Real estate:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Construction	 	 	—  	 	 	(0.1	)	 	0.2	 	 	(0.4	)	 	0.6	 	
 	Residential mortgages	 	 	1.1	 	 	1.1	 	 	0.6	 	 	0.6	 	 	0.6	 	
 	Other	 	 	1.0	 	 	0.3	 	 	1.1	 	 	0.7	 	 	0.3	 	
 	Commercial credit card	 	 	0.2	 	 	0.3	 	 	0.4	 	 	0.3	 	 	0.3	 	
 	Consumer loans	 	 	7.3	 	 	7.8	 	 	7.3	 	 	5.9	 	 	5.8	 	
 	 	 			 			 			 			 			 	
 	Total recoveries	 	 	16.2	 	 	14.6	 	 	17.5	 	 	14.1	 	 	12.1	 	
 	 	 			 			 			 			 			 	
 	Net charge-offs	 	 	(98.3	)	 	(109.7	)	 	(118.6	)	 	(87.4	)	 	(79.9	)	
 	 	 			 			 			 			 			 	
Balance - end of quarter	 	$	929.3	 	$	928.9	 	$	927.6	 	$	867.1	 	$	866.4	 	
 	 			 			 			 			 			 	
Quarter-end loans outstanding	 	$	72,604.9	 	$	71,822.3	 	$	70,849.1	 	$	68,959.2	 	$	69,630.2	 	
Average loans	 	 	71,695.6	 	 	70,985.1	 	 	69,694.6	 	 	69,547.1	 	 	69,024.0	 	
Allowance to quarter-end loans	 	 	1.28	%	 	1.29	%	 	1.31	%	 	1.26	%	 	1.24	%	
Allowance to nonperforming loans	 	 	167.8	 	 	194.0	 	 	173.6	 	 	155.4	 	 	176.7	 	
Net charge-offs to average loans (annualized)	 	 	0.54	 	 	0.62	 	 	0.69	 	 	0.50	 	 	0.46	 	
Recoveries to total charge-offs	 	 	14.2	 	 	11.7	 	 	12.9	 	 	13.9	 	 	13.2	 	
																															
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Nonperforming Assets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Table 8	

 	 	2002	 	2001	 	
 	 		 		 	
(Dollars in millions) (Unaudited)	 	September 30	 	June 30	 	March 31	 	December 31	 	September 30	 	
	 			 			 			 			 			 	
Nonperforming Assets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Nonaccrual loans:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Commercial	 	$	393.0	 	$	316.4	 	$	349.1	 	$	377.6	 	$	339.1	 	
 	Real Estate:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Construction	 	 	11.1	 	 	7.2	 	 	3.9	 	 	4.0	 	 	4.7	 	
 	Residential mortgages	 	 	81.1	 	 	72.8	 	 	82.4	 	 	79.9	 	 	64.9	 	
 	Other	 	 	42.6	 	 	53.8	 	 	65.3	 	 	62.8	 	 	49.5	 	
 	Consumer loans	 	 	26.0	 	 	28.8	 	 	33.5	 	 	33.8	 	 	32.0	 	
 	 	 			 			 			 			 			 	
 	Total nonperforming loans	 	 	553.8	 	 	479.0	 	 	534.2	 	 	558.1	 	 	490.2	 	
 	Other real estate owned (OREO)	 	 	15.0	 	 	18.2	 	 	18.5	 	 	20.7	 	 	18.9	 	
 	 	 			 			 			 			 			 	
 	Total nonperforming loans and OREO	 	 	568.8	 	 	497.2	 	 	552.7	 	 	578.8	 	 	509.1	 	
 	Other repossessed assets	 	 	25.9	 	 	21.3	 	 	23.6	 	 	21.0	 	 	14.3	 	
 	 	 			 			 			 			 			 	
 	Total nonperforming assets	 	$	594.7	 	$	518.5	 	$	576.3	 	$	599.8	 	$	523.4	 	
 	 			 			 			 			 			 	
 	Ratios:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Nonperforming loans to total loans	 	 	0.76	%	 	0.67	%	 	0.75	%	 	0.81	%	 	0.70	%	
 	Nonperforming loans plus OREO to total loans plus OREO	 	 	0.78	 	 	0.69	 	 	0.78	 	 	0.84	 	 	0.73	 	
 	Nonperforming assets to total loans plus OREO and other repossessed assets	 	 	0.82	 	 	0.72	 	 	0.81	 	 	0.87	 	 	0.75	 	
Accruing Loans Past Due 90 Days or More	 	$	185.8	 	$	175.8	 	$	175.5	 	$	185.5	 	$	177.0	 	
																							
Nonperforming Assets. Nonperforming assets, which consist of nonaccrual loans, other real estate owned and other repossessed assets, decreased $5.0 million, or 0.8%, from December 31, 2001 to September 30, 2002.  The net reduction resulted primarily from charge-offs related to credit deterioration across several industry sectors. The Company’s largest nonperforming loans at September 30, 2002 represent a diverse mix of industries that have been impacted by the economic slowdown that began in 2001, including cable television, agribusiness, telecom-related, textiles, energy and retail industries.
Nonperforming assets increased $76.2 million, or 14.7%, from June 30, 2002 to September 30, 2002 due to an increase in commercial nonperformers caused largely by the credit deterioration of a large cable operator.  As a result of this increase the ratio of the allowance for loan and lease losses to nonperforming loans declined from 194.0% at June 30, 2002 to167.8% at September 30, 2002.  Accruing loans past due 90 days or more, which consist largely of low-risk guaranteed student loans, increased $10.0 million, or 5.7%, from June 30, 2002 to September 30, 2002.  The increase was evenly distributed between several smaller commercial loans and guaranteed student loans.
Interest income on nonaccrual loans, if recognized, is recorded using the cash basis method of accounting.  During the first nine months of 2002, this amounted to $10.3 million.  Interest income of $34.2 million would have been recorded for the first nine months ended September 30, 2002 if all nonaccrual and restructured loans had been accruing interest according to their original contract terms.
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Loan Portfolio by Types of Loans	 	 	 	 	 	 	 	 	 	 	 	 	 	Table 9	

 	 	2002	 	2001	 	
 	 		 		 	
(Dollars in millions) (Unaudited)	 	September 30	 	June 30	 	March 31	 	December 31	 	September 30	 	
	 			 			 			 			 			 	
Commercial	 	$	28,823.9	 	$	28,690.0	 	$	28,832.0	 	$	28,945.9	 	$	29,681.8	 	
Real estate:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Construction	 	 	3,936.7	 	 	3,841.0	 	 	3,731.5	 	 	3,627.3	 	 	3,704.9	 	
 	Residential mortgages	 	 	19,187.5	 	 	18,605.3	 	 	18,054.3	 	 	17,297.1	 	 	17,602.4	 	
 	Other	 	 	8,881.4	 	 	8,802.2	 	 	8,600.2	 	 	8,152.0	 	 	7,898.5	 	
Commercial credit card	 	 	115.6	 	 	102.1	 	 	99.5	 	 	92.0	 	 	85.2	 	
Consumer loans	 	 	11,659.8	 	 	11,781.7	 	 	11,531.6	 	 	10,844.9	 	 	10,657.4	 	
 	 			 			 			 			 			 	
 	Total loans	 	$	72,604.9	 	$	71,822.3	 	$	70,849.1	 	$	68,959.2	 	$	69,630.2	 	
 	 			 			 			 			 			 	
Loans. Total loans at September 30, 2002 were $72.6 billion, an increase of $3.6 billion, or 5.3%, from December 31, 2001 primarily due to the acquisition of Huntington. Excluding the impact of the Huntington transaction and reflecting the soft loan demand typical in an uncertain economy, average loans were flat from the third quarter of 2001. Comparing period end September 30, 2002 to December 31, 2001 without adjustments for Huntington, commercial loans decreased slightly, consumer loans increased 7.5% and real estate loans increased 10.9%. Included in the $19.2 billion in residential mortgages at September 30, 2002 were $4.3 billion of home equity lines of credit, which demonstrated growth of 55.1% over the last nine months, mostly due to the lower rate environment.
As a part of its on-going balance sheet management, the Company may securitize residential mortgages and other loans. Through September 30, 2002, the Company has not had any securitization activity. Securitizations from 2001 and 2000 have not had a material impact on the results of operations for any periods.
Income Taxes.  The provision for income taxes was $136.2 million and $409.8 million for the third quarter and first nine months of 2002 compared to $163.1 million and $523.7 million in the same periods last year.  This represents a 28% and 29% effective tax rate for the third quarter and first nine months of 2002 compared to 33% and 34% for the same prior year periods.  In addition to the provision for the first nine months of 2001, the Company recorded an income tax benefit in the second quarter of 2001 of $9.6 million related to the early extinguishment of debt.  The extraordinary loss on the consolidated financial statements is shown net of this amount.
The third quarter of 2002 effective tax rate was lower than historical levels due to settlements with various taxing authorities.  In addition to the tax settlements, the year to date September 30, 2002 effective tax rate was impacted by the Company’s election to change the tax status of a subsidiary to a real estate investment trust.  As a result of this change, which was effective January 1, 2002, tax laws required these assets be marked to market, recognizing gains and losses.  Recognition of these gains and losses resulted in the elimination of certain previously recorded deferred taxes, which resulted in a reduction in the effective tax rate for the first quarter and nine months ended September 30, 2002.
Securities available for sale.  The investment portfolio is managed as part of the overall asset and liability management process to optimize income and market performance over an entire interest rate cycle while mitigating risk.  In conjunction with interest rate risk management, the Company continued the repositioning of the portfolio during the third quarter of 2002 to shorten its average life and shift its mix toward more floating rate assets.  The average life shortened to 3.0 from 4.2 years and the percentage of floating rate securities increased to 25% from 13% of the total portfolio as of September 30, 2002 and 2001, respectively.  The average duration of the portfolio, a measure of price sensitivity, was 1.3% at September 30, 2002 compared with 2.1% at September
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30, 2001.  The portfolio yield decreased from 6.62% in the third quarter of 2001 to 4.83% in the third quarter of 2002, primarily from purchasing shorter term securities and reinvesting accelerated prepayments and maturities at lower market rates.  The portfolio yield for the first nine months of 2002 was 5.18% compared to 6.71% for the first nine months of 2001.  Net securities gains of $45.8 million and $165.0 million were realized in the third quarter and first nine months of 2002 from selling longer term, fixed rate securities as part of the repositioning.
The average portfolio size was up 6.1% and 1.4% on an amortized cost basis compared to the third quarter and first nine months of 2001, respectively.  The carrying value of the investment portfolio, all of which is classified as “securities available for sale,” reflected $2.6 billion in net unrealized gains at September 30, 2002, including a $2.3 billion unrealized gain on the Company’s investment in common stock of The Coca-Cola Company.  The market value of this common stock investment increased $39.1 million while the net unrealized gain on the remainder of the portfolio decreased $55.0 million compared to December 31, 2001.  These changes in market value did not affect the net income of SunTrust, but were included in comprehensive income.
Liquidity Management.  Liquidity is managed to ensure there is sufficient funding to satisfy demand for credit, deposit withdrawals and attractive investment opportunities.  The Company’s liquidity position is supported by its deposit base, capital position and credit ratings.
Funding sources primarily include customer-based core deposits, but also include borrowed funds and cash flows from operations.  Customer-based core deposits, the Company’s largest source of funding, accounted for 71% of the funding base on average for the third quarter of 2002, as compared to 70% in the second quarter of 2002 and 65% in the third quarter of 2001.  Average consumer and commercial deposits grew 15.9% compared to the third quarter of 2001 due to customer-based core deposit growth aided by the acquisition of Huntington, marketing campaigns and the volatility of the financial markets.  Net borrowed funds, which primarily include short-term funds purchased and sold, wholesale domestic and foreign deposits, other short term borrowings and long term debt, were $28.0 billion at September 30, 2002, compared to $28.2 billion at December 31, 2001.  Cash flows from operations are also a significant source of liquidity.  Net cash from operations primarily results from net income adjusted for noncash items such as depreciation and amortization, provision for loan losses, and deferred tax items.
Liquidity is strengthened by access to a diversified base of wholesale funding sources.  These sources include fed funds purchased, securities sold under agreements to repurchase, negotiable certificates of deposit, offshore deposits, Federal Home Loan Bank advances, Global Bank Note issuance, issuance of Trust Preferred securities, and issuance of commercial paper.  Liquidity is also available through unpledged securities in the investment portfolio and capacity to securitize loans, including single-family mortgage loans.  The low rate environment has increased the amount of mortgage originations the Company normally sells to secondary markets (mainly longer-term, fixed rate mortgages), and this is reflected in the increase in loans held for sale.  The loans held for sale are funded in the normal course of business, and although this has increased the need for funding, the Company has ready access to multiple sources of liquidity to accommodate this increase.  If rates increase, loans held for sale will decrease due to a drop in mortgage originations that are typically sold to secondary markets.  For the nine months ended September 30, 2002, the Company funded $18.3 billion of loans which were held for sale and received proceeds of $17.9 billion on the sale of these loans.  As of September 30, 2002, outstanding loans held for sale were $4.7 billion, compared to $4.3 billion as of December 31, 2001.
SunTrust Bank assists in providing liquidity to select corporate customers by directing them to a third-party owned commercial paper conduit.  SunTrust’s conduit relationship is with Three Pillars Funding Corporation (“Three Pillars”).  Three Pillars provides financing for or direct purchases of financial assets originated and serviced by SunTrust Bank’s corporate customers.  Three Pillars finances this activity by issuing A-1/P-1 rated commercial paper.  The result is a favorable funding arrangement for these SunTrust Bank customers.
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Three Pillars had assets and liabilities, not included in the Consolidated Balance Sheet, of approximately $2.2 billion as of September 30, 2002, which primarily consisted of secured loans, marketable asset-backed securities and short-term commercial paper liabilities.  Activities related to SunTrust Bank’s relationship with Three Pillars include: client referrals and investment recommendations to Three Pillars; the issuing of a letter-of-credit, which provides partial credit protection to commercial paper holders; and providing a majority of the temporary liquidity arrangements that would provide funding to Three Pillars in the event that it can no longer issue commercial paper.  The revenue generated from these activities was immaterial to SunTrust for the nine months ended September 30, 2002 and 2001.
As of September 30, 2002, the liquidity commitments and other credit enhancement SunTrust Bank had to Three Pillars totaled $3.6 billion and $328.6 million, respectively.  The Company manages the credit risk associated with these commitments by subjecting them to the Company’s normal credit approval and monitoring processes. SunTrust Bank has never had to fund under either the liquidity arrangements or credit enhancement on behalf of Three Pillars.  Currently, the Company believes it is unlikely it would be required to fund under these arrangements.
On June 28, 2002, the FASB issued an exposure draft of an interpretation to clarify the rules pertaining to the consolidations of special purpose entities such as Three Pillars.  SunTrust is in the process of analyzing the exposure draft to determine its effect, if any, on the financial statements.
The Company enters into transactions involving “when-issued securities.”  When-issued securities are commitments to purchase or sell securities authorized for issuance but not yet actually issued.  Accordingly, they are not recorded on the balance sheet until issued.  Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movements in securities values and interest rates.  As of September 30, 2002, the Company had no commitments to purchase or sell when-issued securities.
The Company has a contingency funding plan that stress tests liquidity needs that may arise from certain events such as agency rating downgrades, rapid loan growth, or significant deposit runoff.  The plan also provides for continual monitoring of net borrowed funds dependence and available sources of liquidity.  Management believes the Company has the funding capacity to meet the liquidity needs arising from potential events.
Derivatives.   Derivative financial instruments are components of the Company’s risk management profile.  These instruments include interest rate swaps, options, futures, forward contracts, credit default swaps and equity derivatives.  The Company also enters into derivative instruments as a service to banking customers.  Where contracts have been created for customers, the Company generally enters into offsetting positions with others to eliminate the Company’s exposure to market risk.
The Company monitors its sensitivity to changes in interest rates and may use derivative instruments to hedge this risk.  On January 1, 2001, the Company adopted SFAS No. 133.  Accordingly, all derivatives are recorded in the financial statements at fair value.
The following table shows the derivative instruments entered into by the Company as an end-user:
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Risk Management Derivative Financial Instruments (a)	 	 	 	 	 	 	 	Table 10	

 	 	As of September 30, 2002	 	
 	 		 	
 	 	Notional
Amount	 	Gross Unrealized (g)	 	Equity (h)	 	Ineffectiveness
(i)	 	Average
Maturity
in Years	 	
 	 		 		 		 		 		 	
(Dollars in thousands) (Unaudited)	 		 	 	Gains	 	 	Losses	 		 		 		 	
	 			 			 			 			 			 			 	
Asset Hedges	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flow hedges	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Other - Collar (b)	 	$	56,081	 	$	904	 	$	—  	 	$	588	 	$	—  	 	 	0.50	 	
Fair value hedges	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Interest rate swaps (c)	 	 	25,000	 	 	—  	 	 	(972	)	 	—  	 	 	—  	 	 	2.07	 	
 	Forward Contracts (d)	 	 	3,465,341	 	 	—  	 	 	(48,013	)	 	—  	 	 	—  	 	 	0.08	 	
 	 	 			 			 			 			 			 			 	
 	Total asset hedges	 	$	3,546,422	 	$	904	 	$	(48,985	)	$	588	 	$	—  	 	 	0.10	 	
 	 			 			 			 			 			 			 	
Liability Hedges	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flow hedges	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Interest rate swaps (e)	 	$	2,845,000	 	$	—  	 	$	(81,780	)	$	(53,157	)	$	—  	 	 	0.98	 	
Fair value hedges	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Interest rate swaps (f)	 	 	1,200,000	 	 	124,116	 	 	—  	 	 	—  	 	 	(1,123	)	 	13.56	 	
 	 	 			 			 			 			 			 			 	
 	Total liability hedges	 	$	4,045,000	 	$	124,116	 	$	(81,780	)	$	(53,157	)	$	(1,123	)	 	4.71	 	

 	 	
(a)	Includes only derivative financial instruments related to risk management of exposure to interest rates and equity price movements.  All of the Company’s other  derivative instruments are classified as trading.  All of the interest rate swaps have variable pay or receive rates based on one-to-six month LIBOR, and they are the pay or receive rates in effect at September 30, 2002.	
(b)	Represents a zero cost equity collar designated as a cash flow hedge of the forecasted sale of equity securities.	
(c) 	Interest rate swaps are designated as fair value hedges of fixed rate loans.	
(d) 	Forward contracts are designated as fair value hedges of mortgage loans held for sale.	
(e)	Represents interest rate swaps designated as cash flow hedges of floating rate FHLB advances and certificates of deposit.	
(f)	Interest rate swaps designated as fair value hedges of trust preferred securities and subordinated notes.	
(g) 	Represents the fair value of derivative financial instruments less accrued interest receivable or payable.	
(h) 	At September 30, 2002, the net unrealized loss on derivatives included in accumulated other comprehensive income, which is a component of stockholders’ equity, was $52.6 million, net of tax, that represents the effective portion of the net losses on derivatives that qualify as cash flow hedges.  Gains or losses on hedges of interest rate risk will be classified into interest income or expense as a yield adjustment of the hedged item in the same period that the hedged cash flows impact earnings. Hedges of non-interest rate risks will be classified into other expense upon occurrence of the forecasted transaction.  As of September 30, 2002, $40.7 million of net losses, net of tax, recorded in accumulated other comprehensive income are expected to be reclassified as interest expense during the next twelve months.	
(i)	In the nine months ended September 30, 2002, losses in the amount of $1.1 million were recognized in other expense representing the ineffective portion of the net gains (losses) on derivatives that qualify as fair value hedges.	

Capital Ratios	 	 	 	 	 	 	 	 	 	 	 	 	 	Table 11	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	2002	 	2001	 	
 	 		 		 	
(Dollars in millions) (Unaudited)	 	September 30	 	June 30	 	March 31	 	December 31	 	September 30	 	
	 			 			 			 			 			 	
Tier 1 capital	 	$	7,973.0	 	$	7,797.4	 	$	7,669.7	 	$	7,994.2	 	$	7,142.2	 	
Total capital	 	 	12,125.7	 	 	12,261.2	 	 	11,950.8	 	 	12,144.2	 	 	11,311.9	 	
Risk-weighted assets	 	 	105,441.2	 	 	101,123.1	 	 	99,165.2	 	 	100,651.8	 	 	98,759.6	 	
Risk-based ratios:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Tier 1 capital	 	 	7.56	%	 	7.71	%	 	7.73	%	 	8.02	%	 	7.23	%	
 	Total capital	 	 	11.50	 	 	12.13	 	 	12.05	 	 	12.18	 	 	11.45	 	
Tier 1 leverage ratio	 	 	7.69	 	 	7.62	 	 	7.60	 	 	7.94	 	 	7.28	 	
Total shareholders’ equity to assets	 	 	7.87	 	 	8.33	 	 	8.07	 	 	7.98	 	 	7.94	 	
																				
Capital Resources.   Regulatory agencies measure capital adequacy within a framework that makes capital requirements sensitive to the risk profiles of individual banking companies.  The guidelines define capital as either Tier 1 (primarily common shareholders’ equity, as defined to include certain debt obligations) or Tier 2 (to include certain other debt obligations and a portion of the allowance for loan losses and since 1998, 45% of the unrealized gains on equity securities).  The Company is subject to a minimum Tier 1 capital ratio (Tier 1 capital to risk-weighted assets) of 4%, total capital ratio (Tier 1 plus Tier 2 to risk-weighted assets) of 8% and Tier 1
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leverage ratio (Tier 1 to average quarterly assets) of 3%.  To be considered a “well capitalized” institution, the Tier 1 capital ratio, the total capital ratio, and the Tier 1 leverage ratio must equal or exceed 6%, 10% and 5%, respectively.  SunTrust is committed to remaining well capitalized.
In the first quarter of 2002, the Company raised $350 million of regulatory capital through the sale of preferred shares issued by a real estate investment trust subsidiary.  In 2001, the Company raised $1.0 billion of regulatory capital through its initial issuance under the Global Bank Note program and raised $600 million of regulatory capital through the issuance of Trust Preferred Securities.
On April 16, 2002, SunTrust filed a shelf registration with the Securities and Exchange Commission.  Under this registration, the Company may issue debt securities in one or more offerings up to a total dollar amount of $1.3 billion.  The Company may issue either subordinated or senior debt under this registration.  As of October 31, 2002, the Company has not issued any subordinated debt under this shelf registration, but had issued $300 million of senior debt on May 30, 2002.
The Company purchased 1.5 million shares of its common stock during the third quarter of 2002.  Under current Board resolutions, the Company is authorized to purchase an additional 2.2 million shares as of September 30, 2002.  The Company purchased an additional 1.5 million shares of its common stock during the month ended October 2002.  On November 12, 2002, the Board of Directors authorized the purchase of up to 10 million shares of SunTrust common stock.
Item 3.
 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of market risk on page 31.
Item 4.
 CONTROLS AND PROCEDURES
A review and evaluation was performed by the Company’s management, including the Company’s Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of a date within 90 days prior to the filing of this quarterly report.  Based on that review and evaluation, the CEO and CFO have concluded that the Company’s current disclosure controls and procedures, as designed and implemented, were effective.  There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect the Company’s internal controls subsequent to the date of their evaluation.  There were no significant material weaknesses identified in the course of such review and evaluation and, therefore, no corrective measures were taken by the Company.
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PART II -  OTHER INFORMATION

ITEM 1.	 LEGAL PROCEEDINGS	
 	None	
 	 	
ITEM 2.	 CHANGES IN SECURITIES	
 	None	
 	 	
ITEM 3.	 DEFAULTS UPON SENIOR SECURITIES	
 	None	
 	 	
ITEM 4.	 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	
 	None	
 	 	
ITEM 5.	 OTHER INFORMATION	
 	None	
 	 	
ITEM 6.	 EXHIBITS AND REPORTS ON FORM  8-K	
 	•	Exhibit 10.1 – Change in Control Agreement effective as of August 30, 2002.	
 	•	Exhibit 10.2 – Change in Control Agreement effective as of September 3, 2002	
 	•	Exhibit 99.1 – Certification of Chairman of the Board, President and CEO, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
 	•	Exhibit 99.2 – Certification of Chief Financial Officer and Vice Chairman, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
					
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized this 14th day of November, 2002.

 	SUNTRUST BANKS, INC.	 	
 		 	
 	(Registrant)	 	
 	 	 	
 	/S/ JORGE ARRIETA	 	
 		 	
 	Jorge Arrieta
Senior Vice President and Controller 
(Chief Accounting Officer)	 	
 	 	 	
 	CERTIFICATIONS 	 	
 	 	 	
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 SEC RELEASE NO. 33-8124	
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I, L. Phillip Humann, Chairman of the Board, President and Chief Executive Officer of the Company, certify that:	
 	
 	(1)	I have reviewed this quarterly report on Form 10-Q of SunTrust Banks, Inc.;	
 	 	 	
 	(2)	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;	
 	 	 	
 	(3)	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;	
 	 	 	
 	(4)	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:	
 	 	 	
 	 	(a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;	
 	 	 	 	
 	 	(b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and	
 	 	 	 	
 	 	(c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;	
 	 	 	 	
 	(5)	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):	
 	 	 	
 	 	(a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and	
 	 	 	 	
 	 	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and	
 	 	 	 	
 	(6)	The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.	
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Date: November 12, 2002

 	/s/ L. Phillip Humann	 	
 	L. Phillip Humann
Chairman of the Board, President
and Chief Executive Officer	 	
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CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
SEC RELEASE NO. 33-8124

I, John Spiegel, Vice-Chairman of the Board and Chief Financial Officer of the Company, certify that:	
 	
 	(1)	I have reviewed this quarterly report on Form 10-Q of SunTrust Banks, Inc.;	
 	 	 	
 	(2)	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;	
 	 	 	
 	(3)	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;	
 	 	 	
 	(4)	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:	
 	 	 	
 	 	(a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;	
 	 	 	 	
 	 	(b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and	
 	 	 	 	
 	 	(c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;	
 	 	 	 	
 	(5)	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):	
 	 	 	
 	 	(a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and	
 	 	 	 	
 	 	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and	
 	 	 	 	
 	(6)	The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.	
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Date: November 12, 2002

 	         /s/ John W. Spiegel       	 	
 	John W. Spiegel
Vice Chairman and Chief Financial Officer	 	
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CHANGE IN CONTROL AGREEMENT
                    This Change in Control Agreement (“Agreement”) is entered into by and between SunTrust Banks, Inc., a Georgia corporation (“SunTrust”), and Jorge Arrieta (“Executive”).
                    WHEREAS, Executive is employed by SunTrust or provides services directly or indirectly to SunTrust as a senior executive of SunTrust or one, or more than one, SunTrust Affiliate; and
                    WHEREAS, the Board and the Compensation Committee have decided that SunTrust should provide certain benefits to Executive in the event Executive’s employment is terminated without Cause or Executive resigns for Good Reason following a Change in Control; and
                    WHEREAS, this Agreement sets forth the benefits which the Board and the Compensation Committee have decided SunTrust shall provide under such circumstances and the terms and conditions under which the Board and the Compensation Committee have decided that such benefits shall be provided;
                    NOW, THEREFORE, in consideration of the mutual promises and agreements contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, SunTrust and Executive hereby agree as follows:
§ 1.
Definitions
                    1.1   Board .  The term “Board” for purposes of this Agreement shall mean the Board of Directors of SunTrust.
                    1.2   Cause .  The term “Cause” for purposes of this Agreement shall (subject to § 1.2(e)) mean:

 	           (a) The willful and continued failure by Executive to perform satisfactorily the duties of Executive’s job;	
 	 	
 	           (b) Executive is convicted of a felony or has engaged in a dishonest act, misappropriation of funds, embezzlement, criminal conduct or common law fraud;	
 	 	
 	           (c) Executive has engaged in a material violation of the SunTrust Code of Conduct; or	
 	 	
 	           (d) Executive has engaged in any willful act that materially damages or materially prejudices SunTrust or a SunTrust Affiliate or has engaged in conduct or activities materially damaging to the property, business or reputation of SunTrust or a SunTrust Affiliate; provided, however,	
 	 	
 	           (e) No such act, omission or event shall be treated as “Cause” under this Agreement unless (i) Executive has been provided a detailed, written statement of the basis for SunTrust’s belief that such act, omission or event constitutes “Cause” and an opportunity to meet with the Compensation Committee (together with Executive’s counsel if Executive chooses to have Executive’s counsel present at such meeting) after Executive has had a reasonable period in which to review such statement and, if the allegation is under § 1.2(a), has had at least a thirty (30) day period to take corrective action and (ii) the Compensation Committee after such meeting (if Executive meets with	

 	the Compensation Committee) and after the end of such thirty (30) day correction period (if applicable) determines reasonably and in good faith and by the affirmative vote of at least two thirds of the members of the Compensation Committee then in office at a meeting called and held for such purpose that “Cause” does exist under this Agreement.	
                    1.3   Change in Control .  The term “Change in Control” for purposes of this Agreement shall mean a change in control of SunTrust of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act as in effect at the time of such “change in control”, provided that such a change in control shall be deemed to have occurred at such time as (i) any “person” (as that term is used in Sections 13(d) and 14(d)(2) of the Exchange Act), is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly, of securities representing 20% or more of the combined voting power for election of directors of the then outstanding securities of SunTrust or any successor of SunTrust; (ii) during any period of two consecutive years or less, individuals who at the beginning of such period constitute the Board cease, for any reason, to constitute at least a majority of the Board, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period; (iii) the shareholders of SunTrust approve any reorganization, merger, consolidation or share exchange as a result of which the common stock of SunTrust shall be changed, converted or exchanged into or for securities of another corporation (other than a merger with a wholly-owned subsidiary of SunTrust) or any dissolution or liquidation of SunTrust or any sale or the disposition of 50% or more of the assets or business of SunTrust; or (iv) the shareholders of SunTrust approve any reorganization, merger, consolidation or share exchange unless (A) the persons who were the beneficial owners of the outstanding shares of the common stock of SunTrust immediately before the consummation of such transaction beneficially own more than 65% of the outstanding shares of the common stock of the successor or survivor corporation in such transaction immediately following the consummation of such transaction and (B) the number of shares of the common stock of such successor or survivor corporation beneficially owned by the persons described in § 1.3(iv)(A) immediately following the consummation of such transaction is beneficially owned by each such person in substantially the same proportion that each such person had beneficially owned shares of SunTrust common stock immediately before the consummation of such transaction, provided (C) the percentage described in § 1.3(iv)(A) of the beneficially owned shares of the successor or survivor corporation and the number described in § 1.3(iv)(B) of the beneficially owned shares of the successor or survivor corporation shall be determined exclusively by reference to the shares of the successor or survivor corporation which result from the beneficial ownership of shares of common stock of SunTrust by the persons described in § 1.3(iv)(A) immediately before the consummation of such transaction.
                    1.4   Change in Control Date .  The term “Change in Control Date” for purposes of this Agreement shall mean the date which includes the “closing” of the transaction which results from a Change in Control or, if there is no transaction which results from a Change in Control, the date such Change in Control is reported by SunTrust to the Securities and Exchange Commission.
                    1.5   Code .  The term “Code” for purposes of this Agreement shall mean the Internal Revenue Code of 1986, as amended.
                    1.6   Compensation Committee .  The term “Compensation Committee” for purposes of this Agreement shall mean the Compensation Committee of the Board.
                    1.7   Confidential or Proprietary Information .  The term “Confidential or Proprietary Information” for purposes of this Agreement shall mean any secret, confidential, or proprietary information of SunTrust or a SunTrust Affiliate (not otherwise included in the definition of Trade Secret in § 1.20 of this Agreement) that has not become generally available to the public by the act of one who has the right to disclose such information without violating any right of SunTrust or a SunTrust Affiliate.
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                    1.8   Current Compensation Package .  The term “Current Compensation Package” for purposes of § 3(a)(2)(A) of this Agreement shall mean the sum of the following:

 	          (a) Executive’s highest annual base salary from SunTrust and any SunTrust Affiliate which (but for any salary deferral election) is in effect at any time during the 1 year period which ends on the date Executive’s employment with SunTrust or a SunTrust Affiliate terminates under the circumstances described in § 3(a) or § 3(f);	
 	 	
 	          (b) The greater of (i) Executive’s target annual MIP bonus for the calendar year in which Executive’s employment with SunTrust or a SunTrust Affiliate terminates under the circumstances described in § 3(a) or § 3(f) or (ii) the greater of (A) the average of the annual MIP bonus which was paid to Executive (or, if greater, which would have been paid to Executive but for any bonus deferral election) for the 3 full calendar years in which Executive has participated in the MIP (or, if less, the number of full calendar years in which Executive has participated in the MIP) which immediately precedes the calendar year in which Executive’s employment so terminates or, if Executive was not eligible to participate in the MIP in the calendar year which immediately precedes the calendar year in which Executive’s employment so terminates, (B) the greater of (1) the average MIP bonus described in §1.8(b)(ii)(A) or (2) the last MIP bonus which was paid to Executive (or, if greater, which would have been paid to Executive but for any bonus deferral election); and	
 	 	
 	          (c) (i) The average of the PUP bonus which was paid to Executive (or, if greater, which would have been paid to Executive but for any bonus deferral election) for the 3 full performance cycles in which Executive has participated in the PUP (or, if less, for the number of full performance cycles in which Executive has participated in the PUP) which immediately precede the performance cycle which ends in the calendar year in which Executive’s employment with SunTrust or a SunTrust Affiliate terminates under the circumstances described in § 3(a) or § 3(f) or, if Executive was not eligible to participate in the PUP for the performance cycle which ends in the calendar year in which Executive’s employment so terminates or if there is no such cycle, (ii) the average PUP bonus described in §1.8(c)(i) or the last PUP bonus which was paid to Executive (or, if greater, which would have been paid to Executive but for any bonus deferral election), whichever is greater.	
                    1.9   Disability Termination .  The term “Disability Termination” for purposes of this Agreement shall mean a termination of Executive’s employment on or after the date Executive has a right immediately upon such termination to receive disability income benefits under SunTrust’s long term disability plan or any successor to or replacement for such plan.
                    1.10   Exchange Act .  The term “Exchange Act” for purposes of this Agreement shall mean the Securities Exchange Act of 1934, as amended.
                    1.11   Good Reason .  The term “Good Reason” for purposes of this Agreement shall (subject to § 1.11(e)) mean:

 	          (a) SunTrust or any SunTrust Affiliate after a Change in Control but before the end of Executive’s Protection Period reduces Executive’s base salary or opportunity to receive comparable incentive compensation or bonuses without Executive’s express written consent;	
3

 	          (b) SunTrust or any SunTrust Affiliate after a Change in Control but before the end of Executive’s Protection Period reduces the scope of Executive’s principal or primary duties, responsibilities or authority without Executive’s express written consent;	
 	 	
 	          (c) SunTrust or any SunTrust Affiliate at any time after a Change in Control but before the end of Executive’s Protection Period (without Executive’s express written consent) transfers Executive’s primary work site from Executive’s primary work site on the date of such Change in Control or, if Executive subsequently consents in writing to such a transfer under this Agreement, from the primary work site which was the subject of such consent, to a new primary work site which is outside the “standard metropolitan statistical area” which then includes Executive’s then current primary work site unless such new primary work site is closer to Executive’s primary residence than Executive’s then current primary work site; or	
 	 	
 	          (d) SunTrust or any SunTrust Affiliate after a Change in Control but before the end of Executive’s Protection Period fails (without Executive’s express written consent) to continue to provide to Executive health and welfare benefits, deferred compensation and retirement benefits, stock option and restricted stock grants that are in the aggregate comparable to those provided to Executive immediately prior to the Change in Control Date; provided, however,	
 	 	
 	          (e) No such act or omission shall be treated as “Good Reason” under this Agreement unless	
 	 	
 	 	          (i) (A)  Executive delivers to the Compensation Committee a detailed, written statement of the basis for Executive’s belief that such act or omission constitutes Good Reason, (B) Executive delivers such statement before the later of (1) the end of the ninety (90) day period which starts on the date there is an act or omission which forms the basis for Executive’s belief that Good Reason exists or (2) the end of the period mutually agreed upon for purposes of this § 1.11(e)(i)(B) in writing by Executive and the Chairman of the Compensation Committee, (C) Executive gives the Compensation Committee a thirty (30) day period after the delivery of such statement to cure the basis for such belief and (D) Executive actually submits Executive’s written resignation to the Compensation Committee during the sixty (60) day period which begins immediately after the end of such thirty (30) day period if Executive reasonably and in good faith determines that Good Reason continues to exist after the end of such thirty (30) day period, or	
 	 	 	
 	 	          (ii) SunTrust states in writing to Executive that Executive has the right to treat such act or omission as Good Reason under this Agreement and Executive resigns during the sixty (60) day period which starts on the date such statement is actually delivered to Executive;	
 	 	 	
 	          (f) If (i) Executive gives the Compensation Committee the statement described in § 1.11(e)(i) before the end of the thirty (30) day period which immediately follows the end of the Protection Period and Executive thereafter resigns within the period described in § 1.11(e)(i) or (ii) SunTrust provides the statement to Executive described in § 1.11(e)(ii) before the end of the thirty (30) day period which immediately follows the end of the Protection Period and Executive thereafter resigns within the period described in § 1.11(e)(ii), then (iii) such resignation shall be treated under this Agreement as if made in Executive’s Protection Period; and	
 	 	
 	          (g) If Executive consents in writing to any reduction described in § 1.11(a) or § 1.11(b), to any transfer described in § 1.11(c) or to any failure described in § 1.11(d) in lieu of exercising Executive’s right to resign for Good Reason and delivers such consent to SunTrust, the date such	
4

 	consent is delivered to SunTrust thereafter shall be treated under this definition as the date of a Change in Control for purposes of determining whether Executive subsequently has Good Reason under this Agreement to resign under § 3(a) or § 3(f) as a result of any subsequent reduction described in § 1.11(a) or § 1.11(b), any subsequent transfer described in § 1.11(c) or any subsequent failure described in § 1.11(d).	
 	 	
                    1.12   Gross Up Payment .  The term “Gross Up Payment” for purposes of this Agreement shall mean a payment to or on behalf of Executive which shall be sufficient to pay (i) any excise tax described in § 9 in full, (ii) any federal, state and local income tax and social security and other employment tax on the payment made to pay such excise tax as well as any additional taxes on such payment and (iii) any interest or penalties assessed by the Internal Revenue Service on Executive which are related to the payment of such excise tax unless such interest or penalties are attributable to Executive’s willful misconduct or negligence.	
 	
                    1.13   MIP .  The term “MIP” for purposes of this Agreement shall mean the SunTrust Banks, Inc. Management Incentive Plan or, if there is any material change in the terms, operation or administration of such plan following a Change in Control, any successor to such plan in which Executive is eligible to participate and which provides an opportunity for a bonus for Executive which is comparable to the opportunity which Executive had under such plan before such Change in Control or, if Executive reasonably determines that there is no such plan in which Executive is eligible to participate but SunTrust or a parent corporation maintains a short term bonus plan for the benefit of senior executives which provides for such an opportunity, such other plan as agreed to by Executive and the Compensation Committee.	
 	
                    1.14   Protection Period .  The term “Protection Period” for purposes of this Agreement shall (subject to § 1.11(f)) mean the two (2) year period which begins on a Change in Control Date.	
 	
                    1.15   PUP .  The term “PUP” for purposes of this Agreement shall mean the SunTrust Banks, Inc. Performance Unit Plan or, if there is any material change in the terms, operation or administration of such plan following a Change in Control, any successor to such plan in which Executive is eligible to participate and which provides an opportunity for a bonus for Executive which is comparable to the opportunity which Executive had under such plan before such Change in Control or, if Executive reasonably determines that there is no such plan in which Executive is eligible to participate but SunTrust or a parent corporation maintains a long term bonus plan for the benefit of senior executives which provides for such an opportunity, such other plan as agreed to by Executive and the Compensation Committee.	
 	
                    1.16   Restricted Period .  The term “Restricted Period” for purposes of this Agreement shall mean the period which starts on the date Executive’s employment by SunTrust or a SunTrust Affiliate terminates under circumstances which require SunTrust to make the payments and provide the benefits described in § 3 and which ends on the earlier of (a)(i) the first anniversary of such termination date for purposes of § 5 and (ii) the second anniversary of such termination date for all other purposes under this Agreement, or (b) on the first date following such a termination on which SunTrust either breaches any obligation to Executive under § 3 or no longer has any obligation to Executive under § 3.	
 	
                    1.17   SunTrust .  The term “SunTrust” for purposes of this Agreement shall mean SunTrust Banks, Inc. and any successor to SunTrust.	
 	
                    1.18   SunTrust Affiliate .  The term “SunTrust Affiliate” for purposes of this Agreement shall mean any corporation which is a subsidiary corporation (within the meaning of § 424(f) of the Code) of SunTrust except a corporation which has subsidiary corporation status under § 424(f) of the Code exclusively as a result of SunTrust or a SunTrust Affiliate holding stock in such corporation as a fiduciary with respect to any trust, estate, conservatorship, guardianship or agency.	
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                    1.19   Term .  The term “Term” for purposes of this Agreement shall mean the period described in § 2(b).	
 	
                    1.20   Trade Secret .  The term “Trade Secret” for purposes of this Agreement shall mean information, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers that:	
 	
 	          (a) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and	
 	 	
 	          (b) is the subject of reasonable efforts by SunTrust or a SunTrust Affiliate to maintain its secrecy.	
 	 	
§ 2.	
 	 	
Effective Date and Term	
 	 	
 	          (a) Effective Date .  This Agreement shall be effective on the date of this Agreement as set forth in the signature section of this Agreement.	
 	 	
 	          (b) Term .	
 	 	
 	 	          (1) The Term of this Agreement shall be the period which starts on the date on which this Agreement becomes effective under § 2(a) and ends (subject to § 2(b)(2) and § 2(b)(3)) on the third anniversary of such effective date.	
 	 	 	
 	 	          (2) The Term of this Agreement shall automatically be extended for one additional year effective as of the first anniversary of the date on which this Agreement becomes effective under § 2(a) and one additional year effective as of each such anniversary date thereafter unless either Executive or SunTrust delivers to the other person notice to the effect that there will be no such one year extension before the beginning of the 90 day period which ends on the anniversary date on which such automatic one year extension otherwise would have been effective.	
 	 	 	
 	 	          (3) (A)  If Executive’s Protection Period starts before the Term of this Agreement (as extended, if applicable, under § 2(b)(2)) expires, the then Term of this Agreement shall automatically be extended until the expiration of such Protection Period.	
 	 	 	
 	 	                (B)  If Executive’s employment terminates during Executive’s Protection Period under the circumstances described in § 3(a) or if Executive’s employment terminates under the circumstances described in § 3(f) before the Term of this Agreement (as extended, if applicable, under § 2(b)(2)) expires, the then Term of this Agreement shall automatically be extended until the earlier of (1) the date Executive agrees that all SunTrust’s obligations to Executive under this Agreement have been satisfied in full or (B) the date a final determination is made pursuant to § 8 that SunTrust has no further obligations to Executive under this Agreement.	
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§ 3.
Compensation and Benefits

 	          (a) General .  If a Change in Control occurs during the Term of this Agreement and	
 	 	
 	          (1) SunTrust or a SunTrust Affiliate terminates Executive’s employment without Cause during Executive’s Protection Period or	
 	 	
 	          (2) Executive resigns for Good Reason during Executive’s Protection Period, then:	
 	 	
 	 	          (A) Cash Payment .  SunTrust shall pay Executive two (2) times Executive’s Current Compensation Package in cash in a lump sum within 30 days after the date Executive’s employment so terminates.	
 	 	 	
 	 	          (B) Stock Options .  Each outstanding stock option granted to Executive by SunTrust shall (subject to § 3(a)(2)(G)) immediately become fully vested and exercisable on the date Executive’s employment so terminates and Executive shall be deemed to continue to be employed by SunTrust for the period described in § 3(d) for purposes of determining when Executive’s right to exercise each such option expires notwithstanding the terms of any plan or agreement under which such option was granted.	
 	 	 	
 	 	          (C) Restricted Stock .  Any restrictions on any outstanding restricted or performance stock grants to Executive by SunTrust shall (subject to § 3(a)(2)(G)) immediately expire and Executive’s right to such stock shall be non-forfeitable notwithstanding the terms of any plan or agreement under which such grants were made.	
 	 	 	
 	 	          (D) Earned but Unpaid Salary, Bonus and Vacation .  SunTrust shall promptly pay Executive any earned but unpaid base salary and bonus, shall promptly pay Executive for any earned but untaken vacation and shall promptly reimburse Executive for any incurred but unreimbursed expenses which are otherwise reimbursable under SunTrust’s expense reimbursement policy as in effect for senior executives immediately before Executive’s employment so terminates.	
 	 	 	
 	 	          (E) MIP .  SunTrust shall pay Executive within 30 days after Executive’s employment terminates a portion of Executive’s target bonus or, if greater, Executive’s projected bonus under the MIP for the calendar year in which Executive’s employment terminates, where (1) Executive’s projected bonus shall be no less than the bonus which would have been projected under the projection procedures in effect under the MIP on the date of the Change in Control and (2) such portion shall be determined by multiplying such target bonus or, if greater, such projected bonus by a fraction, the numerator of which shall be the number of days Executive is employed in such calendar year and the denominator of which shall be the number of days in such calendar year.	
 	 	 	
 	 	          (F) PUP .  SunTrust shall pay Executive within 30 days after Executive’s employment terminates a portion of Executive’s target bonus or, if greater, Executive’s projected bonus under the PUP for each performance cycle in effect on	
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 	 	the date Executive’s employment terminates, where (1) Executive’s projected bonus shall be no less than the bonus which would have been projected under the projection procedures in effect under the PUP on the date of the Change in Control and (2) such portion shall be determined by multiplying such target bonus or, if greater, such projected bonus by a fraction, the numerator of which shall be the number of days Executive is employed in each such performance cycle and the denominator of which shall be the number of days in each such performance cycle.	
 	 	 	
 	          (b) Continuing Benefit Coverage .  If Executive’s employment terminates under the circumstances described in § 3(a) or § 3(f), SunTrust or a SunTrust Affiliate from the date of such termination of Executive’s employment until the end of Executive’s Protection Period shall provide to Executive medical, dental and life insurance benefits which are similar in all material respects as those benefits provided under SunTrust’s employee benefit plans, policies and programs to senior executives of SunTrust who have not terminated their employment. If SunTrust cannot provide such benefits under SunTrust’s employee benefit plans, policies and programs, SunTrust either shall provide such benefits to Executive outside such plans, policies and programs at no additional expense or tax liability to Executive or shall reimburse Executive for Executive’s cost to purchase such benefits and for any tax liability for such reimbursements.	
 	 	
 	          (c) No Interference with Vested Benefits .  If Executive’s employment terminates under the circumstances described in § 3(a) or § 3(f), Executive shall have a right to any benefits under any employee benefit plan, policy or program maintained by SunTrust or any SunTrust Affiliate (other than the MIP, the PUP and the SunTrust Severance Pay Plan) which Executive had a right to receive under the terms of such employee benefit plan, policy or program after a termination of Executive’s employment without regard to this Agreement.	
 	 	
 	          (d) Additional Age and Service Credit .  If Executive’s employment terminates under the circumstances described in § 3(a) or § 3(f), Executive shall be deemed to have been employed by SunTrust throughout Executive’s Protection Period for purposes of computing Executive’s age and service credit on the date Executive’s employment so terminates under any deferred compensation or welfare plan, policy or program (except a plan described in § 401 of the Code) maintained by SunTrust or a SunTrust Affiliate in which Executive is a participant and under which Executive’s benefit, or eligibility for a benefit, is based in whole or in part on Executive’s age or service or age and service, and Executive shall receive such age and service credit notwithstanding the terms of any such plan, policy or program.	
 	 	
 	          (e) No Increase in Other Benefits; No Other Severance Pay .  If Executive’s employment terminates under the circumstances described in § 3(a) or § 3(f), Executive waives Executive’s right, if any, to have any payment made under this § 3 taken into account to increase the benefits otherwise payable to, or on behalf of, Executive under any employee benefit plan, policy or program, whether qualified or nonqualified, maintained by SunTrust or a SunTrust Affiliate and, further, waives Executive’s right, if any, to the payment of severance pay under any severance pay plan, policy or program maintained by SunTrust or a SunTrust Affiliate subject to the condition that SunTrust not be relieved of any of its obligations to Executive under this § 3 pursuant to § 3(g) or § 3(h).	
 	 	
 	          (f) Termination in Anticipation of Change in Control Date .  Executive shall be treated under § 3(a) as if Executive’s employment had been terminated without Cause or Executive had resigned for Good Reason during Executive’s Protection Period if (1)(A) Executive’s employment is terminated by SunTrust or a SunTrust Affiliate without Cause after a Change in Control but	
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 	before the Change in Control Date which results from such Change in Control or (B) Executive resigns for Good Reason after a Change in Control but before the Change in Control Date which results from such Change in Control, (2) such Change in Control occurs on or after the date this Agreement becomes effective under § 2 and (3) there is a Change in Control Date which results from such Change in Control.	
 	 	
 	          (g) Death or Disability .  Executive agrees that SunTrust will have no obligations to Executive under this § 3 if Executive’s employment terminates exclusively as a result of Executive’s death or Executive has a Disability Termination.	
 	 	
 	          (h) Release .  Executive agrees that SunTrust will have no obligations to Executive under this § 3 until Executive executes the form of release which is attached as Exhibit A to this Agreement and, further, will have no further obligations to Executive under this § 3 if Executive revokes such release.	
 	 	
§ 4.	
 	
No Solicitation of Customers or Clients	
 	 	
                    Executive shall not during the Restricted Period solicit any customer or client of SunTrust or any SunTrust Affiliate with whom Executive had any material business contact during the two (2) year period which ends on the date Executive’s employment by SunTrust or a SunTrust Affiliate terminates for the purpose of competing with SunTrust or any SunTrust Affiliate for any reason, either individually, or as an owner, partner, employee, agent, consultant, advisor, contractor, salesman, stockholder, investor, officer or director of, or service provider to, any corporation, partnership, venture or other business entity.	
§ 5.
Antipirating of Employees
                    Absent the Compensation Committee’s written consent, Executive will not during the Restricted Period solicit to employ on Executive’s own behalf or on behalf of any other person, firm or corporation, any person who was employed by SunTrust or a SunTrust Affiliate during the term of Executive’s employment by SunTrust or a SunTrust Affiliate (whether or not such employee would commit a breach of contract), and who has not ceased to be employed by SunTrust or a SunTrust Affiliate for a period of at least one (1) year.
§ 6.
Trade Secrets and Confidential Information
                    Executive hereby agrees that Executive will hold in a fiduciary capacity for the benefit of SunTrust and each SunTrust Affiliate, and will not directly or indirectly use or disclose, any Trade Secret that Executive may have acquired during the term of Executive’s employment by SunTrust or a SunTrust Affiliate for so long as such information remains a Trade Secret.
                    Executive in addition agrees that during the Restricted Period Executive will hold in a fiduciary capacity for the benefit of SunTrust and each SunTrust Affiliate, and will not directly or indirectly use or disclose, any Confidential or Proprietary Information that Executive may have acquired (whether or not developed or compiled by Executive and whether or not Executive was authorized to have access to such information) during the term of, in the course of, or as a result of Executive’s employment by SunTrust or a SunTrust Affiliate.
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§ 7.
Reasonable and Necessary Restrictions and Non-Disparagement
                    Executive acknowledges that the restrictions, prohibitions and other provisions set forth in this Agreement, including without limitation the Territory and Restricted Period, are reasonable, fair and equitable in scope, terms and duration; are necessary to protect the legitimate business interests of SunTrust; and are a material inducement to SunTrust to enter into this Agreement.  Executive covenants that Executive will not challenge the enforceability of this Agreement nor will Executive raise any equitable defense to its enforcement.  Further, Executive and SunTrust each agree not to knowingly make false or materially misleading statements or disparaging comments about the other during the Restricted Period.
§ 8.
Arbitration
                    Any dispute, controversy or claim arising out of or relating to this Agreement shall be determined by binding arbitration in accordance with Title 9 of the United States Code and the applicable set of arbitration rules of the American Arbitration Association.  Judgment upon any award made in such arbitration may be entered and enforced in any court of competent jurisdiction.  All statutes of limitation which would otherwise be applicable in a judicial action brought by a party shall apply to any arbitration or reference proceeding hereunder.  Neither SunTrust nor Executive shall appeal such award to or seek review, modification, or vacation of such award in any court or regulatory agency.  Unless otherwise agreed, venue for arbitration shall be in Atlanta, Georgia.  All of Executive’s reasonable costs and expenses incurred in connection with such arbitration shall be paid in full by SunTrust promptly on written demand from Executive, including the arbitrators’ fees, administrative fees, travel expenses, out-of-pocket expenses such as copying and telephone, court costs, witness fees and attorneys’ fees; provided, however, SunTrust shall pay no more than $30,000 in attorneys’ fees unless a higher figure is awarded in the arbitration, in which event SunTrust shall pay the figure awarded in the arbitration.
§ 9.
Tax Protection
                    If SunTrust or SunTrust’s independent accountants determine that any payments and benefits called for under this Agreement together with any other payments and benefits made available to Executive by SunTrust or a SunTrust Affiliate will result in Executive being subject to an excise tax under § 4999 of the Code or if such an excise tax is assessed against Executive as a result of any such payments and other benefits, SunTrust shall make a Gross Up Payment to or on behalf of Executive as and when any such determination or assessment is made, provided Executive takes such action (other than waiving Executive’s right to any payments or benefits) as SunTrust reasonably requests under the circumstances to mitigate or challenge such tax.  Any determination under this § 9 by SunTrust or SunTrust’s independent accountants shall be made in accordance with § 280G of the Code and any applicable related regulations (whether proposed, temporary or final) and any related Internal Revenue Service rulings and any related case law and, if SunTrust reasonably requests that Executive take action to mitigate or challenge, or to mitigate and challenge, any such tax or assessment (other than waiving Executive’s right to any payment or benefit) and Executive complies with such request, SunTrust shall provide Executive with such information and such expert advice and assistance from SunTrust’s independent accountants, lawyers and other advisors as Executive may reasonably request and shall pay for all expenses incurred in effecting such compliance and any related fines, penalties, interest and other assessments.
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§ 10.
Miscellaneous Provisions
                    10.1   Assignment .  This Agreement is for the personal services of Executive, and the rights and obligations of Executive under this Agreement are not assignable in whole or in part by Executive without the prior written consent of SunTrust.  This Agreement is assignable in whole or in part to any successor to SunTrust. However, if SunTrust as part of any Change in Control transaction fails to assign SunTrust’s obligations under this Agreement to SunTrust’s successor or such successor fails to expressly agree to such assignment on or before the Change in Control Date, SunTrust on the Change in Control Date shall (without any further action on the part of Executive) take the action called for in § 3 of this Agreement as if Executive had been terminated without Cause without regard to whether Executive’s employment actually has terminated.
                    10.2   Governing Law .  This Agreement will be governed by and construed under the laws of the State of Georgia (without reference to the choice of law principles thereof), except to the extent superseded by federal law.
                    10.3   Counterparts .  This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
                    10.4   Headings; References .  The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  Any reference to a section (§ ) shall be to a section (§ ) of this Agreement unless there is an express reference to a section (§ ) of the Code or the Exchange Act, in which event the reference shall be to the Code or to the Exchange Act, whichever is applicable.
                    10.5   Amendments and Waivers .  Except as otherwise specified in this Agreement, this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of SunTrust and Executive.
                    10.6   Severability .  Any provision of this Agreement held to be unenforceable under applicable law will be enforced to the maximum extent possible, and the balance of this Agreement will remain in full force and effect.
                    10.7   Entire Agreement .  This Agreement constitutes the entire understanding and agreement of SunTrust and Executive with respect to the matters contemplated in this Agreement, and supersedes all prior understandings and agreements between SunTrust and Executive with respect to such transactions.
                    10.8   Notices .  Any notice required hereunder to be given by either SunTrust or Executive will be in writing and will be deemed effectively given upon personal delivery to the party to be notified or five (5) days after deposit with the United States Post Office by registered or certified mail, postage prepaid, to the other party at the address set forth below or to such other address as either party may from time to time designate by ten (10) days advance written notice pursuant to this § 10.8.  All such written communication will be directed as follows:

 	If to SunTrust:	
 	 	
 	SunTrust Banks, Inc.	
 	Attention:  Chief Executive Officer	
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 	303 Peachtree St., NE, 30 th Floor	
 	Atlanta, GA  30308	
If to Executive, to the most recent address Executive has provided to SunTrust for inclusion in Executive’s personnel records.
                    10.9   Binding Effect .  This Agreement shall be for the benefit of, and shall be binding upon, SunTrust and Executive and their respective heirs, personal representatives, legal representatives, successors and assigns, subject, however, to the provisions in § 10.1 of this Agreement.
                    10.10   Not an Employment Contract .  This Agreement is not an employment contract and shall not give Executive the right to continue in employment by SunTrust or a SunTrust Affiliate for any period of time or from time to time.  Moreover, this Agreement shall not adversely affect the right of SunTrust or a SunTrust Affiliate to terminate Executive’s employment with or without cause at any time.
                    IN WITNESS WHEREOF , SunTrust and Executive have entered into this Agreement this 30th day of August, 2002, and such date shall be the date of this Agreement.

SUNTRUST BANKS, INC.	 	EXECUTIVE	

By:                             /s/ Mary T. Steele	 	 /s/ Jorge Arrieta	 	
 		 		 	
 	Mary T. Steele	 	Jorge Arrieta	 	
Title:	Senior Vice President and
Human Resources Director	 	 	 	
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CHANGE IN CONTROL AGREEMENT
                    This Change in Control Agreement (“Agreement”) is entered into by and between SunTrust Banks, Inc., a Georgia corporation (“SunTrust”), and Cecil Eugene Kirby (“Executive”).
                    WHEREAS, Executive is employed by SunTrust or provides services directly or indirectly to SunTrust as a senior executive of SunTrust or one, or more than one, SunTrust Affiliate; and
                    WHEREAS, the Board and the Compensation Committee have decided that SunTrust should provide certain benefits to Executive in the event Executive’s employment is terminated without Cause or Executive resigns for Good Reason following a Change in Control; and
                    WHEREAS, this Agreement sets forth the benefits which the Board and the Compensation Committee have decided SunTrust shall provide under such circumstances and the terms and conditions under which the Board and the Compensation Committee have decided that such benefits shall be provided;
                    NOW, THEREFORE, in consideration of the mutual promises and agreements contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, SunTrust and Executive hereby agree as follows:
§ 1.
Definitions
                    1.1   Board .  The term “Board” for purposes of this Agreement shall mean the Board of Directors of SunTrust.
                    1.2   Cause .  The term “Cause” for purposes of this Agreement shall (subject to § 1.2(e)) mean:

 	          (a) The willful and continued failure by Executive to perform satisfactorily the duties of Executive’s job;	
 	 	
 	          (b) Executive is convicted of a felony or has engaged in a dishonest act, misappropriation of funds, embezzlement, criminal conduct or common law fraud;	
 	 	
 	          (c) Executive has engaged in a material violation of the SunTrust Code of Conduct; or	
 	 	
 	          (d) Executive has engaged in any willful act that materially damages or materially prejudices SunTrust or a SunTrust Affiliate or has engaged in conduct or activities materially damaging to the property, business or reputation of SunTrust or a SunTrust Affiliate; provided, however,	
 	 	
 	          (e) No such act, omission or event shall be treated as “Cause” under this Agreement unless (i) Executive has been provided a detailed, written statement of the basis for SunTrust’s belief that such act, omission or event constitutes “Cause” and an opportunity to meet with the Compensation Committee (together with Executive’s counsel if Executive chooses to have Executive’s counsel present at such meeting) after Executive has had a reasonable period in which to review such statement and, if the allegation is under § 1.2(a), has had at least a thirty (30) day period to take corrective action and (ii) the Compensation Committee after such meeting (if Executive meets with the Compensation Committee) and after the end of such thirty (30) day correction period (if	

 	applicable) determines reasonably and in good faith and by the affirmative vote of at least two thirds of the members of the Compensation Committee then in office at a meeting called and held for such purpose that “Cause” does exist under this Agreement.	
 	 	
                    1.3   Change in Control .  The term “Change in Control” for purposes of this Agreement shall mean a change in control of SunTrust of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act as in effect at the time of such “change in control”, provided that such a change in control shall be deemed to have occurred at such time as (i) any “person” (as that term is used in Sections 13(d) and 14(d)(2) of the Exchange Act), is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly, of securities representing 20% or more of the combined voting power for election of directors of the then outstanding securities of SunTrust or any successor of SunTrust; (ii) during any period of two consecutive years or less, individuals who at the beginning of such period constitute the Board cease, for any reason, to constitute at least a majority of the Board, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period; (iii) the shareholders of SunTrust approve any reorganization, merger, consolidation or share exchange as a result of which the common stock of SunTrust shall be changed, converted or exchanged into or for securities of another corporation (other than a merger with a wholly-owned subsidiary of SunTrust) or any dissolution or liquidation of SunTrust or any sale or the disposition of 50% or more of the assets or business of SunTrust; or (iv) the shareholders of SunTrust approve any reorganization, merger, consolidation or share exchange unless (A) the persons who were the beneficial owners of the outstanding shares of the common stock of SunTrust immediately before the consummation of such transaction beneficially own more than 65% of the outstanding shares of the common stock of the successor or survivor corporation in such transaction immediately following the consummation of such transaction and (B) the number of shares of the common stock of such successor or survivor corporation beneficially owned by the persons described in § 1.3(iv)(A) immediately following the consummation of such transaction is beneficially owned by each such person in substantially the same proportion that each such person had beneficially owned shares of SunTrust common stock immediately before the consummation of such transaction, provided (C) the percentage described in § 1.3(iv)(A) of the beneficially owned shares of the successor or survivor corporation and the number described in § 1.3(iv)(B) of the beneficially owned shares of the successor or survivor corporation shall be determined exclusively by reference to the shares of the successor or survivor corporation which result from the beneficial ownership of shares of common stock of SunTrust by the persons described in § 1.3(iv)(A) immediately before the consummation of such transaction.	
 	 	
                    1.4   Change in Control Date .  The term “Change in Control Date” for purposes of this Agreement shall mean the date which includes the “closing” of the transaction which results from a Change in Control or, if there is no transaction which results from a Change in Control, the date such Change in Control is reported by SunTrust to the Securities and Exchange Commission.	
 	 	
                    1.5   Code .  The term “Code” for purposes of this Agreement shall mean the Internal Revenue Code of 1986, as amended.	
 	
                    1.6   Compensation Committee .  The term “Compensation Committee” for purposes of this Agreement shall mean the Compensation Committee of the Board.	
 	
                    1.7   Confidential or Proprietary Information .  The term “Confidential or Proprietary Information” for purposes of this Agreement shall mean any secret, confidential, or proprietary information of SunTrust or a SunTrust Affiliate (not otherwise included in the definition of Trade Secret in § 1.20 of this Agreement) that has not become generally available to the public by the act of one who has the right to disclose such information without violating any right of SunTrust or a SunTrust Affiliate.	
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                    1.8   Current Compensation Package .  The term “Current Compensation Package” for purposes of § 3(a)(2)(A) of this Agreement shall mean the sum of the following:	
 	 	
 	          (a) Executive’s highest annual base salary from SunTrust and any SunTrust Affiliate which (but for any salary deferral election) is in effect at any time during the 1 year period which ends on the date Executive’s employment with SunTrust or a SunTrust Affiliate terminates under the circumstances described in § 3(a) or § 3(f);	
 	 	
 	          (b) The greater of (i) Executive’s target annual MIP bonus for the calendar year in which Executive’s employment with SunTrust or a SunTrust Affiliate terminates under the circumstances described in § 3(a) or § 3(f) or (ii) the greater of (A) the average of the annual MIP bonus which was paid to Executive (or, if greater, which would have been paid to Executive but for any bonus deferral election) for the 3 full calendar years in which Executive has participated in the MIP (or, if less, the number of full calendar years in which Executive has participated in the MIP) which immediately precedes the calendar year in which Executive’s employment so terminates or, if Executive was not eligible to participate in the MIP in the calendar year which immediately precedes the calendar year in which Executive’s employment so terminates, (B) the greater of (1) the average MIP bonus described in §1.8(b)(ii)(A) or (2) the last MIP bonus which was paid to Executive (or, if greater, which would have been paid to Executive but for any bonus deferral election); and	
 	 	
 	          (c) (i) The average of the PUP bonus which was paid to Executive (or, if greater, which would have been paid to Executive but for any bonus deferral election) for the 3 full performance cycles in which Executive has participated in the PUP (or, if less, for the number of full performance cycles in which Executive has participated in the PUP) which immediately precede the performance cycle which ends in the calendar year in which Executive’s employment with SunTrust or a SunTrust Affiliate terminates under the circumstances described in § 3(a) or § 3(f) or, if Executive was not eligible to participate in the PUP for the performance cycle which ends in the calendar year in which Executive’s employment so terminates or if there is no such cycle, (ii) the average PUP bonus described in §1.8(c)(i) or the last PUP bonus which was paid to Executive (or, if greater, which would have been paid to Executive but for any bonus deferral election), whichever is greater.	
 	 	
                    1.9   Disability Termination .  The term “Disability Termination” for purposes of this Agreement shall mean a termination of Executive’s employment on or after the date Executive has a right immediately upon such termination to receive disability income benefits under SunTrust’s long term disability plan or any successor to or replacement for such plan.	
 	
                    1.10   Exchange Act .  The term “Exchange Act” for purposes of this Agreement shall mean the Securities Exchange Act of 1934, as amended.	
 	
                    1.11   Good Reason .  The term “Good Reason” for purposes of this Agreement shall (subject to § 1.11(e)) mean:	
 	 	
 	          (a) SunTrust or any SunTrust Affiliate after a Change in Control but before the end of Executive’s Protection Period reduces Executive’s base salary or opportunity to receive comparable incentive compensation or bonuses without Executive’s express written consent;	
			
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 	          (b) SunTrust or any SunTrust Affiliate after a Change in Control but before the end of Executive’s Protection Period reduces the scope of any of Executive’s duties, responsibilities or authority without Executive’s express written consent;	
 	 	
 	          (c) SunTrust or any SunTrust Affiliate at any time after a Change in Control but before the end of Executive’s Protection Period (without Executive’s express written consent) transfers Executive’s primary work site from Executive’s primary work site on the date of such Change in Control or, if Executive subsequently consents in writing to such a transfer under this Agreement, from the primary work site which was the subject of such consent, to a new primary work site which is outside the “standard metropolitan statistical area” which then includes Executive’s then current primary work site unless such new primary work site is closer to Executive’s primary residence than Executive’s then current primary work site; or	
 	 	
 	          (d) SunTrust or any SunTrust Affiliate after a Change in Control but before the end of Executive’s Protection Period fails (without Executive’s express written consent) to continue to provide to Executive health and welfare benefits, deferred compensation and retirement benefits, stock option and restricted stock grants that are in the aggregate comparable to those provided to Executive immediately prior to the Change in Control Date; provided, however,	
 	 	
 	          (e) No such act or omission shall be treated as “Good Reason” under this Agreement unless	
 	 	
 	 	          (i) (A)  Executive delivers to the Compensation Committee a detailed, written statement of the basis for Executive’s belief that such act or omission constitutes Good Reason, (B) Executive delivers such statement before the later of (1) the end of the ninety (90) day period which starts on the date there is an act or omission which forms the basis for Executive’s belief that Good Reason exists or (2) the end of the period mutually agreed upon for purposes of this § 1.11(e)(i)(B) in writing by Executive and the Chairman of the Compensation Committee, (C) Executive gives the Compensation Committee a thirty (30) day period after the delivery of such statement to cure the basis for such belief and (D) Executive actually submits Executive’s written resignation to the Compensation Committee during the sixty (60) day period which begins immediately after the end of such thirty (30) day period if Executive reasonably and in good faith determines that Good Reason continues to exist after the end of such thirty (30) day period, or	
 	 	 	
 	 	          (ii) SunTrust states in writing to Executive that Executive has the right to treat such act or omission as Good Reason under this Agreement and Executive resigns during the sixty (60) day period which starts on the date such statement is actually delivered to Executive;	
 	 	 	
 	          (f) If (i) Executive gives the Compensation Committee the statement described in § 1.11(e)(i) before the end of the thirty (30) day period which immediately follows the end of the Protection Period and Executive thereafter resigns within the period described in § 1.11(e)(i) or (ii) SunTrust provides the statement to Executive described in § 1.11(e)(ii) before the end of the thirty (30) day period which immediately follows the end of the Protection Period and Executive thereafter resigns within the period described in § 1.11(e)(ii), then (iii) such resignation shall be treated under this Agreement as if made in Executive’s Protection Period; and	
 	 	
 	          (g) If Executive consents in writing to any reduction described in § 1.11(a) or § 1.11(b), to any transfer described in § 1.11(c) or to any failure described in § 1.11(d) in lieu of exercising Executive’s right to resign for Good Reason and delivers such consent to SunTrust, the date such	
4

 	consent is delivered to SunTrust thereafter shall be treated under this definition as the date of a Change in Control for purposes of determining whether Executive subsequently has Good Reason under this Agreement to resign under § 3(a) or § 3(f) as a result of any subsequent reduction described in § 1.11(a) or § 1.11(b), any subsequent transfer described in § 1.11(c) or any subsequent failure described in § 1.11(d).	
 	 	
                    1.12   Gross Up Payment .  The term “Gross Up Payment” for purposes of this Agreement shall mean a payment to or on behalf of Executive which shall be sufficient to pay (i) any excise tax described in § 9 in full, (ii) any federal, state and local income tax and social security and other employment tax on the payment made to pay such excise tax as well as any additional taxes on such payment and (iii) any interest or penalties assessed by the Internal Revenue Service on Executive which are related to the payment of such excise tax unless such interest or penalties are attributable to Executive’s willful misconduct or negligence.	
 	
                    1.13   MIP .  The term “MIP” for purposes of this Agreement shall mean the SunTrust Banks, Inc. Management Incentive Plan or, if there is any material change in the terms, operation or administration of such plan following a Change in Control, any successor to such plan in which Executive is eligible to participate and which provides an opportunity for a bonus for Executive which is comparable to the opportunity which Executive had under such plan before such Change in Control or, if Executive reasonably determines that there is no such plan in which Executive is eligible to participate but SunTrust or a parent corporation maintains a short term bonus plan for the benefit of senior executives which provides for such an opportunity, such other plan as agreed to by Executive and the Compensation Committee.	
 	
                    1.14   Protection Period .  The term “Protection Period” for purposes of this Agreement shall (subject to § 1.11(f)) mean the two (2) year period which begins on a Change in Control Date.	
 	
                    1.15   PUP .  The term “PUP” for purposes of this Agreement shall mean the SunTrust Banks, Inc. Performance Unit Plan or, if there is any material change in the terms, operation or administration of such plan following a Change in Control, any successor to such plan in which Executive is eligible to participate and which provides an opportunity for a bonus for Executive which is comparable to the opportunity which Executive had under such plan before such Change in Control or, if Executive reasonably determines that there is no such plan in which Executive is eligible to participate but SunTrust or a parent corporation maintains a long term bonus plan for the benefit of senior executives which provides for such an opportunity, such other plan as agreed to by Executive and the Compensation Committee.	
 	
                    1.16   Restricted Period .  The term “Restricted Period” for purposes of this Agreement shall mean the period which starts on the date Executive’s employment by SunTrust or a SunTrust Affiliate terminates under circumstances which require SunTrust to make the payments and provide the benefits described in § 3 and which ends on the earlier of (a)(i) the first anniversary of such termination date for purposes of § 5 and (ii) the second anniversary of such termination date for all other purposes under this Agreement, or (b) on the first date following such a termination on which SunTrust either breaches any obligation to Executive under § 3 or no longer has any obligation to Executive under § 3.	
 	
                    1.17   SunTrust .  The term “SunTrust” for purposes of this Agreement shall mean SunTrust Banks, Inc. and any successor to SunTrust.	
 	
                    1.18   SunTrust Affiliate .  The term “SunTrust Affiliate” for purposes of this Agreement shall mean any corporation which is a subsidiary corporation (within the meaning of § 424(f) of the Code) of SunTrust except a corporation which has subsidiary corporation status under § 424(f) of the Code exclusively as a result of SunTrust or a SunTrust Affiliate holding stock in such corporation as a fiduciary with respect to any trust, estate, conservatorship, guardianship or agency.	
5

                    1.19   Term .  The term “Term” for purposes of this Agreement shall mean the period described in § 2(b).	
 	
                    1.20   Trade Secret .  The term “Trade Secret” for purposes of this Agreement shall mean information, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers that:	
 	
 	          (a) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and	
 	 	
 	          (b) is the subject of reasonable efforts by SunTrust or a SunTrust Affiliate to maintain its secrecy.	
 	 	
§ 2.	
 	
Effective Date and Term	
 	 	
 	          (a) Effective Date .  This Agreement shall be effective on the earlier of the date that	
 	 	
 	 	           (1) SunTrust no longer can participate in any transaction which can be accounted for on the “pooling of interests” method under the requirements of Accounting Principles Board Opinion No. 16, Business Combinations without regard to whether this Agreement is effective on such date,	
 	 	 	
 	 	           (2) a Change in Control cannot be accounted for on such “pooling of interests” method without regard to the date this Agreement becomes effective, or	
 	 	 	
 	 	          (3) a Change in Control can be accounted for on such “pooling of interests” method without regard to whether this Agreement is effective on the date of such Change in Control;	
 	 	 	
 	provided, this Agreement shall be effective at the end of the six (6) month period which starts on the date of this Agreement (even if neither § 2(1), § 2(2) nor § 2(3) is applicable) if SunTrust has not entered into a letter of intent or other written agreement to effect a Change in Control before the end of such period.	
 	 	 	
 	 	(b) Term .	
 	 	 	
 	 	          (1) The Term of this Agreement shall be the period which starts on the date on which this Agreement becomes effective under § 2(a) and ends (subject to § 2(b)(2) and § 2(b)(3)) on the third anniversary of such effective date.	
 	 	 	
 	 	          (2) The Term of this Agreement shall automatically be extended for one additional year effective as of the first anniversary of the date on which this Agreement becomes effective under § 2(a) and one additional year effective as of each such anniversary date thereafter unless either Executive or SunTrust delivers to the other person notice to the effect that there will be no such one year extension before the beginning of the 90 day	
6

 	 	period which ends on the anniversary date on which such automatic one year extension otherwise would have been effective.	
 	 	 	
 	 	          (3) (A)  If Executive’s Protection Period starts before the Term of this Agreement (as extended, if applicable, under § 2(b)(2)) expires, the then Term of this Agreement shall automatically be extended until the expiration of such Protection Period.	
 	 	 	
 	 	               (B) If Executive’s employment terminates during Executive’s Protection Period under the circumstances described in § 3(a) or if Executive’s employment terminates under the circumstances described in § 3(f) before the Term of this Agreement (as extended, if applicable, under § 2(b)(2)) expires, the then Term of this Agreement shall automatically be extended until the earlier of (1) the date Executive agrees that all SunTrust’s obligations to Executive under this Agreement have been satisfied in full or (B) the date a final determination is made pursuant to § 8 that SunTrust has no further obligations to Executive under this Agreement.	
 	 	 	
§ 3.	
 	
Compensation and Benefits	
 	 	 	
 	          (b) General .  If a Change in Control occurs during the Term of this Agreement and	
 	 	
 	          (1) SunTrust or a SunTrust Affiliate terminates Executive’s employment without Cause during Executive’s Protection Period or	
 	 	
 	          (2) Executive resigns for Good Reason during Executive’s Protection Period, then:	
 	 	 	
 	 	          (A) Cash Payment .  SunTrust shall pay Executive two (2) times Executive’s Current Compensation Package in cash in a lump sum within 30 days after the date Executive’s employment so terminates.	
 	 	 	
 	 	          (B) Stock Options .  Each outstanding stock option granted to Executive by SunTrust shall (subject to § 3(a)(2)(G)) immediately become fully vested and exercisable on the date Executive’s employment so terminates and Executive shall be deemed to continue to be employed by SunTrust for the period described in § 3(d) for purposes of determining when Executive’s right to exercise each such option expires notwithstanding the terms of any plan or agreement under which such option was granted.	
 	 	 	
 	 	          (C) Restricted Stock .  Any restrictions on any outstanding restricted or performance stock grants to Executive by SunTrust shall (subject to § 3(a)(2)(G)) immediately expire and Executive’s right to such stock shall be non-forfeitable notwithstanding the terms of any plan or agreement under which such grants were made.	
 	 	 	
 	 	          (D) Earned but Unpaid Salary, Bonus and Vacation .  SunTrust shall promptly pay Executive any earned but unpaid base salary and bonus, shall promptly pay Executive for any earned but untaken vacation and shall promptly reimburse Executive for any incurred but unreimbursed expenses which are	
7

 	 	otherwise reimbursable under SunTrust’s expense reimbursement policy as in effect for senior executives immediately before Executive’s employment so terminates.	
 	 	 	
 	 	          (E) MIP .  SunTrust shall pay Executive within 30 days after Executive’s employment terminates a portion of Executive’s target bonus or, if greater, Executive’s projected bonus under the MIP for the calendar year in which Executive’s employment terminates, where (1) Executive’s projected bonus shall be no less than the bonus which would have been projected under the projection procedures in effect under the MIP on the date of the Change in Control and (2) such portion shall be determined by multiplying such target bonus or, if greater, such projected bonus by a fraction, the numerator of which shall be the number of days Executive is employed in such calendar year and the denominator of which shall be the number of days in such calendar year.	
 	 	 	
 	 	          (F) PUP .  SunTrust shall pay Executive within 30 days after Executive’s employment terminates a portion of Executive’s target bonus or, if greater, Executive’s projected bonus under the PUP for each performance cycle in effect on the date Executive’s employment terminates, where (1) Executive’s projected bonus shall be no less than the bonus which would have been projected under the projection procedures in effect under the PUP on the date of the Change in Control and (2) such portion shall be determined by multiplying such target bonus or, if greater, such projected bonus by a fraction, the numerator of which shall be the number of days Executive is employed in each such performance cycle and the denominator of which shall be the number of days in each such performance cycle.	
 	 	 	
 	 	          (G) Pooling .  The provisions of § 3(a)(2)(B) and § 3(a)(2)(C) shall be effective on the earlier of (1) the date that SunTrust no longer can participate in any transaction which can be accounted for on the “pooling of interests” method under the requirements of Accounting Principles Board Opinion No. 16, Business Combinations without regard to whether these provisions are effective on such date, (2) the date there is a Change in Control which can not be accounted for on such “pooling of interests” method without regard to the date these provisions become effective or (3) the date there is a Change in Control which can be accounted for on such “pooling of interests” method without regard to whether these provisions are effective on the date of such Change in Control; provided, these provisions shall be effective at the end of the two (2) year period which starts on the date of this Agreement (even if neither § 3(a)(2)(G)(1), § 3(a)(2)(G)(2) nor § 3(a)(2)(G)(3) is applicable) if SunTrust has not entered into a letter of intent or other written agreement to effect a Change in Control before the end of such period.	
 	 	 	
 	          (b) Continuing Benefit Coverage .  If Executive’s employment terminates under the circumstances described in § 3(a) or § 3(f), SunTrust or a SunTrust Affiliate from the date of such termination of Executive’s employment until the end of Executive’s Protection Period shall provide to Executive medical, dental and life insurance benefits which are similar in all material respects as those benefits provided under SunTrust’s employee benefit plans, policies and programs to senior executives of SunTrust who have not terminated their employment. If SunTrust cannot provide such benefits under SunTrust’s employee benefit plans, policies and programs, SunTrust either shall provide such benefits to Executive outside such plans, policies and programs at no additional expense or tax liability to Executive or shall reimburse Executive for Executive’s cost to purchase such benefits and for any tax liability for such reimbursements.	
8

 	          (c) No Interference with Vested Benefits .  If Executive’s employment terminates under the circumstances described in § 3(a) or § 3(f), Executive shall have a right to any benefits under any employee benefit plan, policy or program maintained by SunTrust or any SunTrust Affiliate (other than the MIP, the PUP and the SunTrust Severance Pay Plan) which Executive had a right to receive under the terms of such employee benefit plan, policy or program after a termination of Executive’s employment without regard to this Agreement.	
 	 	
 	          (d) Additional Age and Service Credit .  If Executive’s employment terminates under the circumstances described in § 3(a) or § 3(f), Executive shall be deemed to have been employed by SunTrust throughout Executive’s Protection Period for purposes of computing Executive’s age and service credit on the date Executive’s employment so terminates under any deferred compensation or welfare plan, policy or program (except a plan described in § 401 of the Code) maintained by SunTrust or a SunTrust Affiliate in which Executive is a participant and under which Executive’s benefit, or eligibility for a benefit, is based in whole or in part on Executive’s age or service or age and service, and Executive shall receive such age and service credit notwithstanding the terms of any such plan, policy or program.	
 	 	
 	          (e) No Increase in Other Benefits; No Other Severance Pay .  If Executive’s employment terminates under the circumstances described in § 3(a) or § 3(f), Executive waives Executive’s right, if any, to have any payment made under this § 3 taken into account to increase the benefits otherwise payable to, or on behalf of, Executive under any employee benefit plan, policy or program, whether qualified or nonqualified, maintained by SunTrust or a SunTrust Affiliate and, further, waives Executive’s right, if any, to the payment of severance pay under any severance pay plan, policy or program maintained by SunTrust or a SunTrust Affiliate subject to the condition that SunTrust not be relieved of any of its obligations to Executive under this § 3 pursuant to § 3(g) or § 3(h).	
 	 	
 	          (f) Termination in Anticipation of Change in Control Date .  Executive shall be treated under § 3(a) as if Executive’s employment had been terminated without Cause or Executive had resigned for Good Reason during Executive’s Protection Period if (1)(A) Executive’s employment is terminated by SunTrust or a SunTrust Affiliate without Cause after a Change in Control but before the Change in Control Date which results from such Change in Control or (B) Executive resigns for Good Reason after a Change in Control but before the Change in Control Date which results from such Change in Control, (2) such Change in Control occurs on or after the date this Agreement becomes effective under § 2 and (3) there is a Change in Control Date which results from such Change in Control.	
 	 	
 	          (g) Death or Disability .  Executive agrees that SunTrust will have no obligations to Executive under this § 3 if Executive’s employment terminates exclusively as a result of Executive’s death or Executive has a Disability Termination.	
 	 	
 	          (h) Release .  Executive agrees that SunTrust will have no obligations to Executive under this § 3 until Executive executes the form of release which is attached as Exhibit A to this Agreement and, further, will have no further obligations to Executive under this § 3 if Executive revokes such release.	
9

§ 4.
No Solicitation of Customers or Clients
                    Executive shall not during the Restricted Period solicit any customer or client of SunTrust or any SunTrust Affiliate with whom Executive had any material business contact during the two (2) year period which ends on the date Executive’s employment by SunTrust or a SunTrust Affiliate terminates for the purpose of competing with SunTrust or any SunTrust Affiliate for any reason, either individually, or as an owner, partner, employee, agent, consultant, advisor, contractor, salesman, stockholder, investor, officer or director of, or service provider to, any corporation, partnership, venture or other business entity.
§ 5.
Antipirating of Employees
                    Absent the Compensation Committee’s written consent, Executive will not during the Restricted Period solicit to employ on Executive’s own behalf or on behalf of any other person, firm or corporation, any person who was employed by SunTrust or a SunTrust Affiliate during the term of Executive’s employment by SunTrust or a SunTrust Affiliate (whether or not such employee would commit a breach of contract), and who has not ceased to be employed by SunTrust or a SunTrust Affiliate for a period of at least one (1) year.
§ 6.
Trade Secrets and Confidential Information
                    Executive hereby agrees that Executive will hold in a fiduciary capacity for the benefit of SunTrust and each SunTrust Affiliate, and will not directly or indirectly use or disclose, any Trade Secret that Executive may have acquired during the term of Executive’s employment by SunTrust or a SunTrust Affiliate for so long as such information remains a Trade Secret.
                    Executive in addition agrees that during the Restricted Period Executive will hold in a fiduciary capacity for the benefit of SunTrust and each SunTrust Affiliate, and will not directly or indirectly use or disclose, any Confidential or Proprietary Information that Executive may have acquired (whether or not developed or compiled by Executive and whether or not Executive was authorized to have access to such information) during the term of, in the course of, or as a result of Executive’s employment by SunTrust or a SunTrust Affiliate.
§ 7.
Reasonable and Necessary Restrictions and Non-Disparagement
                    Executive acknowledges that the restrictions, prohibitions and other provisions set forth in this Agreement, including without limitation the Territory and Restricted Period, are reasonable, fair and equitable in scope, terms and duration; are necessary to protect the legitimate business interests of SunTrust; and are a material inducement to SunTrust to enter into this Agreement.  Executive covenants that Executive will not challenge the enforceability of this Agreement nor will Executive raise any equitable defense to its enforcement.  Further, Executive and SunTrust each agree not to knowingly make false or materially misleading statements or disparaging comments about the other during the Restricted Period.
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§ 8.
Arbitration
                    Any dispute, controversy or claim arising out of or relating to this Agreement shall be determined by binding arbitration in accordance with Title 9 of the United States Code and the applicable set of arbitration rules of the American Arbitration Association.  Judgment upon any award made in such arbitration may be entered and enforced in any court of competent jurisdiction.  All statutes of limitation which would otherwise be applicable in a judicial action brought by a party shall apply to any arbitration or reference proceeding hereunder.  Neither SunTrust nor Executive shall appeal such award to or seek review, modification, or vacation of such award in any court or regulatory agency.  Unless otherwise agreed, venue for arbitration shall be in Atlanta, Georgia.  All of Executive’s reasonable costs and expenses incurred in connection with such arbitration shall be paid in full by SunTrust promptly on written demand from Executive, including the arbitrators’ fees, administrative fees, travel expenses, out-of-pocket expenses such as copying and telephone, court costs, witness fees and attorneys’ fees; provided, however, SunTrust shall pay no more than $30,000 in attorneys’ fees unless a higher figure is awarded in the arbitration, in which event SunTrust shall pay the figure awarded in the arbitration.
§ 9.
Tax Protection
                    If SunTrust or SunTrust’s independent accountants determine that any payments and benefits called for under this Agreement together with any other payments and benefits made available to Executive by SunTrust or a SunTrust Affiliate will result in Executive being subject to an excise tax under § 4999 of the Code or if such an excise tax is assessed against Executive as a result of any such payments and other benefits, SunTrust shall make a Gross Up Payment to or on behalf of Executive as and when any such determination or assessment is made, provided Executive takes such action (other than waiving Executive’s right to any payments or benefits) as SunTrust reasonably requests under the circumstances to mitigate or challenge such tax.  Any determination under this § 9 by SunTrust or SunTrust’s independent accountants shall be made in accordance with § 280G of the Code and any applicable related regulations (whether proposed, temporary or final) and any related Internal Revenue Service rulings and any related case law and, if SunTrust reasonably requests that Executive take action to mitigate or challenge, or to mitigate and challenge, any such tax or assessment (other than waiving Executive’s right to any payment or benefit) and Executive complies with such request, SunTrust shall provide Executive with such information and such expert advice and assistance from SunTrust’s independent accountants, lawyers and other advisors as Executive may reasonably request and shall pay for all expenses incurred in effecting such compliance and any related fines, penalties, interest and other assessments.
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§ 10.
Miscellaneous Provisions
                    10.1 Assignment .  This Agreement is for the personal services of Executive, and the rights and obligations of Executive under this Agreement are not assignable in whole or in part by Executive without the prior written consent of SunTrust.  This Agreement is assignable in whole or in part to any successor to SunTrust. However, if SunTrust as part of any Change in Control transaction fails to assign SunTrust’s obligations under this Agreement to SunTrust’s successor or such successor fails to expressly agree to such assignment on or before the Change in Control Date, SunTrust on the Change in Control Date shall (without any further action on the part of Executive) take the action called for in § 3 of this Agreement as if Executive had been terminated without Cause without regard to whether Executive’s employment actually has terminated.
                    10.2 Governing Law .  This Agreement will be governed by and construed under the laws of the State of Georgia (without reference to the choice of law principles thereof), except to the extent superseded by federal law.
                    10.3 Counterparts .  This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
                    10.4 Headings; References .  The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  Any reference to a section (§ ) shall be to a section (§ ) of this Agreement unless there is an express reference to a section (§ ) of the Code or the Exchange Act, in which event the reference shall be to the Code or to the Exchange Act, whichever is applicable.
                    10.5 Amendments and Waivers .  Except as otherwise specified in this Agreement, this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of SunTrust and Executive.
                    10.6 Severability .  Any provision of this Agreement held to be unenforceable under applicable law will be enforced to the maximum extent possible, and the balance of this Agreement will remain in full force and effect.
                    10.7 Entire Agreement .  This Agreement constitutes the entire understanding and agreement of SunTrust and Executive with respect to the matters contemplated in this Agreement, and supersedes all prior understandings and agreements between SunTrust and Executive with respect to such transactions.
                    10.8 Notices .  Any notice required hereunder to be given by either SunTrust or Executive will be in writing and will be deemed effectively given upon personal delivery to the party to be notified or five (5) days after deposit with the United States Post Office by registered or certified mail, postage prepaid, to the other party at the address set forth below or to such other address as either party may from time to time designate by ten (10) days advance written notice pursuant to this § 10.8.  All such written communication will be directed as follows:

 	If to SunTrust:	
 	 	
 	SunTrust Banks, Inc.	
 	Attention:  Chief Executive Officer
303 Peachtree St., NE, 30th Floor	
12

 	Atlanta, GA  30308	
If to Executive, to the most recent address Executive has provided to SunTrust for inclusion in Executive’s personnel records.
                    10.9 Binding Effect .  This Agreement shall be for the benefit of, and shall be binding upon, SunTrust and Executive and their respective heirs, personal representatives, legal representatives, successors and assigns, subject, however, to the provisions in § 10.1 of this Agreement.
                    10.10 Not an Employment Contract .  This Agreement is not an employment contract and shall not give Executive the right to continue in employment by SunTrust or a SunTrust Affiliate for any period of time or from time to time.  Moreover, this Agreement shall not adversely affect the right of SunTrust or a SunTrust Affiliate to terminate Executive’s employment with or without cause at any time.
                    IN WITNESS WHEREOF , SunTrust and Executive have entered into this Agreement this 3rd day of September, 2002, and such date shall be the date of this Agreement.

SUNTRUST BANKS, INC.	 	EXECUTIVE	
 	 	 	
By:	 	 	 	
 	                      /s/ Mary T. Steele	 	 /s/ Cecil Eugene Kirby	 	
 		 		 	
 	Mary T. Steele	 	Cecil Eugene Kirby	 	
Title:	Senior Vice President and
Human Resources Director	 	 	 	
13

EXHIBIT 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
         In connection with the Quarterly Report on Form 10-Q of SunTrust Banks, Inc. (the “Company”) for the quarterly period ended September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, L. Phillip Humann, Chairman of the Board, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and	
 	 	
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	
 		
  /s/ L. Phillip Humann		
	 	
L. Phillip Humann
Chairman of the Board, President
and Chief Executive Officer	 	

Date:	 November 12, 2002	

 
EXHIBIT 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
          In connection with the Quarterly Report on Form 10-Q of SunTrust Banks, Inc. (the “Company”) for the quarterly period ended September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John W. Spiegel, Vice Chairman of the Board and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(3)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and	
 	 	
(4)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	
 	 	
/s/ John W. Spiegel		
	 	
John W. Spiegel
Vice Chairman of the Board
and Chief Financial Officer	 	
 	 	
Date:       November 12, 2002