2003 FORM 10-K
 
Securities and Exchange Commission
Washington, DC 20549
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 2003
Commission file number 1-8918
 
SunTrust Banks, Inc.
Incorporated in the State of Georgia
IRS Employer Identification Number 58-1575035
Address: 303 Peachtree Street, NE, Atlanta, GA 30308
Telephone: (404) 588-7711
 
Securities Registered Pursuant to Section 12(b) of the Act: Common Stock–$1.00 par value, which is registered on the New York Stock Exchange.
 
As of January 31, 2004, SunTrust had 282,179,309 shares of common stock outstanding.
 
SunTrust (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.
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
 
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act.) þ
 
As of June 30, 2003, SunTrust had 281,392,725 shares of common stock outstanding. The aggregate market value of SunTrust common stock held by non-affiliates on June 30, 2003 was approximately $16.6 billion.

Annual Report 2003	  	 	  	SunTrust Banks, Inc.	

EXECUTIVE OFFICERS

Name
	  	Business Experience
	  	Age
	
L. Phillip Humann	  	Chairman of the Board, President and Chief Executive Officer of the Company. He is a Director of Coca-Cola Enterprises Inc., Equifax Inc. and Haverty Furniture Companies, Inc. Mr. Humann has been a director of the Company since 1991.	  	58	
			
John W. Clay, Jr.	  	A Vice Chairman of the Company since August 2000 with management oversight of banking functions, including corporate and investment banking. From 1997 until August 2000 he was an Executive Vice President of the Company. Prior to 1997, he was Chief Executive Officer of the Company’s Tennessee banking operations.	  	62	
			
Theodore J. Hoepner	  	A Vice Chairman of the Company since August 2000 with responsibility for the Company’s asset quality, efficiency and quality initiatives, human resources and legal and regulatory affairs. Mr. Hoepner is also Chief Risk Officer, effective as of February 2003, to include responsibility for the Company’s audit and internal control functions. From August 2000 until February 2003, Mr. Hoepner also had responsibility for the Company’s technology and operations functions. From 1995 until August 2000 he was an Executive Vice President of the Company, with responsibility for the Company’s Florida banking operations. From 1999 through August 2000 he also had responsibility for SunTrust Service Corporation, human resources and efficiency and quality initiatives.	  	62	
			
John W. Spiegel	  	A Vice Chairman of the Company since August 2000 with responsibility for the Company’s finance-related functions. Mr. Spiegel is also Chief Financial Officer, a position he has held for more than five years. Prior to August 2000 he was an Executive Vice President of the Company.	  	62	
			
James M. Wells III	  	A Vice Chairman of the Company since August 2000 with responsibility for oversight of the Company’s commercial, retail, mortgage and private client services lines of business. He also has senior executive responsibility for the Company’s marketing and corporate strategy units, and, as of February 2003, has responsibility for the Company’s technology and operations functions. From January 2000 to August 2000 Mr. Wells served as President and Chief Executive Officer of the Company’s Mid-Atlantic region. From 1988 to January 2000 he served as President of Crestar Financial Corporation and Crestar Bank.	  	57	
			
Jorge Arrieta	  	A Senior Vice President, Controller and Chief Accounting Officer of the Company. Prior to August 2002, Mr. Arrieta was a First Vice President in the Financial Accounting area.	  	49	
			
Charles T. Hill	  	An Executive Vice President of the Company and, since January 2001, Chairman, President and Chief Executive Officer of the Mid-Atlantic banking operations. From August 2000 to January 2001, Mr. Hill was President and Chief Executive Officer of the Mid-Atlantic banking operations. Prior to August 2000, Mr. Hill was Executive Vice President, Commercial Banking, and Senior Credit Officer for the Mid-Atlantic region.	  	53	

					
Name
	  	Business Experience
	  	Age
	
C. Eugene Kirby	  	An Executive Vice President and Retail Banking Line of Business Head. Prior to 2002, Mr. Kirby was the Director of eBusiness for the Company and prior to that he was an Executive Vice President in the Retail Banking area.	  	44	
			
George W. Koehn	  	An Executive Vice President of the Company and, since August 2000, Chairman and Chief Executive Officer of the Company’s Florida banking operations. Prior to August 2000, Mr. Koehn was President of the Florida banking operations and Chairman and Chief Executive Officer of the Central Florida banking unit.	  	60	
			
Carl F. Mentzer	  	An Executive Vice President of the Company and Commercial Line of Business Head. In May 1995, Mr. Mentzer was elected Chairman of the Board and Chief Executive Officer of SunTrust Bank, Tampa Bay and held that position until December 31, 1999.	  	58	
			
William H. Rogers, Jr.	  	An Executive Vice President of the Company. Since October 2000 Mr. Rogers has had responsibility for trust, investment and private client services. Prior to October 2000, Mr. Rogers was head of Georgia community banking and the Georgia retail line of business.	  	46	
			
R. Charles Shufeldt	  	An Executive Vice President and line of business head for the Company’s Corporate and Investment Banking Unit since August 2000. Prior to that, Mr. Shufeldt served as Senior Vice President in the same unit.	  	53	
			
E. Jenner Wood, III	  	Chairman, President and Chief Executive Officer of SunTrust Bank, Central Group since June 2002 and an Executive Vice President of the Company. Prior to June 2002, Mr. Wood was Chairman, President and CEO of SunTrust Bank, Georgia. Prior to April 2001, Mr. Wood was President of SunTrust Bank, Georgia since October 2000 and prior to that he was responsible for trust, investment and private client services.	  	52	
 
February 23, 2004

Item  15.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	
 
EXHIBIT INDEX

Exhibit
	  	Description
	  	Sequential
Page
Number
	
3.1	  	Amended and Restated Articles of Incorporation of SunTrust Banks, Inc. (“Registrant”) effective as of November 14, 1989, and amendment effective as of April 24, 1998, incorporated by reference to Exhibit 3.1 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
3.2	  	Amendment to Restated Articles of Incorporation of Registrant, effective April 18, 2000, incorporated by reference to Exhibit 3.1 of Registrant’s Form 10-Q as of March 31, 2000.	  	*	
			
3.3	  	Bylaws of Registrant, amended effective as of April 16, 2002, incorporated by reference to Exhibit 3.3 to Registrant’s Form 10-Q as of March 31, 2002.	  	*	
			
4.1	  	Indenture Agreement between Registrant and Morgan Guaranty Trust Company of New York, as Trustee, incorporated by reference to Exhibit 4(a) to Registration Statement No. 33-00084.	  	*	
			
4.2	  	Indenture between Registrant and PNC, N.A., as Trustee, incorporated by reference to Exhibit 4(a) to Registration Statement No. 33-62162.	  	*	
			
4.3	  	Indenture between Registrant and The First National Bank of Chicago, as Trustee, incorporated by reference to Exhibit 4(b) to Registration Statement No. 33-62162.	  	*	
			
4.4	  	Form of Indenture to be used in connection with the issuance of Subordinated Debt Securities, incorporated by reference to Exhibit 4.4 to Registration Statement No. 333-25381.	  	*	
			
4.5	  	Form of Indenture, dated as of February 1, 1985, between SunTrust Bank Holding Company (as successor in interest to Crestar Financial Corporation) and The Chase Manhattan Bank, as Trustee, incorporated by reference to Exhibit 4.3 to Registration Statement No. 333-61583.	  	*	
			
4.6	  	Form of Indenture, dated as of September 1, 1993, between SunTrust Bank Holding Company (as successor in interest to Crestar Financial Corporation) and The Chase Manhattan Bank, as Trustee, incorporated by reference to Exhibit 4.1 to Registration Statement No. 333-50387.	  	*	
			
4.7	  	Form of Third Supplemental Indenture (to Indenture dated as of February 1, 1985), dated as of July 1, 1992, between SunTrust Bank Holding Company (as successor in interest to Crestar Financial Corporation) and The Chase Manhattan Bank, as Trustee, incorporated by reference to Registration Statement No. 333-61583.	  	*	
			
4.8	  	Form of resolutions of the Board of Directors of Crestar Financial Corporation (now known as SunTrust Bank Holding Company) approving issuance of $150 million of 8 3/4% Subordinated Notes Due 2004, incorporated by reference to Exhibit 4.6 to Registration Statement No. 333-61583.	  	*	

					
			
  4.9	  	Form of First Supplemental Indenture (to Indenture dated as of September 1, 1993), dated as of January 1, 1998, between SunTrust Bank Holding Company (as successor in interest to Crestar Financial Corporation) and The Chase Manhattan Bank, as Trustee, incorporated by reference to Exhibit 4.7 to Registration Statement No. 333-61583.	  	*	
			
 	  	Material Contracts and Executive Compensation Plans and Arrangements	  	 	
			
10.1	  	SunTrust Banks, Inc. Supplemental Executive Retirement Plan effective as of January 1, 2001, and First Amendment and Second Amendment thereto, incorporated by reference to Exhibit 10.1 to Registrant’s 2002 Annual Report on Form 10-K.	  	*	
			
10.2	  	SunTrust Banks, Inc. ERISA Excess Retirement Plan, effective as of August 13, 1996, and amendment effective as of November 10, 1998, incorporated by reference to Exhibit 10.10 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.3	  	SunTrust Banks, Inc. Performance Unit Plan, amended and restated as of August 11, 1998, incorporated by reference to Exhibit 10.11 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.4	  	SunTrust Banks, Inc. Management Incentive Plan, amended and restated as of February 8, 2000, incorporated by reference to Exhibit 10.11 to Registrant’s 1999 Annual Report on Form 10-K.	  	*	
			
10.5	  	SunTrust Banks, Inc. 401(k) Excess Plan Amended and Restated as of July 1, 1999, incorporated by reference to Exhibit 10.12 to Registrant’s 1999 Annual Report on Form 10-K.	  	*	
			
10.6	  	Amendment Number One dated December 1, 2001 to the SunTrust Banks, Inc. 401(k) Excess Plan Amended and Restated as of July 1, 1999, incorporated by reference to Exhibit 10.8 of Registrant’s 2001 Annual Report on Form 10-K.	  	*	
			
10.7	  	Amendment Number Two dated December 31, 2002 to the SunTrust Banks, Inc. 401(k) Excess Plan Amended and Restated as of July 1, 1999, incorporated by reference to Exhibit 10.7 to Registrant’s 2002 Annual Report on Form 10-K.	  	*	
			
10.8	  	SunTrust Banks, Inc. Executive Stock Plan, incorporated by reference to Exhibit 10.16 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.9	  	Amendment to SunTrust Banks, Inc. 1986 Executive Stock Plan, effective February 10, 1998 (filed herewith).	  	___	
			
10.10	  	SunTrust Banks, Inc. Performance Stock Agreement, effective February 11, 1992, and First Amendment to Performance Stock Agreement effective February 10, 1998 (filed herewith).	  	___	
			
10.11	  	SunTrust Banks, Inc. 1995 Executive Stock Plan, incorporated by reference to Exhibit 10.16 to Registrant’s 1999 Annual Report on Form 10-K.	  	*	
			
10.12	  	Amendment to the SunTrust Banks, Inc. 1995 Executive Stock Plan, effective as of August 11, 1998, incorporated by reference to Exhibit 10.20 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.13	  	SunTrust Banks, Inc. 2000 Stock Plan, effective February 8, 2000, incorporated by reference to Exhibit A to Registrant’s 2000 Proxy Statement on Form 14A.	  	*	

					
			
10.14	  	SunTrust Banks, Inc. Deferred Compensation Plan, effective October 1, 1999 and Amendment Number One, effective October 31, 1999, incorporated by reference to Exhibit 10.19 to Registrant’s 1999 Annual Report on Form 10-K.	  	*	
			
10.15	  	Amendment to Exhibit A to the SunTrust Banks, Inc. Deferred Compensation Plan, effective January 1, 2000, incorporated by reference to Exhibit 10.21 of Registrant’s 2000 Annual Report on Form 10-K.	  	*	
			
10.16	  	Amendment to SunTrust Banks, Inc., Deferred Compensation Plan, effective as of January 1, 2004 (filed herewith).	  	___	
			
10.17	  	SunTrust Banks, Inc. Directors Deferred Compensation Plan effective as of January 1, 1994, incorporated by reference to Exhibit 10.21 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.18	  	Crestar Financial Corporation Executive Life Insurance Plan, as amended and restated effective January 1, 1991, and amendments effective December 18, 1992, March 30, 1998, and December 30, 1998, incorporated by reference to Exhibit 10.23 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.19	  	1981 Stock Option Plan of Crestar Financial Corporation and Affiliated Corporations, as amended through January 24, 1997, incorporated by reference to Exhibit 10.24 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.20	  	Change in Control Agreements between Registrant and various executives, incorporated by reference to Exhibits 10.1 through 10.10 of Registrant’s Form 10-Q and Form 10-QA as of March 31, 2001.	  	*	
			
10.21	  	Change in Control Agreement dated April 15, 2002, between Registrant and Sandra W. Jansky, incorporated by reference to Exhibit 10.1 of Registrant’s Form 10-Q as of June 30, 2002.	  	*	
			
10.22	  	Change in Control Agreement dated September 3, 2002, between Registrant and Cecil Eugene Kirby, incorporated by reference to Exhibit 10.2 of Registrant’s Form 10-Q as of September 30, 2002.	  	*	
			
10.23	  	Change in Control Agreement dated August 30, 2002 between Registrant and Jorge Arrieta, incorporated by reference to Exhibit 10.1 of Registrant’s Form 10-Q as of September 30, 2002.	  	*	
			
10.24	  	Change in Control Agreement dated January 27, 2003 between Registrant and Richard G. Blumberg, incorporated by reference to Exhibit 10.23 to Registrant’s 2002 Annual Report on Form 10-K.	  	*	
			
10.25	  	Change in Control Agreement dated January 24, 2003 between Registrant and Mark A. Chancy, incorporated by reference to Exhibit 10.24 to Registrant’s 2002 Annual Report on Form 10-K.	  	*	
			
10.26	  	Change in Control Agreement dated January 17, 2003 between Registrant and Sterling Edmunds, Jr., incorporated by reference to Exhibit 10.25 to Registrant’s 2002 Annual Report on Form 10-K.	  	*	
			
10.27	  	Change in Control Agreement dated January 28, 2003 between Registrant and Louis S. Tiller, Jr., incorporated by reference to Exhibit 10.26 to Registrant’s 2002 Annual Report on Form 10-K.	  	*	

					
			
10.28	  	Change in Control Agreement dated January 24, 2003 between Registrant and Edward M. Westerman, incorporated by reference to Exhibit 10.27 to Registrant’s 2002 Annual Report on Form 10-K.	  	*	
			
10.29	  	Change in Control Agreement dated April 14, 2003 between Registrant and Douglas S. Phillips, incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q as of March 31, 2003.	  	*	
			
10.30	  	Change in Control Agreement dated February 27, 2003 between Registrant and Timothy E. Sullivan, incorporated by reference to Exhibit 10.2 to Registrant’s Form 10-Q as of March 31, 2003.	  	*	
			
10.31	  	Employment Agreement between Registrant and James M. Wells III, effective as of December 31, 1998, incorporated by reference to Exhibit 10.24 to Registrant’s 1999 Annual Report on Form 10-K.	  	*	
			
10.32	  	Crestar Financial Corporation Excess Benefit Plan, amended and restated effective December 26, 1990 and amendments thereto (effective December 18, 1992, March 30, 1998 and December 30, 1998), incorporated by reference to Exhibit 10.29 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.33	  	United Virginia Bankshares Incorporated Deferred Compensation Program under Incentive Compensation Plan of United Virginia Bankshares Incorporated and Affiliated Corporation, amended and restated through December 7, 1983, incorporated by reference to Exhibit 10.30 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.34	  	Amendments (effective January 1, 1987 and January 1, 1988) to United Virginia Bankshares Incorporated Deferred Compensation Program Under Incentive Compensation Plan of United Virginia Bankshares Incorporated and Affiliated Corporations, incorporated by reference to Exhibit 10.29 of Registrant’s 2000 Annual Report on Form 10-K.	  	*	
			
10.35	  	Amendment (effective January 1, 1994) to Crestar Financial Corporation Deferred Compensation Program Under Incentive Compensation Plan of Crestar Financial Corporation and Affiliated Corporations, incorporated by reference to Exhibit 10.30 to Registrant’s 2000 Annual Report on Form 10-K.	  	*	
			
10.36	  	Amendment (effective September 21, 1995) to Crestar Financial Corporation Deferred Compensation Program Under Incentive Compensation Plan of Crestar Financial Corporation and Affiliated Corporations, incorporated by reference to Exhibit 10.34 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.37	  	Crestar Financial Corporation Deferred Compensation Plan for Outside Directors of Crestar Financial Corporation and Crestar Bank, amended and restated through December 13, 1983 and amendments thereto (effective January 1, 1985, April 24, 1991, December 31, 1993 and October 23, 1998), incorporated by reference to Exhibit 10.35 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.38	  	Amendment (effective January 1, 1999) to Crestar Financial Corporation Deferred Compensation Plan for Outside Directors of Crestar Financial Corporation, incorporated by reference to Exhibit 10.32 to Registrant’s 1999 Annual Report on Form 10-K.	  	*	

					
			
10.39	  	Crestar Financial Corporation Additional Nonqualified Executive Plan, amended and restated effective December 26, 1990 and amendments thereto (effective December 18, 1992, March 30, 1998 and December 30, 1998), incorporated by reference to Exhibit 10.36 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.40	  	Crestar Financial Corporation 1993 Stock Incentive Plan, as amended and restated effective February 28, 1997 (filed herewith).	  	___	
			
10.41	  	Amendments (effective December 19, 1997) to Crestar Financial Corporation 1993 Stock Incentive Plan, incorporated by reference to Exhibit 10.38 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.42	  	Crestar Financial Corporation Supplemental Executive Retirement Plan, effective January 1, 1995, incorporated by reference to Exhibit 10.37 to Registrant’s 2000 Annual Report on Form 10-K.	  	*	
			
10.43	  	Amendments (effective December 20, 1996) to the Crestar Financial Corporation Supplemental Executive Retirement Plan (filed herewith).	  	___	
			
10.44	  	Amendments (effective December 17, 1997) to Crestar Financial Corporation Supplemental Executive Retirement Plan (filed herewith).	  	___	
			
10.45	  	Amendments (effective December 19, 1997 and December 29, 1998) to the Crestar Financial Corporation Supplemental Executive Retirement Plan, incorporated by reference to Exhibit 10.42 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.46	  	Crestar Financial Corporation Directors’ Equity Program, effective January 1, 1996, incorporated by reference to Exhibit 10.36 of Registrant’s 2001 Annual Report on Form 10-K.	  	*	
			
10.47	  	Amendment (effective December 20, 1996) to Crestar Financial Corporation Directors’ Equity Program, incorporated by reference to Exhibit 10.37 of Registrant’s 2001 Annual Report on Form 10-K.	  	*	
			
10.48	  	Amendment (effective September 26, 1997) to Crestar Financial Corporation Directors’ Equity Plan (filed herewith).	  	___	
			
10.49	  	Amendments (effective October 23, 1998) to Crestar Financial Corporation Directors’ Equity Program, incorporated by reference to Exhibit 10.47 to Registrant’s 1998 Annual Report on Form 10-K.	  	*	
			
10.50	  	Amendment (effective October 23, 1998) to Crestar Financial Corporation Directors’ Equity Program, incorporated by reference to Exhibit 10.44 to Registrant’s 1999 Annual Report on Form 10-K.	  	*	
			
10.51	  	Lighthouse Mortgage Corporation 1994 Stock Option Plan, incorporated by reference to Exhibit 4.1 to Registration Statement No. 333-106638.	  	*	
			
11.1  	  	Statement re computation of per share earnings (filed herewith).	  	___	
			
12.1  	  	Ratio of Earnings to Fixed Changes (filed herewith).	  	___	

					
			
13.1	  	Registrant’s 2003 Annual Report to Shareholders (filed herewith).	  	___	
			
21.1	  	Registrant’s Subsidiaries (filed herewith).	  	___	
			
22.1	  	Registrant’s Proxy Statement relating to the 2004 Annual Meeting of Shareholders, dated March 1, 2004, which will be filed by March 8, 2004.	  	___	
			
23.1	  	Consent of Independent Public Accountants (filed herewith).	  	___	
			
31.1	  	Certification of Chairman of the Board, President and CEO, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).	  	___	
			
31.2	  	Certification of Chief Financial Officer and Vice Chairman, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).	  	___	
			
32.1	  	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 (filed herewith).	  	___	
			
32.2	  	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 (filed herewith).	  	___	
 
Certain instruments defining rights of holders of long-term debt of Registrant and its subsidiaries are not filed herewith pursuant to Item 601(b)(4)(iii) of Regulation S-K. At the Commission’s request, Registrant agrees to give the Commission a copy of any instrument with respect to long-term debt of Registrant and its consolidated subsidiaries and any of its unconsolidated subsidiaries for which financial statements are required to be filed under which the total amount of debt securities authorized does not exceed ten percent of the total assets of Registrant and its subsidiaries on a consolidated basis.
 
*	Incorporated by reference.	
 
Certain statistical data required by the Securities and Exchange Commission are included on pages AR 14 thru AR 50 .
 
EXHIBIT 10.9
 
AMENDMENT TO
1986 EXECUTIVE STOCK PLAN
 
COMPENSATION COMMITTEE
OF THE
BOARD OF DIRECTORS
SUNTRUST BANKS, INC.
 
February 10, 1998
 
The SunTrust Banks, Inc. 1986 Executive Stock Plan (the “Plan”), is hereby amended, effective as of February 10, 1998, as set forth below.
 
Any term which is not defined below shall have the meaning set forth in the Plan.
 
 	1.	Section 8.1 of the Plan is hereby amended by adding a paragraph at the end thereof as follows:	
 
The Committee shall also have the right to insert provisions in any Restricted or Performance Stock Agreement, either at the time such Restricted or Performance Stock Agreement is entered into or subsequent to such time, whereby the Restricted or Performance Stock (or a portion thereof) granted under such Restricted or Performance Stock Agreement may be converted into units, each of which will have a value equal at all times to a share of Stock (each such unit, a “Phantom Stock Unit”). Phantom Stock Units shall be subject to such terms and conditions (including, but not limited to the payment of dividends or the crediting of dividend equivalents in respect of such Phantom Stock Units) not inconsistent with this Plan as the Committee may, in its sole discretion, determine.
 
IN WITNESS WHEREOF, SunTrust Banks, Inc. has caused this Amendment to be executed by a duly authorized officer as of the day and year first above written.

SUNTRUST BANKS, INC.	
		
By	 	/s/ SunTrust Banks, Inc.	

 	 		

EXHIBIT 10.10
 
PERFORMANCE STOCK AGREEMENT
FIRST AMENDMENT
EFFECTIVE FEBRUARY 10, 1998
 
The terms and conditions set forth in the SunTrust Banks, Inc. Performance Stock Agreement(s) (the “Agreement(s)”) entered into with «FirstName» «LastName» under the Executive Stock Plan (the “Plan”), are hereby amended, effective as of February 10, 1998, as set forth below.
 
Performance Stock Granted in 1990

Grant #1 Award	  	«A1Grant» Shares	
Grant #2 Award	  	«A2Grant» Shares	
Grant #3 Award	  	«A3Grant» Shares	
Grant #4 Award	  	«A4Grant» Shares	
Grant #5 Award	  	«A5Grant» Shares	
 
Performance Stock Granted in 1992

Grant #1 Award	  	«B1Grant» Shares	
Grant #2 Award	  	«B2Grant» Shares	
Grant #3 Award	  	«B3Grant» Shares	
Grant #4 Award	  	«B4Grant» Shares	
 
Any term which is not defined below shall have the meaning set forth in the Agreement(s).
 
 	1.	The Agreement(s) is hereby amended by adding a Section 3.A thereto as follows:	
 
 	§	3. A Phantom Stock Units .	
 
 	(a)	As of February 10, 2000 (the “Conversion Date”), an aggregate of «TotalShares» shares of Performance Stock previously awarded to the Grantee and with respect to which the relevant stock price condition set forth in §2 has been satisfied (such number of shares being set forth above and hereinafter referred to as the “Converted Shares”) shall be converted into “Phantom Stock Units” (as described below) at the rate of one Phantom Stock Unit per Converted Share; provided , however , that no such conversion shall occur if, prior to the Conversion Date, (1) the Grantee’s employment with	

 	SunTrust and its Subsidiaries shall have terminated for any reason or (2) a “Change in Control” (as defined in §4) shall have occurred.	
 
 	(b)	The value of each Phantom Stock Unit shall at all times be equal to the value of a share of Stock. As of the Conversion Date, such Phantom Stock Units shall be fully vested and no longer subject to the conditions of §3 hereof. Payment in respect of such Phantom Stock Units shall be made to the Grantee in shares of Stock upon the earlier to occur of (1) the date on which the Grantee would otherwise have satisfied the conditions of §3(a) hereof with respect to the Converted Shares and (2) the date of occurrence of a “Change in Control.”	
 
 	(c)	Upon the payment of dividends with respect to shares of Stock, the Grantee will be entitled to receive, with respect to each Phantom Stock Unit held by such Grantee, a cash payment equal to the dividend the Grantee would have received had such Phantom Stock Unit been a share of Stock.	

SUNTRUST BANKS, INC.	
		
By:	 	 	
 	 		
 	 	Authorized Officer	
 
ACKNOWLEDGEMENT
 
I hereby approve the First Amendment to the Performance Stock Agreement(s) set forth under the Executive Stock Plan.

			

Grantee	 	 	 	Date	

EXHIBIT 10.10a

[GRAPHIC]	 	PERFORMANCE STOCK
AGREEMENT	 	 	
 
SunTrust Banks, Inc. (“SunTrust”), a Georgia corporation, pursuant to action of the Compensation Committee (“Committee”) of its Board of Directors and in accordance with the SunTrust Banks, Inc. Executive Stock Plan (“Plan”) has made the following 5 Performance Stock grants (“Grants”) to 1 - (“Grantee”) as an incentive for Grantee to promote the interest of SunTrust and its Subsidiaries:

		
Grant 1	  	5~ Shares	
		
Grant 2	  	5~ Shares	
		
Grant 3	  	5~ Shares	
		
Grant 4	  	5~ Shares	
		
Grant 5	  	5~ Shares	

TOTAL	  	4~ Shares	
 
This Performance Stock Agreement evidences these Grants, and these Grants have been made subject to all the terms and conditions set forth on the reverse side of this Performance Stock Agreement and in the Plan. These Grants have been made as of February 11, 1992 (“Grant Date”).

SUNTRUST BANKS, INC.	

	
Authorized Officer	
 
ACKNOWLEDGMENT
 
Grantee hereby acknowledges the receipt of this Performance Stock Agreement.

			

Grantee	 	 	 	Date	

TERMS AND CONDITIONS OF PERFORMANCE STOCK GRANTED ON FEBRUARY 11, 1992
 
§ 1. Grants . All of the Grants have been made subject to all the terms and conditions set forth in the Plan and in this Performance Stock Agreement.
 
§ 2. Average Stock Price Conditions . A grant shall be awarded under this Performance Stock Agreement on the first date (which comes before the earlier of the fifth anniversary of the Grant Date or the date the Grantee’s employment terminates for any reason whatsoever) that the average closing price for a share of Stock (as accurately reported In The Wall Street Journal or any successor selected by the Committee) over 20 consecutive trading days (on the New York Stock Exchange or any successor exchange on which Stock is traded) equals or exceeds the average stock price condition for such grant as follows:

Grants
	  	Average Stock
Price Condition
	
Grant 1	  	$	45.60	
Grant 2	  	 	53.20	
Grant 3	  	 	60.80	
Grant 4	  	 	68.40	
Grant 5	  	 	76.00	
 
However, if a grant fails to satisfy the related average stock price condition before the earlier of the fifth anniversary of the Grant Date or the date the Grantee’s employment terminates for any reason whatsoever, such grant automatically shall be forfeited as of the earlier of such fifth anniversary of the Grant Date or the date his employment terminates. If a grant is awarded to Grantee under this § 2, he thereafter shall be eligible to receive the dividends, if any, paid with respect to the Stock subject to such grant and to vote such Stock (to the same extent he would have been entitled to receive such dividends and to vote such Stock if he had purchased such Stock on the date the underlying grant is awarded to him) in accordance with the terms and conditions set forth in the Plan (including any dividend deferral election available under the Plan) respecting dividends and voting until the date he either forfeits his interest in such grant under this Performance Stock Agreement or such shares of Stock are transferred to him under § 3 or § 4.
 
§ 3. Service Conditions .
 
(a) All of the Grants have been made subject to a service condition, and Grantee shall satisfy such condition with respect to each grant if he remains in the continuous employ of SunTrust and its Subsidiaries from the Grant Date through the earlier of the date he reaches age 64 or the 15th anniversary of the date such grant is awarded to him under § 2 and, if he fails to satisfy such service condition with respect to any such grant, he shall forfeit his interest in such grant unless (1) the Committee waives this service condition at the time his employment actually terminates or (2) the Grantee’s employment with SunTrust and its Subsidiaries terminates by reason of his death or his disability (as determined by the Committee using a standard which is no less rigorous than the stand for disability described in Section 22(a)(3) of the Code).
 
(b) Any interest in a grant of Performance Stock which the Grantee does not forfeit under § 2 or § 3(a) shall be transferred to the Grantee free of any forfeiture conditions under the Plan as soon as practicable after the service condition under § 3(a) no longer applies; provided, however, if the Committee at any time before such transfer reasonably determines that the Grantee might have violated any applicable civil or criminal law or did violate the written Code of Conduct or Code of Ethics for officers and employees of SunTrust and its Subsidiaries, the Committee shall have the right to completely forfeit Grantee’s interest in the Stock underlying all his Grants of Performance Stock without regard to whether (i) the Grantee has satisfied the service condition set forth in § 3(a) before the date the Committee makes such determination or (ii) the Grantee’s employment is (or might have been) terminated as a result of such conduct.
 
§ 4. Change in Control .
 
(a) If the service condition set forth in § 3 has not been satisfied by the Grantee on the date there is a “change in control” (as defined in § 4(b)) of SunTrust, § 3(a) shall cease to apply to the Grants on the date of such “change in control”, and any interest in a grant of Performance Stock which had been awarded to the Grantee under § 2 on or before the date of such “change in control” shall be transferred to him as soon as practicable after such date and any interest in a grant of Performance Stock which thereafter is awarded to the Grantee under § 2 shall be transferred to him as soon as practicable after the date such grant is awarded to him under § 2.
 
(b) The term “change in control” for purposes of this § 4 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 Securities Exchange Act of 1934 (“34 Act”) as in effect on February 11, 1992, 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 12(d) and 14(d)(2) of the 34 Act), is or becomes the beneficial owner (as defined in Rule 13d-3 under the 34 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 constituted 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 or who were directors at the beginning of the period; (iii) the shareholders of SunTrust approved any merger, consolidation or share exchange as a result of which stock shall be changed, converted or exchanged (other than a merger with a wholly-owned subsidiary of SunTrust) or any liquidation of SunTrust or any sale or other disposition of 50% or more of the assets or business of SunTrust; or (iv) the shareholders of SunTrust approve any merger or consolidation to which SunTrust is a party or a share exchange in which SunTrust shall exchange its shares for shares of another corporation as a result of which the persons who were shareholders of SunTrust immediately prior to the effective date of the merger, consolidation or share exchange shall have beneficial ownership of less than 50% of the combined voting power for election of directors of the surviving corporation following the effective date of such merge, consolidation or share exchange; provided, however; and notwithstanding the occurrence of any of the events described above, that no “change in control” shall be deemed to have occurred under this § 4 if, prior to such time as a “change in control” would otherwise be deemed to have occurred, the Board determines otherwise.

§ 5. Withholding . The Committee shall have the right to reduce the number of shares of Stock actually transferred to the Grantee to satisfy the minimum applicable tax withholding requirements, and the Grantee shall have the right (absent any such action by the Committee and subject to satisfying the requirements, if any, under Rule 16b-3) to elect that the minimum applicable tax withholdings requirements be satisfied through a reduction in the number of share of Stock transferred to him.
 
§ 6. Nontransferable . No rights granted under the Plan or this Performance Stock Agreement shall be transferable by the Grantee other than by will or by the laws of descent and distribution, and the person or persons to whom such rights are so transferred shall be treated as the Grantee under the Performance Stock Agreement.
 
§ 7. Employment and Termination . Nothing in the Plan or this Performance Stock Agreement or any related material shall give the Grantee the right to continue in employment by SunTrust or by a Subsidiary or adversely affect the right of SunTrust or a Subsidiary to terminate the Grantee’s employment with or without cause at any time.
 
§ 8. Other Laws . SunTrust shall have the right to refuse to issue or transfer any Stock under this Performance Stock Agreement if SunTrust acting in its absolute discretion determines that the issuance or transfer of such Stock might violate any applicable law or regulation.
 
§ 9. Securities Registration . The Grantee may be requested by SunTrust to hold any shares of Stock transferred to him under this Performance Stock Agreement for personal investment and not for purposes of resale or distribution to the public; and the Grantee shall, if so requested by SunTrust, deliver a certified statement to that effect to SunTrust as a condition to the transfer of such stock to the Grantee.
 
§ 10. Miscellaneous .
 
(a) A mere transfer of employment between SunTrust and a Subsidiary shall not be deemed a termination of employment under the Plan or this Performance Stock Agreement.
 
(b) This Performance Stock Agreement shall be subject to all of the provisions, definitions, terms and conditions set forth in the Plan, all of which are incorporated by this reference in this Performance Stock Agreement except that under this agreement the term Performance Stock Agreement under the Plan shall mean Restricted Stock Agreement under the Plan and Performance Stock shall mean Restricted Stock.
 
(c) The Plan and this Performance Stock Agreement shall be governed by the laws of the State of Georgia.
 
(d) The Grantee’s entire interest in the Performance Stock underlying the Grants shall (without regard to § 2, § 3 or § 4) be available to satisfy the claims of SunTrust’s creditors if SunTrust (on any date before such interests are actually transferred under § 3(b) to the Grantee) is generally not paying its debts as such debts become due (other than debts that are the subject of a bona fide dispute) or if an order for relief is entered against SunTrust in a bankruptcy case commenced by or against it under the United States Bankruptcy Code, of if SunTrust is the debtor in any proceeding commenced under any other bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar debtor relief law in which SunTrust is alleged to be insolvent or otherwise unable to pay its debts as such debts become due, and the Grantee shall forfeit his interest in such Stock and such Grants as of such date.

Exhibit 10.16
 
SUNTRUST BANKS, INC.
DEFERRED COMPENSATION PLAN
 
DEFERRAL COMMITTEE CERTIFICATION
 
WHEREAS, SunTrust Banks, Inc. (the “Corporation”) established the SunTrust Banks, Inc. Deferred Compensation Plan effective October 1, 1999 (the “Deferral Plan”), a plan whereby participants in certain selected bonus and incentive programs sponsored may defer receipt of all or a portion of their future awards; and
 
WHEREAS, paragraph 8.7 of the Deferral Plan authorizes the Deferral Committee to amend the Deferral Plan in any manner that is consistent with the Deferral Plan’s purpose, except as to any matter that the Deferral Plan Committee determines may result in a material increased cost to the Corporation; and
 
WHEREAS, on November 11, 2003, the Compensation Committee of the Board of Directors of the Corporation was asked to approve and it did approve certain changes to the Deferral Plan which were recommended on behalf of the Deferral Committee.
 
NOW, THEREFORE, IN WITNESS HEREOF, the Deferral Committee, through its authorized delegate, certifies that the Compensation Committee has approved the following changes to the Deferral Plan, which are implemented effective as of the dates set forth below:
 
First, effective for Plan Years beginning January 1, 2004 and later, “Eligible Employee” means for purposes of deferrals under the Deferral Plan for awards earned under the Corporation’s Management Incentive Plan or Performance Unit Plan, an employee who is in grade 53 or higher.
 
Second, effective February 1, 2004, the Deferral Plan includes the following investment funds:
 
 	•	STI Classic Capital Appreciation Fund	
 
 	•	STI Classic Prime Quality Money Market	
 
 	•	STI Classic Investment Grade Bond Fund	
 
 	•	STI Classic Small Cap Growth Stock Fund	
 
 	•	STI Classic Mid-Cap Equity Fund	
 
 	•	STI Classic Growth and Income Fund	
 
 	•	STI Classic Value Income Stock Fund	
 
 	•	STI Classic Short-Term Fund	

SUNTRUST BANKS, INC.
DEFERRAL PLAN COMMITTEE	 	 	 	 	
					
By:	 	/s/ Mary S. Harrell	 	 	 	 	 	 	

Attest:	 	/s/ Margaret U. Hodgson	 	 	 	 	 	[Corporate Seal]	

 
EXHIBIT 10.40
 
CRESTAR FINANCIAL CORPORATION
 
1993 STOCK INCENTIVE PLAN
 
As Amended and Restated
Effective February 28, 1997

TABLE OF CONTENTS

 	 	 	  	Page
	
ARTICLE I	 	DEFINITIONS	  	 	
			
1.01.	 	Acquiring Person	  	1	
1.02.	 	Administrator	  	1	
1.03.	 	Agreement	  	1	
1.04.	 	Associate	  	1	
1.05.	 	Board	  	1	
1.06.	 	Change in Control	  	2	
1.07.	 	Code	  	2	
1.08.	 	Committee	  	2	
1.09.	 	Common Stock	  	2	
1.10.	 	Company	  	2	
1.11.	 	Continuing Director	  	2	
1.12.	 	Control Affiliate	  	3	
1.13.	 	Control Change Date	  	3	
1.14.	 	Corresponding SAR	  	3	
1.15.	 	Disability	  	3	
1.16.	 	Efficiency Ratio	  	3	
1.17.	 	Exchange Act	  	3	
1.18.	 	Fair Market Value	  	3	
1.19.	 	Incentive Award	  	4	
1.20.	 	Initial Value	  	4	
1.21.	 	NIACC	  	4	
1.22.	 	Option	  	4	
1.23.	 	Participant	  	4	
1.24.	 	Performance Shares	  	5	
1.25.	 	Person	  	5	
1.26.	 	Plan	  	5	
1.27.	 	Related Entity	  	6	
1.28.	 	Retirement	  	6	
1.29.	 	SAR	  	6	
1.30.	 	Stock Award	  	6	
1.31.	 	Total Shareholder Return	  	6	
			
ARTICLE II	 	PURPOSES	  	7	
			
ARTICLE III	 	ADMINISTRATION	  	7	
			
ARTICLE IV	 	ELIGIBILITY	  	9	

TABLE OF CONTENTS

 	 	 	  	Page
	
ARTICLE V	 	STOCK SUBJECT TO PLAN	  	 	
			
5.01.	 	Shares Issued	  	10	
5.02.	 	Aggregate Limit	  	10	
5.03.	 	Reallocation of Shares	  	10	
			
ARTICLE VI	 	OPTIONS	  	 	
			
6.01.	 	Award	  	11	
6.02.	 	Option Price	  	12	
6.03.	 	Maximum Option Period	  	12	
6.04.	 	Nontransferability	  	12	
6.05.	 	Transferable Options	  	12	
6.06.	 	Employee Status	  	13	
6.07.	 	Exercise	  	13	
6.08.	 	Payment	  	14	
6.09.	 	Change in Control	  	14	
6.10.	 	Shareholder Rights	  	15	
6.11.	 	Disposition of Stock	  	15	
			
ARTICLE VII	 	SARS	  	 	
			
7.01.	 	Award	  	16	
7.02.	 	Maximum SAR Period	  	16	
7.03.	 	Nontransferability	  	17	
7.04.	 	Transferable SARs	  	17	
7.05.	 	Exercise	  	18	
7.06.	 	Change in Control	  	18	
7.07.	 	Employee Status	  	19	
7.08.	 	Settlement	  	19	
7.09.	 	Shareholder Rights	  	19	
			
ARTICLE VIII	 	STOCK AWARDS	  	 	
			
8.01.	 	Award	  	19	
8.02.	 	Vesting	  	20	
8.03.	 	Performance Objectives	  	20	
8.04.	 	Employee Status	  	20	
8.05.	 	Change in Control	  	21	
8.06.	 	Shareholder Rights	  	21	

TABLE OF CONTENTS

 	 	 	  	Page
	
ARTICLE IX	 	PERFORMANCE SHARE AWARDS	  	 	
			
9.01.	 	Award	  	22	
9.02.	 	Earning the Award	  	22	
9.03.	 	Payment	  	23	
9.04.	 	Shareholder Rights	  	23	
9.05.	 	Nontransferability	  	23	
9.06.	 	Transferable Performance Shares	  	23	
9.07.	 	Employee Status	  	24	
9.08.	 	Change In Control	  	24	
			
ARTICLE X	 	INCENTIVE AWARDS	  	 	
			
10.01.	 	Award.	  	25	
10.02.	 	Terms and Conditions	  	25	
10.03.	 	Nontransferability	  	26	
10.04.	 	Employee Status	  	26	
10.05.	 	Change in Control	  	26	
10.06.	 	Shareholder Rights	  	27	
			
ARTICLE XI	 	ADJUSTMENT UPON CHANGE IN COMMON STOCK	  	28	
			
ARTICLE XII	 	COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES	  	30	
			
ARTICLE XIII	 	GENERAL PROVISIONS	  	 	
			
13.01.	 	Effect on Employment and Service	  	31	
13.02.	 	Unfunded Plan	  	31	
13.03.	 	Rules of Construction	  	31	
13.04.	 	Tax Withholding	  	31	
13.05.	 	Limitation on Benefits	  	32	
			
ARTICLE XIV	 	AMENDMENT	  	34	
			
ARTICLE XV	 	DURATION OF PLAN	  	35	
			
ARTICLE XVII	 	EFFECTIVE DATE OF PLAN	  	35	

CRESTAR FINANCIAL CORPORATION
1993 STOCK INCENTIVE PLAN
 
ARTICLE I
 
DEFINITIONS
 
1.01. Acquiring Person means that (a) a Person, considered alone or together with all Control Affiliates and Associates of that Person, becomes directly or indirectly the beneficial owner of securities representing at least thirty percent of the Company’s then outstanding securities entitled to vote generally in the election of the Board, or (b) a person enters into an agreement that would result in that Person satisfying the conditions in subsection (a) or that would result in a Related Entity’s failure to be a Related Entity.
 
1.02. Administrator means the Committee and any delegate of the Committee that is appointed in accordance with Article III.
 
1.03. Agreement means a written agreement (including any amendment or supplement thereto) between the Company and a Participant specifying the terms and conditions of an award of Performance Shares or a Stock Award, Option, SAR or Incentive Award granted to such Participant.
 
1.04. Associate , with respect to any Person, is defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as amended as of January 1, 1990. An Associate does not include the Company or a majority-owned subsidiary of the Company.
 
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1.05. Board means the Board of Directors of the Company.
 
1.06. Change in Control means that (a) the Company enters into any agreement with a Person that involves the transfer of ownership of the Company or of at least fifty percent of the Company’s total assets on a consolidated basis, as reported in the Company’s consolidated financial statements filed with the Securities and Exchange Commission (including an agreement for the acquisition of the Company by merger, consolidation, or statutory share exchange - regardless of whether the Company is intended to be the surviving or resulting entity after the merger, consolidation, or statutory share exchange - or for the sale of substantially all of the Company’s assets to that Person), (b) any Person is or becomes an Acquiring Person, or (c) during any period of two consecutive calendar years, the Continuing Directors cease for any reason to constitute a majority of the Board.
 
1.07. Code means the Internal Revenue Code of 1986, and any amendments thereto.
 
1.08. Committee means the Human Resources and Compensation Committee of the Board.
 
1.09. Common Stock means the common stock of the Company.
 
1.10. Company means Crestar Financial Corporation.
 
1.11. Continuing Director means any member of the Board, while a member of the Board and (i) who was a member of the Board prior to the adoption of the Plan or
 
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(ii) whose subsequent nomination for election or election to the Board was recommended or approved by a majority of the Continuing Directors.
 
1.12. Control Affiliate with respect to any Person, means an affiliate as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as amended as of January 1, 1990.
 
1.13. Control Change Date means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the Control Change Date is the date of the last of such transactions.
 
1.14. Corresponding SAR means an SAR that is granted in relation to a particular Option and that can be exercised only upon the surrender to the Company, unexercised, of that portion of the Option to which the SAR relates.
 
1.15. Disability means that a Participant has satisfied the requirements for a benefit under the Crestar Financial Corporation Long Term Disability Benefits Plan.
 
1.16. Efficiency Ratio means the percentage determined by dividing (i) noninterest expense less nonrecurring expense by (ii) the sum of net interest income plus noninterest income, all as reported on the Company’s financial statements.
 
1.17. Exchange Act means the Securities Exchange Act of 1934, as amended and as in effect on the date of this Agreement.
 
1.18. Fair Market Value means, on any given date, the average of the high and low prices of a share of Common Stock as reported on the New York Stock Exchange on such date, or if the Common Stock was not traded on the New York Stock Exchange
 
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on such day, then on the next preceding day that the Common Stock was traded on such exchange, all as reported by such source as the Administrator may select.
 
1.19. Incentive Award means an award under Article X which, subject to such terms and conditions as may be prescribed by the Administrator, entitles the Participant to receive a cash payment from the Company or a Related Entity.
 
1.20. Initial Value means, with respect to a Corresponding SAR, the option price per share of the related Option and, with respect to an SAR granted independently of an Option, the price per share of Common Stock as determined by the Administrator on the date of the grant; provided, however, that the price per share of Common Stock encompassed by the grant of an SAR shall not be less than the Fair Market Value on the date of grant.
 
1.21. NIACC means net income after a capital charge.
 
1.22. Option means a stock option that entitles the holder to purchase from the Company a stated number of shares of Common Stock at the price set forth in an Agreement.
 
1.23. Participant means an employee of the Company or a Related Entity, including an employee who is a member of the Board, who satisfies the requirements of Article IV and is selected by the Administrator to receive an award of Performance Shares, a Stock Award, an Option, an SAR, an Incentive Award or a combination thereof.
 
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1.24. Performance Shares means an award, in the amount determined by the Administrator and specified in an Agreement, stated with reference to a specified number of shares of Common Stock, that entitles the holder to receive a payment for each specified share equal to the Fair Market Value of Common Stock on the date of payment. In the discretion of the Administrator, a Performance Share award may include the right to receive an additional payment for the accumulated dividends that would have been paid on each specified share as if such dividends had been invested in Common Stock on the dividend payment date, from the date of grant to the date of payment.
 
1.25. Person means any human being, firm, corporation, partnership, or other entity. Person also includes any human being, firm, corporation, partnership, or other entity as defined in sections 13(d)(3) and 14(d)(2) of the Exchange Act, as amended as of January 1, 1990. For purposes of this Plan, the term Person does not include the Company or any Related Entity, and the term Person does not include any employee-benefit plan maintained by the Company or by any Related Entity, and any person or entity organized, appointed, or established by the Company or by any subsidiary for or pursuant to the terms of any such employee-benefit plan, unless the Board determines that such an employee-benefit plan or such person or entity is a Person.
 
1.26. Plan means the Crestar Financial Corporation 1993 Stock Incentive Plan.
 
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1.27. Related Entity means any entity that directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company.
 
1.28. Retirement means a Participant’s separation from service on or after his early, normal or delayed retirement date under the Retirement Plan for Employees of Crestar Financial Corporation and Affiliated Corporations.
 
1.29. SAR means a stock appreciation right that entitles the holder to receive, with respect to each share of Common Stock encompassed by the exercise of such SAR, the lesser of (a) the excess, if any, of the Fair Market Value at the time of exercise over the Initial Value, or (b) the Initial Value. References to “SARs” include both Corresponding SARs and SARs granted independently of Options, unless the context requires otherwise.
 
1.30. Stock Award means Common Stock awarded to a Participant under Article VIII.
 
1.31. Total Shareholder Return means, with respect to any period, the sum of (i) the excess, if any of the Fair Market Value on the first day of the period over the Fair Market Value on the last day of the period and (ii) the value of any dividends on Common Stock payable with respect to such period.
 
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ARTICLE II
 
PURPOSES
 
The Plan is intended to assist the Company and Related Entities in recruiting and retaining individuals with ability and initiative by enabling such persons to participate in the future success of the Company and the Related Entities and to associate their interests with those of the Company and its shareholders. The Plan is intended to permit the grant of both Options qualifying under Section 422 of the Code (“incentive stock options”) and Options not so qualifying, and the grant of SARs, Stock Awards, Performance Shares and Incentive Awards. No Option that is intended to be an incentive stock option shall be invalid for failure to qualify as an incentive stock option. The proceeds received by the Company from the sale of Common Stock pursuant to this Plan shall be used for general corporate purposes.
 
ARTICLE III
 
ADMINISTRATION
 
The Plan shall be administered by the Administrator. The Administrator shall have authority to grant Stock Awards, Performance Shares, Incentive Awards, Options and SARs upon such terms (not inconsistent with the provisions of this Plan), as the Administrator may consider appropriate. Such terms may include conditions (in addition to those contained in this Plan), on the exercisability of all or any part of an
 
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Option or SAR or on the transferability or forfeitability of a Stock Award, an award of Performance Shares or an Incentive Award, including by way of example and not of limitation, conditions on which Participants may defer receipt of benefits under the Plan, requirements that the Participant complete a specified period of employment with the Company or a Related Entity, requirements that the Company achieve a specified level of financial performance or that the Company achieve a specified level of financial return. Notwithstanding any such conditions, the Administrator may, in its discretion, accelerate the time at which any Option or SAR may be exercised, or the time at which a Stock Award may become transferable or nonforfeitable or the time at which an Incentive Award or an award of Performance Shares may be settled. In addition, the Administrator shall have complete authority to interpret all provisions of this Plan; to prescribe the form of Agreements; to adopt, amend, and rescind rules and regulations pertaining to the administration of the Plan; and to make all other determinations necessary or advisable for the administration of this Plan. The express grant in the Plan of any specific power to the Administrator shall not be construed as limiting any power or authority of the Administrator. Any decision made, or action taken, by the Administrator or in connection with the administration of this Plan shall be final and conclusive. Neither the Administrator nor any member of the Committee shall be liable for any act done in good faith with respect to this Plan or any Agreement, Option, SAR, Stock Award or Incentive Award or award of Performance Shares. All
 
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expenses of administering this Plan shall be borne by the Company, a Related Entity or a combination thereof.
 
The Committee, in its discretion, may delegate to one or more officers of the Company or the Executive Committee of the Board, all or part of the Committee’s authority and duties with respect to grants and awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act. The Committee may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Committee’s delegate or delegates that were consistent with the terms of the Plan.
 
ARTICLE IV
 
ELIGIBILITY
 
Any employee of the Company or a Related Entity (including a corporation that becomes a Related Entity after the adoption of this Plan), is eligible to participate in this Plan if the Administrator, in its sole discretion, determines that such person has contributed significantly or can be expected to contribute significantly to the profits or growth of the Company or a Related Entity. Directors of the Company who are employees of the Company or a Related Entity may be selected to participate in this Plan.
 
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ARTICLE V
 
STOCK SUBJECT TO PLAN
 
5.01. Shares Issued . Upon the award of shares of Common Stock pursuant to a Stock Award or in settlement of an award of Performance Shares, the Company may issue shares of Common Stock from its authorized but unissued Common Stock. Upon the exercise of any Option or SAR the Company may deliver to the Participant (or the Participant’s broker if the Participant so directs), shares of Common Stock from its authorized but unissued Common Stock.
 
5.02. Aggregate Limit . The maximum aggregate number of shares of Common Stock that may be issued under this Plan, pursuant to the exercise of SARs and Options and the grant of Stock Awards and the settlement of Performance Shares awarded on and after February 28, 1997, is 4,000,000 shares. The maximum aggregate number of shares that may be issued under this Plan as Stock Awards and in settlement of Performance Shares awarded on and after February 28, 1997, is 1,200,000 shares. The maximum aggregate number of shares that may be issued under this Plan and the maximum number of shares that may be issued as Stock Awards and in settlement of Performance Shares shall be subject to adjustment as provided in Article XI.
 
5.03. Reallocation of Shares . If an Option is terminated, in whole or in part, for any reason other than its exercise or the exercise of a Corresponding SAR that is settled with Common Stock, the number of shares of Common Stock allocated to the Option or portion thereof may be reallocated to other Options, SARs, Performance Shares and
 
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Stock Awards to be granted under this Plan. If an SAR is terminated, in whole or in part, for any reason other than its exercise that is settled with Common Stock or the exercise of a related Option, the number of shares of Common Stock allocated to the SAR or portion thereof may be reallocated to other Options, SARs, Performance Shares and Stock Awards to be granted under this Plan. If an award of Performance Shares is terminated, in whole or in part, for any reason other than its settlement with Common Stock, the number of shares of Common Stock allocated to the Performance Shares or portion thereof may be reallocated to other options, SARs, Performance Shares and Stock Awards to be granted under this Plan. If a Stock Award is forfeited, in whole or in part, for any reason, the number of shares of Common Stock allocated to the Stock Award or portion thereof may be reallocated to other Options, SARs, Performance Shares and Stock Awards to be granted under this Plan.
 
ARTICLE VI
 
OPTIONS
 
6.01. Award . In accordance with the provisions of Article IV, the Administrator will designate each individual to whom an Option is to be granted and will specify the number of shares of Common Stock covered by each such award; provided, however, that no individual may be granted Options in any calendar year covering more than 100,000 shares of Common Stock.
 
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6.02. Option Price . The price per share for Common Stock purchased on the exercise of an Option shall be determined by the Administrator on the date of grant, but shall not be less than the Fair Market Value on the date the Option is granted.
 
6.03. Maximum Option Period . The maximum period in which an Option may be exercised shall be ten years from the date such Option was granted. The terms of any Option may provide that it is exercisable for a period less than such maximum period.
 
6.04. Nontransferability . Except as provided in Section 6.05, each Option granted under this Plan shall be nontransferable except by will or by the laws of descent and distribution. In the event of any transfer of an Option (by the Participant or his transferee), the Option and any Corresponding SAR that relates to such Option must be transferred to the same person or persons or entity or entities. Except as provided in Section 6.05, during the lifetime of the Participant to whom the Option is granted, the Option may be exercised only by the Participant. No right or interest of a Participant in any Option shall be liable for, or subject to, any lien, obligation, or liability of such Participant.
 
6.05. Transferable Options . Section 6.04 to the contrary notwithstanding, if the Agreement provides, an Option that is not an incentive stock option may be transferred by a Participant to the Participant’s children, grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership in which such family members are the only partners, on such terms and conditions as may be permitted under Securities Exchange Commission Rule 16b-3 as in effect from time to time. The
 
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holder of an Option transferred pursuant to this section shall be bound by the same terms and conditions that governed the Option during the period that it was held by the Participant; provided, however, that such transferee may not transfer the Option except by will or the laws of descent and distribution. In the event of any transfer of an Option (by the Participant or his transferee), the Option and any Corresponding SAR that relates to such Option must be transferred to the same person or persons or entity or entities.
 
6.06. Employee Status . For purposes of determining the applicability of Section 422 of the Code (relating to incentive stock options), or in the event that the terms of any Option provide that it may be exercised only during employment or within a specified period of time after termination of employment, the Administrator may decide to what extent leaves of absence for governmental or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment.
 
6.07. Exercise . Subject to the provisions of this Plan and the applicable Agreement, an Option may be exercised in whole at any time or in part from time to time at such times and in compliance with such requirements as the Administrator shall determine; provided, however, that incentive stock options (granted under the Plan and all plans of the Company and its Related Entities) may not be first exercisable in a calendar year for stock having a Fair Market (determined as of the date an Option is granted) exceeding the limit prescribed by Code section 422(d). An Option granted
 
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under this Plan may be exercised with respect to any number of whole shares less than the full number for which the Option could be exercised. A partial exercise of an Option shall not affect the right to exercise the Option from time to time in accordance with this Plan and the applicable Agreement with respect to the remaining shares subject to the Option. The exercise of an Option shall result in the termination of any Corresponding SAR to the extent of the number of shares with respect to which the Option is exercised.
 
6.08. Payment . Unless otherwise provided by the Agreement, payment of the Option price shall be made in cash or a cash equivalent acceptable to the Administrator. Subject to rules established by the Administrator, payment of all or part of the Option price may be made with shares of Common Stock which have been owned by the Participant for at least six months and which have not been used for another exercise during the prior six months. If Common Stock is used to pay all or part of the Option price, the sum of the cash and cash equivalent and the Fair Market Value (determined as of the day preceding the date of exercise) of such shares must not be less than the Option price of the shares for which the Option is being exercised.
 
6.09. Change in Control . Section 6.07 to the contrary notwithstanding, each outstanding Option shall be fully exercisable (in whole or in part at the discretion of the holder) on and after a Control Change Date and during the period (i) beginning on the first day after a tender offer or exchange offer for shares of Common Stock (other than
 
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an offer made by the Company); provided that shares are acquired pursuant to such offer and (ii) ending on the thirtieth day following the expiration of such offer.
 
6.10. Shareholder Rights . No Participant shall have any rights as a shareholder with respect to shares subject to his Option until the date of exercise of such Option.
 
6.11. Disposition of Stock . A Participant shall notify the Company of any sale or other disposition of Common Stock acquired pursuant to an Option that was an incentive stock option if such sale or disposition occurs (i) within two years of the grant of an Option or (ii) within one year of the issuance of the Common Stock to the Participant. Such notice shall be in writing and directed to the Secretary of the Company.
 
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ARTICLE VII
 
SARS
 
7.01. Award . In accordance with the provisions of Article IV, the Administrator will designate each individual to whom SARs are to be granted and will specify the number of shares covered by each such award; provided, however, that no individual may be granted SARs in any calendar year covering more than 100,000 shares. For purposes of the preceding sentence, an Option and Corresponding SAR shall be treated as a single award. In addition, no Participant may be granted Corresponding SARs (under all incentive stock option plans of the Company and its Affiliates) that are related to incentive stock options which are first exercisable in any calendar year for stock having an aggregate Fair Market Value (determined as of the date the related Option is granted) that exceeds the limit prescribed by Code section 422(d).
 
7.02. Maximum SAR Period . The maximum period in which an SAR may be exercised shall be ten years from the date such SAR was granted. The terms of any SAR may provide that it has a term that is less than such maximum period.
 
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7.03. Nontransferability . Except as provided in Section 7.04, each SAR granted under this Plan shall be nontransferable except by will or by the laws of descent and distribution. In the event of any such transfer, a Corresponding SAR and the related Option must be transferred to the same person or persons or entity or entities. Except as provided in Section 7.04, during the lifetime of the Participant to whom the SAR is granted, the SAR may be exercised only by the Participant. No right or interest of a Participant in any SAR shall be liable for, or subject to, any lien, obligation, or liability of such Participant.
 
7.04. Transferable SARs . Section 7.03 to the contrary notwithstanding, if the Agreement provides, an SAR, other than a Corresponding SAR that is related to an incentive stock option, may be transferred by a Participant to the Participant’s children, grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership in which such family members are the only partners, on such terms and conditions as may be permitted under Securities Exchange Commission Rule 16b-3 as in effect from time to time. The holder of an SAR transferred pursuant to this section shall be bound by the same terms and conditions that governed the SAR during the period that it was held by the Participant; provided, however, that such transferee may not transfer the SAR except by will or the laws of descent and distribution. In the event of any transfer of a Corresponding SAR (by the Participant or his transferee), the Corresponding SAR and the related Option must be transferred to the same person or person or entity or entities.
 
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7.05. Exercise . Subject to the provisions of this Plan and the applicable Agreement, an SAR may be exercised in whole at any time or in part from time to time at such times and in compliance with such requirements as the Administrator shall determine; provided, however, that a Corresponding SAR that is related to an incentive stock option may be exercised only to the extent that the related Option is exercisable and only when the Fair Market Value exceeds the option price of the related Option. An SAR granted under this Plan may be exercised with respect to any number of whole shares less than the full number for which the SAR could be exercised. A partial exercise of an SAR shall not affect the right to exercise the SAR from time to time in accordance with this Plan and the applicable Agreement with respect to the remaining shares subject to the SAR. The exercise of a Corresponding SAR shall result in the termination of the related Option to the extent of the number of shares with respect to which the SAR is exercised.
 
7.06. Change in Control . Section 7.05 to the contrary notwithstanding, each outstanding SAR shall be fully exercisable (in whole or in part at the discretion of the holder) on and after a Control Change Date and during the period (i) beginning on the first day after any tender offer or exchange offer for shares of Common Stock (other than one made by the Company); provided that shares are acquired pursuant to such offer and (ii) ending on the thirtieth day following the expiration of such offer.
 
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7.07. Employee Status . If the terms of any SAR provide that it may be exercised only during employment or within a specified period of time after termination of employment, the Administrator may decide to what extent leaves of absence for governmental or military service, illness, temporary disability or other reasons shall not be deemed interruptions of continuous employment.
 
7.08. Settlement . At the Administrator’s discretion, the amount payable as a result of the exercise of an SAR may be settled in cash, Common Stock, or a combination of cash and Common Stock. No fractional share will be deliverable upon the exercise of an SAR but a cash payment will be made in lieu thereof.
 
7.09. Shareholder Rights . No Participant shall, as a result of receiving an SAR, have any rights as a shareholder of the Company until the date that the SAR is exercised and then only to the extent that the SAR is settled by the issuance of Common Stock.
 
ARTICLE VIII
 
STOCK AWARDS
 
8.01. Award . In accordance with the provisions of Article IV, the Administrator will designate each individual to whom a Stock Award is to be made and will specify the number of shares of Common Stock covered by each such award; provided, however, that no Participant may receive Stock Awards in any calendar year for more than 30,000 shares of Common Stock.
 
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8.02. Vesting . The Administrator, on the date of the award, may prescribe that a Participant’s rights in a Stock Award shall be forfeitable or otherwise restricted for a period of time or subject to such conditions as may be set forth in the Agreement.
 
8.03. Performance Objectives . In accordance with Section 8.02, the Administrator may prescribe that Stock Awards will become vested or transferable or both based on objectives stated with respect to the Company’s, a Related Entity’s or an operating unit’s return on equity, earnings per share, total earnings, earnings growth, return on assets, Fair Market Value, NIACC, Efficiency Ratio, Total Shareholder Return or such other measures as may be selected by the Administrator. If the Administrator, on the date of award, prescribes that a Stock Award shall become nonforfeitable and transferable only upon the attainment of performance objectives, the shares subject to such Stock Award shall become nonforfeitable and transferable only to the extent that the Administrator certifies that such objectives have been achieved.
 
8.04. Employee Status . In the event that the terms of any Stock Award provide that shares may become transferable and nonforfeitable thereunder only after completion of a specified period of employment, the Administrator may decide in each case to what extent leaves of absence for governmental or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment.
 
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8.05. Change in Control . Sections 8.02, 8.03 and 8.04 to the contrary notwithstanding, on and after a Control Change Date or the first day following a tender offer or exchange offer for shares of Common Stock (other than one made by the Company), provided that shares are acquired pursuant to such offer, each outstanding Stock Award shall be transferable and nonforfeitable as of the Control Change Date or the first day following such offer.
 
8.06. Shareholder Rights . Prior to their forfeiture (in accordance with the applicable Agreement and while the shares of Common Stock granted pursuant to the Stock Award may be forfeited or are nontransferable), a Participant will have all rights of a shareholder with respect to a Stock Award, including the right to receive dividends and vote the shares; provided, however, that during such period (i) a Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of shares of Common Stock granted pursuant to a Stock Award, (ii) the Company shall retain custody of the certificates evidencing shares of Common Stock granted pursuant to a Stock Award, and (iii) the Participant will deliver to the Company a stock power, endorsed in blank, with respect to each Stock Award. The limitations set forth in the preceding sentence shall not apply after the shares of Common Stock granted under the Stock Award are transferable and are no longer forfeitable.
 
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ARTICLE IX
 
PERFORMANCE SHARE AWARDS
 
9.01. Award . In accordance with the provisions of Article IV, the Administrator will designate each individual to whom an award of Performance Shares is to be made and will specify the number of shares of Common Stock covered by each such award; provided, however, that the maximum number of shares of Common Stock that may be earned by a Participant under all Performance Share awards (whether settled in Common Stock, cash or a combination of Common Stock and cash) granted in a calendar year shall be the product of (i) 35,000 shares and (ii) the number of years (twelve consecutive months) during which one or more performance criteria is measured.
 
9.02. Earning the Award . The Administrator, on the date of the grant of an award, shall prescribe that the Performance Shares, or portion thereof, will be earned, and the Participant will be entitled to receive payment pursuant to the award of Performance Shares, only upon the satisfaction of performance objectives and such other criteria as may be prescribed by the Administrator during a performance measurement period of at least one year. The performance objectives may be stated with respect to the Company’s, a Related Entity’s or an operating unit’s return on equity, earnings per share, total earnings, earnings growth, return on assets, Fair Market Value, NIACC, Efficiency Ratio, Total Shareholder Return or such other measures as may be selected by the Administrator. No payments will be made with respect to Performance Shares unless, and then only to the extent that, the Administrator certifies that such objectives have been achieved.
 
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9.03. Payment . In the discretion of the Administrator, the amount payable when an award of Performance Shares is earned may be settled in cash, by the issuance of Common Stock or a combination of cash and Common Stock. A fractional share shall not be deliverable when an award of Performance Shares is earned, but a cash payment will be made in lieu thereof.
 
9.04. Shareholder Rights . No Participant shall, as a result of receiving an award of Performance Shares, have any rights as a shareholder until and to the extent that the award of Performance Shares is earned and settled by the issuance of Common Stock. After an award of Performance Shares is earned, if settled completely or partially in Common Stock, a Participant will have all the rights of a shareholder with respect to such Common Stock.
 
9.05. Nontransferability . Except as provided in Section 9.06, Performance Shares granted under this Plan shall be nontransferable except by will or by the laws of descent and distribution. No right or interest of a Participant in any Performance Shares shall be liable for, or subject to, any lien, obligation, or liability of such Participant.
 
9.06. Transferable Performance Shares . Section 9.05 to the contrary notwithstanding, if the Agreement provides, an award of Performance Shares may be transferred by a Participant to the Participant’s children, grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership in which such family members are the only partners, on such terms and conditions as may be permitted under Securities Exchange Commission Rule 16b-3 as in effect from time to
 
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time. The holder of Performance Shares transferred pursuant to this section shall be bound by the same terms and conditions that governed the Performance Shares during the period that they were held by the Participant; provided, however that such transferee may not transfer Performance Shares except by will or the laws of descent and distribution.
 
9.07. Employee Status . In the event that the terms of any Performance Share award provide that no payment will be made unless the Participant completes a stated period of employment, the Administrator may decide to what extent leaves of absence for government or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment.
 
9.08. Change In Control . Section 9.02 to the contrary notwithstanding, a pro rata amount of each outstanding Performance Share award shall be earned and settled in whole shares of Common Stock as of a Control Change Date that occurs at least three months after the first day of the measurement period or on the first day after a tender offer or exchange offer for shares of Common Stock (other than one made by the Company), provided that such day is at least three months after the first day of the measurement period and provided further that shares are acquired pursuant to such offer. Such Common Stock shall be nonforfeitable and transferable. The number of shares of Common Stock issuable under this Section 9.02 shall be determined by multiplying the target amount of shares (as prescribed by the applicable Agreement), by a fraction. The numerator shall be the number of days in the period beginning on the
 
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date of the first day of the measurement period and ending on the Control Change Date or the first day after the tender or exchange offer described in this Section 9.03. The denominator is the number of days in the period, or the longest of such periods, during which performance is measured under the Performance Share award.
 
ARTICLE X
 
INCENTIVE AWARDS
 
10.01. Award . The Administrator shall designate Participants to whom Incentive Awards are made. All Incentive Awards shall be finally determined exclusively by the Administrator under the procedures established by the Administrator; provided, however, that no Participant may receive an Incentive Award payment in any calendar year that exceeds the lesser of (i) $1,000,000 and (ii) 150% of the Participant’s annual base salary (prior to any salary reduction or deferral elections) as of the date of grant of the Incentive Award.
 
10.02. Terms and Conditions . The Administrator, at the time an Incentive Award is made, shall specify the terms and conditions which govern the award. Such terms and conditions shall prescribe that the Incentive Award shall be earned only upon, and to the extent that, performance objectives are satisfied. The performance objectives may be stated with respect to the Company’s, a Related Entity’s or an operating unit’s return on equity, earnings per share, total earnings, earnings growth, return on assets, Fair Market Value, NIACC, Efficiency Ratio, Total Shareholder Return or such other measures as may be selected by the Administrator. Such terms and conditions also
 
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may include other limitations on the payment of Incentive Awards including, by way of example and not of limitation, requirements that the Participant complete a specified period of employment with the Company or a Related Entity. The Administrator, at the time an Incentive Award is made, shall also specify when amounts shall be payable under the Incentive Award and whether amounts shall be payable in the event of the Participant’s death, Disability, or Retirement. No payments will be made with respect to an Incentive Award unless, and then only to the extent that, the Administrator certifies that the performance objectives have been achieved.
 
10.03. Nontransferability . Incentive Awards granted under this Plan shall be nontransferable except by will or by the laws of descent and distribution and then only to the extent that the Administrator specified, at the time the Incentive Award was made, that amounts may be payable in the event of the Participant’s death. No right or interest of a Participant in an Incentive Award shall be liable for, or subject to, any lien, obligation, or liability of such Participant.
 
10.04. Employee Status . If the terms of an Incentive Award provide that a payment will be made thereunder only if the Participant completes a stated period of employment, the Administrator may decide to what extent leaves of absence for governmental or military service, illness, temporary disability or other reasons shall not be deemed interruptions of continuous employment.
 
10.05. Change in Control . Section 10.02 to the contrary notwithstanding, a pro rata amount of each Incentive Award shall be earned as of a Control Change Date that
 
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occurs at least three months after the first day of the measurement period or on the first day after a tender offer or exchange offer for shares of Common Stock (other than one made by the Company), provided that such day is at least three months after the first day of the measurement period and provided further that shares are acquired pursuant to such offer. The amount payable under this Section 10.05 shall be determined by multiplying the target amount (as prescribed by the applicable Agreement), by a fraction. The numerator shall be the number of days in the period beginning on the first day of the measurement period and ending on the Control Change Date or the first day after the tender or exchange offer described in this Section 10.05. The denominator shall be the number of days in the period, or the longest of such periods, during which performance is measured under the Incentive Award.
 
10.06. Shareholder Rights . No Participant shall, as a result of receiving an Incentive Award, have any rights as a shareholder of the Company or any Affiliate on account of such award.
 
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ARTICLE XI
 
ADJUSTMENT UPON CHANGE IN COMMON STOCK
 
The maximum number of shares as to which Options, SARs, Performance Shares and Stock Awards may be granted under this Plan, the terms of outstanding Stock Awards, Options, Performance Shares, Incentive Awards, and SARs, and the per individual limitations on the number of shares for which Options, SARs, Performance Shares, and Stock Awards may be granted shall be adjusted as the Committee shall determine to be equitably required in the event that (a) the Company (i) effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or (ii) engages in a transaction to which Section 424 of the Code applies or (b) there occurs any other event which, in the judgment of the Committee necessitates such action. Any determination made under this Article XI by the Committee shall be final and conclusive.
 
The issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the maximum number of shares as to which Options, SARs, Performance Shares and Stock Awards may be granted, the per individual limitations on the number of shares for which Options, SARs, Performance Shares and
 
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Stock Awards may be granted or the terms of outstanding Stock Awards, Options, Performance Shares, Incentive Awards or SARs.
 
The Committee may make Stock Awards and may grant Options, SARs, Performance Shares, and Incentive Awards in substitution for performance shares, phantom shares, stock awards, stock options, stock appreciation rights, or similar awards held by an individual who becomes an employee of the Company or a Related Entity in connection with a transaction described in the first paragraph of this Article XI. Notwithstanding any provision of the Plan (other than the limitation of Section 5.02), the terms of such substituted Stock Awards or Option, SAR, Performance Shares or Incentive Award grants shall be as the Committee, in its discretion, determines is appropriate.
 
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ARTICLE XII
 
COMPLIANCE WITH LAW AND
APPROVAL OF REGULATORY BODIES
 
No Option or SAR shall be exercisable, no Common Stock shall be issued, no certificates for shares of Common Stock shall be delivered, and no payment shall be made under this Plan except in compliance with all applicable federal and state laws and regulations (including, without limitation, withholding tax requirements), any listing agreement to which the Company is a party, and the rules of all domestic stock exchanges on which the Company’s shares may be listed. The Company shall have the right to rely on an opinion of its counsel as to such compliance. Any share certificate issued to evidence Common Stock when a Stock Award is granted, a Performance Share is settled or for which an Option or SAR is exercised may bear such legends and statements as the Administrator may deem advisable to assure compliance with federal and state laws and regulations. No Option or SAR shall be exercisable, no Stock Award or Performance Share shall be granted, no Common Stock shall be issued, no certificate for shares shall be delivered, and no payment shall be made under this Plan until the Company has obtained such consent or approval as the Administrator may deem advisable from regulatory bodies having jurisdiction over such matters.
 
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ARTICLE XIII
 
GENERAL PROVISIONS
 
13.01. Effect on Employment and Service . Neither the adoption of this Plan, its operation, nor any documents describing or referring to this Plan (or any part thereof), shall confer upon any individual any right to continue in the employ or service of the Company or a Related Entity or in any way affect any right and power of the Company or a Related Entity to terminate the employment or service of any individual at any time with or without assigning a reason therefor.
 
13.02. Unfunded Plan . The Plan, insofar as it provides for grants, shall be unfunded, and the Company shall not be required to segregate any assets that may at any time be represented by grants under this Plan. Any liability of the Company to any person with respect to any grant under this Plan shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company.
 
13.03. Rules of Construction . Headings are given to the articles and sections of this Plan solely as a convenience to facilitate reference. The reference to any statute, regulation, or other provision of law shall be construed to refer to any amendment to or successor of such provision of law.
 
13.04. Tax Withholding . Each Participant shall be responsible for satisfying any income and employment tax withholding obligation attributable to participation in this
 
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Plan. In accordance with procedures established by the Administrator, a Participant may surrender shares of Common Stock, or receive fewer shares of Common Stock than otherwise would be issuable, in satisfaction of all or part of that obligation.
 
13.05. Limitation on Benefits .
 
(a) Despite any other provision of this Plan, if KPMG Peat Marwick (the “Accounting Firm”) determines that receipt of benefits or payments under this Plan would subject a Participant to tax under Code section 4999, it must determine whether some amount of the benefits or payments would meet the definition of a “Reduced Amount.” If the Accounting Firm determines that there is a Reduced Amount, the total benefits and payments must be reduced to such Reduced Amount, but not below zero.
 
(b) If the Accounting Firm determines that the benefits and payments should be reduced to the Reduced Amount, the Company must promptly notify the Participant of that determination, including a copy of the detailed calculations by the Accounting Firm. All determinations made by the Accounting Firm under this section are binding upon the Company and the Participant.
 
(c) It is the intention of the Company and the Participant to reduce the benefits and payments under this Plan only if the aggregate Net After Tax Receipts to the Participant would thereby be increased. As a result of the uncertainty in the application of Code section 4999 at the time of the initial determination by the Accounting Firm under this section, however, it is possible that amounts will have been paid or distributed under the Plan to or for the benefit of a Participant which should not
 
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have been so paid or distributed (“Overpayment”) or that additional amounts which will not have been paid or distributed under the Plan to or for the benefit of a Participant could have been so paid or distributed (“Underpayment”)—in each case, consistent with the calculation of the Reduced Amount. If the Accounting Firm, based either upon the assertion of a deficiency by the Internal Revenue Service against the Company or the Participant which the Accounting Firm believes has a high probability of success or controlling precedent or other substantial authority, determines that an Overpayment has been made, any such Overpayment must be treated for all purposes as a loan ab initio to which Participant must repay to the Company together with interest at the applicable federal rate under Code section 7872(f)(2); provided, however, that no such loan may be deemed to have been made and no amount shall be payable by Participant to the Company if and to the extent such deemed loan and payment would not either reduce the amount on which Participant is subject to tax under Code section 1 or 4999 or generate a refund of such taxes. If the Accounting Firm, based upon controlling precedent or other substantial authority, determines that an Underpayment has occurred, the Accounting Firm must promptly notify the Administrator of the amount of the Underpayment.
 
(d) For purposes of this section, (i) “Net After Tax Receipt” means the Present Value of a payment or benefit under this Plan net of all taxes imposed on Participant with respect thereto under Code sections 1 and 4999, determined by applying the highest marginal rate under Code section 1 which applied to the
 
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Participant’s taxable income for the immediately preceding taxable year; (ii) “Present Value” means the value determined in accordance with Code section 280G(d)(4); and (iii) “Reduced Amount” means the smallest aggregate amount of all payments or benefit under this Plan which (a) is less than the sum of all payments or benefit under this Plan and (b) results in aggregate Net After Tax Receipts which are equal to or greater than the Net After Tax Receipts which would result if the aggregate payments or benefit under this Plan were any other amount less than the sum of all payments or benefit under this Plan.
 
ARTICLE XIV
 
AMENDMENT
 
The Board may amend or terminate this Plan from time to time; provided, however, that no amendment may become effective until shareholder approval is obtained if (i) the amendment increases the aggregate number of shares of Common Stock that may be issued under the Plan (other than an adjustment pursuant to Article XI) or (ii) the amendment changes the class of individuals eligible to become Participants. No amendment shall, without a Participant’s consent, adversely affect any rights of such Participant under any Stock Award, Performance Share award, Option, SAR or Incentive Award outstanding at the time such amendment is made.
 
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ARTICLE XV
 
DURATION OF PLAN
 
No Stock Award, Performance Share award, Option, SAR or Incentive Award may be granted under this Plan after February 27, 2007. Stock Awards, Performance Share awards, Options, SARs and Incentive Awards granted before that date shall remain valid in accordance with their terms.
 
ARTICLE XVII
 
EFFECTIVE DATE OF PLAN
 
Options, SARs, Performance Shares and Incentive Awards may be granted under this Plan upon its adoption by the Board, provided that no Option, SAR, Performance Shares or Incentive Award granted on or after February 28, 1997, shall be effective or exercisable unless this amended and restated Plan is approved by a majority of the votes cast by the Company’s shareholders, voting either in person or by proxy, at a duly held shareholders’ meeting at which a quorum is present. Stock Awards may be granted under this amended and restated Plan on or after February 28, 1997, upon the later of its adoption by the Board or its approval by shareholders in accordance with the preceding sentence.
 
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EXHIBIT 10.43
 
CRESTAR FINANCIAL CORPORATION
 
BOARD OF DIRECTORS MEETING
Friday, December 20, 1996
 
RESOLUTIONS AMENDING THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AND THE 1993 STOCK INCENTIVE PLAN:
 
RESOLVED, that the Board of Directors of Crestar Financial Corporation hereby amends Section 4.01 of the Crestar Financial Corporation Supplemental Executive Retirement Plan such that the benefit payable to the surviving spouse of a participant who dies before attaining age 55 shall be the greater of (i) the benefit payable under the current SERP formula or (ii) the benefit that would be payable under the SERP benefit formula taking into account the participant’s base salary as in effect on the date of death and his prior year’s bonus (if the participant completed less than six months’ service in the year of death) or his current bonus (if the participant completed at least six months’ service in the year of death). :
 
FURTHER RESOLVED, that the Board of Directors of Crestar Financial Corporation hereby amends Section 7.03 of the Crestar Financial Corporation 1993 Stock Incentive Plan in the manner set forth on the attached Exhibit I.
 
FINALLY RESOLVED, that the appropriate officers of the Corporation are authorized and directed to take such actions and to execute such documents as they may deem necessary or appropriate to implement the foregoing resolutions, all without the necessity of further action by this Board.

Exhibit I
 
7.03 Transferability. (a) Except as provided in Section 7.03(b), each Option and SAR granted under this Plan shall be nontransferable except by will or by the laws of descent and distribution. In the event of any such transfer, the Option and any Corresponding SAR that relates to such Option must be transferred to the same person or persons or entity or entities. Except as provided in Section 7.03(b), during the lifetime of the Participant to whom the Option or SAR is granted, the Option or SAR may be exercised only by he Participant. No right or interest of a Participant in any Option shall be liable for, or subject to, any lien, obligation, or liability of such Participant.
 
(b) Section 7.03(a) to the contrary notwithstanding, if the Agreement provides, an Option that is not an incentive stock option and an SAR that is not related to an incentive stock option may be transferred by a Participant to the Participant’s children, grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership in which such family members are the only partners, on such terms and conditions as may be permitted under Securities Exchange Commission Rule 16-3 as in effect from time to time. The holder of an Option or SAR transferred pursuant to this Section 7.03(b) shall be bound by the same terms and conditions that governed the Option or SAR during the period that it was held by the Participant; provided, however, that such transferee may not transfer the Option or SAR except by will or the laws of descent and distribution. In the event of any transfer of an Option or SAR (by the Participant or his transferee), the Option and any Corresponding SAR that relates to such Option must be transferred to the same person or persons or entity or entities.

EXHIBIT 10.44
 
Compensation Committee Meeting—12/18/97
Supplemental Executive Retirement Plan Resolutions
(Committee Approval Only)
 
RESOLVED, That, based on studies and recommendations of the Committee’s outside consultant, the Committee hereby approves the following amendments to the Supplemental Executive Retirement Plan, effective December 17, 1997:
 
1.	The definition of Years of Service in Section 1.31 of the Plan is revised to read as follows:	
 
Years of Service means the total years of service as determined under the terms of the Retirement Plan for purposes of determining the Participant’s vested or nonforfeitable interest in the Retirement Plan. For any Participant who is not in pay status as of December 17, 1997, Years of Service means two times the total years of service as determined under the terms of the Retirement Plan for purposes of determining the Participant’s vested or nonforfeitable interest in the Retirement Plan plus five additional Years of Service for employment with any prior employer other than the Corporation or an Affiliate. In addition, Years of Service includes service with a successor corporation following a Change in Control to the extent that such service would be recognized for purposes of determining the Participant’s vested or nonforfeitable interest in the Retirement Plan if such successor were the Corporation. In the event of a Change in Control, Years of Service shall also include two additional Years of Service if the Participant becomes entitled to payments under a severance agreement under the Crestar Financial Corporation Executive Severance Plan (the “Executive Severance Plan”) that provides for a lump sum severance amount based on two times his base pay and bonus or three additional Years of Service if the Participant becomes entitled to payments under a severance agreement under the Executive Severance Plan that provides for a lump sum severance amount based on three times his base pay and bonus. To the extent approved by the Committee, Years of Service shall include additional service with a predecessor employer or entity acquired by the Corporation or an Affiliate. Except as provided in the second sentence of this Section 1.31, a period of service with the Corporation, an Affiliate, a predecessor employer or entity, a successor or any other period shall only be counted once in determining a Participant’s Years of Service . Notwithstanding the foregoing, a Participant’s Years of Service shall not be less than the number of years determined in accordance with the provisions of Exhibit I to the Plan as approved by the Committee from time to time and in all events the total Years of Service credited to a Participant under this Section 1.31 and Exhibit I in excess of twenty Years of Service shall be disregarded.
 
2.	The definition of “Offset Amount” in Section 1.23 is amended by adding the following sentence to the end of that Section:	
 
Offset Amount shall also include for any Participant who is credited under Section 1.31 with five Years of Service for service with a prior employer or for any other service with an employer other than the Corporation or an Affiliate, the sum of the annual benefits, if any, payable to or on behalf of that Participant for his lifetime under any qualified or nonqualified defined benefit plan of a prior employer and assuming a benefit commencement date as of the date that benefits are scheduled to commence under Article III or IV.

EXHIBIT 10.48
 
CRESTAR FINANCIAL CORPORATION
BOARD OF DIRECTORS MEETING
September 26, 1997
 
RESOLUTIONS AMENDING THE DIRECTORS’ EQUITY PROGRAM.
 
RESOLVED, that the Board of Directors of Crestar Financial Corporation hereby amends Subsection 2(k) of the Directors’ Equity Program to read as follows:
 
Director means a duly elected or appointed member of he Board who is not an employee of he Company or an affiliate or subsidiary of the Company, excluding any member of the Board who is required to transfer, assign or pay his or her benefits under the Plan to a the member’s employer or firm.
 
FURTHER RESOLVED, that the Board of Directors of Crestar Financial Corporation hereby ratifies and affirms all awards that have been made under the Directors’ Equity Program.
 
FINALLY RESOLVED, that the appropriate officers of the Corporation are hereby are hereby authorized and directed to take such actions and to execute such documents as they may deem necessary or appropriate to implement the foregoing resolutions, all without the necessity of further action by this Board. 

EXHIBIT 11.1
 
SunTrust Banks, Inc.
Statement re: Computation of Per Share Earnings
(In thousands, except per share data)

 	  	 	  	Year Ended December 31
	  	 	  	 	
 	  	2003
	  	2002
	  	2001
	  	2000
	  	1999
	  	1998
	
Basic	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Income before extraordinary gain	  	$	1,332,297	  	$	1,331,809	  	$	1,375,537	  	$	1,294,100	  	$	1,123,952	  	$	971,017	
Extraordinary gain, net of taxes	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	202,648	  	 	—  	
 	  			  			  			  			  			  			
Net income	  	$	1,332,297	  	$	1,331,809	  	$	1,375,537	  	$	1,294,100	  	$	1,326,600	  	$	971,017	
 	  			  			  			  			  			  			
Average basic common shares	  	 	278,295	  	 	282,495	  	 	287,702	  	 	297,834	  	 	317,079	  	 	314,908	
 	  			  			  			  			  			  			
Income before extraordinary gain	  	$	4.79	  	$	4.71	  	$	4.78	  	$	4.35	  	$	3.54	  	$	3.08	
Extraordinary gain, net of taxes	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	0.64	  	 	—  	
 	  			  			  			  			  			  			
Earnings per common share - basic	  	$	4.79	  	$	4.71	  	$	4.78	  	$	4.35	  	$	4.18	  	$	3.08	
 	  			  			  			  			  			  			
Diluted	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Income before extraordinary gain	  	$	1,332,297	  	$	1,331,809	  	$	1,375,537	  	$	1,294,100	  	$	1,123,952	  	$	971,017	
Extraordinary gain, net of taxes	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	202,648	  	 	—  	
 	  			  			  			  			  			  			
Net income	  	$	1,332,297	  	$	1,331,809	  	$	1,375,537	  	$	1,294,100	  	$	1,326,600	  	$	971,017	
 	  			  			  			  			  			  			
Average common shares outstanding	  	 	278,295	  	 	282,495	  	 	287,702	  	 	297,834	  	 	317,079	  	 	314,908	
Incremental shares outstanding (1)	  	 	3,139	  	 	3,557	  	 	3,882	  	 	3,122	  	 	4,095	  	 	4,803	
 	  			  			  			  			  			  			
Average diluted common shares	  	 	281,434	  	 	286,052	  	 	291,584	  	 	300,956	  	 	321,174	  	 	319,711	
 	  			  			  			  			  			  			
Income before extraordinary gain	  	$	4.73	  	$	4.66	  	$	4.72	  	$	4.30	  	$	3.50	  	$	3.04	
Extraordinary gain, net of taxes	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	0.63	  	 	—  	
 	  			  			  			  			  			  			
Earnings per common share - diluted	  	$	4.73	  	$	4.66	  	$	4.72	  	$	4.30	  	$	4.13	  	$	3.04	

(1)	Includes the incremental effect of stock options and restricted stock outstanding computed under the treasury stock method.	

Exhibit 12.1
 
SunTrust Banks, Inc.
Ratio of Earnings to Fixed Charges
(In thousands)

 	  	 	 	 	 	 	 	Year Ended December 31
	 	 	 	 	 	 	 	
 	  	2003
	 	 	2002
	 	 	2001
	 	 	2000
	 	 	1999
	 	 	1998
	 	
Ratio 1 - including deposit interest	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before income taxes and extraordinary gain	  	$	1,909,138	 	 	$	1,823,324	 	 	$	2,029,440	 	 	$	1,919,556	 	 	$	1,695,657	 	 	$	1,498,306	 	
Fixed charges	  	 	1,490,092	 	 	 	1,932,209	 	 	 	3,065,973	 	 	 	3,775,173	 	 	 	2,852,180	 	 	 	2,784,251	 	
 	  				 				 				 				 				 				
Total	  	$	3,399,230	 	 	$	3,755,533	 	 	$	5,095,413	 	 	$	5,694,729	 	 	$	4,547,837	 	 	$	4,282,557	 	
 	  				 				 				 				 				 				
Fixed charges:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest on deposits	  	$	771,631	 	 	$	1,117,296	 	 	$	1,812,385	 	 	$	2,452,919	 	 	$	1,626,132	 	 	$	1,644,229	 	
Interest on funds purchased and securities sold under agreements to repurchase	  	 	106,174	 	 	 	140,463	 	 	 	412,218	 	 	 	651,235	 	 	 	749,561	 	 	 	634,086	 	
Interest on other short-term borrowings	  	 	33,511	 	 	 	14,062	 	 	 	63,359	 	 	 	97,903	 	 	 	79,521	 	 	 	127,800	 	
Interest on long-term debt	  	 	537,223	 	 	 	619,667	 	 	 	739,012	 	 	 	534,924	 	 	 	359,538	 	 	 	340,664	 	
Portion of rents representative of the interest factor (1/3) of rental expense	  	 	41,553	 	 	 	40,721	 	 	 	38,999	 	 	 	38,192	 	 	 	37,428	 	 	 	37,472	 	
 	  				 				 				 				 				 				
Total	  	$	1,490,092	 	 	$	1,932,209	 	 	$	3,065,973	 	 	$	3,775,173	 	 	$	2,852,180	 	 	$	2,784,251	 	
 	  				 				 				 				 				 				
Earnings to fixed charges	  	 	2.28	x	 	 	1.94	x	 	 	1.66	x	 	 	1.51	x	 	 	1.59	x	 	 	1.54	x	
Ratio 2 - excluding deposit interest	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before income taxes and extraordinary gain	  	$	1,909,138	 	 	$	1,823,324	 	 	$	2,029,440	 	 	$	1,919,556	 	 	$	1,695,657	 	 	$	1,498,306	 	
Fixed charges	  	 	718,461	 	 	 	814,913	 	 	 	1,253,588	 	 	 	1,322,254	 	 	 	1,226,048	 	 	 	1,140,022	 	
 	  				 				 				 				 				 				
Total	  	$	2,627,599	 	 	$	2,638,237	 	 	$	3,283,028	 	 	$	3,241,810	 	 	$	2,921,705	 	 	$	2,638,328	 	
 	  				 				 				 				 				 				
Fixed charges:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest on funds purchased and securities sold under agreements to repurchase	  	$	106,174	 	 	$	140,463	 	 	$	412,218	 	 	$	651,235	 	 	$	749,561	 	 	$	634,086	 	
Interest on other short-term borrowings	  	 	33,511	 	 	 	14,062	 	 	 	63,359	 	 	 	97,903	 	 	 	79,521	 	 	 	127,800	 	
Interest on long-term debt	  	 	537,223	 	 	 	619,667	 	 	 	739,012	 	 	 	534,924	 	 	 	359,538	 	 	 	340,664	 	
Portion of rents representative of the interest factor (1/3) of rental expense	  	 	41,553	 	 	 	40,721	 	 	 	38,999	 	 	 	38,192	 	 	 	37,428	 	 	 	37,472	 	
 	  				 				 				 				 				 				
Total	  	$	718,461	 	 	$	814,913	 	 	$	1,253,588	 	 	$	1,322,254	 	 	$	1,226,048	 	 	$	1,140,022	 	
 	  				 				 				 				 				 				
Earnings to fixed charges	  	 	3.66	x	 	 	3.24	x	 	 	2.62	x	 	 	2.45	x	 	 	2.38	x	 	 	2.31	x	

S UN T RUST
 
Throughout 2003, SunTrust people worked harder than ever. To expand our product range. Build up our distribution network. Intensify our sales focus. And do all the other things that add up to a financial services institution determined to serve its customers better than the competition…and deliver the consistently strong financial performance shareholders expect. In turn, our people also provided a compelling answer to a timely question: “Why SunTrust?”
 
SunTrust Banks, Inc.
2003 Annual Report

ABOUT THE COMPANY
 
SunTrust Banks, Inc., with year-end 2003 assets of $125.4 billion, is one of the nation’s largest and strongest financial holding companies.
 
Through its flagship subsidiary, SunTrust Bank, the Company provides deposit, credit and trust and investment services. Additional subsidiaries provide mortgage banking, insurance, asset management, brokerage and capital market services. SunTrust’s customer base encompasses a broad range of individuals and families, high-net-worth clients, businesses and institutions.
 
SunTrust enjoys leading market positions in some of the highest-growth markets in the United States and also serves customers in selected markets nationally. The Company’s priorities include consistency in financial performance, quality in customer service and a strong commitment to all segments of the communities it serves.
 
SunTrust’s 1,201 retail and specialized service branches and 2,225 ATMs are located primarily in Florida, Georgia, Maryland, Tennessee, Virginia and the District of Columbia. In addition, SunTrust provides customers with a selection of technology-based banking channels, including Internet, PC and Telephone Banking. Our Internet address is www.suntrust.com
 
As of December 31, 2003, SunTrust had total assets under advisement of $181 billion. This includes $159 billion in trust assets as well as $22 billion in retail brokerage assets. SunTrust’s mortgage servicing portfolio grew to $69 billion at year-end.
 
CONTENTS
 
Letter to Shareholders 9
Selected Financial Data 14
Management’s Discussion 15
Financial Statements 54
Board of Directors 96
Shareholder Information inside back cover

“Why SunTrust?”

 
With enhancements to our delivery channels and product line-up as well as an intensified focus on sales and service, SunTrust delivers an extensive range of financial products with the individual customer focus typically associated with much smaller institutions.
 
That’s a question we are often asked by shareholders – and by prospective shareholders – in today’s value-conscious investment environment. It is a question we welcome. Why, indeed, choose SunTrust?
 
In part, the answer lies in a distinctive combination of strengths and competitive advantages that we believe differentiates SunTrust in a very positive way from other large financial services organizations.
 
 	•	For one thing, our franchise is widely regarded as one of the most attractive in the United States given our strong positions in high-growth markets.	
 
 	•	We have the strategies, scope, technology and product capabilities needed to tap the opportunities our markets present – and to sustain success in a changing industry.	
 
 	•	Our relationship-based operating model supports a relentless – and profitable – focus on the needs of our customers.	
 
 	•	Our people are smart. They’re energized. And, we’re told by customers, they’re among the very best in the business.	
 
Thanks to these unique strengths, SunTrust can point to an impressive record of performance over the years. Our strengths paid off again in 2003 in business-driven financial results that were not only good when viewed on their own, but indicative of our ongoing earnings potential.
 
In the following pages we talk about some 2003 developments that reflect SunTrust’s current momentum…and also underscore the Company’s excellent growth prospects for 2004 and subsequent years.

Annual Report 2003	  	 	  	SunTrust Banks, Inc.	
 
1

The Right Place. The Right Business.
 
One of SunTrust’s biggest strengths is our Southeast and Mid-Atlantic regional franchise. Our geographic “footprint” is concentrated in some of the most economically vibrant and fastest-growing markets in the United States. Said another way, we think there’s no better place to be in the domestic financial services business than exactly where we are.
 
Of course, being in the right place doesn’t automatically translate into consistent earnings growth. SunTrust also has built the right business mix to deliver consistently strong performance under different economic scenarios.
 
We are a recognized leader in providing a broad array of financial services to consumers and businesses of all sizes through a multi-channel, 24/7 delivery network that emphasizes convenience to the customer and efficiency for us.
 
We deliver highly competitive wealth management and investment-related services to high-net-worth clients ranging from affluent individuals to the very wealthy.
 
We have the demonstrated capability to meet the full range of credit, capital markets and investment banking needs of corporate and institutional clients.

 
HIGH-OPPORTUNITY MARKETS
 
SunTrust’s enviable growth prospects are in part attributable to the fact that population in our geographic “footprint” is expected to grow at a rate that far outpaces the projected national average of 4.8% over the next five years. This means strong demand for the financial services SunTrust provides. The projected growth rates for some of our most dynamic individual markets – including those highlighted at left – are especially encouraging. SunTrust’s investments for the future are concentrated in high-opportunity markets like these.

SunTrust Banks, Inc.	  	2	  	Annual Report 2003	

 
An “Outstanding” Community Reinvestment Act (CRA) rating, broad-based community relations and philanthropic efforts and leadership in a variety of civic organizations reflect SunTrust’s long-standing commitment to enhancing the economic and social vitality of the communities we serve.
 
And our mortgage operation has grown into one of the largest and most successful in the United States.
 
We also have the scope needed to be a meaningful player in our industry. We enjoy a leading position in virtually every market in which we operate. With assets of more than $125 billion, we are big enough to achieve the economies of scale that come with our size. And we can comfortably handle the critical investments in facilities, technology and people vital for future growth.
 
Thinking Big. Acting Locally.
 
What really sets SunTrust apart from other large, multi-state competitors is our business operating model.
 
By that, we mean the way we’re set up to deliver SunTrust’s extensive resources – our product range, our financial capabilities, our technology-based solutions – with the personalized care and attention typically associated with smaller financial institutions, especially in the consumer and commercial markets.
 
The key is true local orientation.
 
To ensure a uniform customer experience throughout the SunTrust footprint, certain behind-the-scenes functions such as business strategy, marketing, product development and technology planning are handled on a consolidated basis at our corporate headquarters.
 
But when it comes to issues that directly affect customers in the marketplace – things like pricing, credit extension or problem resolution – local SunTrust business managers have far greater decision-making latitude than is the case at our major competitors.
 
During 2003, we instituted a series of operating model refinements, mostly invisible to customers and involving things like streamlining communication and coordination of key support functions. These changes help our customer-focused units, especially the more than 50 local banks that represent our primary “face” to our communities, meet client needs with increasing speed and responsiveness.

Annual Report 2003	  	 	  	SunTrust Banks, Inc.	
 
3

Underscoring the importance we place on community focus, we were particularly pleased in 2003 to receive an “Outstanding” Community Reinvestment Act (CRA) rating from the Federal Reserve Bank of Atlanta, the highest rating possible.

 
SunTrust earned market recognition for a variety of strengths last year including outstanding call center effectiveness and creative employment practices. SunTrust was also named “Best Financial Institution” by the readers of Florida Monthly magazine.
 
If We Build It, Customers Will Come.
 
Although SunTrust’s geographic franchise is already characterized by strong market-share positions, we continue to invest in high-growth markets and businesses.
 
With the mid-2003 completion of our purchase of the former Lighthouse Financial Services, for example, the Company’s footprint now includes the Hilton Head Island, SC area, one of our most demographically attractive markets.
 
Asset Management Advisors (AMA), our family office, continues to reach out to some of the wealthiest families in the country – those with more than $25 million in investable assets. New offices in Greenwich, CT and Charlotte, NC, along with existing offices in Palm Beach and Orlando, FL, Atlanta and Washington, DC reflect AMA’s interest in being located where clients live. Our full-service brokerage serving corporate executives and high-net-worth investors, Alexander Key Investments, effectively doubled in size last year with new offices in Washington, DC, Orlando and Jacksonville, FL.
 
THE PEOPLE EQUATION
 
Through a comprehensive talent management process, SunTrust ensures continuity of leadership in key management positions, recognizing the diversity of our employee base. In addition, training and development programs are central to our priority of equipping all employees to meet the needs of clients in a rapidly changing business environment. SunTrust’s increasing number of classroom-style offerings are complemented by cost-effective e-learning capabilities, which provide employees increased flexibility as they undertake career-enhancing classes.

 
					
SunTrust Banks, Inc.	  	4	  	Annual Report 2003	

SunTrust Mortgage expanded market share within the SunTrust footprint through the acquisition of Sun America Mortgage Corp. in Atlanta, and the opening of two new mortgage offices in Alpharetta and Peachtree City, GA. Additionally, with completion of the Lighthouse merger, SunTrust became the number-one mortgage lender in the Hilton Head market. Through joint-venture partnerships, the mortgage unit further expanded its presence in key markets such as Atlanta and Nashville, TN, as well as in select out-of-footprint markets such as Indianapolis, IN.
 
As part of a continuing branch expansion effort, we opened 39 new retail branches in particularly fast-growing spots including Atlanta, Washington, DC, and Central and South Florida. Branch openings are based on intensive research on population growth and traffic patterns. This same research leads to the repositioning of less profitable branches. We want our branches in the best locations from a customer standpoint while also meeting our own financial performance standards.

 
A new branch design creates a more inviting customer experience, better complements our sales and service efforts and provides a cost-effective platform to expand SunTrust’s retail presence in a standardized fashion.
 
A new branch prototype design helps pattern our branch expansion. The prototype establishes a more customer-friendly physical environment that complements our sales and service focus while providing us with an ongoing research and development capability. This new concept, coupled with more standardized construction processes and product delivery, helps shorten the time needed for new offices to achieve profitability.
 
Looking beyond branches, we built an additional customer call center in Cookeville, TN. It replaces three older facilities and will efficiently accommodate anticipated growth in telephone sales and service volume. Each month our call centers handle more than 100,000 inbound sales calls – half of which turn into

Annual Report 2003	  	5	  	SunTrust Banks, Inc.	

customer applications. In a 2003 industry survey on telephone sales and service, SunTrust outranked other large banks as well as some well-known national retailers.
 
We also launched specialized Client Care centers to step up service to targeted clients within our Commercial Banking, Business Banking and Private Banking areas. Available to clients via telephone and the Internet, each center provides 24/7 client access and automated services, plus sales and service advisors specifically trained to meet the specialized needs of these clients.
 
Products: Looking Beyond Today’s Needs.
 
In addition to expanding our physical reach, we looked hard during 2003 at our product set. It’s part of making sure we are not only serving client needs today, but also thinking ahead to what they will need in the future.
 
A suite of highly competitive personal and business checking account products was introduced late in the year with great success. Checking accounts represent the cornerstone product with the majority of our 3.8 million client households and provide a starting point from which we can sell additional products and services.
 
Another example, this time in the commercial market: In a move to expand our Purchasing Card program, SunTrust became one of the first banks in the U.S. to offer the industry-leading Card Manager ™ and Payment Manager ™ solutions from Works, Inc. These Web-based tools allow commercial clients to decrease costs by automating their payment processes and administering card programs online, while also helping us achieve revenue growth targets.
 
For retirement plan sponsors, another targeted SunTrust market, our BenePay ® product provides a secure, on-line mechanism to manage plan distributions as well as more efficiently track participant distributions and payment information.

 
Personalized service means more than face-to-face and telephone interactions. SunTrust was among the first banks to use “online chat” to offer immediate assistance to visitors surfing our Web site.

SunTrust Banks, Inc.	  	6	  	Annual Report 2003	

 
The early 2004 inauguration of a new, state-of-the-art data center caps a multi-year investment program that has provided SunTrust an industry-leading technology and information infrastructure. The return on this investment is increased availability of business systems, improved efficiency and more effective linkages within the Company – all of which ultimately enhances the customer experience.
 
SunTrust Securities, our broker-dealer subsidiary serving retail clients, broadened its appeal with an expanded life insurance product set that now includes long-term care, disability and other advanced insurance solutions. Meanwhile in its core business, SunTrust Securities account assets increased 20% to approximately $18 billion.
 
The appeal of our highly regarded Internet Banking service was enhanced by adding online statements and check images, upgrading electronic bill presentment and payment features and improving self-service features. We also expanded “online chat,” an innovative feature, to encompass most consumer products. Now, sales representatives can electronically reach out to someone surfing our Web site and offer personal assistance in selecting the right product or in completing an application. Ninety-four percent of chat users tell us they would use the service again.
 
S 3 +E 2 : A Formula for Success
 
During 2003, a single-minded focus on customer relationships took center stage among SunTrust’s institutional priorities.
 
To serve as a quick reference point, we unveiled S 3 +E 2 , a shorthand expression of what we see as the central elements of success in a business like ours: relentlessly Selling, Serving and Sustaining customer relationships… through Excellence in Execution.
 
Under the S 3 +E 2 banner, we implemented a variety of related initiatives, promotions and sales management processes that cut across all geographic units and business lines. Specific programs were put in place to focus on things like cross-business line referrals and client retention. And we upgraded reporting, tracking and goal-setting mechanisms.

					
Annual Report 2003	  	7	  	SunTrust Banks, Inc.	

 
SunTrust’s formula for success, “Selling, Serving and Sustaining client relationships, with Excellence in Execution,” highlights SunTrust’s commitment to retaining and building client relationships.
 
As one example of S 3 +E 2 in action, we adopted a structured approach to improve sales effectiveness in our more than 1,200 branches. This new approach, which has been out system-wide, calls for individual sales plans for all employees, enhanced training, a lobby management program and customer access to investment professionals in every office.
 
S 3 +E 2 is an evolving effort, but it is already contributing to results. Some highlights:
 
 	•	In Retail Banking, 2003 sales per day by each employee exceeded the 2002 average by 38%, and more than 63,000 new clients were introduced to our SunTrust Securities brokers. Sales of home equity lines and loans exceeded the prior year by $7.3 billion, or 18%.	
 
 	•	In Commercial Banking, a newly installed sales process and supporting systems contributed to a 21% deposit balance increase and a 10% increase in loan balances.	
 
 	•	In Private Client Services, retail investment sales, heavily driven by branch introductions, were up 25% for the year.	
 
 	•	In our Mortgage business, closing volumes were up 42% over last year resulting in more than $43 billion in production. And a restructured and enhanced cross-sell program resulted in more than 95,000 other targeted products and services sold last year.	
 
 	•	In Corporate & Investment Banking, an intensified focus on developing mutually beneficial relationships with clients and a handful of new products contributed to a 19% increase in debt capital markets fees.	
 
As we see it, providing customers the products and services they need is central to fostering the mutually rewarding customer relationships upon which SunTrust’s long-term success is based. S 3 +E 2 is how we’re making that happen.

 
Mortgage lending has evolved into a key national business with SunTrust Mortgage originating loans through 135 locations in SunTrust markets and adjacent states, maintaining correspondent and broker relationships in 48 states, and servicing loans in all 50 states and the District of Columbia.

SunTrust Banks, Inc.	  	8	  	Annual Report 2003	

 
L. Phillip Humann – Chairman, President and Chief Executive Officer
 
To Our Shareholders
 
Just as we expected, SunTrust’s performance picture brightened during 2003 as various performance-oriented investments and programs we put in place in recent years paid off with an increasingly positive impact.
 
By the end of 2003, against the backdrop of an improving economy, earnings trends were strong – and considerably more promising than they were when the year began.
 
For the full year, net income was a solid $1.3 billion, or $4.73 per fully diluted share, a modest improvement over the prior year. Return on average assets was 1.09% and return on common equity was 14.67%.
 
From an investment perspective, SunTrust share price improved some 25% over the course of the year. This gain notwithstanding, we see room for further share price appreciation over time as SunTrust’s overall performance continues to improve – as we believe it will. In addition, the Board of Directors in February 2004 approved an 11% increase in the dividend on SunTrust common stock, bringing the annual dividend to $2.00 per share.

Annual Report 2003	  	9	  	SunTrust Banks, Inc.	

FINANCIAL HIGHLIGHTS
SunTrust Banks, Inc.

 	  	Year Ended December 31
	 	
(Dollars in millions except per share data)
	  	2003
	 	 	2002
	 	 	2001
	 	
For the Year	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	1,332.3	 	 	$	1,331.8	 	 	$	1,375.5	 	
Total revenue 1	  	 	5,668.3	 	 	 	5,552.1	 	 	 	5,345.2	 	
Common dividends paid	  	 	505.4	 	 	 	489.5	 	 	 	463.5	 	
 	  				 				 				
Per Common Share	  	 	 	 	 	 	 	 	 	 	 	 	
Net income – diluted	  	$	4.73	 	 	$	4.66	 	 	$	4.72	 	
Dividends declared	  	 	1.80	 	 	 	1.72	 	 	 	1.60	 	
Common stock closing price	  	 	71.50	 	 	 	56.92	 	 	 	62.70	 	
Book value	  	 	34.52	 	 	 	31.04	 	 	 	28.97	 	
 	  				 				 				
Financial Ratios	  	 	 	 	 	 	 	 	 	 	 	 	
Return on average total assets	  	 	1.09	%	 	 	1.23	%	 	 	1.34	%	
Return on average total assets less net unrealized gains on securities 2	  	 	1.11	 	 	 	1.26	 	 	 	1.37	 	
Return on average total shareholders’ equity	  	 	14.67	 	 	 	15.26	 	 	 	17.04	 	
Return on average realized shareholders’ equity 2	  	 	17.54	 	 	 	19.07	 	 	 	21.74	 	
Net interest margin 3	  	 	3.08	 	 	 	3.41	 	 	 	3.58	 	
Efficiency ratio 3	  	 	59.99	 	 	 	57.99	 	 	 	56.12	 	
Tier 1 capital ratio	  	 	7.85	 	 	 	7.47	 	 	 	8.02	 	
Total capital ratio	  	 	11.75	 	 	 	11.62	 	 	 	12.18	 	
 	  				 				 				
Selected Average Balances	  	 	 	 	 	 	 	 	 	 	 	 	
Total assets	  	$	122,325.4	 	 	$	108,516.1	 	 	$	102,884.2	 	
Earning assets	  	 	109,257.4	 	 	 	96,370.8	 	 	 	92,034.1	 	
Loans	  	 	76,137.9	 	 	 	71,270.4	 	 	 	70,023.0	 	
Deposits	  	 	80,039.0	 	 	 	71,157.2	 	 	 	64,568.7	 	
Realized shareholders’ equity	  	 	7,596.9	 	 	 	6,984.6	 	 	 	6,328.0	 	
Total shareholders’ equity	  	 	9,083.0	 	 	 	8,725.7	 	 	 	8,073.8	 	
Common shares – diluted (thousands)	  	 	281,434	 	 	 	286,052	 	 	 	291,584	 	
 	  				 				 				
At December 31	  	 	 	 	 	 	 	 	 	 	 	 	
Total assets	  	$	125,393.2	 	 	$	117,322.5	 	 	$	104,740.6	 	
Earning assets	  	 	112,519.6	 	 	 	104,759.6	 	 	 	93,327.5	 	
Loans	  	 	80,732.3	 	 	 	73,167.9	 	 	 	68,959.2	 	
Allowance for loan losses	  	 	941.9	 	 	 	930.1	 	 	 	867.1	 	
Deposits	  	 	81,189.5	 	 	 	79,706.6	 	 	 	67,536.4	 	
Realized shareholders’ equity	  	 	8,067.1	 	 	 	7,260.0	 	 	 	6,704.3	 	
Total shareholders’ equity	  	 	9,731.2	 	 	 	8,769.5	 	 	 	8,359.6	 	
Common shares outstanding (thousands)	  	 	281,923	 	 	 	282,505	 	 	 	288,602	 	
Market value of investment in common stock of The Coca-Cola Company (48,266,496 shares)	  	$	2,450	 	 	$	2,111	 	 	$	2,276	 	
 
1	Total revenue is comprised of net interest income (taxable-equivalent) and noninterest income.	
 
2	In this report, SunTrust presents a return on average assets less net unrealized gains on securities and a return on average realized equity. The foregoing numbers reflect adjustments to remove the effects of the ownership by the Company of 48.3 million shares of The Coca-Cola Company. The Company uses this information internally to gauge its actual performance in the industry. The Company believes that the return on average assets less the net unrealized gains on the securities portfolio is more indicative of the Company’s return on assets because it more accurately reflects the return on the assets that are related to the Company’s core businesses. The Company also believes that the return on average realized equity is more indicative of the Company’s return on equity because the excluded equity relates primarily to a long-term holding of a specific security.	
 
3	The net interest margin and efficiency ratios are presented on a fully taxable-equivalent (FTE) and annualized basis. The FTE basis adjusts for the tax-favored status of income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and provides relative comparison between taxable and non-taxable amounts.	

SunTrust Banks, Inc.	  	10	  	Annual Report 2003	

Financial Results
 
The year’s financial results are reviewed in great detail in the “Management Discussion & Analysis” that begins on page 15. In the spirit of openness in financial reporting, I invite you to review it carefully. For purposes of this letter, though, a quick overview of 2003 financial highlights is in order.
 
In general, our earnings improvement was based on solid, revenue-driven gains in our major lines of business, with particularly strong growth in sales-related revenues.
 
We saw year-over-year improvement in net interest income and, in particular, in fee income where there was noticeable pick-up in fees related to improving equity markets. Because of investments we made in market-driven businesses, such as wealth management and capital markets services, SunTrust is particularly well positioned to benefit from a stronger stock market.
 
Improved Credit Quality
 
The credit quality picture got progressively better during the year. SunTrust continued to be well-served by our traditionally conservative risk posture and careful credit management. We are proud that during an economic cycle when other large U.S. banks were hit by serious credit problems, SunTrust’s credit quality remained “best in class” compared with both peer institutions and industry averages.
 
On a less positive note, loan demand in one important market segment, the large corporate market, was weak in 2003. This overshadowed quite healthy loan growth in other areas such as consumer, mortgage and commercial lending.
 
With our balance sheet positioned for rising interest rates, historically low rates had a dampening effect on our net interest margin, and thus on net interest income and earnings overall, especially during the first half of 2003. The good news is that this negative impact began to diminish – and in fact turned around – in the second half of the year. Signs were pointing to continued improvement as 2004 began.
 
Focus on Efficiency
 
Although we did a respectable job of keeping core operating expenses in check in 2003, further improving efficiency remains a critical corporate priority. To

Annual Report 2003	  	11	  	SunTrust Banks, Inc.	

this end, we have a variety of efficiency-related programs in place and are confident they will yield increasingly tangible results.
 
SunTrust today is a much more cost-conscious operation than it was just a few years ago. Driving this point home is the fact that even as our assets have grown by 35% over the past five years, our total staff level has dropped by more than 9%. We accomplished this reduction through technology improvements and a disciplined approach to personnel management, not broad-scale layoffs that can affect employee morale and customer service.
 
Positive View of the Future
 
Looking ahead, although uncertainty is a fact of life in our industry, we at SunTrust are firmly focused on the future and feeling very good about it.
 
As in the past, we are fortunate to be able to draw on the resources of an experienced and active Board of Directors. We note with appreciation the service of A.W. Dahlberg, who retired from the Board in 2003. And we welcome as a director J. Hicks Lanier, Chairman and Chief Executive Officer of Oxford Industries, Inc. Mr. Lanier joined the Board in November 2003.
 
It is also appropriate to express appreciation to our shareholders for your confidence in our Company. A special word to shareholders who are not yet SunTrust customers: Please give us a chance to win your business. To shareholders that already are customers, and to other customers, we are pleased you have selected us to serve your financial needs. We will work hard to exceed your expectations.
 
Finally, my thanks goes to all our employees for a job well done in 2003. In the end, they really are the answer to the question: “Why SunTrust?”

	
	
/s/ L. Phillip Humann	
	
L. Phillip Humann – Chairman, President and Chief Executive Officer	

SunTrust Banks, Inc.	  	12	  	Annual Report 2003	

2003 FINANCIAL REPORT

		
14	  	SELECTED FINANCIAL DATA	
		
15	  	MANAGEMENT’S DISCUSSION	
		
56	  	CONSOLIDATED STATEMENTS OF INCOME	
		
57	  	CONSOLIDATED BALANCE SHEETS	
		
58	  	CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY	
		
59	  	CONSOLIDATED STATEMENTS OF CASH FLOW	
		
60	  	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	
		
96	  	BOARD OF DIRECTORS	
		
IBC	  	GENERAL INFORMATION	

Annual Report 2003	  	13	  	SunTrust Banks, Inc.	

SELECTED FINANCIAL DATA

 	  	Year Ended December 31
	 	
(Dollars in millions except per share and other data)
	  	2003
	 	 	2002
	 	 	2001
	 	 	2000
	 	 	1999
	 	 	1998
	 	
Summary of Operations	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest and dividend income	  	$	4,768.8	 	 	$	5,135.2	 	 	$	6,279.6	 	 	$	6,845.4	 	 	$	5,960.2	 	 	$	5,675.9	 	
Interest expense	  	 	1,448.5	 	 	 	1,891.5	 	 	 	3,027.0	 	 	 	3,736.9	 	 	 	2,814.7	 	 	 	2,746.8	 	
 	  				 				 				 				 				 				
Net interest income	  	 	3,320.3	 	 	 	3,243.7	 	 	 	3,252.6	 	 	 	3,108.5	 	 	 	3,145.5	 	 	 	2,929.1	 	
Provision for loan losses	  	 	313.6	 	 	 	469.8	 	 	 	275.2	 	 	 	134.0	 	 	 	170.4	 	 	 	214.6	 	
 	  				 				 				 				 				 				
Net interest income after provision for loan losses	  	 	3,006.7	 	 	 	2,773.9	 	 	 	2,977.4	 	 	 	2,974.5	 	 	 	2,975.1	 	 	 	2,714.5	 	
Noninterest income 1	  	 	2,303.0	 	 	 	2,268.8	 	 	 	2,051.9	 	 	 	1,773.6	 	 	 	1,625.9	 	 	 	1,653.9	 	
Noninterest expense 2, 3	  	 	3,400.6	 	 	 	3,219.4	 	 	 	2,999.9	 	 	 	2,828.5	 	 	 	2,905.3	 	 	 	2,870.1	 	
 	  				 				 				 				 				 				
Income before provision for income taxes and extraordinary gain	  	 	1,909.1	 	 	 	1,823.3	 	 	 	2,029.4	 	 	 	1,919.6	 	 	 	1,695.7	 	 	 	1,498.3	 	
Provision for income taxes	  	 	576.8	 	 	 	491.5	 	 	 	653.9	 	 	 	625.5	 	 	 	571.7	 	 	 	527.3	 	
 	  				 				 				 				 				 				
Income before extraordinary gain	  	 	1,332.3	 	 	 	1,331.8	 	 	 	1,375.5	 	 	 	1,294.1	 	 	 	1,124.0	 	 	 	971.0	 	
Extraordinary gain, net of taxes 4	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	202.6	 	 	 	—  	 	
 	  				 				 				 				 				 				
Net income	  	$	1,332.3	 	 	$	1,331.8	 	 	$	1,375.5	 	 	$	1,294.1	 	 	$	1,326.6	 	 	$	971.0	 	
 	  				 				 				 				 				 				
Total revenue	  	$	5,668.3	 	 	$	5,552.1	 	 	$	5,345.2	 	 	$	4,922.1	 	 	$	4,813.9	 	 	$	4,627.4	 	
Net interest income – FTE	  	 	3,365.3	 	 	 	3,283.2	 	 	 	3,293.4	 	 	 	3,148.4	 	 	 	3,188.0	 	 	 	2,973.5	 	
Per Common Share	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before extraordinary gain	  	$	4.73	 	 	$	4.66	 	 	$	4.72	 	 	$	4.30	 	 	$	3.50	 	 	$	3.04	 	
Extraordinary gain	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	0.63	 	 	 	—  	 	
 	  				 				 				 				 				 				
Net income	  	 	4.73	 	 	 	4.66	 	 	 	4.72	 	 	 	4.30	 	 	 	4.13	 	 	 	3.04	 	
Basic	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before extraordinary gain	  	 	4.79	 	 	 	4.71	 	 	 	4.78	 	 	 	4.35	 	 	 	3.54	 	 	 	3.08	 	
Extraordinary gain	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	0.64	 	 	 	—  	 	
 	  				 				 				 				 				 				
Net income	  	 	4.79	 	 	 	4.71	 	 	 	4.78	 	 	 	4.35	 	 	 	4.18	 	 	 	3.08	 	
Dividends declared	  	 	1.80	 	 	 	1.72	 	 	 	1.60	 	 	 	1.48	 	 	 	1.38	 	 	 	1.00	 	
Market price:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
High	  	 	71.73	 	 	 	70.20	 	 	 	72.35	 	 	 	68.06	 	 	 	79.81	 	 	 	87.75	 	
Low	  	 	51.44	 	 	 	51.48	 	 	 	57.29	 	 	 	41.63	 	 	 	60.44	 	 	 	54.00	 	
Close	  	 	71.50	 	 	 	56.92	 	 	 	62.70	 	 	 	63.00	 	 	 	68.81	 	 	 	76.50	 	
Selected Average Balances	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total assets	  	$	122,325.4	 	 	$	108,516.1	 	 	$	102,884.2	 	 	$	98,397.8	 	 	$	92,820.8	 	 	$	85,536.9	 	
Earning assets	  	 	109,257.4	 	 	 	96,370.8	 	 	 	92,034.1	 	 	 	88,609.0	 	 	 	82,255.7	 	 	 	74,880.9	 	
Loans	  	 	76,137.9	 	 	 	71,270.4	 	 	 	70,023.0	 	 	 	70,044.3	 	 	 	62,749.4	 	 	 	57,590.5	 	
Deposits	  	 	80,039.0	 	 	 	71,157.2	 	 	 	64,568.7	 	 	 	66,691.9	 	 	 	57,842.1	 	 	 	53,725.3	 	
Realized shareholders’ equity	  	 	7,596.9	 	 	 	6,984.6	 	 	 	6,328.0	 	 	 	6,031.6	 	 	 	6,368.3	 	 	 	5,641.4	 	
Total shareholders’ equity	  	 	9,083.0	 	 	 	8,725.7	 	 	 	8,073.8	 	 	 	7,501.9	 	 	 	8,190.7	 	 	 	7,853.6	 	
At December 31	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total assets	  	$	125,393.2	 	 	$	117,322.5	 	 	$	104,740.6	 	 	$	103,660.4	 	 	$	95,390.0	 	 	$	93,169.9	 	
Earning assets	  	 	112,519.6	 	 	 	104,759.6	 	 	 	93,327.5	 	 	 	92,147.8	 	 	 	85,193.4	 	 	 	81,295.1	 	
Loans	  	 	80,732.3	 	 	 	73,167.9	 	 	 	68,959.2	 	 	 	72,239.8	 	 	 	66,002.8	 	 	 	61,540.6	 	
Allowance for loan losses	  	 	941.9	 	 	 	930.1	 	 	 	867.1	 	 	 	874.5	 	 	 	871.3	 	 	 	944.6	 	
Deposits	  	 	81,189.5	 	 	 	79,706.6	 	 	 	67,536.4	 	 	 	69,533.3	 	 	 	60,100.5	 	 	 	59,033.3	 	
Long-term debt	  	 	15,313.9	 	 	 	11,879.8	 	 	 	12,660.6	 	 	 	8,945.4	 	 	 	6,017.3	 	 	 	5,807.9	 	
Realized shareholders’ equity	  	 	8,067.1	 	 	 	7,260.0	 	 	 	6,704.3	 	 	 	6,296.4	 	 	 	6,064.0	 	 	 	6,090.4	 	
Total shareholders’ equity	  	 	9,731.2	 	 	 	8,769.5	 	 	 	8,359.6	 	 	 	8,239.2	 	 	 	7,626.9	 	 	 	8,178.6	 	
Ratios and Other Data	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Return on average total assets	  	 	1.09	%	 	 	1.23	%	 	 	1.34	%	 	 	1.32	%	 	 	1.43	%	 	 	1.14	%	
Return on average assets less net unrealized gains on securities	  	 	1.11	 	 	 	1.26	 	 	 	1.37	 	 	 	1.35	 	 	 	1.48	 	 	 	1.18	 	
Return on average total shareholders’ equity	  	 	14.67	 	 	 	15.26	 	 	 	17.04	 	 	 	17.25	 	 	 	16.20	 	 	 	12.36	 	
Return on average realized shareholders’ equity	  	 	17.54	 	 	 	19.07	 	 	 	21.74	 	 	 	21.46	 	 	 	20.83	 	 	 	17.21	 	
Net interest margin	  	 	3.08	 	 	 	3.41	 	 	 	3.58	 	 	 	3.55	 	 	 	3.88	 	 	 	3.97	 	
Efficiency ratio	  	 	59.99	 	 	 	57.99	 	 	 	56.12	 	 	 	57.47	 	 	 	60.35	 	 	 	62.02	 	
Total average shareholders’ equity to total average assets	  	 	7.43	 	 	 	8.04	 	 	 	7.85	 	 	 	7.62	 	 	 	8.82	 	 	 	9.18	 	
Allowance to year-end loans	  	 	1.17	 	 	 	1.27	 	 	 	1.26	 	 	 	1.21	 	 	 	1.32	 	 	 	1.53	 	
Nonperforming assets to total loans plus OREO and other repossessed assets	  	 	0.47	 	 	 	0.74	 	 	 	0.87	 	 	 	0.61	 	 	 	0.43	 	 	 	0.40	 	
Common dividend payout ratio	  	 	37.9	 	 	 	36.8	 	 	 	33.7	 	 	 	34.3	 	 	 	33.4	 	 	 	32.9	 	
Full-service banking offices	  	 	1,183	 	 	 	1,184	 	 	 	1,128	 	 	 	1,129	 	 	 	1,114	 	 	 	1,079	 	
ATMs	  	 	2,225	 	 	 	2,286	 	 	 	1,944	 	 	 	1,991	 	 	 	1,968	 	 	 	1,839	 	
Full-time equivalent employees	  	 	27,578	 	 	 	27,622	 	 	 	28,391	 	 	 	28,268	 	 	 	30,222	 	 	 	30,452	 	
Average common shares – diluted (thousands)	  	 	281,434	 	 	 	286,052	 	 	 	291,584	 	 	 	300,956	 	 	 	321,174	 	 	 	319,711	 	
Average common shares – basic (thousands)	  	 	278,295	 	 	 	282,495	 	 	 	287,702	 	 	 	297,834	 	 	 	317,079	 	 	 	314,908	 	
Reconcilement of Non-GAAP Measures	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Return on average total assets	  	 	1.09	%	 	 	1.23	%	 	 	1.34	%	 	 	1.32	%	 	 	1.43	%	 	 	1.14	%	
Impact of excluding net unrealized securities gains	  	 	0.02	 	 	 	0.03	 	 	 	0.03	 	 	 	0.03	 	 	 	0.05	 	 	 	0.04	 	
 	  				 				 				 				 				 				
Return on average assets less net unrealized gains on securities	  	 	1.11	%	 	 	1.26	%	 	 	1.37	%	 	 	1.35	%	 	 	1.48	%	 	 	1.18	%	
 	  				 				 				 				 				 				
Return on average total shareholders’ equity	  	 	14.67	%	 	 	15.26	%	 	 	17.04	%	 	 	17.25	%	 	 	16.20	%	 	 	12.36	%	
Impact of excluding net unrealized securities gains	  	 	2.87	 	 	 	3.81	 	 	 	4.70	 	 	 	4.21	 	 	 	4.63	 	 	 	4.85	 	
 	  				 				 				 				 				 				
Return on average realized shareholders’ equity	  	 	17.54	%	 	 	19.07	%	 	 	21.74	%	 	 	21.46	%	 	 	20.83	%	 	 	17.21	%	
 	  				 				 				 				 				 				
Net interest income	  	$	3,320.3	 	 	$	3,243.7	 	 	$	3,252.6	 	 	$	3,108.5	 	 	$	3,145.5	 	 	$	2,929.1	 	
FTE Adjustment	  	 	45.0	 	 	 	39.5	 	 	 	40.8	 	 	 	39.9	 	 	 	42.5	 	 	 	44.4	 	
 	  				 				 				 				 				 				
Net interest income – FTE	  	$	3,365.3	 	 	$	3,283.2	 	 	$	3,293.4	 	 	$	3,148.4	 	 	$	3,188.0	 	 	$	2,973.5	 	

1	Includes an additional $52.9 million security gain in 2001 on the sale of STAR Systems, Inc.	
 
2	Includes merger-related expenses of $16.0 million in 2002 related to the acquisition of the Florida franchise of Huntington Bancshares, Inc. and $42.4 million in 2000, $45.6 million in 1999 and $119.4 million in 1998 related to the acquisition of Crestar.	
 
3	Includes expenses of $32.0 million from the proposal to acquire the former Wachovia Corporation in 2001.	
 
4	Represents the gain on sale of the Company’s consumer credit card portfolio in 1999, net of $124.6 million in taxes.	

SunTrust Banks, Inc.	  	14	  	Annual Report 2003	

MANAGEMENT’S DISCUSSION
 
This narrative will assist readers in their analysis of the accompanying Consolidated Financial Statements and supplemental financial information. It should be read in conjunction with the Consolidated Financial Statements and Notes on pages 54 through 92. In Management’s Discussion, net interest income, net interest margin and the efficiency ratio are presented on a fully taxable-equivalent (FTE) basis, which is adjusted for the tax-favored status of income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts. Certain reclassifications have been made to prior year financial statements and related information to conform them to the 2003 presentation.
 
SunTrust has made, and may continue to make, various forward-looking statements with respect to financial and business matters. The following discussion contains forward-looking statements that involve inherent risks and uncertainties. Actual results may differ materially from those contained in these forward-looking statements. For additional information regarding forward-looking statements, see “A Warning About Forward-Looking Information” on pages 51 through 52 of this Annual Report. In addition, the preparation of the financial statements, upon which this Management’s Discussion is based, requires management to make estimates which impact these financial statements. Included in the Notes to the Consolidated Financial Statements, which start on page 60, are the most significant accounting policies used in the preparation of these statements as required by generally accepted accounting principles. These Notes should be read in conjunction with the reader’s review of SunTrust’s financial statements and results of operations.
 
INTRODUCTION
 
Prior to 2003, SunTrust’s geographic footprint extended throughout Alabama, Florida, Georgia, Maryland, Tennessee, Virginia, and the District of Columbia. In June 2003, SunTrust expanded its footprint into South Carolina by acquiring Lighthouse Financial Services, Inc. (Lighthouse) based on Hilton Head Island.
 
Within the geographic footprint, SunTrust strategically operates under six business segments. These business segments are: Retail, Commercial, Corporate and Investment Banking (CIB), Private Client Services (PCS), Mortgage and Corporate/ Other. For a complete description of each line of business, please see pages 17 through 18.
 
From an earnings perspective, 2003 was a challenging year for SunTrust. On the positive side, credit quality retained “best in class” distinction and improved throughout the year, mortgage production reached record levels, the Company’s wealth management business continued to expand, debt capital markets produced strong results and middle market commercial loan growth was solid. On the negative side, the weak economy continued to negatively impact large corporate commercial loan demand and continued margin compression into the first half of 2003 constrained revenue growth. The Company ended the year with earnings per diluted share increasing 1.5% from 2002 to $4.73 per diluted share.
 
Net interest income for 2003 was $3.4 billion, an increase of 2.5% compared to 2002. Net interest income began to show signs of improvement in the latter half of 2003, signaling that the balance sheet was less vulnerable to low interest rates, while still positioned favorably for anticipated rate increases. The increased net interest income was partially attributed to higher volumes in both the loan and securities portfolios, which were able to offset the adverse impact of the low rate environment. Positively impacting net interest income, most notably in the latter half of the year, was the decline in mortgage prepayments along with the steepening of the yield curve. To combat the negative effects of the low rate environment, the Company was continually managing its cost of funding versus the yields on both loans and other earning assets by funding this growth through more cost effective means, such as wholesale funding. SunTrust expects net interest income results in the first half of 2004 to be consistent with the fourth quarter of 2003, with the possibility of slight growth occurring in the latter part of 2004, when the Federal Reserve may begin to increase interest rates. Compression of the net interest margin, which the Company experienced throughout much of 2003, slowed in the second half of the year and the margin began to expand in the fourth quarter compared to the third quarter. Also, the first half of 2003 saw high levels of mortgage prepayments caused by the low rate environment contributing to the decline in the margin. However, in the latter part of the year, the margin began to stabilize as prepayments slowed, causing a reduction in securities premium amortization amounts. Somewhat offsetting these prepayments was an increase in the Company’s loans held for sale, which remained at record levels for much of the year. The Company expects mortgage loans held for sale to return to normal historical levels in 2004.
 
Noninterest income was $2.3 billion in 2003, an increase of 1.5% from 2002. The increase was attributed to strong, customer-driven fee income in areas such as the Company’s wealth management and capital market businesses. The wealth management business performed well in 2003 due to good sales momentum, strong net asset flows and stable customer retention rates. Continued improvement of performance for this business is dependent on cooperation from the stock market and continued economic recovery. SunTrust’s capital market revenues benefited from strong growth in debt capital markets. In certain business areas that appeared to be stagnant, such as corporate lending, the Company benefited from extensive cross line of business referrals generated by the teamwork between business specialists. This is a good example of how the Company’s approach of selling, servicing and sustaining client relationships from a team perspective has produced positive results.
 
Credit quality improved in 2003, as evidenced by significant declines in the provision for loan losses, nonperforming assets and net charge-offs compared to 2002. Nonperforming assets, particularly those related to commercial loans, showed significant improvement from the prior year. The decrease in nonperforming assets was attributed to a decline in new additions to large corporate nonaccrual loans, increased loan sales activity, improvement in credit quality and client repayment. Net

Annual Report 2003	  	15	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
charge-offs decreased primarily due to a reduction in commercial net charge-offs.
 
Controlling noninterest expense continued to be a focus for SunTrust in 2003. Although the Company benefited from numerous cost savings initiatives, increased performance based incentive payments and bonus payouts more than offset expense reduction efforts. Total noninterest expense increased 5.6% from 2002. Personnel expense continued to be the largest component of noninterest expense for SunTrust. Most of the increase in personnel expense related to incentive payments resulting from business growth, higher production volumes, and higher revenue in the PCS, CIB and Mortgage lines of business.
 
SunTrust experienced moderate loan growth four consecutive quarters in 2003. Residential mortgage loans increased significantly from 2002 to 2003 partially due to the improvement in adjustable rate mortgage production during 2003. Commercial middle market produced strong loan growth in 2003, especially given the economic environment. However, the growth in commercial middle market was masked by shrinkage in large corporate loans. Average loans within the Commercial line of business increased 9.9% while average loans in the CIB line of business decreased 1.7%. The Company anticipates gradual pick up in the large corporate loan category as the economy continues to strengthen.
 
As previously mentioned, the Company took advantage of wholesale funding sources during 2003 to fund a part of the earning asset growth. SunTrust also experienced significant growth in average consumer and commercial deposits which increased 6.1% over 2002.
 
The following discussions will provide further insight on the 2003 performance of SunTrust.
 
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. 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 reducing a liability. In instances where required by generally accepted accounting principles, the Company uses a 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 the 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 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 allowance 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 segments of the loan portfolio, historical loan loss experience and the level of classified and nonperforming loans.

 
					
SunTrust Banks, Inc.	  	16	  	Annual Report 2003	

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 according to the contractual terms of the loan agreement. When a loan is deemed impaired, impairment is measured by using the fair value of the underlying collateral, the present value of the future cash flows discounted at the 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, economic conditions, historical loss experience, or the condition of the various markets in which collateral may be sold may affect the required level of the allowance for loan losses and the associated provision for loan losses. Should cash flow assumptions or market conditions change, a different amount may be recorded for the allowance for loan losses and the associated provision for loan losses. For additional discussion of the allowance for loan losses see pages 27 through 30.
 
ESTIMATES OF FAIR VALUE
 
The estimation of fair value is significant to a number of SunTrust’s assets, including trading assets, loans held for sale, available-for-sale investment securities, mortgage servicing rights (MSRs), other real estate owned (OREO), other repossessed assets, 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. Circumstances that could cause estimates of the fair value of certain assets and liabilities to change include a change in prepayment speeds, discount rates, or market interest rates.
 
Fair values for trading 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 selling costs.
 
Estimates of fair value are also required in performing an impairment analysis of goodwill. The Company reviews goodwill for impairment at least once annually and whenever events or circumstances indicate the carrying value may not be recoverable. An impairment would be indicated if the carrying value exceeds the fair value of a reporting unit.
 
RECENT ACCOUNTING DEVELOPMENTS
 
The Company adopted the provisions of several new accounting pronouncements in the current year, including Statement of Financial Accounting Standards (SFAS) Nos. 146, 149, 150 and the recognition and requirements of Financial Accounting Standards Board Interpretation (FIN) Nos. 45 and 46. The provisions of these pronouncements and the related impact to the Company are discussed in the Accounting Policies Adopted section of Note 1 to the Consolidated Financial Statements beginning on page 62.
 
BUSINESS SEGMENTS
 
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 22 – Business Segment Reporting in the Notes to the Financial Statements. The lines of business which are the Company’s segments 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, the Internet (www.SunTrust.com) and the telephone (1-800-SUNTRUST). In addition to serving the retail market, the Retail line of business serves as an entry point for other lines of business. When client needs change and expand, Retail refers clients to the Private Client Services, Mortgage and Commercial lines of business.
 
COMMERCIAL
 
The Commercial line of business provides clients 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 revenue), “Middle Market” ($50 million to $250 million in annual revenue), “Commercial Real Estate” (entities that specialize in Commercial Real Estate activities), 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 Affordable Housing (tax credits related to community development) and Premium Assignment Corporation (insurance premium financing).

Annual Report 2003	  	17	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
CORPORATE AND INVESTMENT BANKING
 
Corporate and Investment Banking (CIB) is comprised of the following businesses: corporate banking, investment banking, capital markets businesses, commercial leasing, receivables capital management and merchant banking. The corporate banking strategy is focused on companies with sales in excess of $250 million and is organized along industry specialty and geographic lines, providing a full array of traditional bank services, capital markets capabilities, and investment banking. The investment banking strategy is focused on small and mid cap growth companies and is organized along industry specialty lines, raising public and private equity and providing merger and acquisition advisory services. The debt and equity capital markets businesses support both the corporate banking and investment banking relationships as well as the smaller commercial clients who are covered by our Commercial line of business and wealthy individuals who are served by our PCS line of business. Through its wholly-owned subsidiary, SunTrust Leasing Corp., the Company provides equipment financing to various corporate customers. Receivables capital management provides traditional factoring services as well as other value added receivables management services.
 
MORTGAGE
 
The Mortgage line of business offers residential mortgage products nationally through its retail, broker and correspondent channels. These products are held in the Company’s residential loan portfolio or are securitized and sold in the secondary market with servicing rights retained. This line of business services loans for its own residential mortgage portfolio as well as for others.
 
PRIVATE CLIENT SERVICES
 
Private Client Services (PCS) provides a full array of wealth 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. SunTrust Securities, Inc. operates across the Company’s footprint and offers discount/online and full service brokerage services to individual clients. Alexander Key offers full service brokerage services to affluent and wealthy clients who generally do not have a pre-existing relationship with the Company. Alexander Key is currently located in Atlanta, Nashville, Washington D.C., Jacksonville, Orlando, and Richmond with plans to expand into additional high opportunity markets. PCS also offers professional investment management and trust services to clients seeking active management of their financial resources. The ultra high net worth segment of these clients is serviced by AMA. AMA provides “family office” services to high net worth clients. Acting in this capacity, AMA investment professionals utilize sophisticated financial products and wealth management tools to provide a holistic approach to multi-generational wealth management. AMA is currently located in Atlanta, Orlando, West Palm Beach, Washington D.C., Charlotte, and Greenwich, Connecticut. 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 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’ clients and the STI Classic Funds.
 
CORPORATE/OTHER
 
Corporate/Other (Other) includes the investment securities portfolio, long-term debt, capital, short-term liquidity and funding activities, balance sheet risk management including derivative hedging activities, 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 the Company’s facilities; 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, tax and treasury. Other functions included in the Other line of business are credit risk management, credit review, audit, internal control, legal and compliance, branch operations, 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.

SunTrust Banks, Inc.	  	18	  	Annual Report 2003	

The following table for SunTrust’s reportable business segments compares total income before taxes for the twelve months ended December 31, 2003 to the same period last year:
 
TABLE 1 TOTAL CONTRIBUTION BEFORE TAXES

(Dollars in millions)
	  	2003
	  	2002
	
Retail	  	$	642.1	  	$	718.8	
Commercial	  	 	491.8	  	 	384.1	
Corporate and Investment Banking	  	 	351.8	  	 	202.6	
Mortgage	  	 	246.3	  	 	157.7	
Private Client Services	  	 	188.1	  	 	194.6	
Corporate/Other	  	 	34.1	  	 	205.2	
 
The following table for SunTrust’s reportable business segments compares average loans and average deposits for the twelve months ended December 31, 2003 to the same period last year:
 
TABLE 2 AVERAGE LOANS AND DEPOSITS

 	  	2003
	  	2002
	
(Dollars in millions)
	  	Average
loans
	  	Average
deposits
	  	Average
loans
	  	Average
deposits
	
Retail	  	$	23,476.2	  	$	52,828.5	  	$	21,669.0	  	$	51,425.4	
Commercial	  	 	21,525.2	  	 	10,611.2	  	 	19,592.1	  	 	8,780.2	
Corporate and Investment Banking	  	 	15,906.4	  	 	2,909.7	  	 	16,185.3	  	 	2,480.7	
Mortgage	  	 	13,221.4	  	 	1,634.4	  	 	12,082.9	  	 	1,011.0	
Private Client Services	  	 	2,001.2	  	 	1,486.9	  	 	1,590.6	  	 	1,531.1	
 
The following analysis details the operating results for each line of business for the twelve months ended December 31, 2003 and 2002.
 
RETAIL
 
Retail’s contribution before taxes was $642.1 million for 2003, a decline of $76.7 million, or 10.7%, compared to 2002. Net interest income declined $26.1 million, or 1.9%, primarily the result of the lower interest rate environment and deposit margin compression. Net interest income on loans increased $67.2 million, or 11.5%, overcoming lower interest rates through an increase in average loans. Net interest income for deposits declined $93.3 million, or 12.0%, due to margin compression, or the inability to reduce interest rates paid on deposits as much as the drop in the funds transfer pricing credit. Provision for loan losses increased $49.9 million, or 48.6%, as a result of growth in the loan portfolio and changes in risk factors.
 
Noninterest income increased $30.0 million, or 4.2%, compared to 2002. Of the increase, $26.8 million was attributable to higher deposit service charges. Noninterest expense grew by $30.8 million, or 2.5%. While personnel expense declined $6.7 million, investment in the Retail distribution network and improved technology drove the 2.5% increase in noninterest expense.
 
Average loan balances grew $1.8 billion, an 8.3% increase over 2002. Growth in consumer equity lines and indirect installment lending drove the overall loan portfolio growth. Average deposit balances increased $1.4 billion, or 2.7%, compared to 2002. Demand deposits, NOW accounts and money market accounts were the primary drivers of the deposit growth. The Lighthouse acquisition did not have a significant impact on the balance sheet growth.
 
COMMERCIAL
 
Commercial’s contribution before taxes increased $107.7 million, or 28.0%, from 2002 to 2003. The growth was driven by a combination of increased net interest income on loans and higher noninterest revenue. During 2003, the Commercial line of business consolidated certain affordable housing limited partnerships. Income and expenses related to these partnerships were not included in the 2002 results. The growth in contribution before taxes included $52.3 million related to the affordable housing unit.
 
Net interest income increased $52.0 million, or 9.8%. The change was driven by a $1.9 billion, or 9.9%, increase in average loans. Increased loan volumes were largely the result of robust sales. Loan quality remained good as the net charge-off ratio was 0.10% in 2003 compared to 0.06% in 2002. SunTrust’s acquisition of Lighthouse Financial Services contributed $234.1 million to the loan growth in 2003. Average deposit balances rose $1.8 billion, or 20.9%, which also contributed to the rise in net interest income. This increase was a result of improved sales efforts and market liquidity.

Annual Report 2003	  	19	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
Total noninterest income grew $78.5 million, or 34.4%. Noninterest income for 2003 included $61.6 million related to the affordable housing unit of which $25.3 million was associated with limited partnership income resulting from the consolidation of certain affordable housing partnerships. An additional $38.8 million was attributable to higher tax-effected revenue generated by SunTrust’s Community Development Corporation, which was transferred from the Corporate/Other line of business. The remaining noninterest income growth resulted from increased deposit service charges, credit card income and loan fees.
 
Total noninterest expense grew $19.6 million, or 5.8%. The increase in noninterest expense included $7.3 million related to the affordable housing unit, with the remainder of the expense growth related to increased volumes.
 
CORPORATE AND INVESTMENT BANKING
 
Corporate and Investment Banking’s contribution before taxes increased $149.2 million, or 73.6%, for 2003 as compared with 2002. The biggest factor in the improvement was a $119.8 million decrease in the provision for loan losses. The remaining $29.4 million increase was primarily due to improvements of $20.9 million, or 4.0%, in noninterest income and $11.4 million, or 4.2%, in net interest income offset by an increase in noninterest expense of $2.8 million, or 0.8%.
 
To comply with FIN 46, Three Pillars Funding LLC (Three Pillars), a multi-seller commercial paper conduit with $3.2 billion in assets at December 31, 2003, was consolidated in the third quarter of 2003. Including the effect of this consolidation, which added $1.1 billion in average loan balances in 2003, average loans declined $279.0 million, or 1.7%. Despite the decline in outstanding loan balances, total commitments during 2003 were essentially unchanged from the prior year, but total binding commitment usage declined to an approximate average of 30.1% in 2003 from 33.9% in 2002. The increase in noninterest income was driven largely by a substantial increase in debt capital markets products.
 
MORTGAGE
 
Driven by higher mortgage loan production resulting from record low interest rates, Mortgage’s 2003 contribution before taxes of $246.3 million was up $88.6 million, or 56.2%, compared to 2002. Mortgage loan production of $43.7 billion in 2003 represented another record year and was up 41.9% over the prior record year.
 
Net interest income was up $171.3 million, or 45.7%, over 2002. Record production pushed average mortgage loans held for sale balances up $3.6 billion, or 83.0%. The higher balances were the primary reason for the net interest income increase. Additionally, residential portfolio loans were up $1.2 billion, or 10.4%, and combined with wider spreads, contributed to the increase in net interest income. Credit quality has remained high even with the significant increase in the residential loan portfolio. Net charge-offs were $2.5 million in 2003 compared to $2.0 million in 2002. Due to high loan payoff levels, average deposit volume grew $623.4 million, or 61.7%, compared to 2002. However, due to the low rate environment in both years, the effect on net interest income was minimal.
 
Total noninterest income increased $1.3 million, or 9.3%, in 2003 compared with 2002. Higher production-related income resulting from record production and other noninterest income was substantially offset by higher mortgage servicing rights amortization expense. The higher mortgage servicing rights expense resulted from record loan payoffs and amortization of existing serviced loans. At December 31, 2003, loans serviced totaled $69.0 billion compared with $57.1 billion at December 31, 2002, a 20.8% increase.
 
As production volume and related income grew in 2003, noninterest expense also increased. Noninterest expense was up $83.5 million, or 37.3%, principally due to volume-related expenses such as commission-based compensation, overtime, temporary employees and other lending-related expenses that vary with loan production.
 
PRIVATE CLIENT SERVICES
 
Private Client Services’ contribution before taxes decreased $6.5 million, or 3.3%, for the year ended December 31, 2003 compared to 2002.
 
Total noninterest income increased $30.6 million, or 4.9%, for the year ended December 31, 2003 compared to 2002. Average assets under management increased 4.1% compared to 2002. Trust and investment management income decreased $1.9 million, or 0.4%, for the year ended December 31, 2003 compared to 2002. As of December 31, 2003 and 2002, assets under management were approximately $101.0 billion and $89.6 billion, respectively. Assets under management increased 12.8% due to appreciation in the equity markets and net new business. Lost business moderately improved compared to prior periods, while new business maintained its momentum. 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 $180.9 billion, which included $21.8 billion in non-managed corporate trust assets, $35.9 billion in non-managed trust assets, and $22.2 billion in retail brokerage assets. The retail brokerage accounts include $2.5 billion related to Alexander Key. As of December 31, 2003, brokerage assets increased 30.6% compared to December 31, 2002.
 
Retail investment income increased $24.0 million, or 18.0%, for the year ended December 31, 2003 compared to 2002. The increase in retail investment income was primarily due to an increase in broker production, an increase in the number of brokers, and increased revenue generated from Alexander Key.
 
Noninterest expense increased $41.0 million, or 8.7%, for the year ended December 31, 2003 compared to 2002. The expense increases were primarily due to additional personnel and occupancy expense associated with PCS’ business-related initiatives. PCS continues to invest in the core business, new product capabilities, and new distribution channels.

SunTrust Banks, Inc.	  	20	  	Annual Report 2003	

CORPORATE/OTHER
 
The Corporate/Other line of business’ contribution before taxes decreased from $205.2 million in 2002 to $34.1 million in 2003, a decline of $171.0 million, or 83.4%.
 
Net interest income decreased from $706.1 million in 2002 to $575.9 million in 2003, a reduction of $130.2 million, or 18.4%. The primary causes were lower interest rates compressing the margin earned on liabilities and capital and lower margins earned on the investment portfolio.
 
Noninterest income decreased from $162.7 million in 2002 to $35.6 million in 2003, a reduction of $127.1 million, or 78.1%. The decline was the result of lower security gains and higher transfers to the Commercial line of business for tax credits generated by SunTrust’s Community Development Corporation. Noninterest expense was essentially unchanged.
 
Average total assets increased $4.3 billion, or 19.9%, in 2003 compared to 2002. The growth was primarily the result of an increase in the investment portfolio. Average total liabilities increased $6.9 billion, or 23.0%. This rise was primarily fueled by growth in wholesale deposits.
 
NET INTEREST INCOME/MARGIN
 
Net interest income for 2003 was $3,365.3 million, an increase of $82.1 million, or 2.5%, compared to 2002. For the year the benefit from higher balance sheet volumes more than offset the adverse impact of the lower rate environment on net interest income. Also helping the year over year increase was the steeper yield curve in the latter part of 2003 and its impact on slowing prepayments and increasing the spreads on incremental asset growth.
 
The net interest margin declined 33 basis points from 3.41% in 2002 to 3.08% in 2003. The Company consolidated Three Pillars, a multi-seller commercial paper conduit, to comply with FIN 46 in July 2003. This consolidation accounted for three basis points of the net interest margin decline for 2003. In addition to the consolidation of Three Pillars, SunTrust consolidated certain affordable housing  partnerships, which had a
 
TABLE 3 ANALYSIS OF CHANGES IN NET INTEREST INCOME 1

 	  	2003 Compared to 2002
Increase (Decrease) Due to
	 	 	2002 Compared to 2001
Increase (Decrease) Due to
	 	
(Dollars in millions on a taxable-equivalent basis)
	  	Volume
	 	 	Rate
	 	 	Net
	 	 	Volume
	 	 	Rate
	 	 	Net
	 	
Interest Income	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loans	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Taxable	  	$	240.0	 	 	$	(607.8	)	 	$	(367.8	)	 	$	75.9	 	 	$	(1,017.7	)	 	$	(941.8	)	
Tax-exempt 2	  	 	18.6	 	 	 	(10.1	)	 	 	8.5	 	 	 	10.2	 	 	 	(17.7	)	 	 	(7.5	)	
Securities available for sale	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Taxable	  	 	171.2	 	 	 	(313.7	)	 	 	(142.5	)	 	 	60.7	 	 	 	(276.0	)	 	 	(215.3	)	
Tax-exempt 2	  	 	(2.3	)	 	 	(1.5	)	 	 	(3.8	)	 	 	(3.0	)	 	 	(4.7	)	 	 	(7.7	)	
Funds sold and securities purchased under agreements to resell	  	 	(0.1	)	 	 	(8.7	)	 	 	(8.8	)	 	 	5.2	 	 	 	(31.9	)	 	 	(26.7	)	
Loans held for sale	  	 	225.8	 	 	 	(57.8	)	 	 	168.0	 	 	 	95.0	 	 	 	(26.1	)	 	 	68.9	 	
Interest-bearing deposits	  	 	(5.7	)	 	 	(1.2	)	 	 	(6.9	)	 	 	5.2	 	 	 	(3.9	)	 	 	1.3	 	
Trading assets	  	 	2.4	 	 	 	(10.0	)	 	 	(7.6	)	 	 	8.2	 	 	 	(25.0	)	 	 	(16.8	)	
 	  				 				 				 				 				 				
Total interest income	  	 	649.9	 	 	 	(1,010.8	)	 	 	(360.9	)	 	 	257.4	 	 	 	(1,403.0	)	 	 	(1,145.6	)	
 	  				 				 				 				 				 				
Interest Expense	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NOW accounts	  	 	9.0	 	 	 	(32.7	)	 	 	(23.7	)	 	 	19.2	 	 	 	(46.0	)	 	 	(26.8	)	
Money Market accounts	  	 	25.9	 	 	 	(149.2	)	 	 	(123.3	)	 	 	125.1	 	 	 	(325.9	)	 	 	(200.8	)	
Savings deposits	  	 	(0.7	)	 	 	(37.7	)	 	 	(38.4	)	 	 	6.6	 	 	 	(93.0	)	 	 	(86.4	)	
Consumer time deposits	  	 	(45.6	)	 	 	(99.8	)	 	 	(145.4	)	 	 	12.6	 	 	 	(134.2	)	 	 	(121.6	)	
Brokered deposits	  	 	45.4	 	 	 	(64.3	)	 	 	(18.9	)	 	 	(3.7	)	 	 	18.5	 	 	 	14.8	 	
Foreign deposits	  	 	46.0	 	 	 	(19.8	)	 	 	26.2	 	 	 	(66.5	)	 	 	(109.3	)	 	 	(175.8	)	
Other time deposits	  	 	(6.8	)	 	 	(15.3	)	 	 	(22.1	)	 	 	(5.2	)	 	 	(93.3	)	 	 	(98.5	)	
Funds purchased and securities sold under agreements to repurchase	  	 	15.7	 	 	 	(50.0	)	 	 	(34.3	)	 	 	(30.8	)	 	 	(241.0	)	 	 	(271.8	)	
Other short-term borrowings	  	 	19.4	 	 	 	—  	 	 	 	19.4	 	 	 	(19.9	)	 	 	(29.4	)	 	 	(49.3	)	
Long-term debt	  	 	34.6	 	 	 	(117.1	)	 	 	(82.5	)	 	 	(30.8	)	 	 	(88.5	)	 	 	(119.3	)	
 	  				 				 				 				 				 				
Total interest expense	  	 	142.9	 	 	 	(585.9	)	 	 	(443.0	)	 	 	6.6	 	 	 	(1,142.1	)	 	 	(1,135.5	)	
 	  				 				 				 				 				 				
Net change in net interest income	  	$	507.0	 	 	$	(424.9	)	 	$	82.1	 	 	$	250.8	 	 	$	(260.9	)	 	$	(10.1	)	

1	Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate, while rate change is change in rate times the previous volume. The rate/volume change, change in rate times change in volume, is allocated between volume change and rate change at the ratio each component bears to the absolute value of their total.	
 
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.	

Annual Report 2003	  	21	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
TABLE 4 CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE AND AVERAGE YIELDS EARNED AND RATES PAID

 	  	2003
	 	 	2002
	 	 	2001
	 	
(Dollars in millions; yields
on taxable-equivalent basis)
	  	Average
Balances
	 	 	Income/
Expense
	  	Yields/
Rates
	 	 	Average
Balances
	 	 	Income/
Expense
	  	Yields/
Rates
	 	 	Average
Balances
	 	 	Income/
Expense
	  	Yields/
Rates
	 	
Assets	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	
Loans: 1	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	
Taxable	  	$	74,476.7	 	 	$	3,553.1	  	4.77	%	 	$	69,981.0	 	 	$	3,920.9	  	5.60	%	 	$	68,892.8	 	 	$	4,862.7	  	7.06	%	
Tax-exempt 2	  	 	1,661.2	 	 	 	79.3	  	4.77	 	 	 	1,289.4	 	 	 	70.8	  	5.49	 	 	 	1,130.2	 	 	 	78.4	  	6.94	 	
 	  				 			  			 				 			  			 				 			  			
Total loans	  	 	76,137.9	 	 	 	3,632.4	  	4.77	 	 	 	71,270.4	 	 	 	3,991.7	  	5.60	 	 	 	70,023.0	 	 	 	4,941.1	  	7.06	 	
Securities available for sale	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	
Taxable	  	 	20,994.4	 	 	 	676.2	  	3.22	 	 	 	16,890.3	 	 	 	818.6	  	4.85	 	 	 	15,904.8	 	 	 	1,033.9	  	6.50	 	
Tax-exempt 2	  	 	374.1	 	 	 	24.1	  	6.46	 	 	 	408.3	 	 	 	28.0	  	6.85	 	 	 	448.7	 	 	 	35.7	  	7.95	 	
 	  				 			  			 				 			  			 				 			  			
Total securities available for sale	  	 	21,368.5	 	 	 	700.3	  	3.28	 	 	 	17,298.6	 	 	 	846.6	  	4.89	 	 	 	16,353.5	 	 	 	1,069.6	  	6.54	 	
Funds sold and securities purchased under agreements to resell	  	 	1,387.0	 	 	 	15.7	  	1.13	 	 	 	1,390.4	 	 	 	24.5	  	1.76	 	 	 	1,250.3	 	 	 	51.2	  	4.09	 	
Loans held for sale	  	 	8,587.7	 	 	 	448.3	  	5.22	 	 	 	4,410.8	 	 	 	280.4	  	6.36	 	 	 	2,949.9	 	 	 	211.5	  	7.17	 	
Interest-bearing deposits	  	 	10.5	 	 	 	0.1	  	1.39	 	 	 	404.7	 	 	 	7.0	  	1.73	 	 	 	167.6	 	 	 	5.8	  	3.43	 	
Trading assets	  	 	1,765.8	 	 	 	17.0	  	0.96	 	 	 	1,595.9	 	 	 	24.5	  	1.54	 	 	 	1,289.8	 	 	 	41.3	  	3.20	 	
 	  				 			  			 				 			  			 				 			  			
Total earning assets	  	 	109,257.4	 	 	 	4,813.8	  	4.41	 	 	 	96,370.8	 	 	 	5,174.7	  	5.37	 	 	 	92,034.1	 	 	 	6,320.5	  	6.87	 	
Allowance for loan losses	  	 	(950.8	)	 	 	 	  	 	 	 	 	(924.3	)	 	 	 	  	 	 	 	 	(876.3	)	 	 	 	  	 	 	
Cash and due from banks	  	 	3,432.1	 	 	 	 	  	 	 	 	 	3,343.2	 	 	 	 	  	 	 	 	 	3,383.4	 	 	 	 	  	 	 	
Premises and equipment	  	 	1,588.7	 	 	 	 	  	 	 	 	 	1,621.2	 	 	 	 	  	 	 	 	 	1,599.7	 	 	 	 	  	 	 	
Other assets	  	 	6,655.0	 	 	 	 	  	 	 	 	 	5,373.4	 	 	 	 	  	 	 	 	 	4,043.3	 	 	 	 	  	 	 	
Unrealized gains on securities available for sale	  	 	2,343.0	 	 	 	 	  	 	 	 	 	2,731.8	 	 	 	 	  	 	 	 	 	2,700.0	 	 	 	 	  	 	 	
 	  				 	 	 	  	 	 	 				 	 	 	  	 	 	 				 	 	 	  	 	 	
Total assets	  	$	122,325.4	 	 	 	 	  	 	 	 	$	108,516.1	 	 	 	 	  	 	 	 	$	102,884.2	 	 	 	 	  	 	 	
 	  				 	 	 	  	 	 	 				 	 	 	  	 	 	 				 	 	 	  	 	 	
Liabilities and Shareholders’ Equity	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	
NOW accounts	  	$	11,702.0	 	 	$	50.7	  	0.43	%	 	$	10,315.4	 	 	$	74.5	  	0.72	%	 	$	8,471.3	 	 	$	101.2	  	1.20	%	
Money Market accounts	  	 	22,218.5	 	 	 	203.5	  	0.92	 	 	 	20,470.9	 	 	 	326.8	  	1.60	 	 	 	15,830.1	 	 	 	527.6	  	3.33	 	
Savings	  	 	6,259.3	 	 	 	46.7	  	0.75	 	 	 	6,310.0	 	 	 	85.1	  	1.35	 	 	 	6,066.6	 	 	 	171.5	  	2.83	 	
Consumer time	  	 	7,975.4	 	 	 	201.7	  	2.53	 	 	 	9,342.4	 	 	 	347.1	  	3.72	 	 	 	9,092.6	 	 	 	468.8	  	5.16	 	
Other time	  	 	3,461.6	 	 	 	80.0	  	2.31	 	 	 	3,722.8	 	 	 	102.1	  	2.74	 	 	 	3,823.9	 	 	 	200.6	  	5.25	 	
 	  				 			  			 				 			  			 				 			  			
Total interest-bearing consumer and commercial deposits	  	 	51,616.8	 	 	 	582.6	  	1.13	 	 	 	50,161.5	 	 	 	935.6	  	1.87	 	 	 	43,284.5	 	 	 	1,469.7	  	3.40	 	
Brokered deposits	  	 	3,662.0	 	 	 	111.2	  	3.04	 	 	 	2,537.2	 	 	 	130.1	  	5.13	 	 	 	2,617.7	 	 	 	115.3	  	4.40	 	
Foreign deposits	  	 	6,933.3	 	 	 	77.8	  	1.12	 	 	 	3,190.4	 	 	 	51.6	  	1.62	 	 	 	5,175.4	 	 	 	227.5	  	4.39	 	
 	  				 			  			 				 			  			 				 			  			
Total interest-bearing deposits	  	 	62,212.1	 	 	 	771.6	  	1.24	 	 	 	55,889.1	 	 	 	1,117.3	  	2.00	 	 	 	51,077.6	 	 	 	1,812.5	  	3.55	 	
Funds purchased and securities sold under agreements to repurchase	  	 	11,666.9	 	 	 	106.2	  	0.91	 	 	 	10,376.2	 	 	 	140.5	  	1.35	 	 	 	11,283.6	 	 	 	412.2	  	3.65	 	
Other short-term borrowings	  	 	2,211.7	 	 	 	33.5	  	1.52	 	 	 	924.8	 	 	 	14.1	  	1.52	 	 	 	1,593.8	 	 	 	63.4	  	3.98	 	
Long-term debt	  	 	12,657.1	 	 	 	537.2	  	4.24	 	 	 	11,960.0	 	 	 	619.6	  	5.18	 	 	 	12,497.2	 	 	 	739.0	  	5.91	 	
 	  				 			  			 				 			  			 				 			  			
Total interest-bearing liabilities	  	 	88,747.8	 	 	 	1,448.5	  	1.63	 	 	 	79,150.1	 	 	 	1,891.5	  	2.39	 	 	 	76,452.2	 	 	 	3,027.1	  	3.96	 	
Noninterest-bearing deposits	  	 	17,826.9	 	 	 	 	  	 	 	 	 	15,268.1	 	 	 	 	  	 	 	 	 	13,491.1	 	 	 	 	  	 	 	
Other liabilities	  	 	6,667.7	 	 	 	 	  	 	 	 	 	5,372.2	 	 	 	 	  	 	 	 	 	4,867.1	 	 	 	 	  	 	 	
Realized shareholders’ equity	  	 	7,596.9	 	 	 	 	  	 	 	 	 	6,984.6	 	 	 	 	  	 	 	 	 	6,328.0	 	 	 	 	  	 	 	
Accumulated other comprehensive income	  	 	1,486.1	 	 	 	 	  	 	 	 	 	1,741.1	 	 	 	 	  	 	 	 	 	1,745.8	 	 	 	 	  	 	 	
 	  				 	 	 	  	 	 	 				 	 	 	  	 	 	 				 	 	 	  	 	 	
Total liabilities and shareholders’ equity	  	$	122,325.4	 	 	 	 	  	 	 	 	$	108,516.1	 	 	 	 	  	 	 	 	$	102,884.2	 	 	 	 	  	 	 	
 	  				 	 	 	  	 	 	 				 	 	 	  	 	 	 				 	 	 	  	 	 	
Interest Rate Spread	  	 	 	 	 	 	 	  	2.78	%	 	 	 	 	 	 	 	  	2.98	%	 	 	 	 	 	 	 	  	2.91	%	
 	  	 	 	 	 	 	 	  			 	 	 	 	 	 	 	  			 	 	 	 	 	 	 	  			
Net Interest Income 3 	  	 	 	 	 	$	3,365.3	  	 	 	 	 	 	 	 	$	3,283.2	  	 	 	 	 	 	 	 	$	3,293.4	  	 	 	
 	  	 	 	 	 			  	 	 	 	 	 	 	 			  	 	 	 	 	 	 	 			  	 	 	
Net Interest Margin	  	 	 	 	 	 	 	  	3.08	%	 	 	 	 	 	 	 	  	3.41	%	 	 	 	 	 	 	 	  	3.58	%	

1	Interest income includes loan fees of $123.8, $122.6, $148.7, $135.6, $142.3, and $118.4 million for each of the six years ended December 31, 2003. 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% for all years reported 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 were $45.0, $39.5, $40.8, $39.9, $42.5, and $44.4 million for each of the six years ended December 31, 2003.	

SunTrust Banks, Inc.	  	22	  	Annual Report 2003	

																													
2000
	 	 	1999
	 	 	1998
	 	
Average
Balances
	 	 	Income/
Expense
	  	Yields/
Rates
	 	 	Average
Balances
	 	 	Income/
Expense
	  	Yields/
Rates
	 	 	Average
Balances
	 	 	Income/
Expense
	  	Yields/
Rates

 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	
$	68,968.8	 	 	$	5,552.4	  	8.05	%	 	$	61,648.3	 	 	$	4,691.2	  	7.61	%	 	$	56,537.1	 	 	$	4,499.6	  	7.96	%	
 	1,075.5	 	 	 	83.0	  	7.72	 	 	 	1,101.1	 	 	 	80.1	  	7.27	 	 	 	1,053.4	 	 	 	81.9	  	7.78	 	
			 			  			 				 			  			 				 			  			
 	70,044.3	 	 	 	5,635.4	  	8.05	 	 	 	62,749.4	 	 	 	4,771.3	  	7.60	 	 	 	57,590.5	 	 	 	4,581.5	  	7.96	 	
 	14,593.7	 	 	 	981.4	  	6.73	 	 	 	14,728.7	 	 	 	927.6	  	6.30	 	 	 	12,618.9	 	 	 	819.7	  	6.50	 	
 	469.7	 	 	 	35.4	  	7.54	 	 	 	558.2	 	 	 	44.6	  	7.99	 	 	 	633.8	 	 	 	52.2	  	8.23	 	
			 			  			 				 			  			 				 			  			
 	15,063.4	 	 	 	1,016.8	  	6.75	 	 	 	15,286.9	 	 	 	972.2	  	6.36	 	 	 	13,252.7	 	 	 	871.9	  	6.58	 	
 	1,439.8	 	 	 	92.8	  	6.44	 	 	 	1,338.0	 	 	 	73.4	  	5.48	 	 	 	1,306.2	 	 	 	71.6	  	5.48	 	
 	1,451.1	 	 	 	110.6	  	7.62	 	 	 	2,577.1	 	 	 	172.2	  	6.68	 	 	 	2,414.7	 	 	 	180.4	  	7.47	 	
 	39.9	 	 	 	0.9	  	2.17	 	 	 	53.0	 	 	 	2.7	  	5.02	 	 	 	99.8	 	 	 	5.8	  	5.78	 	
 	570.5	 	 	 	28.8	  	5.06	 	 	 	251.3	 	 	 	10.9	  	4.36	 	 	 	217.0	 	 	 	9.1	  	4.21	 	
			 			  			 				 			  			 				 			  			
 	88,609.0	 	 	 	6,885.3	  	7.77	 	 	 	82,255.7	 	 	 	6,002.7	  	7.30	 	 	 	74,880.9	 	 	 	5,720.3	  	7.64	 	
 	(869.0	)	 	 	 	  	 	 	 	 	(942.1	)	 	 	 	  	 	 	 	 	(940.5	)	 	 	 	  	 	 	
 	3,316.4	 	 	 	 	  	 	 	 	 	3,630.3	 	 	 	 	  	 	 	 	 	3,306.9	 	 	 	 	  	 	 	
 	1,625.4	 	 	 	 	  	 	 	 	 	1,596.3	 	 	 	 	  	 	 	 	 	1,486.6	 	 	 	 	  	 	 	
 	3,362.2	 	 	 	 	  	 	 	 	 	3,332.5	 	 	 	 	  	 	 	 	 	3,219.1	 	 	 	 	  	 	 	
 	2,353.8	 	 	 	 	  	 	 	 	 	2,948.1	 	 	 	 	  	 	 	 	 	3,583.9	 	 	 	 	  	 	 	
			 	 	 	  	 	 	 				 	 	 	  	 	 	 				 	 	 	  	 	 	
$	98,397.8	 	 	 	 	  	 	 	 	$	92,820.8	 	 	 	 	  	 	 	 	$	85,536.9	 	 	 	 	  	 	 	

$	8,035.4	 	 	$	107.4	  	1.34	%	 	$	7,736.3	 	 	$	70.9	  	0.92	%	 	$	7,149.5	 	 	$	101.6	  	1.42	%	
 	12,093.6	 	 	 	526.9	  	4.36	 	 	 	12,189.7	 	 	 	456.1	  	3.74	 	 	 	11,104.1	 	 	 	422.9	  	3.81	 	
 	6,434.2	 	 	 	228.5	  	3.55	 	 	 	6,918.8	 	 	 	203.8	  	2.95	 	 	 	6,645.9	 	 	 	216.9	  	3.26	 	
 	9,935.5	 	 	 	528.5	  	5.32	 	 	 	9,824.3	 	 	 	468.6	  	4.77	 	 	 	10,390.4	 	 	 	534.4	  	5.14	 	
 	4,085.3	 	 	 	236.0	  	5.78	 	 	 	4,275.0	 	 	 	214.3	  	5.01	 	 	 	4,423.9	 	 	 	244.4	  	5.53	 	
			 			  			 				 			  			 				 			  			
 	40,584.0	 	 	 	1,627.3	  	4.01	 	 	 	40,944.1	 	 	 	1,413.7	  	3.45	 	 	 	39,713.8	 	 	 	1,520.2	  	3.86	 	
 	3,308.7	 	 	 	215.9	  	6.52	 	 	 	7.0	 	 	 	0.4	  	5.27	 	 	 	394.0	 	 	 	21.6	  	5.47	 	
 	9,621.7	 	 	 	609.7	  	6.34	 	 	 	4,087.8	 	 	 	212.0	  	5.19	 	 	 	1,906.2	 	 	 	102.4	  	5.37	 	
			 			  			 				 			  			 				 			  			
 	53,514.4	 	 	 	2,452.9	  	4.58	 	 	 	45,038.9	 	 	 	1,626.1	  	3.61	 	 	 	42,014.0	 	 	 	1,644.2	  	3.91	 	
 	10,754.4	 	 	 	651.2	  	6.06	 	 	 	15,220.8	 	 	 	749.6	  	4.92	 	 	 	12,164.9	 	 	 	634.1	  	5.21	 	
 	1,550.6	 	 	 	97.9	  	6.31	 	 	 	1,689.9	 	 	 	79.5	  	4.71	 	 	 	2,391.8	 	 	 	127.8	  	5.34	 	
 	8,034.6	 	 	 	534.9	  	6.66	 	 	 	5,858.6	 	 	 	359.5	  	6.14	 	 	 	5,368.0	 	 	 	340.7	  	6.35	 	
			 			  			 				 			  			 				 			  			
 	73,854.0	 	 	 	3,736.9	  	5.06	 	 	 	67,808.2	 	 	 	2,814.7	  	4.15	 	 	 	61,938.7	 	 	 	2,746.8	  	4.43	 	
 	13,177.5	 	 	 	 	  	 	 	 	 	12,803.2	 	 	 	 	  	 	 	 	 	11,711.3	 	 	 	 	  	 	 	
 	3,864.4	 	 	 	 	  	 	 	 	 	4,018.7	 	 	 	 	  	 	 	 	 	4,033.3	 	 	 	 	  	 	 	
 	6,031.6	 	 	 	 	  	 	 	 	 	6,368.3	 	 	 	 	  	 	 	 	 	5,641.4	 	 	 	 	  	 	 	
 	1,470.3	 	 	 	 	  	 	 	 	 	1,822.4	 	 	 	 	  	 	 	 	 	2,212.2	 	 	 	 	  	 	 	
			 	 	 	  	 	 	 				 	 	 	  	 	 	 				 	 	 	  	 	 	
$	98,397.8	 	 	 	 	  	 	 	 	$	92,820.8	 	 	 	 	  	 	 	 	$	85,536.9	 	 	 	 	  	 	 	
			 	 	 	  			 				 	 	 	  			 				 	 	 	  			
 	 	 	 	 	 	  	2.71	%	 	 	 	 	 	 	 	  	3.15	%	 	 	 	 	 	 	 	  	3.21	%	
 	 	 	 			  			 	 	 	 	 			  			 	 	 	 	 			  			
 	 	 	 	$	3,148.4	  	 	 	 	 	 	 	 	$	3,188.0	  	 	 	 	 	 	 	 	$	2,973.5	  	 	 	
 	 	 	 			  			 	 	 	 	 			  			 	 	 	 	 			  			
 	 	 	 	 	 	  	3.55	%	 	 	 	 	 	 	 	  	3.88	%	 	 	 	 	 	 	 	  	3.97	%	

3	Derivative instruments used to help balance the Company’s interest-sensitivity position increased net interest income $64.0 million in 2003, decreased net interest income $50.4 million in 2002, $37.4 million in 2001, and $0.5 million in 2000, and increased net interest income $16.3 million and $0.7 million in 1999 and 1998, respectively.	

Annual Report 2003	  	23	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
negative one basis point impact on net interest margin for 2003. The earning asset yield for 2003 declined 96 basis points from 2002. For 2003, loan yields decreased 83 basis points and securities available for sale yields declined 161 basis points compared to 2002. In 2003, total interest-bearing liability costs declined 76 basis points from 2002. The larger decrease in earning asset yield versus the decrease in liability cost resulted in the overall net interest margin decline.
 
The decrease in the margin was due to a number of factors. The shift in the Company’s balance sheet structure in 2001 and 2002 to a slightly asset-sensitive position in anticipation of rising rates did not produce the expected margin benefit. This was due to rates continuing to trend lower during the first half of 2003. After the Fed reduced the Fed Funds rate mid-year to 1.00%, the yield curve finally began to steepen late in the third quarter and into the fourth quarter, helping the fourth quarter margin. SunTrust’s prime rate averaged 4.12% for 2003, a decline of approximately 55 basis points from 2002. The Federal Reserve Bank Fed Funds rate averaged 1.12% for the year, 55 basis points below the 2002 average. The lower rates and flattening of the yield curve in the latter part of 2002 and the first half of 2003 created an acceleration of prepayments in the mortgage industry. As prepayments accelerated, higher yielding assets were replaced by lower yielding assets, which reduced the yield on the residential mortgage loan and the mortgage-backed securities portfolios. The Company’s repositioning of its investment portfolio during 2001 and 2002 shortened the duration of the portfolio and contributed to the decrease in the portfolio yield. Net free funding sources, comprised of demand deposits, equity and other liabilities, net of other assets, are worth less in a low/declining rate environment, contributing to compression of the net interest margin. During 2003, the Company began to moderately increase the duration of the securities portfolio from 1.3 to 2.7 at December 31, 2002 and 2003, respectively. This moderate increase began to help the margin in the second half of 2003. Duration is a measure of price sensitivity of a bond portfolio to an immediate change in interest rates. A duration of 2.7 suggests an expected price change of approximately 2.7% for a one percent change in interest rates, without considering any embedded call or prepayment options.
 
Average earning assets were up 13.4% and average interest-bearing liabilities increased 12.1% compared to 2002. Average earning assets and average interest-bearing liabilities each included $1.3 billion related to Three Pillars for 2003. Average loans rose $4.9 billion, securities available for sale increased $4.1 billion, and loans held for sale increased $4.2 billion in 2003. Loans held for sale increased due to increased mortgage refinancing activity.
 
The Company continued to take steps to obtain alternative lower cost funding sources, such as developing initiatives to grow customer deposits. Campaigns to attract customer deposits were implemented in 2002 and 2003. The Company believes that deposit growth has also benefited from the volatility in the financial markets. Average money market deposits grew 8.5%, NOW accounts increased 13.4% and demand deposits increased 16.8% in 2003.
 
Interest income that the Company was unable to recognize on nonperforming loans had a negative impact of two basis points for 2003 and three basis points for 2002. Table 4 contains more detailed information concerning average loans, yields and rates paid.
 
PROVISION FOR LOAN LOSSES
 
The provision for loan losses charged to expense is based upon credit loss experience and the results of a detailed analysis estimating an appropriate and adequate allowance for loan losses. The analysis includes the evaluation of impaired loans as prescribed under SFAS Nos. 114 and 118, pooled loans as prescribed under SFAS No. 5 and economic and other risk factors as outlined in various Joint Interagency Statements issued by the bank regulatory agencies. For the year ended December 31, 2003, the provision for loan losses was $313.6 million, a decline of $156.2 million, or 33.3%, compared to 2002. The decline was primarily due to improvement in credit quality during 2003. The 2002 provision for loan losses also included an additional $45.3 million to bring the acquired Huntington-Florida loan portfolio into compliance with SunTrust’s credit standards.
 
Net charge-offs for 2003 were $311.1 million, a decrease of $111.2 million, or 26.3%, from 2002. The decline was due to a $111.6 million, or 41.8%, reduction in commercial net charge-offs. Commercial charge-offs in 2002 included $74.9 million related to the bankruptcy of a large corporate energy company. Net charge-offs related to large corporate loans, generally national and large business clients with total annual revenues in excess of $250 million, totaled $115.0 million in 2003, compared to $241.5 million in 2002. Net charge-offs related to the other portfolios totaled $196.1 million in 2003 and $180.8 million in 2002.
 
NONINTEREST INCOME
 
Noninterest income has grown to comprise 41% of total revenues compared with 36% in 1998. Noninterest income for 2003 was $2,303.0 million, an increase of 1.5% compared to 2002.
 
Trust and investment management income decreased $2.1 million, or 0.4%, compared to 2002. As of December 31, 2003 and 2002, assets under management were approximately $101.0 billion and $89.6 billion, respectively. Assets under management increased 12.8% due to appreciation in the equity markets and net new business. Lost business moderately improved compared to prior periods, while new business maintained its momentum. Average assets under management increased 4.1% compared to 2002. The growth in trust and investment management income was offset by less non-recurring revenue, primarily estate fees. 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

SunTrust Banks, Inc.	  	24	  	Annual Report 2003	

 
TABLE 5 NONINTEREST INCOME

 	  	Year Ended December 31
	
(Dollars in millions)
	  	2003
	 	 	2002
	 	 	2001
	 	 	2000
	 	 	1999
	 	 	1998
	
Service charges on deposit accounts	  	$	643.1	 	 	$	612.9	 	 	$	510.2	 	 	$	459.7	 	 	$	438.1	 	 	$	401.1	
Trust and investment management income	  	 	502.4	 	 	 	504.5	 	 	 	486.1	 	 	 	493.9	 	 	 	495.6	 	 	 	453.4	
Retail investment services	  	 	161.8	 	 	 	136.7	 	 	 	107.8	 	 	 	108.2	 	 	 	97.4	 	 	 	64.6	
Other charges and fees	  	 	326.3	 	 	 	296.9	 	 	 	240.3	 	 	 	210.8	 	 	 	200.1	 	 	 	191.0	
Investment banking income	  	 	192.5	 	 	 	177.0	 	 	 	108.5	 	 	 	111.3	 	 	 	67.8	 	 	 	55.8	
Trading account profits and commissions	  	 	109.9	 	 	 	103.2	 	 	 	95.7	 	 	 	31.7	 	 	 	35.1	 	 	 	44.6	
Mortgage production	  	 	150.1	 	 	 	92.3	 	 	 	82.2	 	 	 	90.0	 	 	 	153.0	 	 	 	238.3	
Mortgage servicing	  	 	(177.5	)	 	 	(110.1	)	 	 	(6.1	)	 	 	32.8	 	 	 	27.1	 	 	 	2.8	
Credit card and other fees	  	 	119.6	 	 	 	120.0	 	 	 	113.6	 	 	 	95.7	 	 	 	106.2	 	 	 	87.3	
Other income	  	 	150.9	 	 	 	130.9	 	 	 	160.5	 	 	 	132.9	 	 	 	114.6	 	 	 	106.8	
 	  				 				 				 				 				 			
Total noninterest income before securities gains (losses)	  	 	2,179.1	 	 	 	2,064.3	 	 	 	1,898.8	 	 	 	1,767.0	 	 	 	1,735.0	 	 	 	1,645.7	
Securities gains (losses)	  	 	123.9	 	 	 	204.5	 	 	 	153.1	 	 	 	6.6	 	 	 	(109.1	)	 	 	8.2	
 	  				 				 				 				 				 			
Total noninterest income	  	$	2,303.0	 	 	$	2,268.8	 	 	$	2,051.9	 	 	$	1,773.6	 	 	$	1,625.9	 	 	$	1,653.9	
 	  				 				 				 				 				 			
Year over year growth rate in noninterest income before securities gains (losses)	  	 	5.6	%	 	 	8.7	%	 	 	7.5	%	 	 	1.8	%	 	 	5.4	%	 	 	 	

advisement were approximately $180.9 billion, which included $21.8 billion in non-managed corporate trust assets, $35.9 billion in non-managed trust assets, and $22.2 billion in retail brokerage assets. The retail brokerage accounts include $2.5 billion related to Alexander Key. Total assets under advisement are up $18.3 billion compared to last year due to strong net new business growth and improved equity markets.
 
Retail investment services income increased $25.1 million, or 18.4%, compared to the prior year. The increase in retail investment income was primarily due to an increase in broker production, an increase in the number of brokers, and increased revenue generated from Alexander Key. Retail investment sales, including annuities, increased 25.2% compared to 2002, which was greater than the increase in retail investment income due to fee based products that are sensitive to market volatility. As of December 31, 2003, retail brokerage assets increased 30.6% compared to December 31, 2002.
 
Service charges on deposit accounts increased $30.2 million, or 4.9%, compared to 2002. Increased NSF/stop payment volumes, increased pricing and other revenue enhancement

Annual Report 2003	  	25	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
TABLE 6 NONINTEREST EXPENSE

 	  	Year Ended December 31
	 	
(Dollars in millions)
	  	2003
	 	 	2002
	 	 	2001
	 	 	2000
	 	 	1999
	 	 	1998
	 	
Employee compensation	  	$	1,585.9	 	 	$	1,512.1	 	 	$	1,484.5	 	 	$	1,469.0	 	 	$	1,522.6	 	 	$	1,433.7	 	
Employee benefits	  	 	358.6	 	 	 	306.4	 	 	 	193.0	 	 	 	175.0	 	 	 	175.8	 	 	 	181.8	 	
 	  				 				 				 				 				 				
Total personnel expense	  	 	1,944.5	 	 	 	1,818.5	 	 	 	1,677.5	 	 	 	1,644.0	 	 	 	1,698.4	 	 	 	1,615.5	 	
Net occupancy expense	  	 	237.3	 	 	 	229.3	 	 	 	210.4	 	 	 	202.6	 	 	 	197.4	 	 	 	192.2	 	
Outside processing and software	  	 	246.7	 	 	 	225.2	 	 	 	199.1	 	 	 	172.3	 	 	 	150.3	 	 	 	138.4	 	
Equipment expense	  	 	178.4	 	 	 	174.8	 	 	 	189.8	 	 	 	193.7	 	 	 	198.5	 	 	 	178.8	 	
Marketing and customer development	  	 	100.3	 	 	 	80.0	 	 	 	104.0	 	 	 	106.2	 	 	 	105.4	 	 	 	107.1	 	
Credit and collection services	  	 	70.3	 	 	 	64.6	 	 	 	74.6	 	 	 	56.9	 	 	 	68.7	 	 	 	70.4	 	
Postage and delivery	  	 	69.0	 	 	 	69.4	 	 	 	64.0	 	 	 	63.3	 	 	 	68.1	 	 	 	64.4	 	
Amortization of intangible assets	  	 	64.5	 	 	 	58.9	 	 	 	46.3	 	 	 	35.5	 	 	 	32.8	 	 	 	43.1	 	
Communications	  	 	61.3	 	 	 	64.8	 	 	 	59.2	 	 	 	59.8	 	 	 	66.3	 	 	 	62.1	 	
Other staff expense	  	 	60.4	 	 	 	52.0	 	 	 	58.5	 	 	 	51.5	 	 	 	50.1	 	 	 	47.8	 	
Consulting and legal	  	 	57.4	 	 	 	91.1	 	 	 	87.7	 	 	 	59.6	 	 	 	62.5	 	 	 	67.5	 	
Operating supplies	  	 	39.8	 	 	 	46.8	 	 	 	48.3	 	 	 	47.3	 	 	 	51.9	 	 	 	54.0	 	
FDIC premiums	  	 	18.0	 	 	 	17.4	 	 	 	16.0	 	 	 	13.5	 	 	 	18.1	 	 	 	18.3	 	
Merger-related expense	  	 	—  	 	 	 	16.0	 	 	 	—  	 	 	 	42.4	 	 	 	45.6	 	 	 	119.4	 	
Other real estate income	  	 	(2.0	)	 	 	(0.1	)	 	 	(4.2	)	 	 	(3.8	)	 	 	(4.8	)	 	 	(9.8	)	
Other expense	  	 	254.7	 	 	 	210.7	 	 	 	168.7	 	 	 	83.7	 	 	 	96.0	 	 	 	100.9	 	
 	  				 				 				 				 				 				
Total noninterest expense	  	$	3,400.6	 	 	$	3,219.4	 	 	$	2,999.9	 	 	$	2,828.5	 	 	$	2,905.3	 	 	$	2,870.1	 	
 	  				 				 				 				 				 				
Year over year growth rate	  	 	5.6	%	 	 	7.3	%	 	 	6.1	%	 	 	(2.6	%)	 	 	1.2	%	 	 	 	 	
 	  				 				 				 				 				 	 	 	 	
Efficiency ratio	  	 	59.99	%	 	 	57.99	%	 	 	56.12	%	 	 	57.47	%	 	 	60.35	%	 	 	62.02	%	

initiatives contributed to the increase in this line item. Combined mortgage production and servicing income decreased $9.6 million, or 54.0%, compared to 2002. Record mortgage production for 2003 was more than offset by the decline in mortgage servicing income. Mortgage production for 2003 was $43.7 billion compared to $30.8 billion for 2002. The decline in mortgage servicing income was due to accelerated amortization of mortgage servicing rights resulting from increased prepayments in the low interest rate environment. Although the combined mortgage noninterest income components declined, revenue for the Mortgage line of business increased benefiting from higher interest income from mortgage loans held for sale and mortgage loans retained in the Company’s portfolio.
 
Other charges and fees were up $29.5 million, or 9.9%, as a result of increased letter of credit fees and insurance revenues. The increase in letter of credit fees was due to increased volumes. The increase in insurance revenues was due to increased sales volume and the acquisition of an insurance subsidiary of Lighthouse. Combined trading account profits and commissions and investment banking income, SunTrust’s capital market revenue sources, increased $22.2 million, or 7.9%, compared to the prior year. The increase was primarily due to strong growth in debt capital markets businesses. Other noninterest income increased $20.0 million compared to 2002 primarily due to the consolidation of certain affordable housing partnerships in 2003. The Company incurred net securities gains during 2003 of $123.9 million compared to $204.5 million in 2002 as the Company continued to manage the securities portfolio to take advantage of market yield opportunities.
 
NONINTEREST EXPENSE
 
Noninterest expense increased $181.2 million, or 5.6%, in 2003. Compared to 2002, total personnel expense increased $126.0 million, or 6.9%, primarily due to increases in pension and incentive costs. Pension expense increased $47.7 million, or 315.2%, due to a reduced expected long-term rate of return on plan assets and a lower discount rate for measuring pension liabilities. The Company expects to reduce its expected long-term rate of return in 2004 by an additional 25 basis points to 8.5%. The increase in incentives was primarily due to an increase in commission and performance based incentive plans. This increase was primarily attributed to the Mortgage line of business due to the record production volumes during 2003. Additionally, incentive cost increases were recorded in the CIB (primarily due to the performance of debt capital markets) and PCS (primarily due to stronger financial markets and new business volumes) lines of business.
 
Marketing and customer development expense increased $20.3 million, or 25.4%, due to the Company’s expanded 2003 marketing strategy and sales focus. Campaigns and promotions for 2003 included the “Giant Truckload Sale” (primarily deposit accounts) the “Mini Cooper Campaign” (home equity lines) and the “With the Works Campaign” (deposit and home equity lines).
 
Noninterest expense increased $13.5 million due to the acquisition of Lighthouse. Additionally, the consolidation of certain affordable housing partnerships in 2003 increased non-interest expense $28.7 million most of which was recorded in other expense.

SunTrust Banks, Inc.	  	26	  	Annual Report 2003	

TABLE 7 LOAN PORTFOLIO BY TYPES OF LOANS

 	  	At December 31
	
(Dollars in millions)
	  	2003
	  	2002
	  	2001
	  	2000
	  	1999
	  	1998
	
Commercial	  	$	30,681.9	  	$	28,693.6	  	$	28,945.9	  	$	30,781.1	  	$	26,933.5	  	$	24,589.6	
Real estate	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Construction	  	 	4,479.8	  	 	4,002.4	  	 	3,627.3	  	 	2,966.1	  	 	2,457.1	  	 	2,085.0	
Residential mortgages	  	 	24,173.4	  	 	19,443.4	  	 	17,297.1	  	 	19,953.0	  	 	19,619.3	  	 	16,880.9	
Other	  	 	9,330.1	  	 	9,101.8	  	 	8,152.0	  	 	8,121.4	  	 	7,794.9	  	 	8,254.3	
Credit card	  	 	133.0	  	 	111.3	  	 	92.0	  	 	76.8	  	 	77.4	  	 	1,563.5	
Consumer loans	  	 	11,934.1	  	 	11,815.4	  	 	10,844.9	  	 	10,341.4	  	 	9,120.6	  	 	8,167.3	
 	  			  			  			  			  			  			
Total loans	  	$	80,732.3	  	$	73,167.9	  	$	68,959.2	  	$	72,239.8	  	$	66,002.8	  	$	61,540.6	

In 2002, the One Bank initiative resulted in $56.2 million of noninterest expense. The One Bank initiative represented enhancements to customer-based systems across the Company’s geographic footprint in an effort to yield operating efficiencies and was completed in the fourth quarter of 2002.
 
The efficiency ratio for 2003 was 60.0%, an increase from 58.0% for 2002.
 
PROVISION FOR INCOME TAXES
 
The provision for income taxes covers federal and state income taxes. In 2003, the provision was $576.8 million, compared to $491.5 million in 2002. The provision represents an effective tax rate of 30.2% for 2003 compared to 27.0% for 2002. The 2003 effective tax rate was representative of the Company’s long-term normalized tax rate of 30–31%.
 
The 2002 effective tax rate was lower than historical levels due to several factors. In the first quarter, the Company realized a tax benefit upon the reversal of a deferred liability, which resulted from the change in status of a subsidiary to a real estate investment trust (REIT). A tax benefit was also realized when the Company standardized the recognition of low income housing tax credits during the fourth quarter of 2002.
 
LOANS
 
The Company’s loan portfolio increased $7.6 billion, or 10.3%, from December 31, 2002 to December 31, 2003. The increase was primarily due to an increase in residential mortgages, the acquisition of Lighthouse, and the consolidation in the third quarter of 2003 of SunTrust’s multi-seller commercial paper conduit, Three Pillars. Commercial loans related to Three Pillars were $2.8 billion at December 31, 2003. Compared to the prior year-end, the Company’s portfolio of commercial loans, which included Three Pillars, increased 6.9%, real estate loans grew 16.7% and consumer loans grew 1.0%. The loan portfolio continues to be well diversified from both a product and industry concentration standpoint. The product mix remained relatively constant from year-end 2002 to 2003, with real estate loans accounting for the largest segment (47.0% of total loans). Residential real estate represented 29.9% of total loans at year-end, including $17.3 billion in home mortgages and $6.9 billion in home equity lines. The increase of $1.7 billion in home equity lines was due to the Company’s marketing campaigns, appreciation in the housing market, and the favorable interest rate environment. The Lighthouse acquisition added $567.4 million of loans to the portfolio as of the June 2003 acquisition date.
 
ALLOWANCE FOR LOAN LOSSES
 
SunTrust continuously reviews its loan portfolio and maintains an allowance for loan losses sufficient to absorb losses inherent in the portfolio. The Company is committed to the early recognition of problem loans and to an appropriate and adequate level of allowance. At year-end 2003, the Company’s total allowance was $941.9 million, which represented 1.17% of period-end loans. In addition to the review of credit quality through ongoing credit review processes, the Company constructs an independent and comprehensive allowance analysis for its loan portfolios on a quarterly basis. The analysis includes three basic elements: specific allowances for individual loans, general allowances for loan pools and allowances based on economic conditions and other risk factors. The SunTrust Allowance for Loan Losses Review Committee has the responsibility of affirming the allowance methodology and assessing all of the risk elements in order to determine the appropriate level of allowance for the inherent losses in the loan portfolio at the point in time being reviewed.
 
The first element of the allowance for loan losses analysis involves the calculation of specific allowances for individual impaired loans as required by SFAS Nos. 114 and 118. In this process, specific allowances are established for nonaccrual loans greater than $0.5 million based on a thorough analysis of the most probable sources of repayment, including discounted future cash flows, liquidation of collateral or the market value of the loan itself. As of December 31, 2003 and 2002, the specific allowance related to SFAS No. 114 and 118 prescribed calculations totaled $29 million and $117 million, respectively. The decrease between these two periods was primarily due to the substantial decline in the level of nonperforming loans and an overall improvement in credit quality.
 
The second element — the general allowance for loan pools — is determined per SFAS No. 5 by applying loan loss allowance factors to groups of loans within the portfolio that have similar characteristics. The general allowance factors are based upon the results of an annual statistical loss migration analysis and other analyses of recent and historical charge-off experience and are typically applied to the portfolio in terms of

Annual Report 2003	  	27	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
loan type and internal risk rating. The loss migration analysis provides the basis for factors applied to the commercial and commercial real estate loan portfolios by examining recent twelve month loss experience in relation to internal credit risk ratings over time. Historical loss analyses provide the basis for factors used for more homogenous pools of smaller loans, such as residential real estate and other consumer loan categories. While these analyses that establish the general allowance factors are formally prepared annually, the Company continuously monitors credit quality in all portfolio segments and may revise the general factors whenever necessary in order to address improving or deteriorating credit quality trends or specific risks associated with any given loan category. As of December 31, 2003 and 2002, the general allowance calculations totaled $565 million and $537 million, respectively. The increase between the periods was primarily the result of the increase in the overall pooled loan population.

 
The third element is based on the guidance of various Joint Interagency Statements issued by bank regulatory agencies and includes environmental and unallocated components that are not otherwise evaluated in the first two elements. The environmental component includes assessments of economic, concentration, administrative and country transfer risks. The economic risk assessment considers periodic changes in several widely publicized U.S. economic indicators. This process was enhanced during 2003 after an analysis of the relationship between specific economic indicators and historical charge-off levels. The concentration risk methodology considers credit exposure when grouped by borrower, collateral type, region and industry, and estimates the incremental risks (see Note 19 for additional details of credit concentration and Table 8 for Loans by Selected Industries). Administrative risks are related to specific changes in the organization or loan portfolio, such as reorganization or centralization efforts and acquisitions, along with changes in credit policy or client selection criteria. The unallocated component of the allowance reflects the margin for imprecisions in data and analytics inherent in most estimation processes.

SunTrust Banks, Inc.	  	28	  	Annual Report 2003	

TABLE 8 LOANS BY SELECTED INDUSTRIES 1

 	  	At December 31, 2003
	
(Dollars in millions)
	  	Loans
	  	% of
Total Loans
	
Manufacturing	  	$	3,584.4	  	4.4	
Construction	  	 	3,404.7	  	4.2	
Real estate	  	 	3,327.5	  	4.1	
Retail trade	  	 	3,205.9	  	4.0	
Business services & nonprofits	  	 	3,101.1	  	3.8	
Wholesale trade	  	 	2,546.5	  	3.2	
Health & social assistance	  	 	2,243.8	  	2.8	
Finance & insurance	  	 	2,030.9	  	2.5	
Public administration	  	 	1,512.3	  	1.9	
Professional, scientific & technical services	  	 	1,480.3	  	1.8	
Accommodation & food	  	 	1,366.8	  	1.7	
Information	  	 	1,272.4	  	1.6	
Transportation & warehousing	  	 	1,176.9	  	1.5	
 
1	Industry groupings are loans in aggregate greater than $1 billion based on the North American Industry Classification System (NAICS). The Company converted from Standard Industrial Classification codes to NAICS during 2003.	

 
TABLE 9 ALLOWANCE FOR LOAN LOSSES

 	  	At December 31
	 	
(Dollars in millions)
	  	2003
	 	 	2002
	 	 	2001
	 	 	2000
	 	 	1999
	 	 	1998
	 	
Allocation by Loan Type	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Commercial	  	$	369.3	 	 	$	408.5	 	 	$	435.8	 	 	$	389.0	 	 	$	286.7	 	 	$	251.4	 	
Real estate	  	 	159.3	 	 	 	150.8	 	 	 	145.5	 	 	 	190.2	 	 	 	208.0	 	 	 	229.8	 	
Consumer loans	  	 	344.3	 	 	 	332.8	 	 	 	251.3	 	 	 	252.3	 	 	 	339.3	 	 	 	420.9	 	
Unallocated	  	 	69.0	 	 	 	38.0	 	 	 	34.5	 	 	 	43.0	 	 	 	37.3	 	 	 	42.5	 	
 	  				 				 				 				 				 				
Total	  	$	941.9	 	 	$	930.1	 	 	$	867.1	 	 	$	874.5	 	 	$	871.3	 	 	$	944.6	 	
 	  				 				 				 				 				 				
Allocation as a Percent of Total Allowance	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Commercial	  	 	39.2	%	 	 	43.9	%	 	 	50.2	%	 	 	44.5	%	 	 	32.9	%	 	 	26.6	%	
Real estate	  	 	16.9	 	 	 	16.2	 	 	 	16.8	 	 	 	21.7	 	 	 	23.9	 	 	 	24.3	 	
Consumer loans	  	 	36.6	 	 	 	35.8	 	 	 	29.0	 	 	 	28.9	 	 	 	38.9	 	 	 	44.6	 	
Unallocated	  	 	7.3	 	 	 	4.1	 	 	 	4.0	 	 	 	4.9	 	 	 	4.3	 	 	 	4.5	 	
 	  				 				 				 				 				 				
Total	  	 	100.0	%	 	 	100.0	%	 	 	100.0	%	 	 	100.0	%	 	 	100.0	%	 	 	100.0	%	
 	  				 				 				 				 				 				
Year-end Loan Types as a Percent of Total Loans	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Commercial	  	 	38.2	%	 	 	39.4	%	 	 	42.0	%	 	 	42.6	%	 	 	40.8	%	 	 	40.0	%	
Real estate	  	 	47.0	 	 	 	44.5	 	 	 	42.3	 	 	 	43.0	 	 	 	45.3	 	 	 	44.2	 	
Consumer loans	  	 	14.8	 	 	 	16.1	 	 	 	15.7	 	 	 	14.4	 	 	 	13.9	 	 	 	15.8	 	
 	  				 				 				 				 				 				
Total	  	 	100.0	%	 	 	100.0	%	 	 	100.0	%	 	 	100.0	%	 	 	100.0	%	 	 	100.0	%	

During 2003, the Company substantially completed the conversion of its credit risk rating system to a two dimensional framework as prescribed in the Basel II Capital Accord. This revision effectively rerated all major credit portfolios at both the obligor and obligation levels. The Company also revised several credit data gathering functions, centralized the administration of loans individually reviewed under SFAS No. 114 and enhanced its economic risk component. The qualitative risk factors of this third allowance element are subjective and require a high degree of management judgment. As of December 31, 2003 and 2002, the allowance calculated in the third element totaled $348 million and $276 million, respectively. The change between the two periods was the result of enhancements to the economic risk assessment mentioned above along with increases in the administrative risk and unallocated components.
 
The Company’s provision for loan losses in 2003 was $313.6 million, which exceeded net charge-offs of $311.1 million by $2.5 million. The comparable provision and net charge-off amounts for 2002 were $469.8 million and $422.3 million, respectively. Provision expense decreased from 2002 to 2003

Annual Report 2003	  	29	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
TABLE 10 SUMMARY OF LOAN LOSS EXPERIENCE

 	  	Year Ended December 31
	 	
(Dollars in millions)
	  	2003
	 	 	2002
	 	 	2001
	 	 	2000
	 	 	1999
	 	 	1998
	 	
Allowance for Loan Losses	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance – beginning of year	  	$	930.1	 	 	$	867.1	 	 	$	874.5	 	 	$	871.3	 	 	$	944.6	 	 	$	933.5	 	
Allowance from acquisitions, dispositions and other activity – net	  	 	9.3	 	 	 	15.5	 	 	 	(10.2	)	 	 	—  	 	 	 	(13.3	)	 	 	(10.0	)	
Provision for loan losses	  	 	313.6	 	 	 	469.8	 	 	 	275.2	 	 	 	134.0	 	 	 	170.4	 	 	 	214.6	 	
Charge-offs	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Commercial	  	 	(195.0	)	 	 	(295.1	)	 	 	(217.3	)	 	 	(115.6	)	 	 	(142.0	)	 	 	(49.0	)	
Real estate	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Construction	  	 	(0.8	)	 	 	(0.8	)	 	 	(0.3	)	 	 	(0.2	)	 	 	(2.2	)	 	 	(3.2	)	
Residential mortgages	  	 	(22.1	)	 	 	(16.7	)	 	 	(10.8	)	 	 	(7.8	)	 	 	(15.0	)	 	 	(13.8	)	
Other	  	 	(5.6	)	 	 	(17.8	)	 	 	(5.9	)	 	 	(3.3	)	 	 	(5.2	)	 	 	(5.2	)	
Credit card	  	 	(2.7	)	 	 	(1.9	)	 	 	(2.7	)	 	 	(5.4	)	 	 	(78.9	)	 	 	(129.5	)	
Consumer loans	  	 	(168.1	)	 	 	(157.8	)	 	 	(89.0	)	 	 	(57.5	)	 	 	(52.8	)	 	 	(63.6	)	
 	  				 				 				 				 				 				
Total charge-offs	  	 	(394.3	)	 	 	(490.1	)	 	 	(326.0	)	 	 	(189.8	)	 	 	(296.1	)	 	 	(264.3	)	
Recoveries	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Commercial	  	 	39.3	 	 	 	27.8	 	 	 	23.8	 	 	 	22.7	 	 	 	15.5	 	 	 	14.8	 	
Real estate	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Construction	  	 	0.4	 	 	 	0.4	 	 	 	0.4	 	 	 	0.3	 	 	 	0.7	 	 	 	0.3	 	
Residential mortgages	  	 	5.0	 	 	 	3.7	 	 	 	2.2	 	 	 	3.3	 	 	 	3.4	 	 	 	2.7	 	
Other	  	 	1.4	 	 	 	3.9	 	 	 	1.8	 	 	 	3.9	 	 	 	6.1	 	 	 	8.4	 	
Credit card	  	 	0.5	 	 	 	1.0	 	 	 	1.6	 	 	 	3.1	 	 	 	11.9	 	 	 	14.9	 	
Consumer loans	  	 	36.6	 	 	 	31.0	 	 	 	23.8	 	 	 	25.7	 	 	 	28.1	 	 	 	29.7	 	
 	  				 				 				 				 				 				
Total recoveries	  	 	83.2	 	 	 	67.8	 	 	 	53.6	 	 	 	59.0	 	 	 	65.7	 	 	 	70.8	 	
 	  				 				 				 				 				 				
Net charge-offs	  	 	(311.1	)	 	 	(422.3	)	 	 	(272.4	)	 	 	(130.8	)	 	 	(230.4	)	 	 	(193.5	)	
 	  				 				 				 				 				 				
Balance – end of year	  	$	941.9	 	 	$	930.1	 	 	$	867.1	 	 	$	874.5	 	 	$	871.3	 	 	$	944.6	 	
 	  				 				 				 				 				 				
Total loans outstanding at year end	  	$	80,732.3	 	 	$	73,167.9	 	 	$	68,959.2	 	 	$	72,239.8	 	 	$	66,002.8	 	 	$	61,540.6	 	
Average loans	  	 	76,137.9	 	 	 	71,270.4	 	 	 	70,023.0	 	 	 	70,044.3	 	 	 	62,749.4	 	 	 	57,590.5	 	
 	  				 				 				 				 				 				
Ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Allowance to year-end loans	  	 	1.17	%	 	 	1.27	%	 	 	1.26	%	 	 	1.21	%	 	 	1.32	%	 	 	1.53	%	
Allowance to nonperforming loans	  	 	268.1	 	 	 	182.0	 	 	 	155.4	 	 	 	215.8	 	 	 	350.0	 	 	 	456.0	 	
Net charge-offs to average loans	  	 	0.41	 	 	 	0.59	 	 	 	0.39	 	 	 	0.19	 	 	 	0.37	 	 	 	0.34	 	
Provision to average loans	  	 	0.41	 	 	 	0.66	 	 	 	0.39	 	 	 	0.19	 	 	 	0.27	 	 	 	0.37	 	
Recoveries to total charge-offs	  	 	21.1	 	 	 	13.8	 	 	 	16.4	 	 	 	31.1	 	 	 	22.2	 	 	 	26.8	 	
 
due primarily to improvement in the credit quality of the large corporate portfolio that resulted in lower charge-offs for that segment during 2003 and the 2002 provision expense included an increase of $45.3 million related to the acquisition of the Huntington-Florida portfolio. Net charge-offs for 2003 represented 0.41% of average loans, compared to 0.59% of average loans for 2002. Loan recoveries for 2003 were $15.4 million higher, or 22.7%, than in 2002. The ratio of recoveries to total charge-offs increased to 21.1% from 13.8% due to an increase in the amount of overall recoveries and lower overall gross charge-offs. Recoveries and charge-offs for 2003 were favorably impacted by improvements in the large corporate segment of the portfolio.
 
The Company’s charge-off policy is consistent with regulatory standards. Losses on unsecured consumer loans are recognized at 90 days past due, compared to the regulatory loss criteria of 120 days. Secured consumer loans are typically charged off at 120 days past due if repayment from all sources has been determined to be improbable, or at the occurrence of a loss confirming event (e.g., repossession).
 
The ratio of the allowance for loan losses to total nonperforming loans increased to 268.1% at December 31, 2003 from 182.0% at December 31, 2002. The improvement in this ratio was primarily due to the decline in nonperforming loans mentioned above. Commercial loans and real estate loans are typically placed on nonaccrual when principal or interest is past due for 90 days or more, unless the loan is both secured by collateral having realizable value sufficient to discharge the debt in full and the loan is in the legal process of collection. Accordingly, secured loans may be charged down to the estimated value of the collateral with previously accrued unpaid interest reversed. Subsequent charge-offs may be required as a result of changes in the market value of collateral or other repayment prospects.

SunTrust Banks, Inc.	  	30	  	Annual Report 2003	

TABLE 11 NONPERFORMING ASSETS AND ACCRUING LOANS PAST DUE 90 DAYS OR MORE

 	  	At December 31
	 	
(Dollars in millions) 
	  	2003
	 	 	2002
	 	 	2001
	 	 	2000
	 	 	1999
	 	 	1998
	 	
Nonperforming Assets	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonaccrual loans	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Commercial	  	$	165.9	 	 	$	351.3	 	 	$	377.6	 	 	$	273.6	 	 	$	105.0	 	 	$	50.7	 	
Real estate	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Construction	  	 	4.4	 	 	 	10.0	 	 	 	4.0	 	 	 	2.2	 	 	 	9.0	 	 	 	13.5	 	
Residential mortgages	  	 	85.4	 	 	 	82.5	 	 	 	79.9	 	 	 	81.8	 	 	 	82.6	 	 	 	83.9	 	
Other	  	 	48.6	 	 	 	38.0	 	 	 	62.8	 	 	 	29.0	 	 	 	34.9	 	 	 	46.6	 	
Consumer loans	  	 	32.2	 	 	 	29.2	 	 	 	33.8	 	 	 	18.7	 	 	 	17.4	 	 	 	12.5	 	
 	  				 				 				 				 				 				
Total nonaccrual loans	  	 	336.5	 	 	 	511.0	 	 	 	558.1	 	 	 	405.3	 	 	 	248.9	 	 	 	207.2	 	
Restructured loans	  	 	14.8	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
 	  				 				 				 				 				 				
Total nonperforming loans	  	 	351.3	 	 	 	511.0	 	 	 	558.1	 	 	 	405.3	 	 	 	248.9	 	 	 	207.2	 	
Other real estate owned (OREO)	  	 	16.5	 	 	 	18.0	 	 	 	20.7	 	 	 	23.0	 	 	 	26.8	 	 	 	34.9	 	
Other repossessed assets	  	 	10.3	 	 	 	13.0	 	 	 	21.0	 	 	 	10.3	 	 	 	8.3	 	 	 	7.0	 	
 	  				 				 				 				 				 				
Total nonperforming assets	  	$	378.1	 	 	$	542.0	 	 	$	599.8	 	 	$	438.6	 	 	$	284.0	 	 	$	249.1	 	
 	  				 				 				 				 				 				
Ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonperforming loans to total loans	  	 	0.44	%	 	 	0.70	%	 	 	0.81	%	 	 	0.56	%	 	 	0.38	%	 	 	0.34	%	
Nonperforming assets to total loans plus OREO and other repossessed assets	  	 	0.47	 	 	 	0.74	 	 	 	0.87	 	 	 	0.61	 	 	 	0.43	 	 	 	0.40	 	
Accruing Loans Past Due 90 Days or More	  	$	196.4	 	 	$	177.9	 	 	$	185.5	 	 	$	181.2	 	 	$	117.4	 	 	$	108.2	 	
 
NONPERFORMING ASSETS
 
Nonperforming assets, which consists of nonaccrual loans, restructured loans, other real estate owned (OREO), and other repossessed assets, totaled $378.1 million at December 31, 2003, a decrease of $163.9 million, or 30.2%, from December 31, 2002. The decrease was primarily due to a $159.6 million, or 31.2%, decline in nonperforming loans and resulted in a decline in the ratio of nonperforming assets to total loans plus OREO and other repossessed assets to 0.47% at December 31, 2003 from 0.74% at December 31, 2002. Nonperforming loans at December 31, 2003 included $336.5 million of nonaccrual loans and $14.8 million of restructured loans, the latter of which represents a select group of consumer workout loans.
 
Nonaccrual loans decreased $174.4 million, or 34.1%, from 2002 to 2003 as nonaccrual commercial loans dropped $185.3 million, or 52.8%. The decrease in nonaccrual commercial loans resulted from a decline in new additions to large corporate nonaccrual loans, increased loan sales activity, charge-offs, improvement in credit quality and client repayment.
 
Interest income on nonperforming loans, if recognized, is recorded using the cash basis method of accounting. When a loan is placed on nonaccrual, unpaid interest is reversed against interest income. When a nonaccrual loan is returned to accruing status, any unpaid interest is recorded as interest income only after all principal has been collected.
 
As of December 31, 2003 and 2002, the gross amount of interest income that would have been recorded on nonaccrual loans if all such loans had been accruing interest at the original contractual rate was $33.7 million and $45.2 million, respectively. Interest payments recorded in 2003 and 2002 as interest income for all such nonperforming loans at December 31, 2003 and 2002, were $14.1 million and $15.6 million, respectively.
 
SECURITIES AVAILABLE FOR SALE
 
The securities 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. During 2003, the portfolio was repositioned in conjunction with asset and liability management strategies to mitigate SunTrust’s risk to lower interest rates and a flatter yield curve while maintaining a slightly asset-sensitive interest rate risk position. The portfolio’s size increased by $2.0 billion on an amortized cost basis to $23.0 billion from $21.0 billion at December 31, 2003 and 2002, respectively. Most of the increase occurred in the second half of 2003 and was comprised of mortgage-backed securities issued by federal agencies and investment grade asset-backed securities. During the first half of 2003, the portfolio size decreased $1.3 billion primarily from rapid prepayments in a historically low interest rate environment. During the second half of 2003, the Company took advantage of an increase in market rates and a steeper yield curve to increase the size by $3.3 billion and to improve the yield. The average yield for the year was 3.28%, but the yield improved to 3.55% in the fourth quarter of 2003 and ended the year at 3.66%. The average life increased from 2.8 years to 4.0 years, and the average duration of the portfolio, a measure of price sensitivity described on page 24, also increased from 1.3 to 2.7, at December 31, 2002 and 2003, respectively.

Annual Report 2003	  	31	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
TABLE 12 SECURITIES AVAILABLE FOR SALE

 	  	At December 31
	
(Dollars in millions)
	  	Amortized
Cost
	  	Unrealized
Gains
	  	Unrealized
Losses
	  	Fair
Value
	
U.S. Treasury and other U.S. government agencies and corporations	  	 	 	  	 	 	  	 	 	  	 	 	
2003	  	$	2,286.4	  	$	14.0	  	$	7.9	  	$	2,292.5	
2002	  	 	3,601.5	  	 	82.9	  	 	0.4	  	 	3,684.0	
2001	  	 	2,229.5	  	 	111.2	  	 	0.5	  	 	2,340.2	
States and political subdivisions	  	 	 	  	 	 	  	 	 	  	 	 	
2003	  	 	363.0	  	 	17.8	  	 	0.3	  	 	380.5	
2002	  	 	398.6	  	 	20.9	  	 	0.4	  	 	419.1	
2001	  	 	434.1	  	 	11.1	  	 	1.5	  	 	443.7	
Asset-backed securities	  	 	 	  	 	 	  	 	 	  	 	 	
2003	  	 	5,417.9	  	 	36.2	  	 	26.1	  	 	5,428.0	
2002	  	 	4,478.2	  	 	44.9	  	 	5.0	  	 	4,518.1	
2001	  	 	3,508.4	  	 	45.5	  	 	9.8	  	 	3,544.1	
Mortgage-backed securities	  	 	 	  	 	 	  	 	 	  	 	 	
2003	  	 	12,181.1	  	 	119.3	  	 	26.9	  	 	12,273.5	
2002	  	 	9,467.2	  	 	155.6	  	 	0.7	  	 	9,622.1	
2001	  	 	8,142.5	  	 	163.2	  	 	14.0	  	 	8,291.7	
Corporate bonds	  	 	 	  	 	 	  	 	 	  	 	 	
2003	  	 	2,097.2	  	 	44.0	  	 	29.5	  	 	2,111.7	
2002	  	 	1,923.5	  	 	64.6	  	 	58.4	  	 	1,929.7	
2001	  	 	1,969.5	  	 	62.6	  	 	48.6	  	 	1,983.5	
Other securities 1	  	 	 	  	 	 	  	 	 	  	 	 	
2003	  	 	646.8	  	 	2,473.9	  	 	—  	  	 	3,120.7	
2002	  	 	1,154.6	  	 	2,117.6	  	 	—  	  	 	3,272.2	
2001	  	 	740.1	  	 	2,313.1	  	 	—  	  	 	3,053.2	
Total securities available for sale	  	 	 	  	 	 	  	 	 	  	 	 	
2003	  	$	22,992.4	  	$	2,705.2	  	$	90.7	  	$	25,606.9	
2002	  	 	21,023.6	  	 	2,486.5	  	 	64.9	  	 	23,445.2	
2001	  	 	17,024.1	  	 	2,706.7	  	 	74.4	  	 	19,656.4	
 
1	Includes the Company’s investment in 48,266,496 shares of common stock of The Coca-Cola Company.	
 
Net securities gains of $123.9 million were realized in 2003 to take advantage of market opportunities while implementing the Company’s asset and liability management strategy. The carrying value of the securities portfolio, all of which is classified as “securities available for sale,” reflected $2.6 billion in net unrealized securities gains at December 31, 2003, including a $2.5 billion unrealized gain on the Company’s investment in the common stock of The Coca-Cola Company. The market value of this common stock increased $338.8 million, while the unrealized gain on the remainder of the portfolio decreased $145.9 million compared to December 31, 2002. These changes in market value did not affect the net income of SunTrust, but were included in accumulated other comprehensive income.
 
TABLE 13 FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 1

 	  	At December 31
	 	 	Daily Average
	 	 	Maximum
Outstanding
at Any
Month-End
	
(Dollars in millions)
	  	Balance
	  	Rate
	 	 	Balance
	  	Rate
	 	 		
2003	  	$	9,505.2	  	0.72	%	 	$	11,666.9	  	0.91	%	 	$	15,089.8	
2002	  	 	10,402.5	  	1.01	 	 	 	10,376.2	  	1.35	 	 	 	12,701.9	
2001	  	 	10,104.3	  	1.46	 	 	 	11,283.6	  	3.65	 	 	 	13,546.6	

1	Consists of federal funds purchased and securities sold under agreements to repurchase that mature either overnight or at a fixed maturity generally not exceeding three months. Rates on overnight funds reflect current market rates. Rates on fixed maturity borrowings are set at the time of borrowings.	

SunTrust Banks, Inc.	  	32	  	Annual Report 2003	

TABLE 14 MATURITY DISTRIBUTION OF DEBT SECURITIES AVAILABLE FOR SALE

 	  	At December 31, 2003
	
(Dollars in millions)
	  	1 Year
or Less
	 	 	1–5 Years
	 	 	5–10
Years
	 	 	After 10
Years
	 	 	Total
	 	 	Average
Maturity
in Years
	
Distribution of Maturities:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Amortized Cost	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. Treasury and other U.S. government agencies and corporations	  	$	244.4	 	 	$	1,917.0	 	 	$	123.5	 	 	$	1.5	 	 	$	2,286.4	 	 	3.6	
States and political subdivisions	  	 	51.8	 	 	 	144.5	 	 	 	136.4	 	 	 	30.3	 	 	 	363.0	 	 	4.5	
Asset-backed securities 1	  	 	71.4	 	 	 	4,426.2	 	 	 	901.7	 	 	 	18.6	 	 	 	5,417.9	 	 	4.0	
Mortgage-backed securities 1	  	 	920.0	 	 	 	9,583.9	 	 	 	1,676.4	 	 	 	0.8	 	 	 	12,181.1	 	 	3.2	
Corporate bonds	  	 	224.8	 	 	 	1,178.1	 	 	 	165.5	 	 	 	528.8	 	 	 	2,097.2	 	 	9.2	
 	  				 				 				 				 				 		
Total debt securities	  	$	1,512.4	 	 	$	17,249.7	 	 	$	3,003.5	 	 	$	580.0	 	 	$	22,345.6	 	 	4.0	
 	  				 				 				 				 				 		
Fair Value	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. Treasury and other U.S. government agencies and corporations	  	$	246.0	 	 	$	1,921.0	 	 	$	123.8	 	 	$	1.7	 	 	$	2,292.5	 	 	 	
States and political subdivisions	  	 	52.3	 	 	 	151.3	 	 	 	144.6	 	 	 	32.3	 	 	 	380.5	 	 	 	
Asset-backed securities 1	  	 	72.7	 	 	 	4,432.7	 	 	 	904.0	 	 	 	18.6	 	 	 	5,428.0	 	 	 	
Mortgage-backed securities 1	  	 	929.7	 	 	 	9,664.9	 	 	 	1,678.1	 	 	 	0.8	 	 	 	12,273.5	 	 	 	
Corporate bonds	  	 	229.0	 	 	 	1,197.6	 	 	 	175.3	 	 	 	509.8	 	 	 	2,111.7	 	 	 	
 	  				 				 				 				 				 	 	
Total debt securities	  	$	1,529.7	 	 	$	17,367.5	 	 	$	3,025.8	 	 	$	563.2	 	 	$	22,486.2	 	 	 	
 	  				 				 				 				 				 	 	
Weighted-Average Yield (FTE):	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. Treasury and other U.S. government agencies and corporations	  	 	4.08	%	 	 	3.22	%	 	 	4.18	%	 	 	8.00	%	 	 	3.37	%	 	 	
States and political subdivisions	  	 	5.77	 	 	 	6.78	 	 	 	7.01	 	 	 	6.81	 	 	 	6.75	 	 	 	
Asset-backed securities 1	  	 	6.08	 	 	 	2.85	 	 	 	2.81	 	 	 	1.07	 	 	 	2.89	 	 	 	
Mortgage-backed securities 1	  	 	3.30	 	 	 	3.90	 	 	 	4.24	 	 	 	6.20	 	 	 	3.90	 	 	 	
Corporate bonds	  	 	4.79	 	 	 	3.93	 	 	 	5.58	 	 	 	2.53	 	 	 	3.79	 	 	 	
 	  				 				 				 				 				 	 	
Total debt securities	  	 	3.87	%	 	 	3.59	%	 	 	4.18	%	 	 	2.79	%	 	 	3.66	%	 	 	

1	Distribution of maturities is based on the estimated average life of the asset.	
 
FUNDS PURCHASED AND SECURITIES SOLD
UNDER AGREEMENTS TO REPURCHASE
 
Average funds purchased increased $1,290.7 million, or 12.4%, in 2003 due to growth in the Company’s earning assets over the same time period.
 
DEPOSITS
 
Average consumer and commercial deposits increased $4,014.1 million, or 6.1%, in 2003 and comprised 86.8%, 92.0%, and 87.9% of average total deposits in 2003, 2002, and 2001, respectively. The growth was primarily due to initiatives to grow retail deposits and reduce reliance on wholesale funding. Specifically, noninterest-bearing deposits grew
 
TABLE 15 COMPOSITION OF AVERAGE DEPOSITS

 	  	Year Ended December 31
	  	Percent of Total
	 	
(Dollars in millions)
	  	2003
	  	2002
	  	2001
	  	2003
	 	 	2002
	 	 	2001
	 	
Noninterest-bearing	  	$	17,826.9	  	$	15,268.1	  	$	13,491.1	  	22.3	%	 	21.5	%	 	20.9	%	
NOW accounts	  	 	11,702.0	  	 	10,315.4	  	 	8,471.3	  	14.6	 	 	14.5	 	 	13.1	 	
Money Market accounts	  	 	22,218.5	  	 	20,470.9	  	 	15,830.1	  	27.8	 	 	28.8	 	 	24.5	 	
Savings	  	 	6,259.3	  	 	6,310.0	  	 	6,066.6	  	7.8	 	 	8.9	 	 	9.4	 	
Consumer time	  	 	7,975.4	  	 	9,342.4	  	 	9,092.6	  	10.0	 	 	13.1	 	 	14.1	 	
Other time	  	 	3,461.6	  	 	3,722.8	  	 	3,823.9	  	4.3	 	 	5.2	 	 	5.9	 	
 	  			  			  			  			 			 			
Total consumer and commercial deposits	  	 	69,443.7	  	 	65,429.6	  	 	56,775.6	  	86.8	 	 	92.0	 	 	87.9	 	
Brokered deposits	  	 	3,662.0	  	 	2,537.2	  	 	2,617.7	  	4.6	 	 	3.6	 	 	4.1	 	
Foreign deposits	  	 	6,933.3	  	 	3,190.4	  	 	5,175.4	  	8.6	 	 	4.4	 	 	8.0	 	
 	  			  			  			  			 			 			
Total deposits	  	$	80,039.0	  	$	71,157.2	  	$	64,568.7	  	100.0	%	 	100.0	%	 	100.0	%	

					
Annual Report 2003	  	33	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
TABLE 16 LOAN MATURITY

 	  	At December 31, 2003
Remaining Maturities of Selected Loans
	
(Dollars in millions)
	  	Total
	  	Within
1 Year
	  	1–5
Years
	  	After
5 Years
	
Loan Maturity	  	 	 	  	 	 	  	 	 	  	 	 	
Commercial 1	  	$	26,553.8	  	$	13,447.9	  	$	9,105.8	  	$	4,000.1	
Real estate – construction	  	 	4,479.8	  	 	2,137.6	  	 	1,121.2	  	 	1,221.0	
 	  			  			  			  			
Total	  	$	31,033.6	  	$	15,585.5	  	$	10,227.0	  	$	5,221.1	
 	  			  			  			  			
Interest Rate Sensitivity	  	 	 	  	 	 	  	 	 	  	 	 	
Selected loans with:	  	 	 	  	 	 	  	 	 	  	 	 	
Predetermined interest rates	  	 	 	  	 	 	  	$	1,701.7	  	$	2,039.7	
Floating or adjustable interest rates	  	 	 	  	 	 	  	 	8,525.3	  	 	3,181.4	
 	  	 	 	  	 	 	  			  			
Total	  	 	 	  	 	 	  	$	10,227.0	  	$	5,221.1	

1	Excludes $4,128.1 million in lease financing.	
 
$2,558.8 million, or 16.8%, and money market accounts increased $1,747.6 million, or 8.5%, compared to 2002. The continued uncertainty of the financial markets contributed to the success of these initiatives.
 
LIQUIDITY MANAGEMENT
 
Liquidity risk is the risk of being unable to timely meet obligations as they come due at a reasonable funding cost. SunTrust manages this risk by maintaining borrowing resources to fund increases in assets and replace maturing obligations or deposit withdrawals, both in the normal course of business and in times of unusual events. In addition, the Company enters into off-balance sheet arrangements and commitments which could impact the Company’s liquidity position. These activities are discussed in the Off-Balance Sheet Arrangements section on pages 35 through 37. The Asset Liability Management Committee (ALCO) of the Company sets the policies and reviews adherence to these policies.
 
The Company’s sources of funds include a large, stable deposit base, secured advances from the Federal Home Loan Bank and access to the capital markets. The Company structures its balance sheet so that illiquid assets, such as loans, are funded through customer deposits, long-term debt, other liabilities and capital.
 
Customer-based core deposits, the Company’s largest and most cost-effective source of funding, accounted for 65% of the funding base on average for 2003, as compared to 69% in 2002. The decrease over 2002 is largely attributable to funding growth in loans held for sale and the investment portfolio, which have been largely financed through wholesale funding sources. The yearly average of customer deposits increased by 6.1%, or $4.0 billion, from 2002 to 2003 reflecting a full year of the Huntington-Florida branch acquisition, successful marketing campaigns and growth from customer uncertainty due to volatility of the financial markets. Increases in rates, improved economic activity and confidence in the financial markets may lead to disintermediation of deposits, which may need to be replaced with higher cost borrowings in the future.
 
Net short-term unsecured borrowed funds, including wholesale domestic and international deposits and fed funds, totaled $15.9 billion at year-end 2003, as compared to $14.7 billion at year-end 2002. Net short-term unsecured borrowed funds included $3.2 billion of commercial paper at December 31, 2003, related to Three Pillars, which was not consolidated at year-end 2002. Total net wholesale funding, including short-term unsecured borrowings, secured wholesale borrowings and long-term debt, totaled $35.9 billion at year-end 2003, compared to $32.0 billion at year-end 2002. Long-term debt increased from $11.9 billion at December 31, 2002 to $15.3  billion at December 31, 2003.
 
TABLE 17 MATURITY OF CONSUMER TIME AND OTHER TIME DEPOSITS IN AMOUNTS OF $100,000 OR MORE

 	  	At December 31, 2003
	
(Dollars in millions)
	  	Consumer
	  	Brokered
	  	Foreign
	  	Other
	  	Total
	
Months to Maturity	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
3 or less	  	$	1,267.2	  	$	515.8	  	$	5,080.8	  	$	1.6	  	$	6,865.4	
Over 3 through 6	  	 	601.8	  	 	1,096.9	  	 	—  	  	 	—  	  	 	1,698.7	
Over 6 through 12	  	 	622.3	  	 	953.9	  	 	—  	  	 	—  	  	 	1,576.2	
Over 12	  	 	995.8	  	 	617.5	  	 	—  	  	 	—  	  	 	1,613.3	
 	  			  			  			  			  			
Total	  	$	3,487.1	  	$	3,184.1	  	$	5,080.8	  	$	1.6	  	$	11,753.6	

					
SunTrust Banks, Inc.	  	34	  	Annual Report 2003	

The increase was due to a combination of Global Bank Note and Federal Home Loan Bank debt issuances during 2003 to take advantage of the low interest rate environment and to further diversify the Company’s funding sources. The Company manages reliance on short-term unsecured borrowings as well as total wholesale funding through policy established and reviewed by ALCO.
 
The Company maintains 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 and commercial paper issuance. As of December 31, 2003, SunTrust had $6.1 billion of capacity remaining under its Global Bank Note program after issuing $850 million in Bank Notes in December of 2003. Liquidity is also available through unpledged securities in the investment portfolio and capacity to securitize loans, including single-family mortgage loans. The Company’s credit ratings are important to its access of unsecured wholesale borrowings. Significant changes in these ratings could change the cost and availability of these sources.
 
The low rate environment has created heavy refinance activity and an increase in the amount of mortgage loans originated by the Company. The Company sells most of these loans into the secondary market and they are reflected in loans held for sale. This refinance activity slowed in the second half of 2003, particularly in the fourth quarter of 2003. Mortgage originations declined $5.0 billion from fourth quarter of 2002 to a total of $6.3 billion in the fourth quarter of 2003. Total production in 2003 was $43.7 billion compared to $30.8 billion in 2002. As of December 31, 2003, the balance of loans held for sale was $5.6 billion compared to $7.7 billion on December 31, 2002, a decrease of $2.2 billion. Excluding the addition of Three Pillars in 2003, net short-term unsecured borrowed funds declined $2.0 billion during the same period reflecting the reduced funding need for loans held for sale.
 
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. Liquidity is measured and monitored for the Bank and Bank Holding Company. The Company reviews the Parent Holding Company’s net short-term mismatch. This measures the ability of the holding company to meet obligations through the sale or pledging of assets should access to Bank dividends be constrained.
 
Certain provisions of long-term debt agreements and Holding Company lines of credit prevent the Company from creating liens on, disposing of, or issuing (except to related parties) voting stock of subsidiaries. Further, there are restrictions on mergers, consolidations, certain leases, sales or transfers of assets, and minimum shareholders’ equity ratios. As of December 31, 2003, the Company was in compliance with all covenants and provisions of these agreements.
 
TABLE 18 UNFUNDED LENDING COMMITMENTS

(Dollars in millions)
	  	At December 31,
2003
	
Unused lines of credit	  	 	 	
Commercial	  	$	36,694.4	
Mortgage commitments 1	  	 	10,665.8	
Home equity lines	  	 	7,792.2	
Commercial real estate	  	 	3,650.0	
Commercial credit card	  	 	576.4	
 	  			
Total unused lines of credit	  	$	59,378.8	
 	  			
Letters of credit	  	 	 	
Financial standby	  	$	9,385.8	
Performance standby	  	 	265.8	
Commercial	  	 	191.6	
 	  			
Total letters of credit	  	$	9,843.2	

1	Includes $2,794.6 million in interest rate locks accounted for as derivatives.	
 
OFF-BALANCE SHEET ARRANGEMENTS
 
In the normal course of business, the Company engages in financial transactions that, in accordance with accounting principles generally accepted in the United States, are either not recorded on the Company’s balance sheet or may be recorded on the Company’s balance sheet at an amount that differs from the full contract or notional amount of the transaction. These transactions are structured to meet the financial needs of customers, manage the Company’s credit, market or liquidity risks, diversify funding sources or optimize capital.
 
As a financial services provider, the Company routinely enters into commitments to extend credit, including, but not limited to, loan commitments, financial and performance standby letters of credit and financial guarantees. While these contractual obligations could potentially result in material current or future effects on financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses, a significant portion of commitments to extend credit expire without being drawn upon. Such commitments are subject to the same credit policies and approval processes accorded to loans made by the Company.
 
The Company has undertaken certain guarantee obligations in the ordinary course of business. In following the provisions of FIN 45, as addressed in Note 1, the Company must consider guarantees that have any of the following four characteristics (i) contracts that contingently require the guarantor to make payments to a guaranteed party based on changes in an underlying factor that is related to an asset, a liability, or an equity security of the guaranteed party; (ii) contracts that contingently require the guarantor to make payments to a guaranteed party based on

Annual Report 2003	  	35	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
another entity’s failure to perform under an obligating agreement; (iii) indemnification agreements that contingently require the indemnifying party to make payments to an indemnified party based on changes in an underlying factor that is related to an asset, a liability, or an equity security of the indemnified party; and (iv) indirect guarantees of the indebtedness of others.
 
The issuance of these guarantees imposes an obligation to stand ready to perform, and should certain triggering events occur, it also imposes an obligation for the Company to make future payments. Note 18 to the Consolidated Financial Statements includes the annual required disclosures under FIN 45.
 
In the normal course of business, the Company utilizes various derivative and credit-related financial instruments to meet the needs of customers and to manage the Company’s exposure to interest rate and other market risks. These financial instruments involve, to varying degrees, elements of credit and market risk in excess of the amount recorded on the balance sheet in accordance with accounting principles generally accepted in the United States. SunTrust manages the credit risk of its derivatives by (i) limiting the total amount of arrangements outstanding by an individual counterparty; (ii) monitoring the size and maturity structure of the portfolio; (iii) obtaining collateral based on management’s credit assessment of the counterparty; (iv) applying uniform credit standards maintained for all activities with credit risk; and (v) entering into transactions with high quality counterparties that are periodically reviewed by the Company’s Credit Committee. The Company manages the market risk of its derivatives by establishing and monitoring limits on the types and degree of risk that may be undertaken. The Company continually measures market risk by using a value-at-risk methodology. Note 17 to the Consolidated Financial Statements includes additional information regarding derivative financial instruments and Table 22 provides further details with respect to SunTrust’s derivative positions.
 
As detailed in Table 18, the Company had $59.4 billion in total commitments to extend credit at December 31, 2003 that were not recorded on the Company’s balance sheet which included $2.8 billion in interest rate lock commitments. Commitments to extend credit are arrangements to lend to a customer who has complied with predetermined contractual conditions. The Company also had $9.8 billion at December 31, 2003 in letters of credit, which primarily consisted of financial and performance standby letters of credit that provide guarantees to a third party beneficiary that the Company will fund or perform, respectively, if certain future events occur. Of this, approximately $4.8 billion supports Variable Rate Demand Obligations (VRDO) remarketed by SunTrust and other agents. VRDOs are municipal securities that are typically remarketed by the agent on a weekly basis. In the event that the securities are unable to be remarketed, the Company would fund under the letters of credit.
 
SunTrust also assists in providing liquidity to select corporate customers by directing them to SunTrust’s multi-seller commercial paper conduit, Three Pillars. Three Pillars provides financing for or direct purchases of financial assets originated and serviced by SunTrust’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 customers.
 
As of December 31, 2002, accounting principles generally accepted in the United States did not require the Company to consolidate Three Pillars; however, in January 2003, the FASB issued FIN 46, “Consolidation of Variable Interest Entities,” which addressed the criteria for the consolidation of off-balance sheet entities similar to Three Pillars. Under the provisions of FIN 46, SunTrust consolidated Three Pillars as of July 1, 2003; however, SunTrust is currently restructuring Three Pillars and expects consolidation will no longer be required as of March 31, 2004.
 
As of December 31, 2003, Three Pillars had assets and liabilities included on the Consolidated Balance Sheet of approximately $3.2 billion, primarily consisting of secured loans, marketable asset-backed securities and short-term commercial paper liabilities. As of December 31, 2002, Three Pillars had assets and liabilities of approximately $2.8 billion which were not included in the Consolidated Balance Sheet.
 
For the year ended December 31, 2003, activities related to the Three Pillars relationship generated approximately $21.3 million in fee revenue for the Company. These activities include: client referrals and investment recommendations to Three Pillars; the issuing of a letter of credit, which provides partial credit protection to the commercial paper holders; and providing a majority of the temporary liquidity arrangements that would provide funding to Three Pillars in the event it can no longer issue commercial paper or in certain other circumstances.
 
As part of its community reinvestment initiatives, the Company invests in multi-family affordable housing properties throughout its footprint as a limited and/or general partner. Assets of approximately $723.8 million in partnerships where SunTrust is only a limited partner are not included in the Consolidated Balance Sheet. The Company’s maximum exposure to loss for these partnerships is $179.6 million, consisting of the limited partnership investments plus unfunded commitments.
 
In addition, the Company is also a general partner in a number of limited partnerships, which have been formed to provide investment opportunities for certain SunTrust customers. Assets under management, which are not included in the Consolidated Balance Sheet, totaled $3.6 billion as of December 31, 2003.
 
In connection with certain acquisitions made by the Company, the terms of the acquisition agreement provide for deferred payments or additional consideration to minority interest holders and others, based on certain post-acquisition performance targets. Disclosure of the amount of contingent consideration expected to be paid is included in Note 18 to the Consolidated Financial Statements.

SunTrust Banks, Inc.	  	36	  	Annual Report 2003	

TABLE 19 CONTRACTUAL COMMITMENTS

 	  	December 31, 2003
	
(Dollars in millions)
	  	1 year
or less
	  	1 – 3
years
	  	3 –5
years
	  	After
5 years
	  	Total
	
Time deposit maturities	  	$	15,489	  	$	2,786	  	$	770	  	$	159	  	$	19,204	
Short-term borrowings	  	 	13,681	  	 	—  	  	 	—  	  	 	—  	  	 	13,681	
Long-term debt	  	 	792	  	 	2,575	  	 	1,332	  	 	10,615	  	 	15,314	
Operating lease obligations	  	 	95	  	 	146	  	 	86	  	 	172	  	 	499	
Capital lease obligations	  	 	3	  	 	4	  	 	4	  	 	30	  	 	41	
Purchase obligations 1	  	 	38	  	 	84	  	 	—  	  	 	—  	  	 	122	
Other long-term liabilities	  	 	14	  	 	27	  	 	27	  	 	134	  	 	202	
 	  			  			  			  			  			
Total	  	$	30,112	  	$	5,622	  	$	2,219	  	$	11,110	  	$	49,063	

1	Includes contracts with a minimum annual payment of $5 million.	
 
CONTRACTUAL COMMITMENTS
 
In the normal course of business, the Company enters into certain contractual obligations. Such obligations include obligations to make future payments on debt and lease arrangements, contractual commitments for capital expenditures, and service contracts. Table 19 summarizes the Company’s significant contractual obligations at December 31, 2003, except for obligations under the Company’s pension and postretirement benefit plans which are included in Note 16.
 
CAPITAL RESOURCES
 
SunTrust’s primary regulator, the Federal Reserve Board, measures capital adequacy within a framework that makes capital sensitive to the risk profiles of individual banking institutions. The guidelines weight assets and off-balance sheet risk exposures (risk weighted assets) according to predefined classifications, creating a base from which to compare capital levels. Tier 1 Capital primarily includes realized equity and qualified preferred instruments, less purchase accounting intangibles such as goodwill and core deposit intangibles. Total Capital consists of Tier 1 Capital and Tier 2 Capital, which includes qualifying portions of subordinated debt, allowance for loan loss up to a maximum of 1.25% of risk weighted assets, and 45% of the unrealized gain on equity securities.
 
The Company and subsidiary banks are subject to minimum Tier 1 Risk-Based Capital and Total Capital ratios of 4% and 8%, respectively, of risk weighted assets. To be considered “well-capitalized,” ratios of 6% and 10%, respectively, are needed. Additionally, the Company and the Banks are subject to Tier 1 Leverage ratio requirements, which measures Tier 1 Capital against average assets for the quarter. The minimum and well-capitalized ratios are 3% and 5%, respectively. As of December 31, 2003, SunTrust Banks, Inc. had Tier 1, Total Capital and Tier 1 Leverage ratios of 7.85%, 11.75%, and 7.37%, respectively. SunTrust is committed to remaining well capitalized.
 
The Company raises subordinated debt as part of managing the Total Capital regulatory ratios. SunTrust Bank issued $500 million in subordinated debt in 2002 under its bank note program. SunTrust Bank has $6.1 billion in capacity remaining under this program to issue senior or subordinated debt. SunTrust Banks, Inc. has $1 billion in capacity remaining on its current shelf registration for senior or subordinated debt. In 2002, the Company raised $350 million of regulatory capital through the sale of preferred shares issued by a real estate investment trust subsidiary. This amount is reflected in other liabilities and totals $412.5 million including accrued interest as of December 31, 2003.
 
TABLE 20 CAPITAL RATIOS

 	  	At December 31 
	 	
(Dollars in millions)
	  	2003
	 	 	2002
	 	 	2001
	 	 	2000
	 	 	1999
	 	 	1998
	 	
Tier 1 capital 1	  	$	8,930.0	 	 	$	8,106.1	 	 	$	7,994.2	 	 	$	6,850.6	 	 	$	6,579.6	 	 	$	6,586.5	 	
Total capital	  	 	13,365.9	 	 	 	12,609.8	 	 	 	12,144.2	 	 	 	10,488.9	 	 	 	9,939.1	 	 	 	10,307.9	 	
Risk-weighted assets	  	 	113,711.3	 	 	 	108,501.1	 	 	 	99,700.9	 	 	 	96,656.7	 	 	 	87,866.1	 	 	 	80,586.4	 	
Risk-based ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tier 1 capital	  	 	7.85	%	 	 	7.47	%	 	 	8.02	%	 	 	7.09	%	 	 	7.48	%	 	 	8.17	%	
Total capital	  	 	11.75	 	 	 	11.62	 	 	 	12.18	 	 	 	10.85	 	 	 	11.31	 	 	 	12.79	 	
Tier 1 leverage ratio	  	 	7.37	 	 	 	7.30	 	 	 	7.94	 	 	 	6.98	 	 	 	7.17	 	 	 	7.68	 	
Total shareholders’ equity to assets	  	 	7.76	 	 	 	7.47	 	 	 	7.98	 	 	 	7.95	 	 	 	8.00	 	 	 	8.78	 	

1	Tier 1 capital includes notes payable to a trust of $1,650 million at the end of 2003, 2002 and 2001, respectively, and $1,050 million at the end of 2000, 1999, and 1998, respectively. Tier 1 capital also includes preferred shares issued by a real estate investment trust subsidiary of $450 million at the end of 2003 and 2002, and $100 million at the end of 2001 and 2000.	

Annual Report 2003	  	37	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
TABLE 21 SHARE REPURCHASES

 	  	Total
number of
shares
purchased
	  	Average
price paid
per share
	  	Broker-dealer used to effect
purchases
	  	Number of
shares purchased
as part of
publicly announced
plans or programs
	  	Maximum number
of shares that may
yet be purchased
under the plans or
programs 1
	
January	  	300,000	  	$	55.92	  	SunTrust Robinson Humphrey	  	300,000	  	9,202,796	
February	  	1,243,000	  	 	56.02	  	SunTrust Robinson Humphrey	  	1,243,000	  	7,959,796	
March	  	1,460,000	  	 	54.45	  	SunTrust Robinson Humphrey	  	1,460,000	  	6,499,796	
April	  	—  	  	 	—  	  	—  	  	—  	  	6,499,796	
May	  	—  	  	 	—  	  	—  	  	—  	  	6,499,796	
June	  	—  	  	 	—  	  	—  	  	—  	  	6,499,796	
July	  	—  	  	 	—  	  	—  	  	—  	  	6,499,796	
August	  	257,000	  	 	59.36	  	SunTrust Robinson Humphrey	  	257,000	  	6,242,796	
September	  	15,000	  	 	60.00	  	SunTrust Robinson Humphrey	  	15,000	  	6,227,796	
October	  	—  	  	 	—  	  	—  	  	—  	  	6,227,796	
November	  	—  	  	 	—  	  	—  	  	—  	  	6,227,796	
December	  	—  	  	 	—  	  	—  	  	—  	  	6,227,796	
 	  		  			  	 	  		  	 	
Total	  	3,275,000	  	$	55.59	  	 	  	3,275,000	  	 	

1	On November 12, 2002, the Board of Directors authorized to purchase 10 million shares of SunTrust common stock in addition to 2,796 shares which were remaining from a June 13, 2001 authorization. There is no expiration date for this authorization.	
 
Prior to year-end, the Regulatory Agencies issued an interim rule allowing sponsoring banking organizations to remove Asset Backed Commercial Paper (ABCP) program assets consolidated under FIN 46, “Consolidation of Variable Interest Entities” from their risk-weighted asset bases for purposes of calculating risk-based capital ratios. This interim rule does not affect the average assets used in the calculation of Tier 1 Leverage. This provision, unless otherwise amended or modified, expires after March 31, 2004. Without the interim rule, Tier 1 Risk-Based Capital and Total Risk-Based Capital would be negatively impacted by 17 and 25 basis points, respectively.
 
The Regulatory Agencies concurrently issued for comment proposals on the risk-based treatment of ABCP conduits by sponsoring organizations, regardless of their consolidation under FIN 46. The proposal provides for a 20% credit conversion factor on the liquidity facilities supporting the underlying assets of the program. The new proposal would negatively impact the Tier 1 Risk-Based Capital and Total Risk-Based Capital ratios by five and seven basis points, respectively, compared to its current treatment.
 
In December 2003, the Financial Accounting Standards Board issued a revised interpretation of FIN 46, which required deconsolidation of subordinated beneficial interests. As a result, the Company deconsolidated its Trust Preferred Securities in the fourth quarter of 2003. There was no impact to the results of operations and a less than .04% impact to the statement of condition as a result of the deconsolidation. These notes payable to trusts established to issue the preferred securities are included in long-term debt and totaled $1.65 billion at December 31, 2003 and 2002.
 
As a result of FASB’s Interpretation, questions have been raised whether Trust Preferred Securities would still qualify for treatment as Tier 1 Capital given the new accounting treatment. In July of 2003, the Federal Reserve instructed bank holding companies to continue to include Trust Preferred Securities in Tier 1 Capital for regulatory capital purposes, until notice is given to the contrary. Management does not expect the final rules will result in the immediate elimination of existing Trust Preferred Securities as Tier 1 Capital. These securities comprised 18.5% of Tier 1 Capital as of December 31, 2003. If it were determined that the existing Trust Preferred Securities do not qualify as Tier 1 Capital, SunTrust would still meet the requirements for well-capitalized institutions at December 31, 2003.
 
SunTrust manages capital through dividends and share repurchases authorized by the Company’s Board of Directors. Management assesses capital needs based on expected growth and the current economic climate. In 2003, the Company repurchased 3.3 million shares for $182 million compared to 5.7 million shares for $341 million repurchased in 2002. Shares issued under various compensation programs of 1.4 million and 1.0 million in 2003 and 2002, respectively, partially offset these repurchases. As of December 31, 2003, the Company was authorized to purchase up to an additional 6.2 million shares under current Board resolutions.

SunTrust Banks, Inc.	  	38	  	Annual Report 2003	

DERIVATIVE INSTRUMENTS
 
The Company monitors its sensitivity to changes in interest rates and may use derivative instruments to limit the volatility of net interest income. Derivative instruments increased net interest income in 2003 by $64.0 million and decreased net interest income in 2002 by $50.4 million.
 
For a detailed discussion of the impact of derivatives on Accumulated Other Comprehensive Income see Note 23.
 
The following tables summarize the derivative instruments entered into by the Company as an end-user. See Note 17 for a complete description of the derivative instruments and activity for 2003 and 2002.
 
TABLE 22 RISK MANAGEMENT DERIVATIVE FINANCIAL INSTRUMENTS 1

 	  	As of December 31, 2003
	
(Dollars in millions)
	  	Notional
Amount
	  	Gross
Unrealized
Gains 6
	  	Gross
Unrealized
Losses 6
	 	 	Equity 7
	 	 	Average
Maturity
in Years
	
Asset Hedges	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	
Fair value hedges	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	
Interest rate swaps 2	  	$	25	  	$	—  	  	$	(1	)	 	$	—  	 	 	0.82	
Forward contracts 3	  	 	3,938	  	 	—  	  	 	(43	)	 	 	—  	 	 	0.07	
 	  			  			  				 				 		
Total asset hedges	  	$	3,963	  	$	—  	  	$	(44	)	 	$	—  	 	 	0.07	
 	  			  			  				 				 		
Liability Hedges	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	
Cash flow hedges	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	
Interest rate swaps 4	  	$	3,557	  	$	—  	  	$	(27	)	 	$	(17	)	 	1.38	
Fair value hedges	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	
Interest rate swaps 5	  	 	5,917	  	 	126	  	 	(51	)	 	 	—  	 	 	8.56	
 	  			  			  				 				 		
Total liability hedges	  	$	9,474	  	$	126	  	$	(78	)	 	$	(17	)	 	5.86	

1	Includes only derivative financial instruments which are qualifying hedges under SFAS No. 133 and 149. All of the Company’s other derivative instruments are classified as trading. All interest rate swaps have resets of three months or less, and are the pay or receive rates in effect at December 31, 2003.	
 
2	Interest rate swaps are designated as fair value hedges of fixed rate loans.	
 
3	Forward contracts are designated as fair value hedges of mortgage lending activities.	
 
4	Represents interest rate swaps designated as cash flow hedges of floating rate certificates of deposit and other variable rate debt.	
 
5	Interest rate swaps are designated as fair value hedges of subordinated notes, FHLB Advances and other fixed rate debt.	
 
6	Represents the fair value of derivative financial instruments less accrued interest receivable or payable.	
 
7	At December 31, 2003, the net unrealized loss on derivatives included in accumulated other comprehensive income, which is a component of stockholders’ equity, was $17.3 million, net of tax, that represents the effective portion of the net gains and 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. As of December 31, 2003, $12.6 million of net losses, net of income taxes recorded in accumulated other comprehensive income are expected to be reclassified as interest expense or other income during the next twelve months.	

 	  	As of December 31, 2002
	
(Dollars in millions)
	  	Notional
Amount
	  	Gross
Unrealized
Gains
	  	Gross
Unrealized
Losses
	 	 	Equity
	 	 	Average
Maturity
in Years
	
Asset Hedges	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	
Cash flow hedges	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	
Equity collar	  	$	56	  	$	—  	  	$	—  	 	 	$	—  	 	 	0.25	
Fair value hedges	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	
Interest rate swaps	  	 	25	  	 	—  	  	 	(1	)	 	 	—  	 	 	1.82	
Forward contracts	  	 	6,286	  	 	—  	  	 	(79	)	 	 	—  	 	 	0.08	
 	  			  			  				 				 		
Total asset hedges	  	$	6,367	  	$	—  	  	$	(80	)	 	$	—  	 	 	0.09	
 	  			  			  				 				 		
Liability Hedges	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	
Cash flow hedges	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	
Interest rate swaps	  	$	2,345	  	$	—  	  	$	(72	)	 	$	(47	)	 	0.91	
Fair value hedges	  	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	
Interest rate swaps	  	 	2,525	  	 	158	  	 	—  	 	 	 	—  	 	 	9.32	
 	  			  			  				 				 		
Total liability hedges	  	$	4,870	  	$	158	  	$	(72	)	 	$	(47	)	 	5.27	

					
Annual Report 2003	  	39	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
Derivative hedging instrument activities are as follows:

 	  	Notional Values 1
	 	
(Dollars in millions)
	  	Asset
Hedges
	 	 	Liability
Hedges
	 	 	Total
	 	
Balance, January 1, 2002	  	$	81	 	 	$	4,220	 	 	$	4,301	 	
Additions	  	 	—  	 	 	 	1,775	 	 	 	1,775	 	
Maturities	  	 	—  	 	 	 	(1,125	)	 	 	(1,125	)	
 	  				 				 				
Balance, December 31, 2002	  	 	81	 	 	 	4,870	 	 	 	4,951	 	
Additions	  	 	—  	 	 	 	7,464	 	 	 	7,464	 	
Maturities	  	 	(56	)	 	 	(2,860	)	 	 	(2,916	)	
 	  				 				 				
Balance, December 31, 2003	  	$	25	 	 	$	9,474	 	 	$	9,499	 	

1	Excludes hedges of mortgage lending activities. At December 31, 2003 and 2002, mortgage notional amounts totaled $3,938 and $6,286 million respectively.	
 
The following table presents the expected maturities of risk management derivative financial instruments:

 	  	As of December 31, 2003
	 	
(Dollars in millions)
	  	1 Year
or Less
	 	 	1–2
Years
	 	 	2–5
Years
	 	 	5–10
Years
	 	 	After
10
Years
	 	 	Total
	 	
Cash Flow Asset Hedges	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Notional amount – swaps	  	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	
Notional amount – other	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Weighted-average receive rate 1	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Weighted-average pay rate 1	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Unrealized gain (loss)	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
 	  				 				 				 				 				 				
Fair Value Asset Hedges	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Notional amount – swaps	  	 	25	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	25	 	
Notional amount – forwards	  	 	3,938	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	3,938	 	
Weighted-average receive rate 1	  	 	1.92	%	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	1.92	%	
Weighted-average pay rate 1	  	 	4.97	%	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	4.97	%	
Unrealized loss	  	 	(44	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(44	)	
 	  				 				 				 				 				 				
Cash Flow Liability Hedges	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Notional amount – swaps	  	 	1,101	 	 	 	2,389	 	 	 	22	 	 	 	45	 	 	 	—  	 	 	 	3,557	 	
Notional amount – other	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Weighted-average receive rate 1	  	 	1.15	%	 	 	1.17	%	 	 	1.17	%	 	 	1.16	%	 	 	—  	 	 	 	1.16	%	
Weighted-average pay rate 1	  	 	4.89	%	 	 	2.02	%	 	 	4.38	%	 	 	4.51	%	 	 	—  	 	 	 	2.95	%	
Unrealized loss	  	 	(15	)	 	 	(6	)	 	 	(2	)	 	 	(4	)	 	 	—  	 	 	 	(27	)	
 	  				 				 				 				 				 				
Fair Value Liability Hedges	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Notional amount – swaps	  	 	—  	 	 	 	—  	 	 	 	1,317	 	 	 	3,650	 	 	 	950	 	 	 	5,917	 	
Notional amount – other	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Weighted-average receive rate 1	  	 	—  	 	 	 	—  	 	 	 	4.84	%	 	 	3.91	%	 	 	6.23	%	 	 	4.49	%	
Weighted-average pay rate 1	  	 	—  	 	 	 	—  	 	 	 	1.18	%	 	 	1.16	%	 	 	1.42	%	 	 	1.21	%	
Unrealized gain (loss)	  	 	—  	 	 	 	—  	 	 	 	65	 	 	 	(34	)	 	 	44	 	 	 	75	 	

1	All interest rate swaps have variable pay or receive rates with resets of three months or less, and are the pay or receive rates in effect at December 31, 2003.	

SunTrust Banks, Inc.	  	40	  	Annual Report 2003	

The following table presents the expected maturities of risk management derivative financial instruments:

 	  	As of December 31, 2002
	 	
(Dollars in millions)
	  	1 Year
or Less
	 	 	1–2
Years
	 	 	2–5
Years
	 	 	5–10
Years
	  	After
10
Years
	 	 	Total
	 	
Cash Flow Asset Hedges	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Notional amount – swaps	  	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	  	$	—  	 	 	$	—  	 	
Notional amount – other	  	 	56	 	 	 	—  	 	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	56	 	
Weighted-average receive rate	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	—  	 	
Weighted-average pay rate	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	—  	 	
Unrealized gain	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	—  	 	
 	  				 				 				 			  				 				
Fair Value Asset Hedges	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Notional amount – swaps	  	 	—  	 	 	 	25	 	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	25	 	
Notional amount – forwards	  	 	6,286	 	 	 	—  	 	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	6,286	 	
Weighted-average receive rate	  	 	—  	 	 	 	2.58	%	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	2.58	%	
Weighted-average pay rate	  	 	—  	 	 	 	4.97	%	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	4.97	%	
Unrealized loss	  	 	(79	)	 	 	(1	)	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	(80	)	
 	  				 				 				 			  				 				
Cash Flow Liability Hedges	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Notional amount – swaps	  	 	1,250	 	 	 	1,095	 	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	2,345	 	
Notional amount – other	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	—  	 	
Weighted-average receive rate	  	 	1.42	%	 	 	1.60	%	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	1.51	%	
Weighted-average pay rate	  	 	4.79	%	 	 	4.91	%	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	4.85	%	
Unrealized loss	  	 	(22	)	 	 	(50	)	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	(72	)	
 	  				 				 				 			  				 				
Fair Value Liability Hedges	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Notional amount – swaps	  	 	825	 	 	 	—  	 	 	 	750	 	 	 	—  	  	 	950	 	 	 	2,525	 	
Notional amount – other	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	  	 	—  	 	 	 	—  	 	
Weighted-average receive rate	  	 	1.23	%	 	 	—  	 	 	 	6.33	%	 	 	—  	  	 	6.23	%	 	 	4.63	%	
Weighted-average pay rate	  	 	1.25	%	 	 	—  	 	 	 	1.73	%	 	 	—  	  	 	1.66	%	 	 	1.55	%	
Unrealized gain	  	 	—  	 	 	 	—  	 	 	 	94	 	 	 	—  	  	 	64	 	 	 	158	 	

MARKET RISK MANAGEMENT
 
Market risk refers to potential losses arising from changes in interest rates, foreign exchange rates, equity prices, commodity prices and other relevant market rates or prices. Interest rate risk, defined as the exposure of net interest income and Economic Value of Equity (EVE) to adverse movements in interest rates, is SunTrust’s primary market risk, and mainly arises from the structure of the balance sheet (non-trading activities). SunTrust is also exposed to market risk in its trading activities, mortgage servicing rights, mortgage lending activities, and equity holdings of The Coca-Cola Company common stock. ALCO meets regularly and is responsible for reviewing the interest-rate sensitivity position of the Company and establishing policies to monitor and limit exposure to interest rate risk. The policies established by ALCO are reviewed and approved by the Company’s Board of Directors.
 
MARKET RISK FROM NON-TRADING ACTIVITIES
 
The primary goal of interest rate risk management is to control exposure to interest rate risk, both within policy limits approved by ALCO and the Board and within narrower guidelines established by ALCO. These limits and guidelines reflect SunTrust’s tolerance for interest rate risk over both short-term and long-term horizons.
 
The major sources of the Company’s non-trading interest rate risk are timing differences in the maturity and repricing characteristics of assets and liabilities, changes in relationships between rate indices (basis risk), changes in the shape of the yield curve, and the potential exercise of explicit or embedded options. SunTrust measures these risks and their impact by identifying and quantifying exposures through use of sophisticated simulation and valuation models, as well as duration gap analysis.
 
The primary method that SunTrust uses to quantify and manage interest rate risk is simulation analysis, which is used to model net interest income from assets, liabilities, and derivative positions over a specified time period under various interest rate scenarios and balance sheet structures. This analysis measures the sensitivity of net interest income over a relatively short time horizon (two years). Key assumptions in the simulation analysis (and in the valuation analysis discussed below) relate to the behavior of interest rates and spreads, the changes in product balances and the behavior of loan and deposit customers in different rate environments. Material assumptions include the

Annual Report 2003	  	41	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
repricing characteristics and balance fluctuations of indeterminate, or non-contractual maturity, deposits.
 
As the future path of interest rates cannot be known in advance, management uses simulation analysis to project net interest income under various interest rate scenarios including expected, or “most likely,” as well as deliberately extreme and perhaps unlikely scenarios. The analyses may include rapid ramping of interest rates, gradual ramping of interest rates, interest rate shocks, spread narrowing and widening, and yield curve twists. Usually, each analysis incorporates what management believes to be the most appropriate assumptions about customer behavior in an interest rate scenario. In some analyses, however, assumptions are deliberately changed to test the Company’s exposure to a specified event or set of events. Specific strategies are also analyzed to determine their impact on net interest income levels and sensitivities.
 
The following table reflects the estimated sensitivity of net interest income to changes in interest rates. The sensitivity is measured as a percentage change in net interest income due to gradual changes in interest rates (25 basis points per quarter) compared to forecasted net interest income under stable rates during the next twelve months. Currently, rates are ramped down only 75 basis points due to the absolute low level of rates. The Fed Funds rate declined to 1.00% in late June 2003 and for net interest income simulation purposes taking the Fed Funds rate down 100 basis points to 0.00% would be a low probability. Estimated changes set forth below are dependent on material assumptions such as those previously discussed.
 
ESTIMATED CHANGES IN NET INTEREST INCOME

Rate Change
(Basis Points)
	  	Estimated % Change in
Net Interest Income
Over 12 Months
	 	
	  	Dec. 31,
2003
	 	 	Dec. 31,
2002
	 	
+100	  	0.2	%	 	0.6	%	
   -75 (-100 for Dec. 31, 2002)	  	-0.6	%	 	-0.9	%	

As indicated, a gradual decrease in interest rates would reduce net interest income, but by an amount that is within the policy limits. A gradual increase in rates would tend to enhance net interest income. Thus, the Company’s interest rate sensitivity position is modestly asset-sensitive. While simulations of more rapid changes in interest rates indicate more adverse changes in net interest income, the Company is still within the policy limits.
 
Estimated net interest income exposures at December 31, 2003 differ from those at year-end 2002, reflecting changes in the balance sheet, economic environment, and level of interest rates. The decrease in the asset sensitive position from 2002 reflects actions the Company has taken to minimize its exposure to further declines in rates, as evidenced by the smaller degree of risk it has to declining rates. These steps have included increasing the duration of the investment portfolio and shortening the duration of liabilities through swapping debt from longer durations to shorter durations. These steps have reduced the benefit to rising rates as noted in the table above.
 
SunTrust also performs valuation analysis, which is used for discerning levels of risk present in the balance sheet and derivative positions that might not be taken into account in the net interest income simulation analysis. Whereas net interest income simulation highlights exposures over a relatively short time horizon, valuation analysis incorporates all cash flows over the estimated remaining life of all balance sheet and derivative positions. The valuation of the balance sheet, at a point in time, is defined as the discounted present value of asset cash flows and derivative cash flows minus the discounted value of liability cash flows, the net of which is referred to as Economic Value of Equity (EVE). The sensitivity of EVE to changes in the level of interest rates is a measure of the longer-term repricing risk and options risk embedded in the balance sheet. In contrast to the net interest income simulation, which assumes interest rates will change over a period of time (ramp), EVE uses instantaneous changes in rates (shock). EVE values only the current balance sheet, and does not incorporate the growth assumptions that are used in the net interest income simulation model. As with the net interest income simulation model, assumptions about the timing and variability of balance sheet cash flows are critical in the EVE analysis. Particularly important are the assumptions driving prepayments and the expected changes in balances and pricing of the indeterminate deposit portfolios.
 
ESTIMATED CHANGES IN ECONOMIC VALUE OF EQUITY (EVE)

Rate Shock
(Basis Points)
	  	Estimated % Change in EVE
	 	
	  	Dec. 31, 2003
	 	 	Dec. 31, 2002
	 	
+100	  	-3.3	%	 	2.7	%	
 -100	  	1.5	%	 	-7.2	%	

While an instantaneous and severe shift in interest rates is used in this analysis to provide an estimate of exposure under an extremely adverse scenario, management believes that a gradual shift in interest rates would have a much more modest impact. Since EVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in EVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon (i.e., the next fiscal year). Further, EVE does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, and changing product spreads that could mitigate the adverse impact of changes in interest rates.
 
Estimated EVE exposures at December 31, 2003 changed significantly from 2002, due largely to a change in indeterminate deposit methodology used in the EVE calculations and to a smaller degree actions that help mitigate exposure to lower rates. A detailed study of the indeterminate deposit methodology was performed during 2003 and was modified to better reflect

SunTrust Banks, Inc.	  	42	  	Annual Report 2003	

the current behavior of these products. The impact of the change shortened the duration of these products to reflect the sharp increase in balances that may be temporary, and at a minimum, are highly volatile. Shortening the duration of the deposit base decreased EVE’s exposure to declining rates, and at the same time decreased the benefit EVE would have in rising rates. Actions taken to mitigate EVE’s exposure to declining rates were the same as those noted for net interest income sensitivity previously: extending investment portfolio duration and reducing liability duration through swapping debt from longer to shorter durations. The change in indeterminate deposit methodology and actions to mitigate exposure to lower rates significantly reduced the market value volatility for 2003 compared to 2002.
 
The net interest income simulation and valuation analyses (EVE) do not necessarily include certain actions that management may undertake to manage this risk in response to anticipated changes in interest rates.
 
TRADING ACTIVITIES
 
Most of the Company’s trading activities are designed to support secondary trading with customers rather than for the purpose of positioning itself to profit from market movements. Product offerings include the sale of debt securities, including loans traded in the secondary market, equity securities, derivatives and foreign exchange contracts, and similar financial instruments. The Company also participates in underwritings and acts as a market maker in certain equity securities. Also, in the normal course of business, the Company maintains an inventory of securities to support secondary trading. When executing orders on behalf of customers, which are not sold out of inventory, such as derivatives, the Company enters into subsequent transactions to manage the resulting risk in accordance with approved limits.
 
The Company has developed policies and procedures to manage market risk associated with trading, capital markets and foreign exchange activities using a value-at-risk (VaR) approach that combines interest rate risk, equity risk, foreign exchange risk, spread risk and volatility risk. For trading portfolios, VaR measures the maximum fair value the Company could lose on a trading position, given a specified confidence level and time horizon. VaR limits and exposures are monitored daily for each significant trading portfolio. The Company’s VaR calculation measures the potential losses in fair value using a 99% confidence level. This equates to 2.33 standard deviations from the mean under a normal distribution. This means that, on average, daily profits and losses are expected to exceed VaR one out of every 100 overnight trading days. The VaR methodology includes holding periods for each position based upon an assessment of relative trading market liquidity. For the Foreign Exchange and Derivatives desks, the Company estimates VaR by applying the Monte Carlo simulation platform as designed by RiskMetrics, ™ and for the estimate of the Fixed Income and Equity desks’ VaR, the Company uses Bloomberg ™ analytics. The Company uses internally developed methodology to estimate VaR for credit derivatives and loan trading.
 
The estimated average combined Undiversified VaR (Undiversified VaR represents a simple summation of the VaR calculated across each Desk) was $1.8 million for 2003 and $2.4 million for 2002. Trading assets net of trading liabilities averaged $796.3 million for 2003 and $898.7 million for 2002. The estimated combined period-end Undiversified VaR was $1.3 million at December 31, 2003 and $1.4 million at December 31, 2002. Trading assets net of trading liabilities were $804.6 million at December 31, 2003 and $787.1 million at December 31, 2002.
 
OTHER MARKET RISK
 
Other sources of market risk include mortgage servicing rights (MSRs) and the risk associated with holding mortgage loans prior to selling them (mortgage warehouse) into the secondary market, and commitments to customers to make mortgage loans (mortgage pipeline) that will be sold to the secondary market.
 
The value of the MSRs asset is dependent upon the assumed prepayment speed of the mortgage servicing portfolio. Future expected net cash flows from servicing a loan in the servicing portfolio would not be realized if the loan pays off earlier than anticipated. MSRs are the discounted present value of future net cash flows that are expected to be received from the servicing portfolio. Accordingly, prepayment risk subjects the MSRs to impairment risk. The Company does not specifically hedge the MSRs asset for the potential impairment risk; it does however employ a balanced business strategy using the natural counter-cyclicality of servicing and production to mitigate the cost of higher MSR amortization resulting from prepayments. The fair value determination, key economic assumptions and the sensitivity of the current fair value of the MSRs as of December 31, 2003 is discussed in greater detail in Note 12.
 
The Company hedges the risks associated with the mortgage warehouse and pipeline. The mortgage warehouse and pipeline consist primarily of fixed and adjustable-rate single family residential real estate loans. The risk associated with the mortgage warehouse and pipeline is the potential change in interest rates between the time the customer locks in the rate on the loan and the time the loan is sold. This period is usually 90-150 days. To hedge this risk, forward sales agreements and option contracts are executed. The Company has set exposure limits on the risk associated with the changes in market value of the mortgage warehouse and pipeline. The limit is based on a percentage of the aggregate mortgage warehouse and pipeline for price movements within two standard deviations.
 
The Company is also subject to risk from changes in equity prices that arise from owning The Coca-Cola Company common stock. SunTrust owns 48,266,496 shares of common stock of The Coca-Cola Company, which had a carrying value of $2.4 billion at December 31, 2003. A 10% decrease in share price of The Coca-Cola Company common stock at December 31, 2003 would result in a decrease, net of deferred taxes, of approximately $159 million in accumulated other comprehensive income.

Annual Report 2003	  	43	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
EARNINGS AND BALANCE SHEET ANALYSIS 2002 VS. 2001
 
Net income was $1,331.8 million in 2002 compared to $1,375.5 million in 2001, a decrease of 3.2%. Diluted earnings per share were $4.66 in 2002 and $4.72 in 2001. After-tax merger-related expenses associated with the Huntington-Florida acquisition totaled $39.8 million, or $0.14 per diluted share, in 2002. After-tax expenses totaling $20.2 million, or $0.07 per diluted share, were incurred in 2001 related to the Company’s proposal to acquire the former Wachovia Corporation. Additionally, the Company recorded One Bank initiative charges of $36.5 million, net of tax, or $0.13 per diluted share, and $35.5 million, net of tax, or $0.12 per diluted share, in 2002 and 2001, respectively. The One Bank initiative was completed in the fourth quarter of 2002.
 
The continued decline of interest rates impacted operating results in 2002 and 2001. Net interest income decreased $10.1 million to $3,283.2 million in 2002, compared to $3,293.4 million in 2001. The net interest margin decreased 17 basis points from 3.58% in 2001 to 3.41% in 2002. The decrease in net interest income and margin was due to multiple factors, including a decline in loan demand resulting from a sluggish economy, the shift in the Company’s balance sheet position to slightly asset-sensitive in anticipation of rising interest rates that did not come to fruition and the flattening of the yield curve in 2002, which created an acceleration of prepayments in the mortgage industry. Net interest income was positively impacted by the high volume of mortgage refinancing experienced during 2002, which led to an increase in average loans to be sold into the secondary market from $2.9 billion in 2001 to $4.4 billion in 2002.
 
Net charge-offs were $422.3 million, or 0.59%, of average loans for 2002, compared to $272.4 million, or 0.39%, of average loans for 2001. The provision for loan losses increased $194.6 million, or 70.7%, from 2001 to 2002. The increases were primarily due to an increase in large corporate charge-offs resulting from the weakened economy. Also, $45.3 million of additional provision expense was recorded in 2002 to conform the Huntington-Florida portfolio to SunTrust’s credit standards.
 
Noninterest income was $2,268.8 million in 2002, compared to $2,051.9 million in 2001. The increase was driven by a $159.2 million, or 21.2%, increase in service charges on deposit accounts and other charges and fees as the Company benefited from increased usage of products and services, a more consistent pricing strategy throughout the Company’s markets, and a lower earnings credit rate. Also positively impacting noninterest income was a $68.5 million, or 63.1%, increase in investment banking income due to improvements in the performance of the Company’s capital markets business and the addition of the institutional business of Robinson Humphrey during the third quarter of 2001. Additionally, the Company benefited from increases of $28.9 million, or 26.8%, in retail investment services and $18.4 million, or 3.8%, in trust and investment management income. Combined mortgage production and servicing income decreased $93.9 million from 2001 to 2002 due to accelerated amortization of mortgage servicing rights resulting from increased prepayments in the low rate environment.
 
Noninterest expense was $3,219.4 million in 2002, compared to $2,999.9 million in 2001. Personnel expenses increased $141.1 million, or 8.4%, primarily attributable to increased benefits costs and the acquisitions of Huntington-Florida, the institutional business of The Robinson Humphrey and AMA Holdings, Inc., as well as expenses related to the One Bank initiative. Also negatively impacting personnel expenses were increased incentive payments resulting from the high level of mortgage production in 2002. Other noninterest expense increased $42.2 million, or 25.0%, from 2001 to 2002 primarily due to $25.0 million related to the standardization of the financial performance of the Company’s affordable housing business. Also impacting noninterest expense was an increase in net occupancy expense of $18.8 million, or 8.9%, due to the acquisitions of Huntington-Florida and the institutional business of Robinson Humphrey. Amortization of intangible assets increased $12.6 million, or 27.3%, due to amortization of intangibles related to the Huntington-Florida acquisition. In 2001, the Company recorded $41.7 million of goodwill amortization that is no longer being amortized in conjunction with the provisions of SFAS No. 142.
 
Average earning assets increased $4.3 billion, or 4.7%, from 2001 to 2002. The acquisition of Huntington-Florida contributed $3.2 billion of the growth in average earning assets. Average loans increased $1.2 billion, or 1.8%, from 2001 to 2002. Included in the increase was $2.3 billion in average loans from the acquisition of Huntington-Florida. Average loans held for sale increased $1.5 billion, or 49.5%, from 2001 to 2002 due to an increase in refinancing activity and mortgage originations resulting from the low rate environment.
 
Average interest-bearing liabilities increased $2.7 billion, or 3.5%, from 2001 to 2002. Included in the increase was $3.7 billion in interest-bearing liabilities related to the acquisition of Huntington-Florida. Average consumer and commercial deposits increased $8.7 billion compared to 2001. The acquisition of Huntington-Florida contributed $3.8 billion of the growth in consumer and commercial deposits. The remaining growth was due primarily to an increase of 29.3% in money market accounts resulting from initiatives taken by the Company to grow retail deposits.
 
FOURTH QUARTER RESULTS
 
SunTrust reported $342.5 million, or $1.21 per diluted share, of net income for the fourth quarter of 2003 compared with $340.3 million, or $1.20 per diluted share, for the fourth quarter of 2002.

SunTrust Banks, Inc.	  	44	  	Annual Report 2003	

TABLE 23 QUARTERLY FINANCIAL DATA

 	 	2003
	 	 	2002
	 	
(Dollars in millions except per share data)
	 	4
	 	 	3
	 	 	2
	 	 	1
	 	 	4
	 	 	3
	 	 	2
	 	 	1
	 	
Summary of Operations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest and dividend income	 	$	1,198.9	 	 	$	1,177.7	 	 	$	1,174.0	 	 	$	1,218.1	 	 	$	1,274.9	 	 	$	1,270.7	 	 	$	1,292.0	 	 	$	1,297.6	 	
Interest expense	 	 	333.4	 	 	 	344.9	 	 	 	374.5	 	 	 	395.6	 	 	 	447.8	 	 	 	465.6	 	 	 	478.6	 	 	 	499.5	 	
 	 				 				 				 				 				 				 				 				
Net interest income	 	 	865.5	 	 	 	832.8	 	 	 	799.5	 	 	 	822.5	 	 	 	827.1	 	 	 	805.1	 	 	 	813.4	 	 	 	798.1	 	
Provision for loan losses	 	 	70.3	 	 	 	79.8	 	 	 	82.7	 	 	 	80.8	 	 	 	96.5	 	 	 	98.7	 	 	 	111.0	 	 	 	163.6	 	
 	 				 				 				 				 				 				 				 				
Net interest income after provision for loan losses	 	 	795.2	 	 	 	753.0	 	 	 	716.8	 	 	 	741.7	 	 	 	730.6	 	 	 	706.4	 	 	 	702.4	 	 	 	634.5	 	
Noninterest income	 	 	584.1	 	 	 	574.5	 	 	 	596.8	 	 	 	547.6	 	 	 	527.7	 	 	 	548.9	 	 	 	601.7	 	 	 	590.5	 	
Noninterest expense	 	 	884.8	 	 	 	859.9	 	 	 	837.7	 	 	 	818.2	 	 	 	836.4	 	 	 	776.1	 	 	 	794.0	 	 	 	812.8	 	
 	 				 				 				 				 				 				 				 				
Income before provision for income taxes	 	 	494.5	 	 	 	467.6	 	 	 	475.9	 	 	 	471.1	 	 	 	421.9	 	 	 	479.2	 	 	 	510.1	 	 	 	412.2	 	
Provision for income taxes	 	 	152.0	 	 	 	136.0	 	 	 	145.5	 	 	 	143.3	 	 	 	81.6	 	 	 	136.2	 	 	 	166.4	 	 	 	107.3	 	
 	 				 				 				 				 				 				 				 				
Net income	 	$	342.5	 	 	$	331.6	 	 	$	330.4	 	 	$	327.8	 	 	$	340.3	 	 	$	343.0	 	 	$	343.7	 	 	$	304.9	 	
 	 				 				 				 				 				 				 				 				
Total revenue	 	$	1,461.6	 	 	$	1,418.9	 	 	$	1,407.2	 	 	$	1,380.7	 	 	$	1,365.1	 	 	$	1,364.0	 	 	$	1,424.8	 	 	$	1,398.2	 	
Net interest income – FTE	 	 	877.5	 	 	 	844.4	 	 	 	810.4	 	 	 	833.0	 	 	 	837.3	 	 	 	815.1	 	 	 	823.1	 	 	 	807.7	 	
Per Common Share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted	 	$	1.21	 	 	$	1.18	 	 	$	1.17	 	 	$	1.17	 	 	$	1.20	 	 	$	1.20	 	 	$	1.20	 	 	$	1.06	 	
Basic	 	 	1.23	 	 	 	1.19	 	 	 	1.19	 	 	 	1.18	 	 	 	1.21	 	 	 	1.21	 	 	 	1.22	 	 	 	1.07	 	
Dividends declared	 	 	0.45	 	 	 	0.45	 	 	 	0.45	 	 	 	0.45	 	 	 	0.43	 	 	 	0.43	 	 	 	0.43	 	 	 	0.43	 	
Book value	 	 	34.52	 	 	 	32.83	 	 	 	32.62	 	 	 	31.06	 	 	 	31.04	 	 	 	31.04	 	 	 	31.41	 	 	 	29.97	 	
Market Price:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
High	 	 	71.73	 	 	 	63.00	 	 	 	61.98	 	 	 	59.95	 	 	 	63.25	 	 	 	69.12	 	 	 	70.20	 	 	 	68.47	 	
Low	 	 	60.45	 	 	 	58.00	 	 	 	51.44	 	 	 	51.73	 	 	 	51.48	 	 	 	55.90	 	 	 	65.10	 	 	 	58.32	 	
Close	 	 	71.50	 	 	 	60.37	 	 	 	59.34	 	 	 	52.65	 	 	 	56.92	 	 	 	61.48	 	 	 	67.72	 	 	 	66.73	 	
Selected Average Balances	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total assets	 	$	124,756.1	 	 	$	126,701.8	 	 	$	119,448.0	 	 	$	118,276.2	 	 	$	114,827.5	 	 	$	107,845.9	 	 	$	106,492.0	 	 	$	104,796.1	 	
Earning assets	 	 	112,729.5	 	 	 	112,328.6	 	 	 	106,606.4	 	 	 	105,249.0	 	 	 	101,895.5	 	 	 	95,562.2	 	 	 	94,740.5	 	 	 	93,198.1	 	
Loans	 	 	79,370.1	 	 	 	77,733.2	 	 	 	74,311.5	 	 	 	73,049.8	 	 	 	72,668.8	 	 	 	71,695.6	 	 	 	70,985.1	 	 	 	69,694.6	 	
Consumer and commercial deposits	 	 	70,312.6	 	 	 	70,851.5	 	 	 	69,097.1	 	 	 	67,466.7	 	 	 	67,829.7	 	 	 	66,141.3	 	 	 	65,466.3	 	 	 	62,211.5	 	
Brokered and foreign deposits	 	 	10,769.6	 	 	 	10,521.1	 	 	 	10,707.2	 	 	 	10,379.9	 	 	 	7,329.4	 	 	 	4,956.7	 	 	 	5,179.8	 	 	 	5,432.4	 	
Realized shareholders’ equity	 	 	7,932.4	 	 	 	7,710.4	 	 	 	7,413.7	 	 	 	7,323.1	 	 	 	7,204.8	 	 	 	7,095.9	 	 	 	6,901.5	 	 	 	6,729.8	 	
Total shareholders’ equity	 	 	9,435.8	 	 	 	9,236.8	 	 	 	8,864.1	 	 	 	8,786.6	 	 	 	8,823.3	 	 	 	8,943.3	 	 	 	8,743.1	 	 	 	8,385.9	 	
Common shares–diluted (thousands)	 	 	282,537	 	 	 	281,567	 	 	 	280,287	 	 	 	281,330	 	 	 	283,595	 	 	 	285,991	 	 	 	287,288	 	 	 	287,375	 	
Common shares–basic (thousands)	 	 	278,852	 	 	 	278,296	 	 	 	277,397	 	 	 	278,631	 	 	 	280,364	 	 	 	282,310	 	 	 	283,293	 	 	 	284,055	 	
Financial Ratios (Annualized)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Return on average total assets	 	 	1.09	%	 	 	1.04	%	 	 	1.11	%	 	 	1.12	%	 	 	1.18	%	 	 	1.26	%	 	 	1.29	%	 	 	1.18	%	
Return on average assets less net unrealized gains on securities	 	 	1.11	 	 	 	1.06	 	 	 	1.13	 	 	 	1.15	 	 	 	1.20	 	 	 	1.30	 	 	 	1.33	 	 	 	1.21	 	
Return on average total shareholders’ equity	 	 	14.40	 	 	 	14.24	 	 	 	14.95	 	 	 	15.13	 	 	 	15.30	 	 	 	15.22	 	 	 	15.77	 	 	 	14.74	 	
Return on average realized shareholders’ equity	 	 	17.13	 	 	 	17.06	 	 	 	17.87	 	 	 	18.16	 	 	 	18.74	 	 	 	19.18	 	 	 	19.97	 	 	 	18.37	 	
Net interest margin	 	 	3.09	 	 	 	2.98	 	 	 	3.05	 	 	 	3.21	 	 	 	3.26	 	 	 	3.38	 	 	 	3.48	 	 	 	3.51	 	
Reconcilement of Non-GAAP Measures	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Return on average total assets	 	 	1.09	%	 	 	1.04	%	 	 	1.11	%	 	 	1.12	%	 	 	1.18	%	 	 	1.26	%	 	 	1.29	%	 	 	1.18	%	
Impact of excluding net unrealized securities gains	 	 	0.02	 	 	 	0.02	 	 	 	0.02	 	 	 	0.03	 	 	 	0.02	 	 	 	0.04	 	 	 	0.04	 	 	 	0.03	 	
 	 				 				 				 				 				 				 				 				
Return on average assets less net unrealized gains on securities	 	 	1.11	%	 	 	1.06	%	 	 	1.13	%	 	 	1.15	%	 	 	1.20	%	 	 	1.30	%	 	 	1.33	%	 	 	1.21	%	
 	 				 				 				 				 				 				 				 				
Return on average total shareholders’ equity	 	 	14.40	%	 	 	14.24	%	 	 	14.95	%	 	 	15.13	%	 	 	15.30	%	 	 	15.22	%	 	 	15.77	%	 	 	14.74	%	
Impact of excluding net unrealized securities gains	 	 	2.73	 	 	 	2.82	 	 	 	2.92	 	 	 	3.03	 	 	 	3.44	 	 	 	3.96	 	 	 	4.20	 	 	 	3.63	 	
 	 				 				 				 				 				 				 				 				
Return on average realized shareholders’ equity	 	 	17.13	%	 	 	17.06	%	 	 	17.87	%	 	 	18.16	%	 	 	18.74	%	 	 	19.18	%	 	 	19.97	%	 	 	18.37	%	
 	 				 				 				 				 				 				 				 				
Net interest income	 	$	865.5	 	 	$	832.8	 	 	$	799.5	 	 	$	822.5	 	 	$	827.1	 	 	$	805.1	 	 	$	813.4	 	 	$	798.1	 	
FTE Adjustment	 	 	12.0	 	 	 	11.6	 	 	 	10.9	 	 	 	10.5	 	 	 	10.2	 	 	 	10.0	 	 	 	9.7	 	 	 	9.6	 	
 	 				 				 				 				 				 				 				 				
Net interest income–FTE	 	$	877.5	 	 	$	844.4	 	 	$	810.4	 	 	$	833.0	 	 	$	837.3	 	 	$	815.1	 	 	$	823.1	 	 	$	807.7	 	

					
Annual Report 2003	  	45	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
TABLE 24 CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE AND AVERAGE YIELDS EARNED AND RATES PAID

 	  	Quarters Ended
	 	
 	  	December 31, 2003
	 	 	December 31, 2002
	 	
(Dollars in millions; yields on taxable-equivalent basis)
	  	Average
Balances
	 	 	Income/
Expense
	  	Yields/
Rates
	 	 	Average
Balances
	 	 	Income/
Expense
	  	Yields/
Rates
	 	
Assets	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	
Loans 1	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	
Taxable	  	$	77,551.6	 	 	$	883.7	  	4.52	%	 	$	71,277.2	 	 	$	961.1	  	5.35	%	
Tax-exempt 2	  	 	1,818.5	 	 	 	21.1	  	4.60	 	 	 	1,391.6	 	 	 	18.1	  	5.16	 	
 	  				 			  			 				 			  			
Total loans	  	 	79,370.1	 	 	 	904.8	  	4.52	 	 	 	72,668.8	 	 	 	979.2	  	5.35	 	
Securities available for sale	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	
Taxable	  	 	22,868.1	 	 	 	200.7	  	3.51	 	 	 	18,891.3	 	 	 	193.4	  	4.10	 	
Tax-exempt 2	  	 	363.3	 	 	 	5.7	  	6.32	 	 	 	399.5	 	 	 	6.7	  	6.67	 	
 	  				 			  			 				 			  			
Total securities available for sale	  	 	23,231.4	 	 	 	206.4	  	3.55	 	 	 	19,290.8	 	 	 	200.1	  	4.15	 	
Funds sold and securities purchased under agreements to resell	  	 	1,181.2	 	 	 	3.2	  	1.05	 	 	 	1,488.1	 	 	 	6.0	  	1.58	 	
Loans held for sale	  	 	7,202.3	 	 	 	92.2	  	5.12	 	 	 	6,228.4	 	 	 	92.2	  	5.92	 	
Interest-bearing deposits	  	 	13.0	 	 	 	—  	  	1.28	 	 	 	557.8	 	 	 	2.3	  	1.61	 	
Trading assets	  	 	1,731.5	 	 	 	4.3	  	0.98	 	 	 	1,661.6	 	 	 	5.3	  	1.26	 	
 	  				 			  			 				 			  			
Total earning assets	  	 	112,729.5	 	 	 	1,210.9	  	4.26	 	 	 	101,895.5	 	 	 	1,285.1	  	5.00	 	
Allowance for loan losses	  	 	(954.2	)	 	 	 	  	 	 	 	 	(930.4	)	 	 	 	  	 	 	
Cash and due from banks	  	 	3,492.3	 	 	 	 	  	 	 	 	 	3,558.8	 	 	 	 	  	 	 	
Premises and equipment	  	 	1,591.3	 	 	 	 	  	 	 	 	 	1,617.0	 	 	 	 	  	 	 	
Other assets	  	 	5,533.3	 	 	 	 	  	 	 	 	 	6,133.7	 	 	 	 	  	 	 	
Unrealized gains on securities available for sale	  	 	2,363.9	 	 	 	 	  	 	 	 	 	2,552.9	 	 	 	 	  	 	 	
 	  				 	 	 	  	 	 	 				 	 	 	  	 	 	
Total assets	  	$	124,756.1	 	 	 	 	  	 	 	 	$	114,827.5	 	 	 	 	  	 	 	
 	  				 	 	 	  	 	 	 				 	 	 	  	 	 	
Liabilities and Shareholders’ Equity	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	
Interest-bearing deposits	  	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	  	 	 	
NOW accounts	  	$	12,102.3	 	 	$	11.2	  	0.37	%	 	$	11,012.5	 	 	$	18.6	  	0.67	%	
Money Market accounts	  	 	22,273.8	 	 	 	42.3	  	0.75	 	 	 	21,451.2	 	 	 	75.6	  	1.40	 	
Savings	  	 	6,248.9	 	 	 	9.5	  	0.60	 	 	 	6,230.3	 	 	 	17.7	  	1.13	 	
Consumer time	  	 	7,600.3	 	 	 	41.8	  	2.18	 	 	 	9,161.2	 	 	 	78.2	  	3.39	 	
Other time	  	 	3,501.2	 	 	 	20.7	  	2.35	 	 	 	3,745.2	 	 	 	22.0	  	2.33	 	
 	  				 			  			 				 			  			
Total interest-bearing consumer and commercial deposits	  	 	51,726.5	 	 	 	125.5	  	0.96	 	 	 	51,600.4	 	 	 	212.1	  	1.63	 	
Brokered deposits	  	 	3,754.0	 	 	 	21.9	  	2.28	 	 	 	2,713.3	 	 	 	30.8	  	4.44	 	
Foreign deposits	  	 	7,015.6	 	 	 	17.7	  	0.99	 	 	 	4,616.1	 	 	 	16.4	  	1.39	 	
 	  				 			  			 				 			  			
Total interest-bearing deposits	  	 	62,496.1	 	 	 	165.1	  	1.05	 	 	 	58,929.8	 	 	 	259.3	  	1.75	 	
Funds purchased and securities sold under agreements to repurchase	  	 	10,497.4	 	 	 	20.1	  	0.75	 	 	 	11,984.8	 	 	 	36.6	  	1.19	 	
Other short-term borrowings	  	 	3,750.6	 	 	 	14.8	  	1.56	 	 	 	789.1	 	 	 	2.4	  	1.23	 	
Long-term debt	  	 	14,468.8	 	 	 	133.5	  	3.66	 	 	 	11,733.2	 	 	 	149.5	  	5.06	 	
 	  				 			  			 				 			  			
Total interest-bearing liabilities	  	 	91,212.9	 	 	 	333.4	  	1.45	 	 	 	83,436.9	 	 	 	447.8	  	2.13	 	
Noninterest-bearing deposits	  	 	18,586.1	 	 	 	 	  	 	 	 	 	16,229.3	 	 	 	 	  	 	 	
Other liabilities	  	 	5,521.3	 	 	 	 	  	 	 	 	 	6,338.0	 	 	 	 	  	 	 	
Realized shareholders’ equity	  	 	7,932.4	 	 	 	 	  	 	 	 	 	7,204.8	 	 	 	 	  	 	 	
Accumulated other comprehensive income	  	 	1,503.4	 	 	 	 	  	 	 	 	 	1,618.5	 	 	 	 	  	 	 	
 	  				 	 	 	  	 	 	 				 	 	 	  	 	 	
Total liabilities and shareholders’ equity	  	$	124,756.1	 	 	 	 	  	 	 	 	$	114,827.5	 	 	 	 	  	 	 	
 	  				 	 	 	  	 	 	 				 	 	 	  	 	 	
Interest Rate Spread	  	 	 	 	 	 	 	  	2.81	%	 	 	 	 	 	 	 	  	2.87	%	
 	  	 	 	 	 	 	 	  			 	 	 	 	 	 	 	  			
Net Interest Income 3 	  	 	 	 	 	$	877.5	  	 	 	 	 	 	 	 	$	837.3	  	 	 	
 	  	 	 	 	 			  	 	 	 	 	 	 	 			  	 	 	
Net Interest Margin	  	 	 	 	 	 	 	  	3.09	%	 	 	 	 	 	 	 	  	3.26	%	

1	Interest income includes loan fees of $33.0 million and $32.1 million in the quarters ended December 31, 2003 and 2002, 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 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 $12.0 million and $10.2 million in the quarters ended December 31, 2003 and 2002, respectively.	
 
3	Derivative instruments used to help balance the Company’s interest-sensitivity position increased net interest income $29.0 million in the fourth quarter of 2003 and decreased net interest income $5.9 million in the fourth quarter of 2002.	

SunTrust Banks, Inc.	  	46	  	Annual Report 2003	

TABLE 25 QUARTERLY NONINTEREST INCOME AND EXPENSE

 	  	Quarters
	 	
 	  	2003
	 	 	2002
	 	
(Dollars in millions)
	  	4
	 	 	3
	 	 	2
	 	 	1
	 	 	4
	 	 	3
	 	 	2
	 	 	1
	 	
Noninterest Income	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Service charges on deposit accounts	  	$	165.3	 	 	$	162.0	 	 	$	158.0	 	 	$	157.8	 	 	$	156.2	 	 	$	157.0	 	 	$	153.8	 	 	$	146.0	 	
Trust and investment management income	  	 	129.6	 	 	 	127.8	 	 	 	124.2	 	 	 	120.8	 	 	 	119.4	 	 	 	123.9	 	 	 	132.2	 	 	 	129.1	 	
Retail investment services	  	 	43.6	 	 	 	38.7	 	 	 	42.0	 	 	 	37.5	 	 	 	33.0	 	 	 	35.1	 	 	 	37.3	 	 	 	31.3	 	
Other charges and fees	  	 	79.4	 	 	 	86.1	 	 	 	82.6	 	 	 	78.3	 	 	 	74.3	 	 	 	76.6	 	 	 	75.6	 	 	 	70.4	 	
Investment banking income	  	 	53.8	 	 	 	47.7	 	 	 	57.2	 	 	 	33.8	 	 	 	39.5	 	 	 	39.8	 	 	 	52.8	 	 	 	44.8	 	
Trading account profits and commissions	  	 	22.7	 	 	 	26.8	 	 	 	29.6	 	 	 	30.8	 	 	 	29.7	 	 	 	23.6	 	 	 	24.2	 	 	 	25.7	 	
Mortgage production	  	 	(3.0	)	 	 	32.2	 	 	 	82.1	 	 	 	38.8	 	 	 	61.3	 	 	 	22.3	 	 	 	3.0	 	 	 	5.8	 	
Mortgage servicing	  	 	2.3	 	 	 	(52.7	)	 	 	(80.1	)	 	 	(47.0	)	 	 	(68.1	)	 	 	(36.5	)	 	 	0.8	 	 	 	(6.3	)	
Securities gains	  	 	19.5	 	 	 	31.1	 	 	 	31.2	 	 	 	42.0	 	 	 	39.5	 	 	 	45.8	 	 	 	55.7	 	 	 	63.5	 	
Credit card and other fees	  	 	28.9	 	 	 	29.6	 	 	 	32.4	 	 	 	28.6	 	 	 	29.9	 	 	 	27.4	 	 	 	31.4	 	 	 	31.2	 	
Other income	  	 	42.0	 	 	 	45.2	 	 	 	37.6	 	 	 	26.2	 	 	 	13.0	 	 	 	33.9	 	 	 	34.9	 	 	 	49.0	 	
 	  				 				 				 				 				 				 				 				
Total noninterest income	  	$	584.1	 	 	$	574.5	 	 	$	596.8	 	 	$	547.6	 	 	$	527.7	 	 	$	548.9	 	 	$	601.7	 	 	$	590.5	 	
 	  				 				 				 				 				 				 				 				
Noninterest Expense	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Employee compensation	  	$	432.9	 	 	$	391.7	 	 	$	386.4	 	 	$	375.0	 	 	$	385.2	 	 	$	363.2	 	 	$	394.3	 	 	$	369.5	 	
Employee benefits	  	 	83.3	 	 	 	80.4	 	 	 	96.2	 	 	 	98.7	 	 	 	71.0	 	 	 	72.2	 	 	 	72.5	 	 	 	90.8	 	
 	  				 				 				 				 				 				 				 				
Total personnel expense	  	 	516.2	 	 	 	472.1	 	 	 	482.6	 	 	 	473.7	 	 	 	456.2	 	 	 	435.4	 	 	 	466.8	 	 	 	460.3	 	
Net occupancy expense	  	 	60.5	 	 	 	60.5	 	 	 	58.6	 	 	 	57.7	 	 	 	61.7	 	 	 	57.6	 	 	 	55.9	 	 	 	54.0	 	
Outside processing and software	  	 	63.2	 	 	 	65.4	 	 	 	61.0	 	 	 	57.1	 	 	 	57.0	 	 	 	59.9	 	 	 	54.0	 	 	 	54.3	 	
Equipment expense	  	 	45.5	 	 	 	44.9	 	 	 	44.5	 	 	 	43.5	 	 	 	45.1	 	 	 	42.8	 	 	 	43.2	 	 	 	43.7	 	
Marketing and customer development	  	 	24.8	 	 	 	25.0	 	 	 	25.6	 	 	 	24.9	 	 	 	20.8	 	 	 	15.7	 	 	 	18.2	 	 	 	25.2	 	
Credit and collection services	  	 	15.8	 	 	 	19.3	 	 	 	19.2	 	 	 	16.1	 	 	 	15.9	 	 	 	14.2	 	 	 	16.2	 	 	 	18.3	 	
Postage and delivery	  	 	17.0	 	 	 	17.4	 	 	 	17.1	 	 	 	17.5	 	 	 	18.3	 	 	 	17.0	 	 	 	17.5	 	 	 	16.6	 	
Amortization of intangible assets	  	 	16.4	 	 	 	16.2	 	 	 	15.2	 	 	 	16.7	 	 	 	17.5	 	 	 	17.5	 	 	 	17.5	 	 	 	6.5	 	
Communications	  	 	14.8	 	 	 	16.1	 	 	 	15.4	 	 	 	14.9	 	 	 	14.1	 	 	 	16.6	 	 	 	17.5	 	 	 	16.7	 	
Other staff expense	  	 	18.9	 	 	 	15.0	 	 	 	15.8	 	 	 	10.6	 	 	 	13.8	 	 	 	12.2	 	 	 	12.1	 	 	 	13.9	 	
Consulting and legal	  	 	15.9	 	 	 	14.2	 	 	 	14.6	 	 	 	12.7	 	 	 	25.0	 	 	 	21.6	 	 	 	21.8	 	 	 	22.6	 	
Operating supplies	  	 	10.9	 	 	 	10.8	 	 	 	8.5	 	 	 	9.7	 	 	 	11.2	 	 	 	10.3	 	 	 	12.9	 	 	 	12.4	 	
FDIC premiums	  	 	4.4	 	 	 	4.7	 	 	 	4.8	 	 	 	4.1	 	 	 	4.2	 	 	 	4.4	 	 	 	4.6	 	 	 	4.1	 	
Merger-related expense	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	16.0	 	
Other real estate expense (income)	  	 	(0.9	)	 	 	(0.3	)	 	 	(0.8	)	 	 	—  	 	 	 	0.3	 	 	 	(0.1	)	 	 	(0.4	)	 	 	—  	 	
Other expense	  	 	61.4	 	 	 	78.6	 	 	 	55.6	 	 	 	59.0	 	 	 	75.3	 	 	 	51.0	 	 	 	36.2	 	 	 	48.2	 	
 	  				 				 				 				 				 				 				 				
Total noninterest expense	  	$	884.8	 	 	$	859.9	 	 	$	837.7	 	 	$	818.2	 	 	$	836.4	 	 	$	776.1	 	 	$	794.0	 	 	$	812.8	 	

Fully-taxable net interest income increased $40.2 million, or 4.8%, and the net interest margin declined 17 basis points from the fourth quarter of 2002 to the fourth quarter of 2003. The increase in net interest income was attributed to higher balance sheet volumes, which more than offset the adverse impact of the lower rate environment. Total average earning assets increased $10.8 billion, or 10.6%, from the fourth quarter of 2002 to the fourth quarter of 2003. The consolidation of Three Pillars in accordance with FIN 46, contributed $2.7 billion of the increase in total average earning assets. The consolidation of Three Pillars also contributed 6 basis points to the decline in the net interest margin and the consolidation of certain of the Company’s affordable housing partnerships contributed 1 basis point to the decline in net interest margin.
 
The provision for loan losses for the fourth quarter of 2003 was $70.3 million, a decrease of $26.2 million, or 27.2%, from the fourth quarter of 2002. Net charge-offs declined $25.9 million, or 27.1%, from the fourth quarter of 2002 to the fourth quarter of 2003. The decline in net charges charge-offs was primarily attributable to a decrease in commercial net charge-offs of $21.7 million, or 51.8%.
 
Noninterest income was $584.1 million in the fourth quarter of 2003, an increase of $56.3 million, or 10.7%, compared to the fourth quarter of 2002. Positively impacting noninterest income were increases in retail investment services, trust and

Annual Report 2003	  	47	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
TABLE 26 SUMMARY OF LOAN LOSS EXPERIENCE, NONPERFORMING ASSETS AND ACCRUING LOANS PAST DUE 90 DAYS OR MORE

 	  	Quarters
	 	
 	  	2003
	 	 	2002
	 	
(Dollars in millions)
	  	4
	 	 	3
	 	 	2
	 	 	1
	 	 	4
	 	 	3
	 	 	2
	 	 	1
	 	
Allowance for Loan Losses	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance – beginning of quarter	  	$	941.4	 	 	$	940.9	 	 	$	931.1	 	 	$	930.1	 	 	$	929.3	 	 	$	928.9	 	 	$	927.6	 	 	$	867.1	 	
Allowance from acquisitions, dispositions and other activity – net	  	 	—  	 	 	 	—  	 	 	 	9.3	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	15.5	 	
Provision for loan losses	  	 	70.3	 	 	 	79.8	 	 	 	82.7	 	 	 	80.8	 	 	 	96.5	 	 	 	98.7	 	 	 	111.0	 	 	 	163.6	 	
Charge-offs	  	 	(90.6	)	 	 	(103.6	)	 	 	(100.3	)	 	 	(99.9	)	 	 	(115.2	)	 	 	(114.5	)	 	 	(124.3	)	 	 	(136.1	)	
Recoveries	  	 	20.8	 	 	 	24.3	 	 	 	18.1	 	 	 	20.1	 	 	 	19.5	 	 	 	16.2	 	 	 	14.6	 	 	 	17.5	 	
 	  				 				 				 				 				 				 				 				
Balance – end of quarter	  	$	941.9	 	 	$	941.4	 	 	$	940.9	 	 	$	931.1	 	 	$	930.1	 	 	$	929.3	 	 	$	928.9	 	 	$	927.6	 	
 	  				 				 				 				 				 				 				 				
Ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Allowance to quarter-end loans	  	 	1.17	%	 	 	1.19	%	 	 	1.25	%	 	 	1.26	%	 	 	1.27	%	 	 	1.28	%	 	 	1.29	%	 	 	1.31	%	
Allowance to nonperforming loans	  	 	268.1	 	 	 	217.6	 	 	 	194.8	 	 	 	179.0	 	 	 	182.0	 	 	 	167.8	 	 	 	194.0	 	 	 	173.6	 	
Net charge-offs to average loans (annualized)	  	 	0.35	 	 	 	0.40	 	 	 	0.44	 	 	 	0.44	 	 	 	0.52	 	 	 	0.54	 	 	 	0.62	 	 	 	0.69	 	
Provision to average loans (annualized)	  	 	0.35	 	 	 	0.41	 	 	 	0.45	 	 	 	0.45	 	 	 	0.53	 	 	 	0.55	 	 	 	0.63	 	 	 	0.95	 	
Recoveries to total charge-offs	  	 	23.0	 	 	 	23.5	 	 	 	18.0	 	 	 	20.1	 	 	 	16.9	 	 	 	14.2	 	 	 	11.7	 	 	 	12.9	 	
Nonperforming Assets	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonaccrual loans	  	$	336.5	 	 	$	423.3	 	 	$	480.6	 	 	$	520.1	 	 	$	511.0	 	 	$	553.8	 	 	$	479.0	 	 	$	534.2	 	
Restructured loans	  	 	14.8	 	 	 	9.2	 	 	 	2.5	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
 	  				 				 				 				 				 				 				 				
Total nonperforming loans	  	 	351.3	 	 	 	432.5	 	 	 	483.1	 	 	 	520.1	 	 	 	511.0	 	 	 	553.8	 	 	 	479.0	 	 	 	534.2	 	
Other real estate owned	  	 	16.5	 	 	 	19.6	 	 	 	20.9	 	 	 	18.0	 	 	 	18.0	 	 	 	15.0	 	 	 	18.2	 	 	 	18.5	 	
Other repossessed assets	  	 	10.3	 	 	 	11.7	 	 	 	11.4	 	 	 	10.3	 	 	 	13.0	 	 	 	25.9	 	 	 	21.3	 	 	 	23.6	 	
 	  				 				 				 				 				 				 				 				
Total nonperforming assets	  	$	378.1	 	 	$	463.8	 	 	$	515.4	 	 	$	548.4	 	 	$	542.0	 	 	$	594.7	 	 	$	518.5	 	 	$	576.3	 	
 	  				 				 				 				 				 				 				 				
Ratios	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonperforming loans to total loans	  	 	0.44	%	 	 	0.55	%	 	 	0.64	%	 	 	0.70	%	 	 	0.70	%	 	 	0.76	%	 	 	0.67	%	 	 	0.75	%	
Nonperforming assets to total loans plus OREO and other repossessed assets	  	 	0.47	 	 	 	0.59	 	 	 	0.68	 	 	 	0.74	 	 	 	0.74	 	 	 	0.82	 	 	 	0.72	 	 	 	0.81	 	
Accruing Loans Past Due 90 Days or More	  	$	196.4	 	 	$	228.2	 	 	$	157.1	 	 	$	165.3	 	 	$	177.9	 	 	$	185.8	 	 	$	175.8	 	 	$	175.5	 	

TABLE 27 QUARTERLY LINE OF BUSINESS RESULTS

 	  	Retail
	
 	  	2003
	  	2002
	
(Dollars in millions)
	  	4
	  	3
	  	2
	  	1
	  	4
	  	3
	  	2
	  	1
	
Average total assets	  	$	26,549.6	  	$	25,990.3	  	$	25,276.6	  	$	24,892.9	  	$	24,530.4	  	$	23,745.5	  	$	23,331.4	  	$	21,526.0	
Average total liabilities	  	 	53,504.8	  	 	53,303.4	  	 	52,892.6	  	 	52,208.7	  	 	52,522.0	  	 	52,118.4	  	 	52,321.3	  	 	49,546.2	
Average total equity	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	
 	  			  			  			  			  			  			  			  			
Net interest income (FTE)	  	 	359.4	  	 	348.1	  	 	311.9	  	 	314.9	  	 	331.8	  	 	333.8	  	 	359.2	  	 	335.6	
Provision for loan losses	  	 	39.1	  	 	38.9	  	 	37.9	  	 	36.7	  	 	27.5	  	 	26.5	  	 	25.2	  	 	23.5	
 	  			  			  			  			  			  			  			  			
Net interest income after provision for loan losses	  	 	320.3	  	 	309.2	  	 	274.0	  	 	278.2	  	 	304.3	  	 	307.3	  	 	334.0	  	 	312.1	
Noninterest income	  	 	189.7	  	 	186.9	  	 	183.4	  	 	178.4	  	 	177.5	  	 	182.4	  	 	181.8	  	 	166.6	
Noninterest expense	  	 	322.7	  	 	321.5	  	 	318.0	  	 	315.8	  	 	288.1	  	 	308.0	  	 	324.0	  	 	327.1	
 	  			  			  			  			  			  			  			  			
Total contribution before taxes	  	 	187.3	  	 	174.6	  	 	139.4	  	 	140.8	  	 	193.7	  	 	181.7	  	 	191.8	  	 	151.6	
Provision for income taxes	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	
 	  			  			  			  			  			  			  			  			
Net income	  	$	187.3	  	$	174.6	  	$	139.4	  	$	140.8	  	$	193.7	  	$	181.7	  	$	191.8	  	$	151.6	

					
SunTrust Banks, Inc.	  	48	  	Annual Report 2003	

																									
 	  	Commercial
	
 	  	2003
	  	2002
	
(Dollars in millions)
	  	4
	  	3
	  	2
	  	1
	  	4
	  	3
	  	2
	  	1
	
Average total assets	  	$	23,847.4	  	$	23,757.2	  	$	23,425.0	  	$	22,535.1	  	$	22,058.2	  	$	21,412.2	  	$	21,305.5	  	$	20,262.1	
Average total liabilities	  	 	11,620.6	  	 	11,070.5	  	 	10,401.9	  	 	10,199.8	  	 	9,823.2	  	 	9,053.0	  	 	8,469.9	  	 	8,153.8	
Average total equity	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	
 	  			  			  			  			  			  			  			  			
Net interest income (FTE)	  	 	153.9	  	 	151.1	  	 	141.1	  	 	139.4	  	 	138.6	  	 	134.1	  	 	133.0	  	 	127.9	
Provision for loan losses	  	 	6.6	  	 	12.3	  	 	11.6	  	 	11.3	  	 	11.2	  	 	7.2	  	 	10.3	  	 	9.8	
 	  			  			  			  			  			  			  			  			
Net interest income after provision for loan losses	  	 	147.3	  	 	138.8	  	 	129.5	  	 	128.1	  	 	127.4	  	 	126.9	  	 	122.7	  	 	118.1	
Noninterest income	  	 	83.9	  	 	87.6	  	 	66.5	  	 	68.7	  	 	58.3	  	 	52.9	  	 	55.9	  	 	61.1	
Noninterest expense	  	 	94.8	  	 	103.9	  	 	80.7	  	 	79.2	  	 	97.6	  	 	73.5	  	 	78.4	  	 	89.5	
 	  			  			  			  			  			  			  			  			
Total contribution before taxes	  	 	136.4	  	 	122.5	  	 	115.3	  	 	117.6	  	 	88.1	  	 	106.3	  	 	100.2	  	 	89.7	
Provision for income taxes	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	
 	  			  			  			  			  			  			  			  			
Net income	  	$	136.4	  	$	122.5	  	$	115.3	  	$	117.6	  	$	88.1	  	$	106.3	  	$	100.2	  	$	89.7	

																										
 	  	Corporate & Investment Banking
	
 	  	2003
	  	2002
	
(Dollars in millions)
	  	4
	  	3
	  	2
	  	1
	  	4
	  	3
	  	2
	 	 	1
	
Average total assets	  	$	21,469.9	  	$	24,349.5	  	$	21,444.5	  	$	22,268.6	  	$	22,376.7	  	$	21,376.8	  	$	20,974.3	 	 	$	22,017.4	
Average total liabilities	  	 	9,340.0	  	 	11,642.1	  	 	7,560.1	  	 	7,738.4	  	 	7,394.6	  	 	6,261.0	  	 	5,775.1	 	 	 	6,000.2	
Average total equity	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	 	 	 	—  	
 	  			  			  			  			  			  			  				 			
Net interest income (FTE)	  	 	76.1	  	 	72.9	  	 	68.9	  	 	62.1	  	 	63.4	  	 	63.0	  	 	65.8	 	 	 	76.3	
Provision for loan losses	  	 	16.9	  	 	28.0	  	 	31.3	  	 	31.0	  	 	50.8	  	 	41.7	  	 	79.4	 	 	 	55.2	
 	  			  			  			  			  			  			  				 			
Net interest income after provision for loan losses	  	 	59.2	  	 	44.9	  	 	37.6	  	 	31.1	  	 	12.6	  	 	21.3	  	 	(13.6	)	 	 	21.1	
Noninterest income	  	 	137.3	  	 	133.3	  	 	153.7	  	 	123.2	  	 	133.3	  	 	126.3	  	 	140.1	 	 	 	127.0	
Noninterest expense	  	 	95.5	  	 	94.3	  	 	90.7	  	 	88.0	  	 	80.5	  	 	83.9	  	 	93.4	 	 	 	107.8	
 	  			  			  			  			  			  			  				 			
Total contribution before taxes	  	 	101.0	  	 	83.9	  	 	100.6	  	 	66.3	  	 	65.4	  	 	63.7	  	 	33.1	 	 	 	40.3	
Provision for income taxes	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	 	 	 	—  	
 	  			  			  			  			  			  			  				 			
Net income	  	$	101.0	  	$	83.9	  	$	100.6	  	$	66.3	  	$	65.4	  	$	63.7	  	$	33.1	 	 	$	40.3	

																											
 	  	Mortgage
	
 	  	2003
	  	2002
	
(Dollars in millions)
	  	4
	  	3
	 	 	2
	  	1
	  	4
	  	3
	 	 	2
	  	1
	
Average total assets	  	$	22,597.0	  	$	24,933.8	 	 	$	21,549.3	  	$	20,850.7	  	$	20,030.8	  	$	18,005.1	 	 	$	17,846.1	  	$	18,813.6	
Average total liabilities	  	 	1,458.4	  	 	2,392.1	 	 	 	1,900.5	  	 	1,446.0	  	 	1,562.3	  	 	1,166.5	 	 	 	1,151.9	  	 	1,177.2	
Average total equity	  	 	—  	  	 	—  	 	 	 	—  	  	 	—  	  	 	—  	  	 	—  	 	 	 	—  	  	 	—  	
 	  			  				 			  			  			  				 			  			
Net interest income (FTE)	  	 	129.7	  	 	161.1	 	 	 	128.7	  	 	126.4	  	 	112.1	  	 	82.3	 	 	 	87.8	  	 	92.4	
Provision for loan losses	  	 	1.9	  	 	1.8	 	 	 	1.6	  	 	1.5	  	 	1.5	  	 	1.6	 	 	 	1.6	  	 	1.7	
 	  			  				 			  			  			  				 			  			
Net interest income after provision for loan losses	  	 	127.8	  	 	159.3	 	 	 	127.1	  	 	124.9	  	 	110.6	  	 	80.7	 	 	 	86.2	  	 	90.7	
Noninterest income	  	 	8.6	  	 	(10.4	)	 	 	14.1	  	 	2.4	  	 	5.1	  	 	(7.8	)	 	 	11.2	  	 	4.9	
Noninterest expense	  	 	82.5	  	 	82.7	 	 	 	73.6	  	 	68.7	  	 	64.0	  	 	44.9	 	 	 	53.5	  	 	61.5	
 	  			  				 			  			  			  				 			  			
Total contribution before taxes	  	 	53.9	  	 	66.2	 	 	 	67.6	  	 	58.6	  	 	51.7	  	 	28.0	 	 	 	43.9	  	 	34.1	
Provision for income taxes	  	 	—  	  	 	—  	 	 	 	—  	  	 	—  	  	 	—  	  	 	—  	 	 	 	—  	  	 	—  	
 	  			  				 			  			  			  				 			  			
Net income	  	$	53.9	  	$	66.2	 	 	$	67.6	  	$	58.6	  	$	51.7	  	$	28.0	 	 	$	43.9	  	$	34.1	

					
Annual Report 2003	  	49	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued

 	  	Private Client Services
	 	
 	  	2003
	 	 	2002
	 	
(Dollars in millions)
	  	4
	 	 	3
	 	 	2
	 	 	1
	 	 	4
	 	 	3
	 	 	2
	 	 	1
	 	
Average total assets	  	$	2,362.2	 	 	$	2,296.7	 	 	$	2,137.7	 	 	$	1,930.5	 	 	$	1,873.1	 	 	$	1,731.0	 	 	$	1,727.8	 	 	$	1,720.2	 	
Average total liabilities	  	 	1,563.9	 	 	 	1,568.7	 	 	 	1,535.2	 	 	 	1,451.3	 	 	 	1,587.2	 	 	 	1,532.1	 	 	 	1,583.4	 	 	 	1,543.9	 	
Average total equity	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
 	  				 				 				 				 				 				 				 				
Net interest income (FTE)	  	 	12.4	 	 	 	11.8	 	 	 	9.8	 	 	 	9.7	 	 	 	10.0	 	 	 	9.9	 	 	 	10.2	 	 	 	10.1	 	
Provision for loan losses	  	 	0.5	 	 	 	0.6	 	 	 	0.5	 	 	 	0.4	 	 	 	0.6	 	 	 	0.5	 	 	 	0.6	 	 	 	0.6	 	
 	  				 				 				 				 				 				 				 				
Net interest income after provision for loan losses	  	 	11.9	 	 	 	11.2	 	 	 	9.3	 	 	 	9.3	 	 	 	9.4	 	 	 	9.4	 	 	 	9.6	 	 	 	9.5	 	
Noninterest income	  	 	172.5	 	 	 	165.4	 	 	 	165.1	 	 	 	157.1	 	 	 	149.4	 	 	 	155.9	 	 	 	167.1	 	 	 	157.1	 	
Noninterest expense	  	 	131.0	 	 	 	134.9	 	 	 	125.7	 	 	 	122.3	 	 	 	117.7	 	 	 	115.7	 	 	 	119.2	 	 	 	120.2	 	
 	  				 				 				 				 				 				 				 				
Total contribution before taxes	  	 	53.4	 	 	 	41.7	 	 	 	48.7	 	 	 	44.1	 	 	 	41.1	 	 	 	49.6	 	 	 	57.5	 	 	 	46.4	 	
Provision for income taxes	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
 	  				 				 				 				 				 				 				 				
Net income	  	$	53.4	 	 	$	41.7	 	 	$	48.7	 	 	$	44.1	 	 	$	41.1	 	 	$	49.6	 	 	$	57.5	 	 	$	46.4	 	

 	  	Corporate/Other
	 	
 	  	2003
	 	 	2002
	 	
(Dollars in millions)
	  	4
	 	 	3
	 	 	2
	 	 	1
	 	 	4
	 	 	3
	 	 	2
	 	 	1
	 	
Average total assets	  	$	27,929.9	 	 	$	25,374.3	 	 	$	25,614.9	 	 	$	25,798.4	 	 	$	23,958.5	 	 	$	21,575.3	 	 	$	21,306.9	 	 	$	20,456.8	 	
Average total liabilities	  	 	37,832.6	 	 	 	37,488.2	 	 	 	36,293.8	 	 	 	36,445.5	 	 	 	33,114.9	 	 	 	28,771.6	 	 	 	28,447.2	 	 	 	29,988.9	 	
Average total equity	  	 	9,435.8	 	 	 	9,236.8	 	 	 	8,864.1	 	 	 	8,786.6	 	 	 	8,823.3	 	 	 	8,943.3	 	 	 	8,743.2	 	 	 	8,385.9	 	
 	  				 				 				 				 				 				 				 				
Net interest income (FTE)	  	 	146.0	 	 	 	99.4	 	 	 	150.0	 	 	 	180.6	 	 	 	181.5	 	 	 	192.0	 	 	 	167.2	 	 	 	165.4	 	
Provision for loan losses	  	 	5.2	 	 	 	(1.7	)	 	 	(0.4	)	 	 	(0.1	)	 	 	4.8	 	 	 	21.2	 	 	 	(6.0	)	 	 	72.7	 	
 	  				 				 				 				 				 				 				 				
Net interest income after provision for loan losses	  	 	140.8	 	 	 	101.1	 	 	 	150.4	 	 	 	180.7	 	 	 	176.7	 	 	 	170.8	 	 	 	173.2	 	 	 	92.7	 	
Noninterest income	  	 	(7.9	)	 	 	11.7	 	 	 	14.0	 	 	 	17.9	 	 	 	4.2	 	 	 	39.1	 	 	 	45.5	 	 	 	73.8	 	
Noninterest expense	  	 	158.4	 	 	 	122.6	 	 	 	149.0	 	 	 	144.4	 	 	 	188.5	 	 	 	150.3	 	 	 	125.5	 	 	 	106.6	 	
 	  				 				 				 				 				 				 				 				
Total contribution before taxes	  	 	(25.5	)	 	 	(9.8	)	 	 	15.4	 	 	 	54.2	 	 	 	(7.6	)	 	 	59.6	 	 	 	93.2	 	 	 	59.9	 	
Provision for income taxes	  	 	164.0	 	 	 	147.6	 	 	 	156.5	 	 	 	153.8	 	 	 	91.9	 	 	 	146.2	 	 	 	176.1	 	 	 	116.8	 	
 	  				 				 				 				 				 				 				 				
Net loss	  	$	(189.5	)	 	$	(157.4	)	 	$	(141.1	)	 	$	(99.6	)	 	$	(99.5	)	 	$	(86.6	)	 	$	(82.9	)	 	$	(56.9	)	

investment management income, and service charges on deposits. Retail investment services income increased $10.7 million, or 32.4%, quarter over quarter, primarily due to an increase in broker production, the number of brokers, and increased revenue generated from Alexander Key. Trust and investment management income increased $10.2 million, or 8.5%, from the fourth quarter of 2002 to the fourth quarter of 2003. The increase in trust and investment income was attributed to strong sales momentum and improved customer retention. Service charges on deposit accounts increased $9.1 million, or 5.8%, from the fourth quarter of 2002 to the fourth quarter of 2003 primarily due to increased NSF/stop payment volumes. Additionally, other noninterest income increased $29.1 million, or 225.3%, in the fourth quarter of 2003 compared to the same period of the prior year primarily due to the consolidation of certain of the Company’s affordable housing partnerships.
 
Noninterest expense in the fourth quarter of 2003 was $884.8 million, an increase of $48.4 million, or 5.8%, from the fourth quarter of 2002. Personnel expense grew $60.0 million, or 13.1%, from the fourth quarter of 2002 to the fourth quarter of 2003. The increase in personnel expense was mainly attributable to incentive and commissions payments related to higher business volumes and an $11.5 million increase in performance incentives as the Company met certain financial targets which were not achieved in 2002. Pension expense increased $11.4 million due to a reduced expected rate of return on plan assets and a lower discount rate for measuring pension liabilities. The consolidation of certain affordable housing partnerships resulted in an additional $14.6 million of noninterest expense in the fourth quarter of 2003 compared to last year.
 
Provision for income taxes was $152.0 million for the fourth quarter of 2003 compared to $81.6 million in the same period of 2002. The provision represents an effective tax rate of 30.7% for the fourth quarter of 2003, compared to 19.4% for the fourth quarter of 2002. The fourth quarter 2003 effective tax rate was representative of the Company’s long-term normalized tax rate of 30-31%. The lower fourth quarter 2002 effective tax was primarily due to tax benefits resulting from the Company standardizing the recognition of low income housing tax credits and dividends declared by a real estate investment trust subsidiary.

SunTrust Banks, Inc.	  	50	  	Annual Report 2003	

SUPERVISION AND REGULATION
 
As a bank holding company and a financial holding company, the Company is subject to the regulation and supervision of the Board of Governors of the Federal Reserve System (the Federal Reserve). SunTrust Bank (the Bank) is a Georgia state bank which has branches in Georgia, Florida, Tennessee, Alabama, Virginia, Maryland, South Carolina, and the District of Columbia. The Bank is a member of the Federal Reserve System, and is regulated by the Federal Reserve and the Georgia Department of Banking and Finance.
 
The Bank is subject to various requirements and restrictions under federal and state law, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be made and the interest that may be charged thereon, and limitations on the types of investments that may be made and the types of services that may be offered. Various consumer laws and regulations also affect the operations of the Bank. In addition to the impact of regulation, commercial banks are affected significantly by the actions of the Federal Reserve as it attempts to control the money supply and credit availability in order to influence the economy.
 
Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, bank holding companies from any state may acquire banks located in any other state, subject to certain conditions, including concentration limits. In addition, a bank may establish branches across state lines by merging with a bank in another state, subject to certain restrictions.
 
There are a number of obligations and restrictions imposed on bank holding companies and their depository institution subsidiaries by federal law and regulatory policy that are designed to reduce potential loss exposure to the depositors of such depository institutions and to the FDIC insurance fund in the event the depository institution becomes in danger of default or is in default. For example, under a policy of the Federal Reserve with respect to bank holding company operations, a bank holding company is required to serve as a source of financial strength to its subsidiary depository institutions and commit resources to support such institutions in circumstances where it might not do so absent such policy. In addition, the “cross-guarantee” provisions of federal law require insured depository institutions under common control to reimburse the FDIC for any loss suffered or reasonably anticipated as a result of the default of a commonly controlled insured depository institution or for any assistance provided by the FDIC to a commonly controlled insured depository institution in danger of default.
 
The federal banking agencies have broad powers under current federal law to take prompt corrective action to resolve problems of insured depository institutions. The extent of these powers depends upon whether the institutions in question are “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized” as such terms are defined under regulations issued by each of the federal banking agencies.
 
There are various legal and regulatory limits on the extent to which the Bank may pay dividends or otherwise supply funds to the Company. In addition, federal and state bank regulatory agencies also have the authority to prevent a bank or bank holding company from paying a dividend or engaging in any other activity that, in the opinion of the agency, would constitute an unsafe or unsound practice.
 
FDIC regulations require that management report annually on its responsibility for preparing its institution’s financial statements, and establishing and maintaining an internal control structure and procedures for financial reporting, and compliance with designated laws and regulations concerning safety and soundness.
 
The Company’s nonbanking subsidiaries are regulated and supervised by various regulatory bodies. For example, SunTrust Capital Markets, Inc. is a broker-dealer and investment adviser registered with the Securities and Exchange Commission (SEC) and a member of the New York Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. (NASD). SunTrust Securities, Inc. is also a broker-dealer and investment adviser registered with the SEC and a member of the NASD. Trusco Capital Management, Inc. is an investment adviser registered with the SEC. The Company also has one limited purpose national bank subsidiary, SunTrust BankCard, N.A., which is regulated by the office of the Comptroller of the Currency.
 
On November 12, 1999, financial modernization legislation known as the Gramm-Leach-Bliley Act (the Act) was signed into law. Under the Act, a bank holding company which elects to become a financial holding company may engage in expanded securities activities, insurance sales and underwriting activities, and other financial activities, and may also acquire securities firms and insurance companies, subject in each case to certain conditions. The Company has elected to become a financial holding company under the Act.
 
In addition to the Act, there have been a number of legislative and regulatory proposals that would have an impact on the operation of bank/financial holding companies and their bank and nonbank subsidiaries. It is impossible to predict whether or in what form these proposals may be adopted in the future and, if adopted, what their effect will be on the Company.
 
A WARNING ABOUT FORWARD-LOOKING INFORMATION
 
This Annual Report contains forward-looking statements. The Company may also make written forward-looking statements in periodic reports to the Securities and Exchange Commission, proxy statements, offering circulars and prospectuses, press releases and other written materials and oral statements made by SunTrust’s officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. These statements are based on beliefs and assumptions of SunTrust’s management, and on information currently available to such management. The forward-looking statements are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933 and

Annual Report 2003	  	51	  	SunTrust Banks, Inc.	

MANAGEMENT’S DISCUSSION continued
 
Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements preceded by, followed by or that include the words “believes,” “expects,” “anticipates,” “plans,” “estimates” or similar expressions or future conditional verbs such as “will,” “should,” “would” and “could.” Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events.
 
Forward-looking statements involve inherent risks and uncertainties. Management cautions the readers that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following:
 
 	•	competitive pressures among local, regional and international banks, thrifts, credit unions and other nonbank financial institutions may increase significantly;	
 
 	•	changes in the interest rate environment may reduce margins and impact funding sources;	
 
 	•	general economic or business conditions in the geographic regions and industries in which SunTrust operates as well as the risk of domestic or international military or terrorist activities or conflicts, may lead to a deterioration in credit quality or a reduced demand for credit;	
 
 	•	legislative or regulatory changes, including changes in accounting standards, may adversely affect the business in which SunTrust is engaged;	
 
 	•	various monetary and fiscal policies and regulations, including those determined by the Federal Reserve Board, the Federal Deposit Insurance Corporation and state regulators;	
 
 	•	changes may occur in the securities markets; and	
 
 	•	competitors of SunTrust may have greater financial resources and develop products that enable such competitors to compete more successfully than SunTrust. Other factors that may cause actual results to differ from the forward-looking statements include the following:	
 
 	•	the timely development of competitive new products and services by the Company and the acceptance of such products and services by customers;	
 
 	•	changes in consumer spending and saving habits;	
 
 	•	the effects of competitors’ pricing policies;	
 
 	•	the Company’s success in managing the costs associated with the expansion of existing distribution channels and developing new ones, and in realizing increased revenues from such distribution channels, including cross-selling initiatives and electronic commerce-based efforts; and	
 
 	•	the effect of corporate restructurings, mergers, acquisitions and/or dispositions and their integration into the Company, the actual restructuring and other charges related thereto and management’s ability to manage these and other risks, including achieving the expected revenue growth and/or expense savings from such corporate restructurings, mergers, acquisitions and/or dispositions.	
 
Management of SunTrust believes these forward-looking statements are reasonable; however, undue reliance should not be placed on such forward-looking statements, which are based on current expectations. SunTrust cautions that the foregoing list of important factors is not inclusive.
 
Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. The future results and shareholder values of SunTrust may differ materially from those expressed in the forward-looking statements contained in this annual report. Many of the factors that will determine these results and values are beyond SunTrust’s ability to control or predict.
 
COMMUNITY REINVESTMENT
 
A hallmark of SunTrust’s traditional success and a key element in its future strategy is the Company’s local market orientation. Experience has shown that no one knows the unique needs of each community better than the people who live and work there. Local SunTrust leaders are charged with supporting the overall Company reinvestment initiative by identifying opportunities and achieving lending, investment and service goals to ensure that the Company is doing the right things in the right places.
 
The effectiveness of our approach was underscored in 2003 with an “Outstanding” Community Reinvestment Act (CRA) rating from the Federal Reserve Bank of Atlanta in its latest examination of SunTrust Bank. This is the highest CRA rating that can be achieved, and it reflects the sustained effort the Company has made to continue growing and improving its community investment activities.
 
Overall policy direction and oversight for SunTrust’s community reinvestment efforts is provided by a senior level committee, consisting of line of business heads and geographic group level executives and led by a member of the Company’s Policy Committee.
 
SunTrust’s financial support for building communities through its extensive lending activities, investments and corporate contributions continued to grow in 2003. The opportunity for achieving the American dream of home ownership across all economic levels is necessary for a healthy and growing community. In 2003, the Company made more than 36,000 loans totaling approximately $4.2 billion to provide housing in low- to moderate-income areas. In addition, almost 83,000 loans totaling $8.4 billion were made to families with low- to moderate-income to purchase or rehabilitate their homes. Once again these figures represent continuing growth in the volume of SunTrust’s housing-related lending to low- and moderate-income communities.
 
In addition to housing, businesses of every size play a vital role in the lifeblood of a community. In 2003, SunTrust provided nearly 48,000 small businesses loans for a total of $5.1 billion. Businesses located in low- to moderate-income communities received more than 10,000 of these loans totaling approximately $1.3 billion. More than 36,000 of SunTrust’s small business loans (or 75% of the total) had an original principal

SunTrust Banks, Inc.	  	52	  	Annual Report 2003	

balance of $100,000 or less. Also in 2003, SunTrust made 30,000 loans totaling over $2.1 billion to small businesses with annual revenues of $1 million or less.
 
The Company continued to play a very active role in providing funding for affordable housing projects through membership in the Federal Home Loan Bank as one of the leading lenders in its Affordable Housing Program and Community Investment Program. SunTrust continues to create quality housing for families and seniors of modest means through its SunTrust Community Development Corporation (CDC), which helps them build better lives and preserve and enhance the quality and character of their surrounding communities. Through the SunTrust CDC and our investments in low-income housing tax credits, SunTrust has provided equity financing of $540 million that has created nearly 25,000 units of affordable housing throughout the Southeast.
 
In addition, SunTrust makes bond investments that help finance community development initiatives such as public housing and school construction, and invests in targeted mortgage-backed securities providing affordable single-family and rental housing. The Company makes grants in and equity investments to local and regional groups providing affordable housing or promoting small business development. Through lending, investing and services, SunTrust continues to adhere to the principle “Build your community and you will build your bank.”
 
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 the end of the period covered by this Annual 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.
 
LEGAL PROCEEDINGS
 
The Company and its subsidiaries are parties to numerous claims and lawsuits arising in the course of their normal business activities, some of which involve claims for substantial amounts. Although the ultimate outcome of these suits cannot be ascertained at this time, it is the opinion of management that none of these matters, when resolved, will have a material effect on the Company’s consolidated results of operations or financial position.
 
COMPETITION
 
All aspects of the Company’s business are highly competitive. The Company faces aggressive competition from other domestic and foreign lending institutions and from numerous other providers of financial services. The ability of nonbanking financial institutions to provide services previously reserved for commercial banks has intensified competition. Because nonbanking financial institutions are not subject to the same regulatory restrictions as banks and bank holding companies, they can often operate with greater flexibility and lower cost structures. Securities firms and insurance companies that elect to become financial holding companies may acquire banks and other financial institutions. This may significantly change the competitive environment in which the Company and its subsidiaries conduct business.
 
PROPERTIES
 
The Company’s headquarters are located in Atlanta, Georgia. As of December 31, 2003, SunTrust Bank owned 746 of its 1,183 full-service banking offices, and leased the remaining banking offices. (See Note 8 to the Consolidated Financial Statements.)

Annual Report 2003	  	53	  	SunTrust Banks, Inc.	

MANAGEMENT’S STATEMENT OF RESPONSIBILITY FOR FINANCIAL INFORMATION
 
Financial statements and information in this Annual Report were prepared in conformity with generally accepted accounting principles. Management is responsible for the integrity and objectivity of the financial statements and related information. Accordingly, they maintain an extensive system of internal controls and accounting policies and procedures to provide reasonable assurance of the accountability and safeguarding of Company assets, and of the accuracy of financial information. These procedures include management evaluations of asset quality and the impact of economic events, organizational arrangements that provide an appropriate division of responsibility and a program of internal audits to evaluate independently the adequacy and application of financial and operating controls and compliance with Company policies and procedures.
 
The Company’s independent auditors, PricewaterhouseCoopers LLP, express their opinion as to the fairness of the financial statements presented. Their opinion is based on an audit conducted in accordance with generally accepted auditing standards as described in their report.
 
The Board of Directors, through its Audit Committee, is responsible for ensuring that both management and the independent public accountants fulfill their respective responsibilities with regard to the financial statements. The Audit Committee, composed entirely of directors who are not officers or employees of the Company, meets periodically with both management and the independent public accountants to ensure that each is carrying out its responsibilities. The independent public accountants have full and free access to the Audit Committee and meet with it, with and without management present, to discuss auditing and financial reporting matters.
 
The Company assessed its internal control system as of December 31, 2003, in relation to criteria for effective internal control over consolidated financial reporting described in “Internal Control — Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, the Company believes that, as of December 31, 2003, its system of internal controls over consolidated financial reporting met those criteria.
 
L. Phillip Humann
Chairman of the Board of Directors,
President and Chief Executive Officer
 
John W. Spiegel
Vice Chairman
and Chief Financial Officer
 
Jorge Arrieta
Senior Vice President
and Controller
 
ABBREVIATIONS
 
Within the Consolidated Financial Statements and the notes thereto, the following references will be used:
 
SunTrust Banks, Inc. – Company or SunTrust
SunTrust Bank Holding Company – Bank Parent Company
SunTrust Bank – Bank
 
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 	  	Page
	
Consolidated Statements of Income	  	56	
Consolidated Balance Sheets	  	57	
Consolidated Statements of Shareholders’ Equity	  	58	
Consolidated Statements of Cash Flow	  	59	
Notes to Consolidated Financial Statements	  	60	

SunTrust Banks, Inc.	  	54	  	Annual Report 2003	

REPORT OF INDEPENDENT AUDITORS
 
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF SUNTRUST BANKS, INC.:
 
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, shareholders’ equity and cash flows present fairly, in all material respects, the financial position of SunTrust Banks, Inc. and its subsidiaries at December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
As discussed in Note 1 to the Consolidated Financial Statements, during 2002 the Company changed its method of accounting for goodwill and intangible assets.

 
Atlanta, Georgia
January 12, 2004

Annual Report 2003	  	55	  	SunTrust Banks, Inc.	

CONSOLIDATED STATEMENTS OF INCOME

 	  	Year Ended December 31
	 	
(Dollars in thousands except per share data)
	  	2003
	 	 	2002
	 	 	2001
	 	
Interest Income	  	 	 	 	 	 	 	 	 	 	 	 	
Interest and fees on loans	  	$	3,593,630	 	 	$	3,959,041	 	 	$	4,908,775	 	
Interest and fees on loans held for sale	  	 	448,322	 	 	 	280,353	 	 	 	211,471	 	
Interest and dividends on securities available for sale	  	 	 	 	 	 	 	 	 	 	 	 	
Taxable interest	  	 	609,500	 	 	 	755,664	 	 	 	965,694	 	
Tax-exempt interest	  	 	17,971	 	 	 	21,267	 	 	 	27,669	 	
Dividends 1	  	 	66,671	 	 	 	62,967	 	 	 	68,207	 	
Interest on funds sold and securities purchased under agreements to resell	  	 	15,673	 	 	 	24,475	 	 	 	51,164	 	
Interest on deposits in other banks	  	 	146	 	 	 	7,018	 	 	 	5,743	 	
Other interest	  	 	16,929	 	 	 	24,412	 	 	 	40,851	 	
 	  				 				 				
Total interest income	  	 	4,768,842	 	 	 	5,135,197	 	 	 	6,279,574	 	
 	  				 				 				
Interest Expense	  	 	 	 	 	 	 	 	 	 	 	 	
Interest on deposits	  	 	771,631	 	 	 	1,117,296	 	 	 	1,812,385	 	
Interest on funds purchased and securities sold under agreements to repurchase	  	 	106,174	 	 	 	140,463	 	 	 	412,218	 	
Interest on other short-term borrowings	  	 	33,511	 	 	 	14,062	 	 	 	63,359	 	
Interest on long-term debt	  	 	537,223	 	 	 	619,667	 	 	 	739,012	 	
 	  				 				 				
Total interest expense	  	 	1,448,539	 	 	 	1,891,488	 	 	 	3,026,974	 	
 	  				 				 				
Net Interest Income	  	 	3,320,303	 	 	 	3,243,709	 	 	 	3,252,600	 	
Provision for loan losses	  	 	313,550	 	 	 	469,792	 	 	 	275,165	 	
 	  				 				 				
Net interest income after provision for loan losses	  	 	3,006,753	 	 	 	2,773,917	 	 	 	2,977,435	 	
 	  				 				 				
Noninterest Income	  	 	 	 	 	 	 	 	 	 	 	 	
Fees and other charges	  	 	800,129	 	 	 	730,461	 	 	 	570,168	 	
Service charges on deposit accounts	  	 	643,103	 	 	 	612,918	 	 	 	510,249	 	
Trust and investment management income	  	 	502,409	 	 	 	504,548	 	 	 	486,116	 	
Mortgage production	  	 	150,138	 	 	 	92,318	 	 	 	82,166	 	
Mortgage servicing	  	 	(177,512	)	 	 	(110,088	)	 	 	(6,073	)	
Other noninterest income	  	 	260,858	 	 	 	234,123	 	 	 	256,169	 	
Securities gains	  	 	123,876	 	 	 	204,547	 	 	 	153,080	 	
 	  				 				 				
Total noninterest income	  	 	2,303,001	 	 	 	2,268,827	 	 	 	2,051,875	 	
 	  				 				 				
Noninterest Expense	  	 	 	 	 	 	 	 	 	 	 	 	
Employee compensation	  	 	1,585,919	 	 	 	1,512,117	 	 	 	1,484,483	 	
Employee benefits	  	 	358,644	 	 	 	306,415	 	 	 	192,969	 	
Net occupancy expense	  	 	237,266	 	 	 	229,258	 	 	 	210,436	 	
Equipment expense	  	 	178,443	 	 	 	174,809	 	 	 	189,763	 	
Marketing and customer development	  	 	100,280	 	 	 	79,987	 	 	 	103,998	 	
Merger-related expense	  	 	—  	 	 	 	15,998	 	 	 	—  	 	
Other noninterest expense	  	 	940,064	 	 	 	900,836	 	 	 	818,221	 	
 	  				 				 				
Total noninterest expense	  	 	3,400,616	 	 	 	3,219,420	 	 	 	2,999,870	 	
 	  				 				 				
Income before provision for income taxes	  	 	1,909,138	 	 	 	1,823,324	 	 	 	2,029,440	 	
Provision for income taxes	  	 	576,841	 	 	 	491,515	 	 	 	653,903	 	
 	  				 				 				
Net Income	  	$	1,332,297	 	 	$	1,331,809	 	 	$	1,375,537	 	
 	  				 				 				
Net income per average common share:	  	 	 	 	 	 	 	 	 	 	 	 	
Diluted	  	$	4.73	 	 	$	4.66	 	 	$	4.72	 	
Basic	  	 	4.79	 	 	 	4.71	 	 	 	4.78	 	
 	  				 				 				
Average common shares – diluted (thousands)	  	 	281,434	 	 	 	286,052	 	 	 	291,584	 	
Average common shares – basic (thousands)	  	 	278,295	 	 	 	282,495	 	 	 	287,702	 	
1 Includes dividends on 48,266,496 shares of common stock of The Coca-Cola Company	  	$	42,475	 	 	$	38,613	 	 	$	34,752	 	

See notes to Consolidated Financial Statements.

SunTrust Banks, Inc.	  	56	  	Annual Report 2003	

CONSOLIDATED BALANCE SHEETS

 	  	At December 31
	 	
(Dollars in thousands)
	  	2003
	 	 	2002
	 	
Assets	  	 	 	 	 	 	 	 	
Cash and due from banks	  	$	3,931,653	 	 	$	4,455,776	 	
Interest-bearing deposits in other banks	  	 	16,329	 	 	 	10,238	 	
Funds sold and securities purchased under agreements to resell	  	 	1,373,392	 	 	 	1,092,281	 	
Trading assets	  	 	1,853,137	 	 	 	1,717,774	 	
Securities available for sale 1	  	 	25,606,884	 	 	 	23,445,182	 	
Loans held for sale	  	 	5,552,060	 	 	 	7,747,793	 	
Loans	  	 	80,732,321	 	 	 	73,167,935	 	
Allowance for loan losses	  	 	(941,922	)	 	 	(930,114	)	
 	  				 				
Net loans	  	 	79,790,399	 	 	 	72,237,821	 	
Premises and equipment	  	 	1,595,307	 	 	 	1,607,200	 	
Goodwill	  	 	1,077,638	 	 	 	963,761	 	
Other intangible assets	  	 	639,619	 	 	 	612,158	 	
Customers’ acceptance liability	  	 	63,014	 	 	 	45,594	 	
Other assets	  	 	3,893,721	 	 	 	3,386,945	 	
 	  				 				
Total assets	  	$	125,393,153	 	 	$	117,322,523	 	
 	  				 				
Liabilities and Shareholders’ Equity	  	 	 	 	 	 	 	 	
Noninterest-bearing consumer and commercial deposits	  	$	21,001,324	 	 	$	18,080,496	 	
Interest-bearing consumer and commercial deposits	  	 	51,923,322	 	 	 	52,146,314	 	
 	  				 				
Total consumer and commercial deposits	  	 	72,924,646	 	 	 	70,226,810	 	
Brokered deposits	  	 	3,184,084	 	 	 	3,169,826	 	
Foreign deposits	  	 	5,080,789	 	 	 	6,309,992	 	
 	  				 				
Total deposits	  	 	81,189,519	 	 	 	79,706,628	 	
Funds purchased and securities sold under agreements to repurchase	  	 	9,505,246	 	 	 	10,402,536	 	
Other short-term borrowings	  	 	4,175,415	 	 	 	1,368,425	 	
Long-term debt	  	 	15,313,922	 	 	 	11,879,820	 	
Acceptances outstanding	  	 	63,014	 	 	 	45,594	 	
Trading liabilities	  	 	1,048,543	 	 	 	930,645	 	
Other liabilities	  	 	4,366,328	 	 	 	4,219,379	 	
 	  				 				
Total liabilities	  	 	115,661,987	 	 	 	108,553,027	 	
 	  				 				
Commitments and contingencies – Notes 8, 13, 17, 18, 21	  	 	 	 	 	 	 	 	
Preferred stock, no par value; 50,000,000 shares authorized; none issued	  	 	—  	 	 	 	—  	 	
Common stock, $1.00 par value	  	 	294,163	 	 	 	294,163	 	
Additional paid in capital	  	 	1,288,311	 	 	 	1,276,110	 	
Retained earnings	  	 	7,149,118	 	 	 	6,322,217	 	
Treasury stock and other	  	 	(664,518	)	 	 	(632,464	)	
 	  				 				
Realized shareholders’ equity	  	 	8,067,074	 	 	 	7,260,026	 	
Accumulated other comprehensive income	  	 	1,664,092	 	 	 	1,509,470	 	
 	  				 				
Total shareholders’ equity	  	 	9,731,166	 	 	 	8,769,496	 	
 	  				 				
Total liabilities and shareholders’ equity	  	$	125,393,153	 	 	$	117,322,523	 	
 	  				 				
Common shares outstanding	  	 	281,923,057	 	 	 	282,504,571	 	
Common shares authorized	  	 	750,000,000	 	 	 	750,000,000	 	
Treasury shares of common stock	  	 	12,239,700	 	 	 	11,658,186	 	
1 Includes net unrealized gains on securities available for sale	  	$	2,614,512	 	 	$	2,421,562	 	

See notes to Consolidated Financial Statements.

Annual Report 2003	  	57	  	SunTrust Banks, Inc.	

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Dollars in thousands)
	  	Common
Stock
	 	 	Additional
Paid in
Capital
	 	 	Retained
Earnings
	 	 	Treasury
Stock and
Other 1
	 	 	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	  	 	—  	 	 	 	—  	 	 	 	1,375,537	 	 	 	—  	 	 	 	—  	 	 	 	1,375,537	 	
Other comprehensive income:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adoption of SFAS No. 133	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(10,560	)	 	 	(10,560	)	
Change in unrealized gains (losses) on derivatives, net of taxes	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(45,169	)	 	 	(45,169	)	
Change in unrealized gains (losses) on securities, net of taxes	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(231,792	)	 	 	(231,792	)	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Total comprehensive income	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,088,016	 	
Cash dividends declared and paid, $1.60 per share	  	 	—  	 	 	 	—  	 	 	 	(463,529	)	 	 	—  	 	 	 	—  	 	 	 	(463,529	)	
Exercise of stock options	  	 	—  	 	 	 	(15,771	)	 	 	—  	 	 	 	34,784	 	 	 	—  	 	 	 	19,013	 	
Acquisition of treasury stock	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(551,485	)	 	 	—  	 	 	 	(551,485	)	
Retirement of treasury stock	  	 	(29,000	)	 	 	—  	 	 	 	(1,744,101	)	 	 	1,773,101	 	 	 	—  	 	 	 	—  	 	
Performance stock activity	  	 	—  	 	 	 	103	 	 	 	—  	 	 	 	(103	)	 	 	—  	 	 	 	—  	 	
Amortization of compensation element of performance stock	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	6,110	 	 	 	—  	 	 	 	6,110	 	
Issuance of stock for employee benefit plans	  	 	—  	 	 	 	861	 	 	 	—  	 	 	 	21,374	 	 	 	—  	 	 	 	22,235	 	
 	  				 				 				 				 				 				
Balance, December 31, 2001	  	 	294,163	 	 	 	1,259,609	 	 	 	5,479,951	 	 	 	(329,408	)	 	 	1,655,253	 	 	 	8,359,568	 	
Net income	  	 	—  	 	 	 	—  	 	 	 	1,331,809	 	 	 	—  	 	 	 	—  	 	 	 	1,331,809	 	
Other comprehensive income:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Change in unrealized gains (losses) on derivatives, net of taxes	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	8,984	 	 	 	8,984	 	
Change in unrealized gains (losses) on securities, net of taxes	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(126,891	)	 	 	(126,891	)	
Accumulated other comprehensive income related to retirement plans	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(27,876	)	 	 	(27,876	)	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Total comprehensive income	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,186,026	 	
Cash dividends declared and paid, $1.72 per share	  	 	—  	 	 	 	—  	 	 	 	(489,543	)	 	 	—  	 	 	 	—  	 	 	 	(489,543	)	
Exercise of stock options and stock compensation element	  	 	—  	 	 	 	(6,801	)	 	 	—  	 	 	 	19,625	 	 	 	—  	 	 	 	12,824	 	
Acquisition of treasury stock	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(340,656	)	 	 	—  	 	 	 	(340,656	)	
Performance stock activity	  	 	—  	 	 	 	17,236	 	 	 	—  	 	 	 	(19,842	)	 	 	—  	 	 	 	(2,606	)	
Amortization of compensation element of performance stock	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	3,074	 	 	 	—  	 	 	 	3,074	 	
Issuance of stock for employee benefit plans	  	 	—  	 	 	 	6,066	 	 	 	—  	 	 	 	34,743	 	 	 	—  	 	 	 	40,809	 	
 	  				 				 				 				 				 				
Balance, December 31, 2002	  	 	294,163	 	 	 	1,276,110	 	 	 	6,322,217	 	 	 	(632,464	)	 	 	1,509,470	 	 	 	8,769,496	 	
Net income	  	 	—  	 	 	 	—  	 	 	 	1,332,297	 	 	 	—  	 	 	 	—  	 	 	 	1,332,297	 	
Other comprehensive income:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Change in unrealized gains (losses) on derivatives, net of taxes	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	29,488	 	 	 	29,488	 	
Change in unrealized gains (losses) on securities, net of taxes	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	115,254	 	 	 	115,254	 	
Accumulated other comprehensive income related to retirement plans	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	9,881	 	 	 	9,881	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				
Total comprehensive income	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,486,920	 	
Cash dividends declared and paid, $1.80 per share	  	 	—  	 	 	 	—  	 	 	 	(505,396	)	 	 	—  	 	 	 	—  	 	 	 	(505,396	)	
Exercise of stock options and stock compensation element	  	 	—  	 	 	 	(1,859	)	 	 	—  	 	 	 	38,526	 	 	 	—  	 	 	 	36,667	 	
Acquisition of treasury stock	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(182,152	)	 	 	—  	 	 	 	(182,152	)	
Acquisition of Lighthouse Financial Services, Inc.	  	 	—  	 	 	 	11,745	 	 	 	—  	 	 	 	64,144	 	 	 	(1	)	 	 	75,888	 	
Performance stock activity	  	 	—  	 	 	 	(572	)	 	 	—  	 	 	 	572	 	 	 	—  	 	 	 	—  	 	
Amortization of compensation element of performance stock	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	5,475	 	 	 	—  	 	 	 	5,475	 	
Issuance of stock for employee benefit plans	  	 	—  	 	 	 	2,887	 	 	 	—  	 	 	 	41,381	 	 	 	—  	 	 	 	44,268	 	
 	  				 				 				 				 				 				
Balance, December 31, 2003	  	$	294,163	 	 	$	1,288,311	 	 	$	7,149,118	 	 	$	(664,518	)	 	$	1,664,092	 	 	$	9,731,166	 	

1	Balance at December 31, 2003 includes $634,878 for treasury stock and $29,640 for compensation element of restricted stock. Balance at December 31, 2002 includes $603,602 for treasury stock and $28,862 for compensation element of restricted stock. See notes to Consolidated Financial Statements.	

SunTrust Banks, Inc.	  	58	  	Annual Report 2003	

CONSOLIDATED STATEMENTS OF CASH FLOW

 	  	Year Ended December 31
	 	
(Dollars in thousands)
	  	2003
	 	 	2002
	 	 	2001
	 	
Cash Flows from Operating Activities	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	1,332,297	 	 	$	1,331,809	 	 	$	1,375,537	 	
Adjustments to reconcile net income to net cash provided by operating activities:	  	 	 	 	 	 	 	 	 	 	 	 	
Net gain on extinguishment of debt	  	 	—  	 	 	 	—  	 	 	 	(9,720	)	
Depreciation, amortization and accretion	  	 	881,542	 	 	 	619,965	 	 	 	357,371	 	
Origination of mortgage servicing rights	  	 	(384,198	)	 	 	(277,343	)	 	 	(159,278	)	
Provisions for loan losses and foreclosed property	  	 	314,667	 	 	 	470,730	 	 	 	275,541	 	
Deferred income tax provision	  	 	179,905	 	 	 	146,326	 	 	 	42,035	 	
Amortization of compensation element of performance stock	  	 	5,475	 	 	 	3,074	 	 	 	6,110	 	
Securities gains	  	 	(123,876	)	 	 	(204,547	)	 	 	(153,080	)	
Net gain on sale of assets	  	 	(12,596	)	 	 	(16,030	)	 	 	(8,467	)	
Originated loans held for sale, net	  	 	(43,816,219	)	 	 	(28,954,686	)	 	 	(21,455,760	)	
Sales of loans held for sale	  	 	46,011,952	 	 	 	25,526,486	 	 	 	18,895,447	 	
Net increase in other assets	  	 	(526,923	)	 	 	(852,597	)	 	 	(679,140	)	
Net increase in other liabilities	  	 	271,207	 	 	 	643,203	 	 	 	359,155	 	
 	  				 				 				
Net cash provided by (used in) operating activities	  	 	4,133,233	 	 	 	(1,563,610	)	 	 	(1,154,249	)	
 	  				 				 				
Cash Flows from Investing Activities	  	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from maturities of securities available for sale	  	 	10,841,607	 	 	 	5,217,479	 	 	 	3,114,827	 	
Proceeds from sales of securities available for sale	  	 	7,633,468	 	 	 	5,626,929	 	 	 	5,419,095	 	
Purchases of securities available for sale	  	 	(19,933,984	)	 	 	(14,687,010	)	 	 	(7,754,258	)	
Net (increase) decrease in loans	  	 	(5,533,737	)	 	 	(2,744,616	)	 	 	332,021	 	
Proceeds from sale of loans	  	 	392,412	 	 	 	721,195	 	 	 	762,405	 	
Capital expenditures	  	 	(157,608	)	 	 	(123,245	)	 	 	(89,224	)	
Proceeds from the sale of other assets	  	 	39,324	 	 	 	29,599	 	 	 	35,889	 	
Net cash proceeds received from consolidation of affordable housing partnerships	  	 	13,932	 	 	 	—  	 	 	 	—  	 	
Net cash proceeds (used for) received from acquisitions, net of cash acquired	  	 	(34,261	)	 	 	1,160,333	 	 	 	—  	 	
 	  				 				 				
Net cash (used in) provided by investing activities	  	 	(6,738,847	)	 	 	(4,799,336	)	 	 	1,820,755	 	
 	  				 				 				
Cash Flows from Financing Activities	  	 	 	 	 	 	 	 	 	 	 	 	
Net increase in consumer and commercial deposits	  	 	2,404,052	 	 	 	3,481,945	 	 	 	5,644,915	 	
Net (decrease) increase in foreign and brokered deposits	  	 	(1,328,925	)	 	 	4,224,638	 	 	 	(7,641,830	)	
Net decrease in funds purchased and other short-term borrowings	  	 	(1,124,378	)	 	 	(131,681	)	 	 	(902,003	)	
Proceeds from the issuance of long-term debt	  	 	3,281,676	 	 	 	1,451,692	 	 	 	7,114,068	 	
Repayment of long-term debt	  	 	(257,119	)	 	 	(2,236,225	)	 	 	(3,389,198	)	
Proceeds from the exercise of stock options and stock compensation expense	  	 	36,667	 	 	 	12,824	 	 	 	19,013	 	
Proceeds from stock issuance	  	 	44,268	 	 	 	40,809	 	 	 	22,235	 	
Acquisition of treasury stock	  	 	(182,152	)	 	 	(340,656	)	 	 	(551,485	)	
Performance stock activity	  	 	—  	 	 	 	(2,606	)	 	 	—  	 	
Dividends paid	  	 	(505,396	)	 	 	(489,543	)	 	 	(463,529	)	
 	  				 				 				
Net cash provided by (used in) financing activities	  	 	2,368,693	 	 	 	6,011,197	 	 	 	(147,814	)	
 	  				 				 				
Net (decrease) increase in cash and cash equivalents	  	 	(236,921	)	 	 	(351,749	)	 	 	518,692	 	
Cash and cash equivalents at beginning of year	  	 	5,558,295	 	 	 	5,910,044	 	 	 	5,391,352	 	
 	  				 				 				
Cash and cash equivalents at end of period	  	$	5,321,374	 	 	$	5,558,295	 	 	$	5,910,044	 	
 	  				 				 				
Supplemental Disclosure	  	 	 	 	 	 	 	 	 	 	 	 	
Interest paid	  	$	1,465,030	 	 	$	1,926,320	 	 	$	3,118,383	 	
Income taxes paid, net	  	 	358,391	 	 	 	440,518	 	 	 	446,814	 	
Non-cash impact to total assets as a result of consolidation of Three Pillars	  	 	2,857,316	 	 	 	—  	 	 	 	—  	 	
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.

Annual Report 2003	  	59	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
NOTE 1 ACCOUNTING POLICIES
 
GENERAL
 
The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Results of operations of companies purchased are included from the dates of acquisition. Assets and liabilities of purchased companies are stated at estimated fair values at the date of acquisition.
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could vary from these estimates; however, in the opinion of management, such variances would not be material. Certain reclassifications have been made to prior year amounts to conform to the 2003 presentation.
 
SECURITIES
 
Securities in the investment portfolio are classified as securities available for sale and are carried at market value with unrealized gains and losses, net of any tax effect, included in accumulated other comprehensive income as a component of shareholders’ equity. Realized gains and losses on the securities portfolio are determined using the specific identification method and recognized currently in the Consolidated Statements of Income.
 
Trading account securities are carried at market value with the gains and losses, determined using the specific identification method and recognized currently in the Consolidated Statements of Income. Included in noninterest income are realized and unrealized gains and losses resulting from such market value adjustments of trading account securities and from recording the results of sales.
 
LOANS HELD FOR SALE
 
Loans held for sale that are not documented as the hedged item in a fair value hedge are carried at the lower of aggregate cost or market value. Adjustments to reflect market value and realized gains and losses upon ultimate sale of the loans are classified as other noninterest income.
 
Loans held for sale that are documented as the hedged item in a fair value hedge are carried at fair value. Fair value is based on the contract prices at which the loan will be sold, or if the loan is not committed for sale, the current market price.
 
The Company classifies certain residential mortgage loans and student loans as loans held for sale. Upon transfer to loans held for sale, any losses are recorded through the allowance for loan losses with subsequent losses recorded as a component of noninterest expense.
 
LOANS
 
Interest income on all types of loans is accrued based upon the outstanding principal amounts, except those classified as nonaccrual loans. Interest accrual is discontinued when it appears that future collection of principal or interest according to the contractual terms may be doubtful. Interest income on nonaccrual loans is recognized on a cash basis if there is no longer doubt of future collection of principal. Loans classified as nonaccrual, except for smaller balance homogenous loans, which include consumer and residential loans, meet the criteria to be considered impaired loans. The Company classifies a loan as nonaccrual with the occurrence of one of the following events: (i) interest or principal has been in default 90 days or more, unless the loan is well-secured and in the process of collection; (ii) collection of recorded interest or principal is not anticipated; or (iii) income for the loan is recognized on a cash basis due to the deterioration in the financial condition of the debtor. Consumer and residential mortgage loans are typically placed on nonaccrual when payments have been in default for 90 and 125 days or more, respectively. (See Allowance for Loan Losses section of this Note for further discussion of impaired loans.)
 
Fees and incremental direct costs associated with the loan origination and pricing process are deferred and amortized as level yield adjustments over the respective loan terms. Fees received for providing loan commitments and letter of credit facilities that result in loans are deferred and then recognized over the term of the loan as an adjustment of the yield. Fees on commitments and letters of credit that are not expected to be funded are amortized into noninterest income using the straight-line method over the commitment period.
 
ALLOWANCE FOR LOAN LOSSES
 
The Company’s allowance for loan losses is that amount considered adequate to absorb losses in the portfolio based on management’s evaluations of the size and current risk characteristics of the loan portfolio. Such evaluations consider the level of problem loans, prior loan loss experience, as well as the impact of current economic conditions, portfolio concentrations and other risk factors. Specific allowances for loan losses are established for individual impaired loans as required per SFAS Nos. 114 and 118. The specific allowance established for these loans is based on a thorough analysis of the most probable source of repayment, including the present value of the loan’s expected future cash flow, the loan’s estimated market value or the estimated fair value of the underlying collateral. General allowances are established for loans that can be grouped into pools based on similar characteristics as outlined in SFAS No. 5. In this process, general allowance factors are based on the results of a statistical loss migration analysis and other analyses of recent and historical charge-off experience and are typically applied to the portfolio in terms of loan type and internal credit risk ratings. Economic

SunTrust Banks, Inc.	  	60	  	Annual Report 2003	

conditions, concentrations and other risk factors are based on economic indicators, concentrations of credit risk and administrative factors that are not otherwise addressed and have a bearing on the collectibility of loans.
 
PREMISES AND EQUIPMENT
 
Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation has been calculated primarily using the straight-line method over the assets’ estimated useful lives. Certain leases are capitalized as assets for financial reporting purposes. Such capitalized assets are amortized, using the straight-line method, over the terms of the leases. Maintenance and repairs are charged to expense and improvements are capitalized.
 
GOODWILL AND OTHER INTANGIBLE ASSETS
 
Goodwill represents the excess of purchase price over the fair value of identifiable net assets of acquired companies. On January 1, 2002, SunTrust adopted SFAS No. 142, “Goodwill and Other Intangible Assets.” Under SFAS No. 142, goodwill, including that acquired before initial application of the standard, is no longer amortized but is tested for impairment at least annually.
 
All other identified finite-lived intangible assets are amortized over their useful lives and evaluated for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable.
 
MORTGAGE SERVICING RIGHTS
 
The Company recognizes as assets the rights to service mortgage loans for others whether the servicing rights are acquired through purchase or loan origination. Purchased MSRs are capitalized at cost. The carrying value of MSRs is maintained on the balance sheet in intangible assets. For loans originated and sold where the servicing rights have been retained, the Company allocates the cost of the loan and the servicing rights based on their relative fair market values. Fair value is determined through a review of valuation assumptions that are supported by market and economic data collected from various outside sources. The Company records amortization of the MSRs based on two components. First, the Company amortizes fully the remaining balance of all MSRs for loans paid-in-full in recognition of the termination of future cash flow streams, and second, normal amortization (amortization of the surviving MSRs) is recorded based on the current market cash flows. The current market cash flows are calculated and updated monthly by applying market-driven assumptions, such as interest rate and prepayment speed assumptions.
 
Impairment for MSRs is determined based on the fair value of the rights, stratified according to interest rate and type of related loan. Impairment, if any, is recognized through a valuation allowance with a corresponding charge recorded in the income statement.
 
LOAN SALES AND SECURITIZATIONS
 
The Company sells residential mortgages and other loans and has securitized mortgage loans. Retained interests in securitized assets, including debt securities, are initially recorded at their allocated carrying amounts based on the relative fair value of assets sold and retained. Retained interests are subsequently carried at fair value, which is generally estimated based on the present value of expected cash flows, calculated using management’s best estimates of key assumptions, including credit losses, loan repayment speeds and discount rates commensurate with the risks involved. Gains or losses on sales and servicing fees are recorded in noninterest income.
 
INCOME TAXES
 
Deferred income tax assets and liabilities result from temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years.
 
EARNINGS PER SHARE
 
Basic earnings per share are based on the weighted-average number of common shares outstanding during each period. Diluted earnings per share are based on the weighted-average number of common shares outstanding during each period, plus common shares calculated for stock options and performance restricted stock outstanding using the treasury stock method.
 
CASH FLOWS
 
For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks, interest-bearing deposits in other banks and funds sold and securities purchased under agreements to resell (only those items with an original maturity of three months or less).
 
DERIVATIVE FINANCIAL INSTRUMENTS
 
It is the policy of the Company to record all derivative financial instruments at fair value in the financial statements. The Company uses derivative instruments to hedge interest rate exposure by modifying the characteristics of the related balance sheet instruments. Derivatives that do not qualify as hedges are carried at their current market value on the balance sheet and changes in their fair value are recorded as trading income in the current period.
 
Under the provisions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” and SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities,” on the date that a derivative contract is entered into, the Company designates the derivative as (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge); (2) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge); (3) a foreign currency fair value or cash flow hedge (foreign currency hedge); or (4) held for trading (trading instruments). Changes in the fair value of a derivative that is highly

Annual Report 2003	  	61	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
effective, and that has been designated and qualifies as a fair value hedge, along with the loss or gain on the hedged asset or liability that is attributable to the hedged risk (including losses or gains on firm commitments), are recorded in current period earnings. Changes in the fair value of a derivative that is highly effective, and that is designated and qualifies as a cash flow hedge, are recorded in other comprehensive income, with any ineffective portion recorded in current period earnings. Changes in the fair value of derivative trading instruments are reported in current period earnings.
 
STOCK-BASED COMPENSATION
 
The Company sponsors a stock-based employee compensation plan, which is further described in Note 16. Prior to 2002, the Company accounted for the plan under the recognition and measurement provisions of Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. No stock-based employee compensation cost is reflected in 2001’s net income since all options granted had an exercise price equal to market value on the date of grant. Effective January 1, 2002, the Company adopted the fair-value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” prospectively, to all awards granted after January 1, 2002. Awards under the Company’s plan typically vest over three years. The cost related to stock-based employee compensation included in the determination of net income for 2003 and 2002 was less than that which would have been recognized if the fair-value based method had been applied to all awards since the original effective date of SFAS No.123. The effect on net income and earnings per share if the fair-value based method had been applied to all awards in each period is included in Note 16.
 
OFF-BALANCE SHEET ENTITIES
 
The Company has a multi-seller commercial paper conduit relationship with a variable interest entity (VIE), Three Pillars. See Note 17 for further discussion of Three Pillars. As of December 31, 2002, the Company was not required to consolidate 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 (ARB) 51, “Consolidated Financial Statements;” SFAS No. 94, “Consolidation of All Majority-Owned Subsidiaries;” EITF D-14, “Transactions involving Special-Purpose Entities,” and other accounting principles generally accepted in the United States.
 
In January 2003, the FASB issued FIN 46, “Consolidation of Variable Interest Entities,” which addressed the criteria for the consolidation of off-balance sheet entities similar to Three Pillars. FIN 46 nullified the consensus reached in various accounting pronouncements and interpretations and required consolidation of Three Pillars. SunTrust adopted the provisions of FIN 46 for certain of the Company’s VIEs and consolidated Three Pillars as of July 1, 2003.
 
In December 2003, the FASB issued a revision to FIN 46 (FIN 46(R)), which replaced the Interpretation issued in January 2003. FIN 46(R) is effective for reporting periods ending after March 15, 2004. SunTrust will adopt FIN 46(R) for the quarter ended March 31, 2004 and will continue to apply FIN 46 in the interim. The adoption of FIN 46(R) is not expected to have a significant impact on the financial statements of SunTrust.
 
ACCOUNTING POLICIES ADOPTED
 
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 rescinded 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 restricted 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 Occurring Events and Transactions.” The Statement also rescinded SFAS No. 44, “Accounting for Intangible Assets of Motor Carriers,” which was no longer necessary because the transition to the provisions of the Motor Carrier Act of 1980 was complete. The Statement also amended 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 made various technical corrections to existing pronouncements which were not considered substantive.
 
The provisions of this Statement relating to the rescission of SFAS No. 4 and 64 were effective for fiscal years beginning after May 15, 2002. The provisions relating to amendments of SFAS No. 13 were effective for transactions initiated after May 15, 2002, and all other provisions were effective for financial statements issued after May 15, 2002. Additionally, there was 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. As of January 1, 2003, the Company adopted all provisions of this Statement, and the adoption did not 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 was effective for exit or disposal activities that are initiated after December 31, 2002. The Company adopted this Statement as of January 1, 2003, and it did not have a material impact on the Company’s financial position or results of operations.

SunTrust Banks, Inc.	  	62	  	Annual Report 2003	

In November 2002, FASB issued FIN 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an interpretation of FASB Statements No. 5, 57, and 107 and Rescission of FIN 34.” FIN 45 details the disclosures that should be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. The Interpretation also requires a company to record a liability for certain guarantees that have been issued. The disclosure provisions were effective for interim or annual periods ending after December 15, 2002. The recognition requirements of the Interpretation were effective for all guarantees issued or modified subsequent to December 31, 2002. The Company adopted the recognition requirements of FIN 45 on January 1, 2003, and they did not have a material impact on the Company’s financial position or results of operations. The required disclosures are included in Note 18 to the Consolidated Financial Statements.
 
In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure.” SFAS No.148 amended SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide three alternative methods of transition to SFAS 123’s fair-value method of accounting for stock-based compensation. The Statement also amended disclosure provisions of SFAS No. 123 and APB Opinion No. 28, “Interim Financial Reporting,” to require additional disclosures in annual and interim financial statements. The Statement was effective for fiscal years ending after December 15, 2002. The amendment of the disclosure requirements of Opinion No. 28 was effective for interim financial reports beginning after December 15, 2002. Effective January 1, 2002, the Company adopted the fair-value method using the prospective method of transition. The prospective method required the Company to apply the provisions of SFAS No. 123 to new stock awards granted from the beginning of the year of adoption and going forward. Note 16 includes the annual disclosures required by SFAS No. 148.
 
In January 2003, the FASB issued FIN 46, “Consolidation of Variable Interest Entities.” FIN 46 is an Interpretation of ARB No. 51 and addresses consolidation by business enterprises of variable interest entities (VIEs). The Interpretation is based on the concept that an enterprise controlling another entity through interests other than voting interests should consolidate the controlled entity. Business enterprises are required under the provisions of the Interpretation to identify VIEs, based on specified characteristics, and then determine whether they should be consolidated. An enterprise that holds a majority of the variable interests is considered the primary beneficiary and would consolidate the VIE. In addition to the primary beneficiary, an enterprise that holds a significant variable interest in a VIE is required to make certain interim and annual disclosures.
 
The Interpretation was effective immediately for all enterprises with variable interests in VIEs created after January 31, 2003. A public entity with variable interests in a VIE created before February 1, 2003, was required to apply the provisions of this Interpretation for the first interim or annual reporting period ending after December 15, 2003; however, early adoption was permitted. As of July 1, 2003, the Company adopted the Interpretation and the disclosures related to certain of the Company’s variable interests in VIEs.
 
On December 24, 2003, the FASB issued a revision of FIN 46 (FIN 46(R)), which replaces the Interpretation issued in January 2003. The revised Interpretation clarifies some of the provisions of FIN 46 and provides additional exemptions for certain entities. Under the provisions of FIN 46(R), SunTrust is permitted to continue the application of FIN 46 until the reporting period ending March 31, 2004, at which time the Company will adopt the provisions of FIN 46(R).
 
The Company does not expect the adoption of FIN 46(R) to have a material impact on the Company’s financial position or results of operations. The required disclosures related to the Company’s variable interests in VIEs are included in Note 17 to the Consolidated Financial Statements.
 
In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” SFAS No. 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133. The Statement was effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of this Statement did not have a material impact on the Company’s financial position or results of operations.
 
In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” SFAS No. 150 establishes guidelines on how instruments sharing the characteristics of both liabilities and equity should be classified and measured. Financial instruments falling within the scope of the Statement must be classified as liabilities. SFAS No.150 was effective for financial instruments entered into or modified after May 31, 2003 and otherwise was effective for the first interim period beginning after June 15, 2003; however, in November 2003, the FASB decided to defer the provisions of SFAS No. 150 as they apply to certain mandatorily redeemable noncontrolling interests. The deferral for this type of instrument is expected to remain in effect while these interests are addressed by the FASB. SunTrust will continue to monitor and evaluate the impact of FASB’s decisions as they relate to the deferral provisions of SFAS No. 150. The adoption of the remainder of this statement did not have a material impact on the Company’s financial position or results of operations.

Annual Report 2003	  	63	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 
In December 2003, the American Institute of Certified Public Accountants (AICPA) issued Statement of Position (SOP) 03-3, “Accounting for Loans or Certain Debt Securities Acquired in a Transfer.” The SOP addresses accounting for differences between contractual cash flows and cash flows expected to be collected from an investor’s initial investment in loans or debt securities acquired in a transfer if those differences relate to a deterioration of credit quality. The SOP also prohibits companies from “carrying over” or creating a valuation allowance in the initial accounting for loans acquired that meet the scope criteria of the SOP. The SOP is effective for loans acquired in fiscal years beginning after December 15, 2004.
 
In December 2003, the Securities Exchange Commission (SEC) Staff announced that it will issue a Staff Accounting Bulletin (SAB) addressing the accounting treatment for mortgage loan interest rate lock commitments. The SAB will require interest rate lock commitments that relate to mortgage loans held for sale to be accounted for, by the issuer of the interest rate lock commitment, under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as written options that would be reported as liabilities until either they are exercised or they expire unexercised. SunTrust hedges its interest rate lock commitments with fair value hedging instruments and the SAB, if issued, would restrict the Company’s ability to apply fair value accounting to the interest rate lock commitments that could be reported as an asset on the Company’s balance sheet, while the hedges in place would be subject to unrestricted fair value accounting. The SAB is expected to be effective for interest rate lock commitments entered into in the period beginning after March 15, 2004. The Company is in the process of assessing the impact this SAB will have on its results of operation.
 
In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Medicare Act) was signed into law. The Medicare Act calls for sponsors of retiree health care benefit plans to be reimbursed for a certain percentage of the prescription cost for retirees. SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions,” requires enacted changes in relevant laws to be considered in current period measurements of postretirement benefit costs and
 
Accumulated Postretirement Benefit Obligations (APBO). Therefore, under SFAS No. 106, measures of APBO and net periodic post retirement benefit costs on or after the date of enactment should reflect the effects of the Medicare Act. However, certain accounting issues raised in the Medicare Act have resulted in the FASB allowing plan sponsors to elect to defer accounting for the effects of the Medicare Act until further guidance is issued. SunTrust elected to defer until the FASB issues additional guidance, which is expected to be later in 2004. Nonetheless, certain disclosures are required as of December 31, 2003, and are included in Note 16 to the Consolidated Financial Statements. SunTrust is in the process of analyzing the impact the Medicare Act will have on the Company’s financial position and results of operations when adopted.
 
NOTE 2 ACQUISITIONS
 
SunTrust completed the acquisition of the Florida banking franchise of Huntington Bancshares, Inc. (Huntington-Florida) on February 15, 2002. The Company acquired approximately $4.7 billion in assets and liabilities. The transaction resulted in $528 million of goodwill, $255 million of core deposit intangibles and $13 million of other intangibles, all of which were deductible for tax purposes.
 
On June 2, 2003, SunTrust completed the acquisition of Lighthouse Financial Services, Inc. (Lighthouse) based in Hilton Head Island, South Carolina. The Company acquired approximately $637 million in assets, $567 million in loans, and $421 million in deposits. In addition, SunTrust paid $131 million in a combination of cash and SunTrust stock. The transaction resulted in $99 million of goodwill and $23 million of other intangible assets, which were not deductible for tax purposes. The acquisition did not have a material impact on SunTrust’s financial position or results of operation.
 
SunTrust completed the acquisition of Sun America Mortgage (Sun America), one of the top mortgage lenders in Metro Atlanta, on July 31, 2003. The transaction resulted in $10 million of goodwill and $9 million of other intangibles, all of which were deductible for tax purposes. The acquisition did not have a material impact on SunTrust’s financial position or results of operation.

SunTrust Banks, Inc.	  	64	  	Annual Report 2003	

NOTE 3 FUNDS SOLD AND SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL
 
Funds sold and securities purchased under agreements to resell at December 31 were as follows:

(Dollars in thousands)
	  	2003
	  	2002
	
Federal funds	  	$	427,875	  	$	300,217	
Repurchase agreements	  	 	945,517	  	 	792,064	
 	  			  			
Total funds sold and securities purchased under agreements to resell	  	$	1,373,392	  	$	1,092,281	

Securities purchased under agreements to resell are collateralized by U.S. government or agency securities and are carried at the amounts at which securities will be subsequently resold. The Company takes possession of all securities purchased under agreements to resell and performs the appropriate margin evaluation on the acquisition date based on market volatility, as necessary. The Company requires collateral between 100% to 105% of the underlying securities. The total market value of the collateral held was $970.5 and $812.1 million at December 31, 2003 and 2002, of which $832.6 and $687.1 million was repledged, respectively.
 
NOTE 4 TRADING ASSETS AND LIABILITIES
 
The fair values of the components of trading account assets and liabilities at December 31 were as follows:

(Dollars in thousands)
	  	2003
	  	2002
	
Trading Assets	  	 	 	  	 	 	
U.S. government and agency securities	  	$	280,076	  	$	480,584	
Corporate and other debt securities	  	 	177,000	  	 	82,844	
Equity securities	  	 	398	  	 	563	
Mortgage-backed securities	  	 	69,151	  	 	38,391	
Derivative contracts	  	 	1,161,676	  	 	1,062,815	
Other	  	 	164,836	  	 	52,577	
 	  			  			
Total trading assets	  	$	1,853,137	  	$	1,717,774	
 	  			  			
Trading Liabilities	  	 	 	  	 	 	
Derivative contracts	  	$	1,041,579	  	$	929,380	
Other	  	 	6,964	  	 	1,265	
 	  			  			
Total trading liabilities	  	$	1,048,543	  	$	930,645	

					
Annual Report 2003	  	65	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
NOTE 5 SECURITIES AVAILABLE FOR SALE
 
Securities available for sale at December 31 were as follows:

 	  	2003
	
(Dollars in thousands)
	  	Amortized
Cost
	  	Unrealized
Gains
	  	Unrealized
Losses
	  	Fair Value
	
U.S. Treasury and other U.S. government agencies and corporations	  	$	2,286,427	  	$	13,959	  	$	7,872	  	$	2,292,514	
States and political subdivisions	  	 	362,995	  	 	17,807	  	 	271	  	 	380,531	
Asset-backed securities	  	 	5,417,882	  	 	36,175	  	 	26,071	  	 	5,427,986	
Mortgage-backed securities	  	 	12,181,073	  	 	119,342	  	 	26,934	  	 	12,273,481	
Corporate bonds	  	 	2,097,218	  	 	43,966	  	 	29,513	  	 	2,111,671	
Common stock of The Coca-Cola Company	  	 	110	  	 	2,449,415	  	 	—  	  	 	2,449,525	
Other securities	  	 	646,667	  	 	24,509	  	 	—  	  	 	671,176	
 	  			  			  			  			
Total securities available for sale	  	$	22,992,372	  	$	2,705,173	  	$	90,661	  	$	25,606,884	

 	  	2002
	
(Dollars in thousands)
	  	Amortized
Cost
	  	Unrealized
Gains
	  	Unrealized
Losses
	  	Fair Value
	
U.S. Treasury and other U.S. government agencies and corporations	  	$	3,601,544	  	$	82,828	  	$	360	  	$	3,684,012	
States and political subdivisions	  	 	398,640	  	 	20,877	  	 	407	  	 	419,110	
Asset-backed securities	  	 	4,478,169	  	 	44,961	  	 	4,986	  	 	4,518,144	
Mortgage-backed securities	  	 	9,467,150	  	 	155,660	  	 	727	  	 	9,622,083	
Corporate bonds	  	 	1,923,471	  	 	64,681	  	 	58,415	  	 	1,929,737	
Common stock of The Coca-Cola Company	  	 	110	  	 	2,110,584	  	 	—  	  	 	2,110,694	
Other securities	  	 	1,154,536	  	 	6,866	  	 	—  	  	 	1,161,402	
 	  			  			  			  			
Total securities available for sale	  	$	21,023,620	  	$	2,486,457	  	$	64,895	  	$	23,445,182	

The amortized cost and fair value of investments in debt securities at December 31, 2003 by estimated average life are shown below. Actual cash flows will differ from estimated average lives and contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(Dollars in thousands)
	  	Amortized
Cost
	  	Fair Value
	
Due in one year or less	  	$	1,512,410	  	$	1,529,655	
Due after one year through five years	  	 	17,249,703	  	 	17,367,564	
Due after five years through ten years	  	 	3,003,515	  	 	3,025,770	
Due after ten years	  	 	579,967	  	 	563,194	
 	  			  			
Total	  	$	22,345,595	  	$	22,486,183	

Proceeds from the sale of investments in securities were $7.6, $5.6 and $5.4 billion in 2003, 2002 and 2001. Gross realized gains were $124.9, $206.5, and $166.8 million and gross realized losses on such sales were $1.0, $2.0, and $13.7 million in 2003, 2002, and 2001.
 
Securities available for sale that were pledged to secure public deposits, trust and other funds had fair values of $13.7, $14.2, and $12.9 billion at December 31, 2003, 2002, and 2001.

SunTrust Banks, Inc.	  	66	  	Annual Report 2003	

Securities with unrealized losses at December 31 were as follows:

 	  	2003
	
 	  	Less than twelve months
	  	Twelve months or longer
	  	Total
	
(Dollars in thousands)
	  	Fair Value
	  	Unrealized
Losses
	  	Fair Value
	  	Unrealized
Losses
	  	Fair Value
	  	Unrealized
Losses
	
U.S. Treasury and other U.S. government agencies and corporations	  	$	689,476	  	$	7,872	  	$	—  	  	$	—  	  	$	689,476	  	$	7,872	
States and political subdivisions	  	 	27,512	  	 	271	  	 	—  	  	 	—  	  	 	27,512	  	 	271	
Asset-backed securities	  	 	1,312,307	  	 	25,933	  	 	90,136	  	 	138	  	 	1,402,443	  	 	26,071	
Mortgage-backed securities	  	 	3,131,051	  	 	26,774	  	 	60,751	  	 	160	  	 	3,191,802	  	 	26,934	
Corporate bonds	  	 	310,863	  	 	9,504	  	 	384,573	  	 	20,009	  	 	695,436	  	 	29,513	
 	  			  			  			  			  			  			
Total securities with unrealized losses	  	$	5,471,209	  	$	70,354	  	$	535,460	  	$	20,307	  	$	6,006,669	  	$	90,661	

Market changes in interest rates and market changes in credit spreads will result in temporary unrealized losses as a normal fluctuation in the market price of securities. The majority of the gross unrealized losses, $70.4 million out of total unrealized losses of $90.7 million, have been in an unrealized loss position for less than 12 months. These are temporary losses due primarily to increases in interest rates on securities purchased predominately in 2003. The $20.3 million in unrealized losses which have been in a loss position for more than twelve months are primarily floating-rate, trust preferred corporate securities. These securities are all highly-rated, investment grade securities issued by bank holding companies. The reason for the temporary loss is that market credit spreads on these securities are wider than when they were originally purchased as a result of market supply and demand factors. The Company has determined that there were no other than temporary impairments associated with the above securities at December 31, 2003.
 
NOTE 6 LOANS
 
The composition of the Company’s loan portfolio at December 31 is shown in the following table:

(Dollars in thousands)
	  	2003
	  	2002
	
Commercial	  	$	30,681,914	  	$	28,693,616	
Real estate	  	 	 	  	 	 	
Construction	  	 	4,479,771	  	 	4,002,439	
Residential mortgages	  	 	24,173,441	  	 	19,443,445	
Other	  	 	9,330,114	  	 	9,101,801	
Commercial credit card	  	 	132,998	  	 	111,255	
Consumer loans	  	 	11,934,083	  	 	11,815,379	
 	  			  			
Total loans	  	$	80,732,321	  	$	73,167,935	

Total nonaccrual loans at December 31, 2003 and 2002 were $336.5 and $511.0 million, respectively. The gross amounts of interest income that would have been recorded in 2003, 2002, and 2001 on nonaccrual loans at December 31 of each year, if all such loans had been accruing interest at their contractual rates, were $33.7, $45.2, and $45.6 million, while interest income actually recognized totaled $14.1, $15.6, and $15.8 million, respectively.
 
In the normal course of business, the Company’s banking subsidiary has made loans at prevailing interest rates and terms to directors and executive officers of the Company and its subsidiaries, and to their related interests. The aggregate dollar amount was $408.9 and $410.2 million at December 31, 2003 and 2002, respectively. During 2003, $197.5 million of such loans were made and repayments totaled $198.8 million.
 
At December 31, 2003 and 2002, impaired loans amounted to $229.7 and $399.3 million, respectively. Included in the allowance for loan losses was $41.3 and $121.7 million at December 31, 2003 and 2002, respectively related to impaired loans. For the years ended December 31, 2003 and 2002, the average recorded investment in impaired loans was $359.6 and $424.6 million, respectively; and $10.0 and $10.6 million, respectively, of interest income was recognized on loans while they were impaired.

Annual Report 2003	  	67	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
NOTE 7 ALLOWANCE FOR LOAN LOSSES
 
Activity in the allowance for loan losses is summarized in the table below:

(Dollars in thousands)
	  	2003
	 	 	2002
	 	
Balance at beginning of year	  	$	930,114	 	 	$	867,059	 	
Allowance from acquisitions, dispositions and other activity – net	  	 	9,324	 	 	 	15,531	 	
Provision for loan losses	  	 	313,550	 	 	 	469,792	 	
Loan charge-offs	  	 	(394,328	)	 	 	(490,117	)	
Loan recoveries	  	 	83,262	 	 	 	67,849	 	
 	  				 				
Balance at end of year	  	$	941,922	 	 	$	930,114	 	

NOTE 8 PREMISES AND EQUIPMENT
 
Premises and equipment at December 31 were as follows

(Dollars in thousands)
	  	Useful Life
	  	2003
	  	2002
	
Land	  	 	  	$	402,726	  	$	368,876	
Buildings and improvements	  	5 – 40 years	  	 	1,391,864	  	 	1,367,298	
Leasehold improvements	  	1 – 30 years	  	 	294,876	  	 	279,263	
Furniture and equipment	  	3 – 20 years	  	 	1,231,944	  	 	1,236,609	
Construction in progress	  	 	  	 	81,940	  	 	81,068	
 	  	 	  			  			
 	  	 	  	 	3,403,350	  	 	3,333,114	
Less accumulated depreciation and amortization	  	 	  	 	1,808,043	  	 	1,725,914	
 	  	 	  			  			
Total premises and equipment	  	 	  	$	1,595,307	  	$	1,607,200	

The carrying amounts of premises and equipment subject to mortgage indebtedness (included in long-term debt) were not significant at December 31, 2003 and 2002.
 
Various Company facilities are leased under both capital and noncancelable operating leases with initial remaining terms in excess of one year. Minimum payments, by year and in aggregate, as of December 31, 2003 were as follows:

(Dollars in thousands)
	  	Operating
Leases
	  	Capital
Leases
	
2004	  	$	94,816	  	$	3,109	
2005	  	 	78,738	  	 	2,254	
2006	  	 	67,848	  	 	1,982	
2007	  	 	50,592	  	 	1,877	
2008	  	 	35,407	  	 	1,877	
Thereafter	  	 	172,092	  	 	29,994	
 	  			  			
Total minimum lease payments	  	 	499,493	  	 	41,093	
 	  			  			
Amounts representing interest	  	 	 	  	 	24,090	
 	  	 	 	  			
Present value of net minimum lease payments	  	 	 	  	$	17,003	

Net premises and equipment included $11.5 million and $12.5 million at December 31, 2003 and 2002, respectively, related to capital leases.
 
Aggregate rent expense (principally for offices), including contingent rental expense, amounted to $124.7, $122.5 and $117.0 million for 2003, 2002 and 2001, respectively.

SunTrust Banks, Inc.	  	68	  	Annual Report 2003	

NOTE 9 INTANGIBLE ASSETS
 
Under the provisions of SFAS No. 142, goodwill is tested for impairment on an annual basis and as events or circumstances arise that would more likely than not reduce fair value of a reporting unit below its carrying amount. The Company completed its annual review as of December 31, 2003, and determined there was no impairment of goodwill as of this date. The changes in the carrying amount of goodwill by reportable segment for the twelve months ended December 31, 2002 and 2003 are as follows:

(Dollars in thousands)
	  	Retail
	 	 	Commercial
	  	Corporate and
Investment
Banking
	  	Mortgage
	 	 	Private
Client
Services
	  	Corporate/
Other
	  	Total
	 	
Balance, January 1, 2002	  	$	299,984	 	 	$	20,781	  	$	93,442	  	$	1,859	 	 	$	24,431	  	$	—  	  	$	440,497	 	
Huntington-Florida acquisition	  	 	395,412	 	 	 	68,730	  	 	—  	  	 	14,650	 	 	 	44,902	  	 	—  	  	 	523,694	 	
Reallocation	  	 	744	 	 	 	—  	  	 	—  	  	 	(744	)	 	 	—  	  	 	—  	  	 	—  	 	
Contingent consideration	  	 	—  	 	 	 	7,115	  	 	—  	  	 	—  	 	 	 	—  	  	 	—  	  	 	7,115	 	
Purchase price adjustment	  	 	(8,955	)	 	 	—  	  	 	1,410	  	 	—  	 	 	 	—  	  	 	—  	  	 	(7,545	)	
 	  				 			  			  				 			  			  				
Balance, December 31, 2002	  	 	687,185	 	 	 	96,626	  	 	94,852	  	 	15,765	 	 	 	69,333	  	 	—  	  	 	963,761	 	
Purchase price adjustment	  	 	7,499	 	 	 	2,203	  	 	—  	  	 	2,236	 	 	 	—  	  	 	—  	  	 	11,938	 	
Lighthouse acquisition	  	 	41,830	 	 	 	24,447	  	 	—  	  	 	24,804	 	 	 	—  	  	 	—  	  	 	91,081	 	
Sun America acquisition	  	 	—  	 	 	 	—  	  	 	—  	  	 	10,168	 	 	 	—  	  	 	—  	  	 	10,168	 	
Other acquisitions	  	 	—  	 	 	 	—  	  	 	—  	  	 	690	 	 	 	—  	  	 	—  	  	 	690	 	
 	  				 			  			  				 			  			  				
Balance, December 31, 2003	  	$	736,514	 	 	$	123,276	  	$	94,852	  	$	53,663	 	 	$	69,333	  	$	—  	  	$	1,077,638	 	

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.

(Dollars in thousands, except per share data)
	  	2003
	  	2002
	  	2001
	
Reported net income	  	$	1,332,297	  	$	1,331,809	  	$	1,375,537	
Goodwill amortization, net of taxes	  	 	—  	  	 	—  	  	 	36,115	
 	  			  			  			
Adjusted net income	  	$	1,332,297	  	$	1,331,809	  	$	1,411,652	
 	  			  			  			
Reported diluted earnings per share	  	$	4.73	  	$	4.66	  	$	4.72	
Goodwill amortization, net of taxes	  	 	—  	  	 	—  	  	 	0.12	
 	  			  			  			
Adjusted diluted earnings per share	  	$	4.73	  	$	4.66	  	$	4.84	
 	  			  			  			
Reported basic earnings per share	  	$	4.79	  	$	4.71	  	$	4.78	
Goodwill amortization, net of taxes	  	 	—  	  	 	—  	  	 	0.13	
 	  			  			  			
Adjusted basic earnings per share	  	$	4.79	  	$	4.71	  	$	4.91	

					
Annual Report 2003	  	69	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
The changes in the carrying amounts of other intangible assets for the twelve months ended December 31, 2002 and 2003 are as follows:

(Dollars in thousands)
	  	Core
Deposit
Intangible
	 	 	Mortgage
Servicing
Rights
	 	 	Other
	 	 	Total
	 	
Balance, January 1, 2002	  	$	19,158	 	 	$	351,200	 	 	$	421	 	 	$	370,779	 	
Amortization	  	 	(57,262	)	 	 	(244,625	)	 	 	(1,636	)	 	 	(303,523	)	
Servicing rights originated	  	 	—  	 	 	 	277,343	 	 	 	—  	 	 	 	277,343	 	
Huntington-Florida acquisition	  	 	254,959	 	 	 	—  	 	 	 	12,600	 	 	 	267,559	 	
 	  				 				 				 				
Balance, December 31, 2002	  	 	216,855	 	 	 	383,918	 	 	 	11,385	 	 	 	612,158	 	
Amortization	  	 	(61,227	)	 	 	(324,221	)	 	 	(3,289	)	 	 	(388,737	)	
Servicing rights originated	  	 	—  	 	 	 	384,198	 	 	 	—  	 	 	 	384,198	 	
Asset acquisition	  	 	—  	 	 	 	—  	 	 	 	402	 	 	 	402	 	
Lighthouse acquisition	  	 	9,400	 	 	 	5,398	 	 	 	7,800	 	 	 	22,598	 	
Sun America acquisition	  	 	—  	 	 	 	—  	 	 	 	9,000	 	 	 	9,000	 	
 	  				 				 				 				
Balance, December 31, 2003	  	$	165,028	 	 	$	449,293	 	 	$	25,298	 	 	$	639,619	 	

The estimated amortization expense for intangible assets, excluding amortization of mortgage servicing rights, for the subsequent five years is as follows:

(Dollars in thousands)
	  	Core
Deposit
Intangible
	  	Other
	  	Total
	
2004	  	$	52,208	  	$	4,848	  	$	57,056	
2005	  	 	41,515	  	 	4,755	  	 	46,270	
2006	  	 	31,975	  	 	4,191	  	 	36,166	
2007	  	 	22,664	  	 	4,180	  	 	26,844	
2008	  	 	13,339	  	 	3,513	  	 	16,852	
Thereafter	  	 	3,327	  	 	3,811	  	 	7,138	
 	  			  			  			
Total	  	$	165,028	  	$	25,298	  	$	190,326	

NOTE 10 FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
 
Funds purchased and securities sold under agreements to repurchase at December 31 were as follows:

(Dollars in thousands)
	  	2003
	  	2002
	
Federal funds	  	$	4,468,779	  	$	5,114,850	
Repurchase agreements	  	 	5,036,467	  	 	5,287,686	
 	  			  			
Total funds purchased and securities sold under agreements to repurchase	  	$	9,505,246	  	$	10,402,536	

NOTE 11 OTHER SHORT-TERM BORROWINGS
 
Other short-term borrowings at December 31 include:

 	  	2003
	 	 	2002
	 	
(Dollars in thousands)
	  	Balance
	  	Rates
	 	 	Balance
	  	Rates
	 	
Commercial paper	  	$	3,216,678	  	1.06% – 1.14	%	 	$	50,000	  	1.25	%	
Federal funds purchased maturing in over one day	  	 	31,500	  	0.88 – 0.97	 	 	 	41,000	  	1.12 – 1.72	 	
Master notes	  	 	311,490	  	0.45	 	 	 	308,945	  	0.75	 	
U.S. Treasury demand notes	  	 	498,979	  	0.73	 	 	 	849,346	  	0.99	 	
Other	  	 	116,768	  	various	 	 	 	119,134	  	various	 	
 	  			  	 	 	 			  	 	 	
Total other short-term borrowings	  	$	4,175,415	  	 	 	 	$	1,368,425	  	 	 	

					
SunTrust Banks, Inc.	  	70	  	Annual Report 2003	

At December 31, 2003, $275 million of unused borrowings under unsecured lines of credit from non-affiliated banks were available to the Parent Company to support outstanding commercial paper and provide for general liquidity needs. The average balances of short-term borrowings for the years ended December 31, 2003 and 2002 were $2.2 and $0.9 billion, respectively, while the maximum amounts outstanding at any month-end during the years ended December 31, 2003 and 2002 were $4.2 and $1.6 billion, respectively.
 
NOTE 12 MORTGAGE SERVICING RIGHTS
 
The following is an analysis of capitalized mortgage servicing rights included in intangible assets in the Consolidated Balance Sheets:

(Dollars in thousands)
	  	2003
	 	 	2002
	 	
Balance at beginning of year	  	$	383,918	 	 	$	351,200	 	
Amortization 1	  	 	(324,221	)	 	 	(244,625	)	
Servicing rights originated	  	 	384,198	 	 	 	277,343	 	
Lighthouse acquisition	  	 	5,398	 	 	 	—  	 	
 	  				 				
Balance at end of year	  	$	449,293	 	 	$	383,918	 	

1	Includes $158.9 and $97.2 million for the years ended December 31, 2003 and 2002, respectively, on loans that have paid-in-full and loans that have been foreclosed.	
 
No valuation allowances were required at December 31, 2003, 2002 and 2001 for the Company’s mortgage servicing rights.
 
The Company retained the servicing rights for all of its securitized single-family mortgages. Key economic assumptions used to measure total mortgage servicing rights at December 31, 2003 were as follows:

 	  	2003
	 	
Payment rate	  	15.6% annual	 	
Weighted-average life	  	6.2 years	 	
Discount rate	  	9.7	%	
Weighted-average coupon	  	6.0	%	
 
At December 31, 2003, key economic assumptions and the sensitivity of the current fair value on retained servicing rights to immediate 10% and 20% adverse changes in those assumptions follow:

(Dollars in millions)
	  	 	 	
Fair value of retained servicing rights	  	$	560.6	 	
Weighted-average life (in years)	  	 	6.2	 	
 	  				
Prepayment rate (annual rate)	  	 	15.6	%	
Decline in fair value of 10% adverse change	  	$	31.4	 	
Decline in fair value of 20% adverse change	  	 	59.9	 	
Residual cash flows discount rate (annual rate)	  	 	9.7	%	
Decline in fair value of 10% adverse change	  	$	17.2	 	
Decline in fair value of 20% adverse change	  	 	33.4	 	
 
These sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in fair value based on a 10% variation in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of a variation in a particular assumption on the fair value of the retained servicing right is calculated without changing any other assumption; in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments and increased credit losses), which might magnify or counteract the sensitivities.

Annual Report 2003	  	71	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
NOTE 13 LONG-TERM DEBT
 
Long-term debt at December 31 consisted of the following:

(Dollars in thousands)
	  	2003
	  	2002
	 	
Parent Company Only	  	 	 	  	 	 	 	
6.125% notes due 2004	  	$	200,000	  	$	200,000	 	
7.375% notes due 2006	  	 	200,000	  	 	200,000	 	
Floating rate notes due 2007	  	 	300,000	  	 	300,000	 	
6.25% notes due 2008	  	 	294,250	  	 	294,250	 	
7.75% notes due 2010	  	 	300,000	  	 	300,000	 	
Floating rate notes due 2019	  	 	50,563	  	 	50,563	 	
6.00% notes due 2026	  	 	200,000	  	 	200,000	 	
Floating rate notes due 2027 1	  	 	350,000	  	 	350,000	 	
7.90% notes due 2027 1	  	 	250,000	  	 	250,000	 	
Floating rate notes due 2028 1	  	 	250,000	  	 	250,000	 	
6.00% notes due 2028	  	 	222,925	  	 	222,925	 	
7.125% notes due 2031 1	  	 	300,000	  	 	300,000	 	
7.05% notes due 2031 1	  	 	300,000	  	 	300,000	 	
Capital lease obligations	  	 	1,111	  	 	1,977	 	
Other	  	 	72,850	  	 	(12,237	)	
 	  			  				
Total Parent Company (excluding intercompany of $193,922 in 2003 and $176,456 in 2002)	  	 	3,291,699	  	 	3,207,478	 	
 	  			  				
Subsidiaries	  	 	 	  	 	 	 	
Floating rate notes due 2004	  	 	850,000	  	 	—  	 	
8.75% notes due 2004	  	 	149,966	  	 	149,927	 	
Floating rate notes due 2005	  	 	1,001,057	  	 	—  	 	
2.125% notes due 2006	  	 	149,979	  	 	—  	 	
2.50% notes due 2006	  	 	399,289	  	 	—  	 	
7.25% notes due 2006	  	 	249,655	  	 	249,528	 	
6.90% notes due 2007	  	 	99,747	  	 	99,676	 	
6.375% notes due 2011	  	 	1,000,949	  	 	1,001,076	 	
5.45% notes due 2017	  	 	498,960	  	 	498,885	 	
6.50% notes due 2018	  	 	141,119	  	 	141,393	 	
8.16% notes due 2026 1	  	 	200,000	  	 	200,000	 	
Capital lease obligations	  	 	15,892	  	 	16,299	 	
FHLB advances (2003: 0.50 – 8.79%, 2002: 0.50 – 8.79%)	  	 	6,847,124	  	 	6,274,240	 	
Direct finance lease obligations	  	 	164,718	  	 	—  	 	
Other	  	 	253,768	  	 	41,318	 	
 	  			  				
Total subsidiaries	  	 	12,022,223	  	 	8,672,342	 	
 	  			  				
Total long-term debt	  	$	15,313,922	  	$	11,879,820	 	

1	Notes payable to trusts formed to issue Trust Preferred Securities totaled $1.65 billion at December 31, 2003 and 2002.	
 
Principal amounts due for the next five years on long-term debt are: 2004 – $792.1 million; 2005 – $966.4 million; 2006 –$1,608.7 million; 2007 – $528.9 million; and 2008 – $803.4 million. Restrictive provisions of several long-term debt agreements prevent the Company from creating liens on, disposing of, or issuing (except to related parties) voting stock of subsidiaries. Further, there are restrictions on mergers, consolidations, certain leases, sales or transfers of assets, minimum shareholders’ equity, and maximum borrowings by the Company. As of December 31, 2003, the Company was in compliance with all covenants and provisions of long-term debt agreements. In 2003 and 2002, $1,650.0 million of long-term debt qualified as Tier 1 capital. As currently defined by Federal bank regulators, $2,380.7 in 2003 and $2,560.8 million in 2002 qualified as Tier 2 capital.
 
NOTE 14 CAPITAL
 
The Company is subject to various regulatory capital requirements which involve quantitative measures of the Company’s assets, liabilities and certain off-balance sheet items. The Company’s capital requirements and classification are ultimately subject to qualitative judgments by the regulators about components, risk weightings and other factors. The Company and its

SunTrust Banks, Inc.	  	72	  	Annual Report 2003	

subsidiary banks are 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 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. Included in Tier 1 capital is $450 million of preferred shares issued by real estate investment trust subsidiaries. These amounts are included in other liabilities in the Consolidated Balance Sheets. Management believes, as of December 31, 2003, that the Company meets all capital adequacy requirements to which it is subject. A summary of Tier 1 and Total capital and the Tier 1 leverage ratio for the Company and its principal subsidiary as of December 31 is as follows:

 	  	2003
	 	 	2002
	 	
(Dollars in millions)
	  	Amount
	  	Ratio
	 	 	Amount
	  	Ratio
	 	
SunTrust Banks, Inc.	  	 	 	  	 	 	 	 	 	  	 	 	
Tier 1 capital	  	$	8,930	  	7.85	%	 	$	8,106	  	7.47	%	
Total capital	  	 	13,366	  	11.75	 	 	 	12,610	  	11.62	 	
Tier 1 leverage	  	 	 	  	7.37	 	 	 	 	  	7.30	 	
SunTrust Bank	  	 	 	  	 	 	 	 	 	  	 	 	
Tier 1 capital	  	 	8,883	  	7.92	 	 	 	8,153	  	7.75	 	
Total capital	  	 	12,176	  	10.85	 	 	 	11,474	  	10.91	 	
Tier 1 leverage	  	 	 	  	7.35	 	 	 	 	  	7.52	 	
 
Substantially all the Company’s retained earnings are undistributed earnings of the Bank, which is restricted by various regulations administered by federal and state bank regulatory authorities. Retained earnings of the Bank available for payment of cash dividends to the Bank Parent Company under these regulations totaled approximately $520 million at December 31, 2003.
 
In the calculation of basic and diluted EPS, net income is identical. Shares of 2.2 million and 8.9 million for the years ended December 31, 2003 and 2002, respectively, were excluded in the computation of average shares because they would have been antidilutive. Below is a reconciliation for the three years ended December 31, 2003, of the difference between average basic common shares outstanding and average diluted common shares outstanding.

(Shares in thousands)
	  	2003
	  	2002
	  	2001
	
Average common shares – basic	  	278,295	  	282,495	  	287,702	
Effect of dilutive securities	  	 	  	 	  	 	
Stock options	  	1,166	  	1,681	  	1,971	
Performance stock	  	1,973	  	1,876	  	1,911	
 	  		  		  		
Average common shares – diluted	  	281,434	  	286,052	  	291,584	

NOTE 15 INCOME TAXES
 
The provision for income taxes for the three years ended December 31 consisted of the following:

(Dollars in thousands)
	  	2003
	  	2002
	 	 	2001
	
Provision for federal income taxes	  	 	 	  	 	 	 	 	 	 	
Current	  	$	381,250	  	$	360,851	 	 	$	582,885	
Deferred	  	 	154,348	  	 	121,319	 	 	 	41,741	
 	  			  				 			
Provision for federal income taxes	  	 	535,598	  	 	482,170	 	 	 	624,626	
 	  			  				 			
Provision (benefit) for state income taxes	  	 	 	  	 	 	 	 	 	 	
Current	  	 	15,686	  	 	(15,662	)	 	 	28,983	
Deferred	  	 	25,557	  	 	25,007	 	 	 	294	
 	  			  				 			
Provision for state income taxes	  	 	41,243	  	 	9,345	 	 	 	29,277	
 	  			  				 			
Total provision for income taxes	  	$	576,841	  	$	491,515	 	 	$	653,903	

The Company’s income from international operations, before provision for income taxes, was not significant.

Annual Report 2003	  	73	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
The Company’s provisions for income taxes for the three years ended December 31 differ from the amounts computed by applying the statutory federal income tax rate of 35% to income before income taxes. A reconciliation of this difference is as follows:

(Dollars in thousands)
	  	2003
	 	 	2002
	 	 	2001
	 	
Tax provision at federal statutory rate	  	$	668,198	 	 	$	638,163	 	 	$	706,902	 	
(Decrease) increase resulting from	  	 	 	 	 	 	 	 	 	 	 	 	
Tax-exempt interest	  	 	(31,951	)	 	 	(29,366	)	 	 	(29,848	)	
Income tax credits, net	  	 	(39,653	)	 	 	(51,243	)	 	 	(17,320	)	
State income taxes, net of federal benefit	  	 	26,807	 	 	 	6,074	 	 	 	13,943	 	
Dividends on subsidiary preferred stock	  	 	(23,567	)	 	 	(25,530	)	 	 	—  	 	
Reversal of deferred liability	  	 	—  	 	 	 	(25,000	)	 	 	—  	 	
Other	  	 	(22,993	)	 	 	(21,583	)	 	 	(19,774	)	
 	  				 				 				
Provision for income taxes	  	$	576,841	 	 	$	491,515	 	 	$	653,903	 	

Temporary differences create deferred tax assets and liabilities that are detailed below as of December 31, 2003 and 2002:

 	  	Deferred Tax Assets (Liabilities)
	 	
(Dollars in thousands)
	  	2003
	 	 	2002
	 	
Allowance for loan losses	  	$	342,510	 	 	$	321,491	 	
Employee benefits	  	 	(248,225	)	 	 	(150,675	)	
Fixed assets	  	 	(65,159	)	 	 	(34,402	)	
Loans	  	 	(41,518	)	 	 	(27,863	)	
Mortgage	  	 	(118,379	)	 	 	(80,797	)	
Leasing	  	 	(677,515	)	 	 	(562,171	)	
Accrued expenses	  	 	76,522	 	 	 	83,003	 	
Unrealized gains on securities available for sale	  	 	(847,538	)	 	 	(779,274	)	
Other	  	 	76,705	 	 	 	54,664	 	
 	  				 				
Net deferred tax liability	  	$	(1,502,597	)	 	$	(1,176,024	)	

SunTrust and its subsidiaries file consolidated income tax returns where permissible. Each subsidiary remits current taxes to or receives current refunds from the Parent Company based on what would be required had the subsidiary filed an income tax return as a separate entity. The Company’s federal and state income tax returns are subject to review and examination by government authorities. Various such examinations are now in progress. In the opinion of management, any adjustments which may result from these examinations will not have a material effect on the Company’s Consolidated Financial Statements.
 
NOTE 16	EMPLOYEE BENEFIT PLANS	
 
SunTrust sponsors various incentive plans for eligible employees. The Management Incentive Plan for key executives provides for annual cash awards, if any, based on the attainment of a profit plan goal and the achievement of business unit, as well as, individual performance objectives. The Performance Unit Plan (PUP) for key executives provides awards, if any, based on three-year earnings performance in relation to earnings goals established by the Compensation Committee (Committee) of the Company’s Board of Directors. In 2003, a restricted stock grant was made in lieu of implementing the PUP for the 2003-2005 cycle. This restricted stock grant will vest after a three year restricted period, and will be transferred to the participant upon vesting; a pro rata number of shares immediately vests upon death, disability, or retirement. Participants receive dividends and maintain voting rights on these shares.
 
The Company also sponsors an Executive Stock Plan (Stock Plan) under which the Committee has the authority to grant stock options, restricted stock and performance based restricted stock (performance stock) to key employees of the Company. The Company has 14 million shares of common stock reserved for issuance under the Stock Plan, of which no more than 4 million shares may be issued as restricted stock. Options granted are at no less than the fair market value of a share of stock on the grant date and may be either tax-qualified incentive stock options or nonqualified options. Prior to 2002, the Company did not record expense as a result of the grant or exercise of any of the stock options. Effective January 1, 2002, the Company adopted the fair-value recognition provision of SFAS No. 123, Accounting for Stock-Based Compensation, prospectively and began expensing the cost of stock options.
 
With respect to performance stock, shares must be granted, awarded and vested before participants take full title. Awards are distributed on the earliest of (i) fifteen years after the date shares are awarded to participants; (ii) the participant attaining age 64; (iii) death or disability of a participant; or (iv) a change in control of the Company as defined in the Stock Plan. Dividends are paid on awarded but unvested performance stock and participants may exercise voting privileges on such shares.

SunTrust Banks, Inc.	  	74	  	Annual Report 2003	

The compensation element for performance stock (which is deferred and shown as a reduction of shareholders’ equity) is equal to the fair market value of the shares at the date of the award and is amortized to compensation expense over the period from the award date to age 64 or the 15th anniversary of the award date, whichever comes first. Phantom Stock units have also been issued. Payment of Phantom Stock units will be made to participants in shares of SunTrust stock upon the earlier to occur of (1) the date on which the participant would have vested in his or her performance stock or (2) the date of a change in control. Dividend equivalents will be paid at the same rate as the shares of performance stock; however, these units do not carry voting privileges.
 
Compensation expense related to the incentive plans for the three years ended December 31 were as follows:

(Dollars in thousands)
	  	2003
	  	2002
	 	 	2001
	
401(k) Plan and Performance Bonus Plan 1	  	$	44,090	  	$	43,670	 	 	$	52,184	
Management Incentive Plan and Performance Unit Plan	  	 	29,849	  	 	(5,664	)	 	 	28,618	
Performance stock	  	 	5,475	  	 	3,074	 	 	 	6,110	
 
1	The non-qualified Performance Bonus Plan was not paid in 2002 and was discontinued as of January 1, 2003.	
 
The following table presents information on stock options and performance stock:

 	  	Stock Options
	  	Performance Stock
	
(Dollars in thousands except per share data)
	  	Shares
	 	 	Price Range
	  	Weighted-
Average
Exercise Price
	  	Shares
	 	 	Deferred
Compensation
	 	 	Weighted-
Average
Grant Price
	
Balance, January 1, 2001	  	10,001,653	 	 	$	 3.46 – $76.50	  	$	52.83	  	3,128,474	 	 	$	44,397	 	 	$	—  	
Granted	  	3,231,025	 	 	 	64.40 – 69.38	  	 	64.59	  	49,896	 	 	 	3,436	 	 	 	68.87	
Exercised/Vested	  	(627,840	)	 	 	9.23 – 70.81	  	 	28.96	  	(105,399	)	 	 	—  	 	 	 	—  	
Canceled/Expired/Forfeited	  	(474,542	)	 	 	17.88 – 73.06	  	 	64.46	  	(101,374	)	 	 	(4,206	)	 	 	—  	
Amortization of compensation for Performance Stock	  	—  	 	 	 	—  	  	 	—  	  	—  	 	 	 	(6,110	)	 	 	—  	
 	  			 			  			  			 				 			
Balance, December 31, 2001	  	12,130,296	 	 	 	11.13 – 76.50	  	 	56.70	  	2,971,597	 	 	 	37,517	 	 	 	—  	
Granted	  	478,191	 	 	 	58.21 – 67.98	  	 	62.78	  	19,523	 	 	 	1,261	 	 	 	64.62	
Exercised/Vested	  	(415,634	)	 	 	11.13 – 65.25	  	 	33.14	  	(145,913	)	 	 	—  	 	 	 	—  	
Canceled/Expired/Forfeited	  	(449,945	)	 	 	11.13 – 73.06	  	 	63.96	  	(157,715	)	 	 	(6,842	)	 	 	—  	
Amortization of compensation for Performance Stock	  	—  	 	 	 	—  	  	 	—  	  	—  	 	 	 	(3,074	)	 	 	—  	
 	  			 			  			  			 				 			
Balance, December 31, 2002	  	11,742,908	 	 	 	13.96 – 76.50	  	 	57.56	  	2,687,492	 	 	 	28,862	 	 	 	—  	
Granted	  	3,818,050	 	 	 	54.28 – 69.90	  	 	54.48	  	198,985	 	 	 	11,040	 	 	 	55.48	
Exercised/Vested	  	(777,087	)	 	 	6.96 – 65.25	  	 	36.14	  	(22,930	)	 	 	—  	 	 	 	—  	
Canceled/Expired/Forfeited	  	(795,225	)	 	 	21.03 – 73.06	  	 	61.50	  	(100,382	)	 	 	(4,787	)	 	 	—  	
Acquisition of Lighthouse Financial Services, Inc.	  	175,417	 	 	 	6.96 – 22.75	  	 	13.32	  	—  	 	 	 	—  	 	 	 	—  	
Amortization of compensation for Performance Stock	  	—  	 	 	 	—  	  	 	—  	  	—  	 	 	 	(5,475	)	 	 	—  	
 	  			 			  			  			 				 			
Balance, December 31, 2003	  	14,164,063	 	 	$	 6.96 –$76.50	  	$	57.14	  	2,763,165	 	 	$	29,640	 	 	 	 	
 	  			 			  			  			 				 			
Exercisable, December 31, 2003	  	7,241,116	 	 	 	 	  	$	55.12	  	 	 	 	 	 	 	 	 	 	
 	  			 	 	 	  			  	 	 	 	 	 	 	 	 	 	
Available for Additional Grant, December 31, 2003	  	4,310,320 1 	  	 	 	 	  	 	 	  	 	 	 	 	 	 	 	 	 	

1	Includes 3.8 million shares available to be issued as performance stock.	

Annual Report 2003	  	75	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
The following table presents information on stock options by ranges of exercise price:

 	  	Options Outstanding
	  	Options Exercisable
	
Range of Exercise Prices
	  	Number
Outstanding at
December 31,
2003
	  	Weighted
Average
Exercise
Price
	  	Weighted
Average
Remaining
Contractual
Life (Years)
	  	Number
Exercisable at
December 31,
2003
	  	Weighted
Average
Exercise
Price
	
$  6.96 to 49.61	  	1,663,113	  	$	32.67	  	2.4	  	1,663,113	  	$	32.67	
$50.10 to 64.57	  	9,478,221	  	 	56.98	  	8.0	  	2,708,888	  	 	51.87	
$65.19 to 76.50	  	3,022,729	  	 	71.08	  	5.4	  	2,869,115	  	 	71.21	
 	  		  			  		  		  			
 	  	14,164,063	  	$	57.14	  	6.8	  	7,241,116	  	$	55.12	

Effective January 1, 2002, the Company adopted the fair-value recognition provision of SFAS No. 123 prospectively to all awards granted after January 1, 2002. The effect on net income and earnings per share if the fair-value based method had been applied to all outstanding awards in each period is as follows:

(Dollars in thousands except per share data)
	  	2003
	 	 	2002
	 	 	2001
	 	
Net income, as reported	  	$	1,332,297	 	 	$	1,331,809	 	 	$	1,375,537	 	
Stock-based employee compensation expense included in reported net income, net of related tax effects	  	 	5,285	 	 	 	484	 	 	 	—  	 	
Total stock-based employee compensation expense determined under fair-value based method for all awards, net of related tax effects	  	 	(14,474	)	 	 	(19,278	)	 	 	(17,464	)	
 	  				 				 				
Net Income, pro forma	  	$	1,323,108	 	 	$	1,313,015	 	 	$	1,358,073	 	
 	  				 				 				
Earnings per share:	  	 	 	 	 	 	 	 	 	 	 	 	
Diluted – as reported	  	$	4.73	 	 	$	4.66	 	 	$	4.72	 	
Diluted – pro forma	  	 	4.70	 	 	 	4.59	 	 	 	4.66	 	
Basic – as reported	  	 	4.79	 	 	 	4.71	 	 	 	4.78	 	
Basic – pro forma	  	 	4.75	 	 	 	4.64	 	 	 	4.72	 	
 
The weighted-average fair values of options granted during 2003, 2002 and 2001 were $6.22, $9.71 and $10.73 per share, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

 	  	2003
	 	 	2002
	 	 	2001
	 	
Expected dividend yield	  	3.20	%	 	2.66	%	 	2.47	%	
Expected stock price volatility	  	15.52	 	 	14.68	 	 	15.84	 	
Risk-free interest rate	  	2.96	 	 	4.05	 	 	3.90	 	
Expected life of options	  	5 years	 	 	6 years	 	 	6 years	 	
 
SunTrust maintains a defined contribution plan that offers a dollar for dollar match on the first 3% and $.50 cents on each dollar for the fourth and fifth percents. There is a maximum match of 4% of eligible wages for contributions of 5% or more in the SunTrust Banks, Inc. 401(k) Plan.
 
SunTrust maintains a funded, noncontributory qualified retirement plan covering all employees meeting certain service requirements. The plan provides benefits based on salary and years of service. SunTrust performed a benefits study in 2002 to determine the long-term costs and competitive position of this plan. This study resulted in the decision by SunTrust to reduce future benefits effective January 31, 2003. In addition to managing costs, SunTrust contributed $300.0 million to this plan in 2003 and $115.9 million in 2002 to maintain a well-funded position. SunTrust will continue to review the funded status of the plan and make additional contributions as permitted by law.
 
SunTrust also maintains unfunded, noncontributory non-qualified supplemental defined benefit pension plans that cover key executives of the Company. The plans provide defined benefits based on years of service and final average salary. SunTrust’s obligations for these plans are shown separately under the “Supplemental Retirement Benefits” sections below.
 
Although not under contractual obligation, SunTrust provides certain health care and life insurance benefits to retired employees (Other Postretirement Benefits in the table below). At the option of SunTrust, retirees may continue certain health and life insurance benefits if they meet age and service requirements for postretirement welfare benefits while working for the

SunTrust Banks, Inc.	  	76	  	Annual Report 2003	

Company. The healthcare plans are contributory with participant contributions adjusted annually; the life insurance plans are noncontributory. As part of the benefit study performed in 2002, SunTrust realigned the cost sharing of the postretirement welfare plans with retirees and eliminated postretirement life insurance benefits for employees who retire after December 31, 2003. Additionally, effective January 1, 2004, SunTrust will no longer subsidize post-65 medical benefits for future retirees. Certain retiree health benefits are funded in a Retiree Health Trust. In addition, certain retiree life insurance benefits are funded in a Voluntary Employees’ Beneficiary Association (VEBA).
 
SunTrust uses a measurement date of December 31 for its pension and other postretirement benefit plans.
 
The change in benefit obligations for the years ended December 31 was as follows:

 	  	Retirement Benefits
	 	 	Supplemental
Retirement Benefits
	 	 	Other Postretirement
Benefits
	 	
(Dollars in thousands)
	  	2003
	 	 	2002
	 	 	2003
	 	 	2002
	 	 	2003
	 	 	2002
	 	
Benefit obligations, beginning of year	  	$	1,046,260	 	 	$	914,090	 	 	$	89,305	 	 	$	64,680	 	 	$	158,201	 	 	$	164,055	 	
Service cost	  	 	43,071	 	 	 	42,530	 	 	 	1,520	 	 	 	823	 	 	 	2,515	 	 	 	4,146	 	
Interest cost	  	 	74,574	 	 	 	69,067	 	 	 	4,991	 	 	 	4,995	 	 	 	10,823	 	 	 	11,052	 	
Plan participants’ contributions	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	9,192	 	 	 	8,216	 	
Amendments	  	 	—  	 	 	 	—  	 	 	 	1,434	 	 	 	2,882	 	 	 	—  	 	 	 	(14,873	)	
Actuarial loss	  	 	186,775	 	 	 	83,304	 	 	 	6,304	 	 	 	19,006	 	 	 	20,012	 	 	 	9,343	 	
Acquisition	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Benefits paid	  	 	(81,990	)	 	 	(62,731	)	 	 	(3,118	)	 	 	(3,081	)	 	 	(24,343	)	 	 	(23,738	)	
 	  				 				 				 				 				 				
Benefit obligations, end of year	  	$	1,268,690	 	 	$	1,046,260	 	 	$	100,436	 	 	$	89,305	 	 	$	176,400	 	 	$	158,201	 	

The accumulated benefit obligation for the Retirement Benefits at the end of 2003 and 2002 was $1,141 million and $938 million, respectively. For the Supplemental Retirement Benefits, the accumulated benefit obligation at the end of 2003 and 2002 was $87 million and $77 million, respectively.
 
The weighted-average assumptions used to determine benefit obligations at December 31 were as follows:

 	  	Retirement
Benefits
	 	 	Supplemental
Retirement
Benefits
	 	 	Other
Postretirement
Benefits
	 	
(Weighted-average assumptions used to determine benefit obligations, end of year)
	  	2003
	 	 	2002
	 	 	2003
	 	 	2002
	 	 	2003
	 	 	2002
	 	
Discount rate	  	6.25	%	 	6.75	%	 	6.25	%	 	6.75	%	 	6.25	%	 	6.75	%	
Rate of compensation increase	  	3.50	 	 	3.50	 	 	3.50	 	 	3.50	 	 	N/A	 	 	N/A	 	
 
Assumed healthcare cost trend rates have a significant effect on the amounts reported for the postretirement health-care plans. As of December 31, 2003, SunTrust assumed that retiree healthcare costs will increase at an initial rate of 12% per year. SunTrust’s medical plans are managed carefully and retirees share a large portion of the medical cost. Therefore, SunTrust expects this annual cost increase to decrease over time to 5.25% per year. Due to changing medical inflation, it is important to understand the effect of a one percent point change in assumed healthcare cost trend rates. These amounts are shown below:

(Dollars in thousands)
	  	1% Increase
	  	1% Decrease
	 	
Effect on postretirement benefit obligation	  	$	7,781	  	$	(6,853	)	
Effect on postretirement expense	  	 	491	  	 	(432	)	

Annual Report 2003	  	77	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
The change in plan assets for the years ended December 31 was as follows:

 	  	Retirement Benefits
	 	 	Other
Postretirement Benefits
	 	
(Dollars in thousands)
	  	2003
	 	 	2002
	 	 	2003
	 	 	2002
	 	
Fair value of plan assets, beginning of year	  	$	1,025,873	 	 	$	1,096,878	 	 	$	140,669	 	 	$	122,794	 	
Actual return on plan assets	  	 	307,349	 	 	 	(124,174	)	 	 	17,740	 	 	 	(6,983	)	
Foreign currency exchange rate changes	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Acquisition	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Employer contribution	  	 	300,000	 	 	 	115,900	 	 	 	4,971	 	 	 	40,380	 	
Plan participants’ contributions	  	 	—  	 	 	 	—  	 	 	 	9,192	 	 	 	8,216	 	
Benefits paid	  	 	(81,990	)	 	 	(62,731	)	 	 	(24,343	)	 	 	(23,738	)	
 	  				 				 				 				
Fair value of plan assets, end of year	  	$	1,551,232	 	 	$	1,025,873	 	 	$	148,229	 	 	$	140,669	 	

Employer contributions and benefits paid in the above table include only those amounts contributed directly to, or paid directly from, plan assets in 2003 and 2002, respectively. Note that the other Supplemental Retirement Plans are not funded through Trust assets.
 
The asset allocation for SunTrust’s Retirement Plan at the end of 2003 and 2002, and the target allocation for 2004, by asset category, follows.

 	  	Target
Allocation	 	 	Percentage of Plan
Assets at December 31
	 	
(Asset Category)
	  	2004
	 	 	2003
	 	 	2002
	 	
Equity securities	  	58–88	%	 	74	%	 	68	%	
Debt securities	  	20–25	 	 	23	 	 	30	 	
Cash Equivalents	  	0–5	 	 	3	 	 	2	 	
 	  	 	 	 			 			
Total	  	 	 	 	100	%	 	100	%	

Equity securities include $4.2 million of SunTrust Common Stock (0.3% of total plan assets) and $3.3 million (0.3% of total plan assets) at the end of 2003 and 2002, respectively.
 
The SunTrust Benefit Plan Committee establishes investment policies and strategies and regularly monitors the performance of the assets. The Company’s investment strategy with respect to pension assets is to invest the assets in accordance with ERISA and fiduciary standards. The long-term primary objectives for the Retirement Plan are to 1) provide for a reasonable amount of long-term growth of capital, without undue exposure to risk; and protect the assets from erosion of purchasing power, and 2) provide investment results that meet or exceed the Retirement Plan’s actuarially assumed long-term rate of return.
 
The asset allocation for the other postretirement benefit plans at the end of 2003 and 2002, and target allocation for 2004, by asset category, are as follows:

 	  	Target
Allocation	 	 	Percentage of Plan
Assets at December 31
	 	
(Asset Category)
	  	2004
	 	 	2003
	 	 	2002
	 	
Equity securities	  	35–50	%	 	50	%	 	33	%	
Debt securities	  	50–65	 	 	49	 	 	39	 	
Other	  	—  	 	 	1	 	 	28	 	
 	  	 	 	 			 			
Total	  	 	 	 	100	%	 	100	%	

No SunTrust stock is included in equity securities.
 
The Company’s Investment Strategy with respect to other Postretirement Benefits is to create a stream of investment return sufficient to provide for current and future liabilities at a reasonable level of risk.

SunTrust Banks, Inc.	  	78	  	Annual Report 2003	

FUNDED STATUS
 
The funded status of the plans, reconciled to the amount reported on the Consolidated Balance Sheets, follows:

 	  	Retirement Benefits
	 	 	Supplemental
Retirement Benefits
	 	 	Other
Postretirement Benefits
	 	
(Dollars in thousands)
	  	2003
	  	2002
	 	 	2003
	 	 	2002
	 	 	2003
	 	 	2002
	 	
Fair value of plan assets	  	$	1,551,232	  	$	1,025,873	 	 	$	—  	 	 	$	—  	 	 	$	148,229	 	 	$	140,669	 	
Benefit obligations	  	 	1,268,690	  	 	1,046,260	 	 	 	100,436	 	 	 	89,305	 	 	 	176,400	 	 	 	158,201	 	
 	  			  				 				 				 				 				
Funded status	  	 	282,542	  	 	(20,387	)	 	 	(100,436	)	 	 	(89,305	)	 	 	(28,171	)	 	 	(17,532	)	
Unrecognized net loss	  	 	463,073	  	 	527,525	 	 	 	41,589	 	 	 	39,795	 	 	 	80,901	 	 	 	77,534	 	
Unrecognized prior service cost	  	 	878	  	 	2,208	 	 	 	12,496	 	 	 	12,852	 	 	 	—  	 	 	 	—  	 	
Unrecognized net transition obligation	  	 	—  	  	 	—  	 	 	 	—  	 	 	 	43	 	 	 	20,894	 	 	 	23,216	 	
 	  			  				 				 				 				 				
Net amount recognized	  	$	746,493	  	$	509,346	 	 	$	(46,351	)	 	$	(36,615	)	 	$	73,624	 	 	$	83,218	 	

 	  	Retirement Benefits
	 	 	Supplemental
Retirement Benefits
	 	 	Other
Postretirement Benefits
	 	
(Dollars in thousands)
	  	2003
	  	2002
	 	 	2003
	 	 	2002
	 	 	2003
	 	 	2002
	 	
Prepaid benefit cost	  	$	746,493	  	$	509,346	 	 	$	—  	 	 	$	—  	 	 	$	73,624	 	 	$	83,218	 	
Accrued benefit cost	  	 	—  	  	 	—  	 	 	 	(86,914	)	 	 	(77,387	)	 	 	—  	 	 	 	—  	 	
Intangible asset	  	 	—  	  	 	—  	 	 	 	12,496	 	 	 	12,896	 	 	 	—  	 	 	 	—  	 	
Accumulated other comprehensive	  	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
income, before taxes	  	 	—  	  	 	—  	 	 	 	28,067	 	 	 	27,876	 	 	 	—  	 	 	 	—  	 	
 	  			  				 				 				 				 				
Net amount recognized	  	$	746,493	  	$	509,346	 	 	$	(46,351	)	 	$	(36,615	)	 	$	73,624	 	 	$	83,218	 	

The following information pertains to the Supplemental Retirement Plan at December 31, 2003 and 2002:

(Dollars in thousands)
	  	2003
	  	2002
	
Projected benefit obligation	  	$	100,436	  	$	89,305	
Accumulated benefit obligation	  	 	86,914	  	 	77,387	
 
EXPECTED CASH FLOWS
 
Information regarding the expected cash flows for benefit plans is as follows:

(Dollars in thousands)
	  	Retirement
Benefits
	 	 	Supplemental
Retirement
Benefits
	 	 	Other
Postretirement
Benefits
	 	
Employer Contributions	  	 	 	 	 	 	 	 	 	 	 	 	
2004 (expected)	  	$	—  	1	 	$	—  	2	 	$	12,832	3	
Expected Benefit Payments	  	 	 	 	 	 	 	 	 	 	 	 	
2004	  	 	61,240	 	 	 	7,793	 	 	 	14,494	 	
2005	  	 	65,591	 	 	 	8,652	 	 	 	15,008	 	
2006	  	 	70,549	 	 	 	12,348	 	 	 	15,488	 	
2007	  	 	76,214	 	 	 	9,589	 	 	 	15,916	 	
2008	  	 	82,838	 	 	 	12,527	 	 	 	16,129	 	
2009 – 2013	  	 	525,501	 	 	 	44,343	 	 	 	82,456	 	
 
1	At this time, SunTrust does not anticipate any contributions to the Retirement Plan during 2004 based on the well-funded status of the Plan and contribution limitations under the Employee Retirement Income Security Act of 1974 (ERISA).	
 
2	The expected benefit payments for the Supplemental Retirement Plan will be paid directly by SunTrust corporate assets.	
 
3	The 2004 expected contribution for the Other Postretirement Benefit Plans represents the expected benefit payments under the medical plans only. The expected benefits under postretirement benefits are shown net of participant contributions.	

Annual Report 2003	  	79	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
NET PERIODIC BENEFIT COST
 
Components of net periodic benefit cost (income) were as follows:

 	  	Retirement Benefits
	 	 	Supplemental
Retirement Benefits
	 	 	Other
Postretirement Benefits
	 	
(Dollars in thousands)
	  	2003
	 	 	2002
	 	 	2001
	 	 	2003
	 	 	2002
	 	 	2001
	 	 	2003
	 	 	2002
	 	 	2001
	 	
Service cost	  	$	43,071	 	 	$	42,530	 	 	$	39,506	 	 	$	1,520	 	 	$	823	 	 	$	773	 	 	$	2,515	 	 	$	4,146	 	 	$	3,905	 	
Interest cost	  	 	74,574	 	 	 	69,067	 	 	 	62,976	 	 	 	4,991	 	 	 	4,995	 	 	 	4,678	 	 	 	10,823	 	 	 	11,052	 	 	 	11,643	 	
Expected return on plan assets	  	 	(111,656	)	 	 	(112,670	)	 	 	(103,451	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(8,489	)	 	 	(8,218	)	 	 	(9,124	)	
Amortization of prior service cost	  	 	(443	)	 	 	(443	)	 	 	(1,422	)	 	 	1,941	 	 	 	2,201	 	 	 	2,446	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Recognized net actuarial loss	  	 	57,307	 	 	 	16,657	 	 	 	—  	 	 	 	4,358	 	 	 	3,180	 	 	 	2,581	 	 	 	6,840	 	 	 	3,372	 	 	 	2,443	 	
Amortization of initial transition obligation	  	 	—  	 	 	 	—  	 	 	 	(510	)	 	 	44	 	 	 	44	 	 	 	275	 	 	 	2,322	 	 	 	3,809	 	 	 	3,809	 	
 	  				 				 				 				 				 				 				 				 				
Net periodic benefit cost (income)	  	$	62,853	 	 	$	15,141	 	 	$	(2,901	)	 	$	12,854	 	 	$	11,243	 	 	$	10,753	 	 	$	14,011	 	 	$	14,161	 	 	$	12,676	 	
 	  				 				 				 				 				 				 				 				 				
Weighted-average assumptions used to determine net cost	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Discount rate	  	 	6.75	%	 	 	7.25	%	 	 	7.50	%	 	 	6.75	%	 	 	7.25	%	 	 	7.50	%	 	 	6.75	%	 	 	7.25	%	 	 	7.50	%	
Expected return on plan assets	  	 	8.75	 	 	 	9.50	 	 	 	9.50	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	6.25	 	 	 	7.00	 	 	 	7.00	 	
Rate of compensation increase	  	 	3.50	 	 	 	4.00	 	 	 	4.00	 	 	 	3.50	 	 	 	4.00	 	 	 	4.00	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
 
Based on the investment policy of the plans, as well as the plan’s asset allocation and future return expectation, an 8.75% rate of return was used to calculate the periodic benefit cost for 2003. During 2003, a detailed asset study was performed which included a statistical forecast of the plan’s expected rate of return for the approximate duration of SunTrust’s benefit obligations using capital markets data and historical analysis. Based on this study, SunTrust anticipates lowering the return on asset assumption to 8.50% for 2004.
 
In addition, SunTrust sets pension asset values equal to their market value, in contrast to the use of a smoothed asset value that incorporates gains and losses over a period of years. The poor economic environment over the three years prior to 2003 may have led to inflated asset values in cases where a smoothed asset value is used. Assumed discount rates and expected returns on plan assets impact the net periodic benefit cost. A 25 basis point adverse change to the discount rate or other expected long-term return on plan assets would increase the net periodic benefit cost approximately $9.0 million and $3.8 million, respectively.
 
NOTE 17	DERIVATIVES AND OFF-BALANCE SHEET ARRANGEMENTS	
 
In the normal course of business, the Company utilizes various financial instruments to meet the needs of customers and to manage the Company’s exposure to interest rate and other market risks. These financial instruments, which consist of derivatives contracts and credit-related arrangements, involve, to varying degrees, elements of credit and market risk in excess of the amount recorded on the balance sheet in accordance with generally accepted accounting principles.
 
Credit risk represents the potential loss that may occur because a party to a transaction fails to perform according to the terms of the contract. Market risk is the possibility that a change in market prices may cause the value of a financial instrument to decrease or become more costly to settle. The contract/notional amounts of financial instruments, which are not included in the Consolidated Balance Sheets, do not necessarily represent credit or market risk. However, they can be used to measure the extent of involvement in various types of financial instruments.
 
The Company manages the credit risk of its derivatives and unfunded commitments by limiting the total amount of arrangements outstanding by individual counterparty; by monitoring the size and maturity structure of the portfolio; by obtaining collateral based on management’s credit assessment of the counterparty; and by applying uniform credit standards maintained for all activities with credit risk. Collateral held varies but may include marketable securities, accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties. Collateral may cover the entire expected exposure for transactions or may be called for when credit exposure exceeds defined thresholds or credit risk. In addition, the Company enters into master netting agreements which incorporate the right of set-off to provide for the net settlement of covered contracts with the same counterparty in the event of default or other termination of the agreement.

SunTrust Banks, Inc.	  	80	  	Annual Report 2003	

DERIVATIVES
 
The Company enters into various derivative contracts both in a dealer capacity, to facilitate customer transactions, and also as a risk management tool. Where contracts have been created for customers, the Company enters into transactions with dealers to offset its risk exposure. Derivatives are also used as a risk management tool to hedge the Company’s exposure to changes in interest rates or other defined market risks.
 
Interest rate swaps are contracts in which a series of interest rate cash flows, based on a specific notional amount and a fixed and floating interest rate, are exchanged over a prescribed period. Caps and floors are contracts that transfer, modify or reduce interest rate risk in exchange for the payment of a premium when the contract is issued. The true measure of credit exposure is the replacement cost of contracts that have become favorable to the Company.
 
Futures and forwards are contracts for the delayed delivery of securities or money market instruments in which the seller agrees to deliver on a specified future date, a specified instrument, at a specified price or yield. The credit risk inherent in futures is the risk that the exchange party may default. Futures contracts settle in cash daily; therefore, there is minimal credit risk to the Company. The credit risk inherent in forwards arises from the potential inability of counterparties to meet the terms of their contracts. Both futures and forwards are also subject to the risk of movements in interest rates or the value of the underlying securities or instruments.
 
Derivative instruments expose the Company to credit and market risk. If the counterparty fails to perform, the credit risk is equal to the fair value gain of the derivative. When the fair value of a derivative contract is positive, this indicates the counterparty owes the Company, and therefore, creates a repayment risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and has no repayment risk. The Company minimizes the credit or repayment risk in derivative instruments by entering into transactions with high quality counterparties that are reviewed periodically by the Company’s credit committee. The Company also maintains a policy of requiring that all derivative contracts be governed by an International Swaps and Derivatives Associations Master Agreement; depending on the nature of the derivative transactions, bilateral collateral agreements may be required as well. When the Company has more than one outstanding derivative transaction with a single counterparty, and there exists a legally enforceable master netting agreement with the counterparty, the mark to market exposure is the net of the positive and negative exposures with the same counterparty. When there is a net negative exposure, the Company considers its exposure to the counterparty to be zero. The net mark to market position with a particular counterparty represents a reasonable measure of credit risk when there is a legally enforceable master netting agreement, including a legal right of setoff of receivable and payable derivative contracts between the Company and a counterparty.

 	  	At December 31, 2003
	  	At December 31, 2002
	
 	  	Contract or
Notional Amount
	  	Credit
Risk
Amount
	  	Contract or
Notional Amount
	  	Credit
Risk
Amount
	
(Dollars in millions)
	  	End User
	  	For
Customers 1
	  		  	End User
	  	For
Customers 1
	  		
Derivatives Contracts	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Interest rate contracts	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Swaps	  	$	9,524	  	$	39,468	  	$	395	  	$	4,919	  	$	32,344	  	$	266	
Futures and forwards	  	 	4,836	  	 	3,861	  	 	—  	  	 	8,746	  	 	6,708	  	 	—  	
Caps/Floors	  	 	30	  	 	8,176	  	 	—  	  	 	—  	  	 	6,254	  	 	—  	
 	  			  			  			  			  			  			
Total interest rate contracts	  	 	14,390	  	 	51,505	  	 	395	  	 	13,665	  	 	45,306	  	 	266	
Foreign exchange rate contracts	  	 	—  	  	 	6,129	  	 	82	  	 	—  	  	 	3,803	  	 	50	
Interest rate lock commitments	  	 	2,795	  	 	—  	  	 	—  	  	 	5,489	  	 	—  	  	 	—  	
Commodity and other contracts	  	 	440	  	 	29	  	 	68	  	 	236	  	 	2	  	 	59	
 	  			  			  			  			  			  			
Total derivatives contracts	  	$	17,625	  	$	57,663	  	$	545	  	$	19,390	  	$	49,111	  	$	375	
 	  			  			  			  			  			  			
Credit-related Arrangements	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Commitments to extend credit	  	$	56,584	  	 	 	  	$	56,584	  	$	49,557	  	 	 	  	$	49,557	
Standby letters of credit and similar arrangements	  	 	9,843	  	 	 	  	 	9,843	  	 	9,362	  	 	 	  	 	9,362	
 	  			  	 	 	  			  			  	 	 	  			
Total credit-related arrangements	  	$	66,427	  	 	 	  	$	66,427	  	$	58,919	  	 	 	  	$	58,919	
 	  			  	 	 	  			  			  	 	 	  			
Total Credit Risk Amount	  	 	 	  	 	 	  	$	66,972	  	 	 	  	 	 	  	$	59,294	

1	Includes both long and short derivative contracts.	

Annual Report 2003	  	81	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
Market risk is the adverse effect that a change in interest rates, currency or implied volatility rates has on the value of a financial instrument. The Company manages the market risk associated with interest rate, credit, and equity derivatives and foreign exchange contracts by establishing and monitoring limits on the types and degree of risk that may be undertaken. The Company continually measures this risk by using a value-at-risk methodology.
 
FAIR VALUE HEDGES
 
The Company enters into interest rate swaps to convert its fixed rate funding exposure to a floating rate. For the years ended December 31, 2003 and 2002, the Company recognized additional income in the net interest margin of $130.7 and $49.9 million, respectively, related to cash payments from net settlements and income accrued for interest rate swaps accounted for as fair value hedges. This hedging strategy resulted in ineffectiveness that reduced earnings by $0.3 million and $1.4 million for the periods ended December 31, 2003 and 2002, respectively.
 
The Company maintains a risk management program to protect and manage interest rate risk and pricing risk associated with its mortgage lending activities. The following derivative instruments are recorded in the financial statements at fair value and are used to offset changes in value of the mortgage inventory due to changes in market interest rates: forward contracts, interest rate lock commitments and option contracts. A portion of the forward contracts have been documented as fair value hedges of specific pools of loans that meet the similar assets test as described in SFAS No. 133. The pools of hedged loans are recorded in the financial statements at their fair value, resulting in a partial offset of the market value adjustments on the forward contracts. The pools of loans are matched with a certain portion of a forward contract so that the expected changes in market value will inversely offset within a range of 80% to 125%. This hedging strategy resulted in ineffectiveness that reduced earnings by $149.7 million and $72.7 million for the periods ended December 31, 2003 and 2002, respectively.
 
CASH FLOW HEDGES
 
The Company uses various interest rate swaps to convert floating rate funding to fixed rates. Specific types of funding and principal amounts hedged were determined based on prevailing market conditions and the current shape of the yield curve. The terms and notional amounts of the swaps are determined based on management’s assessment of future interest rates, as well as on other factors.
 
For the years ended December 31, 2003 and 2002, the Company recognized expense in the net interest margin of $66.7 million and $100.3 million, respectively, related to cash payments and expense accrued for interest rate swaps accounted for as cash flow hedges.
 
Gains and losses on derivative contracts that are reclassified from accumulated other comprehensive income to current period earnings are included as an adjustment to the cost of funding in the net interest margin. As of December 31, 2003, $12.6 million, net of taxes, of the deferred net losses on derivative instruments that are recorded in accumulated other comprehensive income are expected to be reclassified to interest expense in the next twelve months as derivatives mature or as payments are made.
 
TRADING ACTIVITIES
 
The Company enters into various derivative contracts on behalf of its clients and for its own trading account. These trading positions primarily include interest rate swaps, equity derivatives, credit default swaps, futures, options and foreign currency contracts.
 
CREDIT-RELATED ARRANGEMENTS
 
In meeting the financing needs of its customers, the Company issues commitments to extend credit, standby and other letters of credit and guarantees. For additional information regarding guarantees, which includes standby and other letters of credit see Note 19. The Company also provides securities lending services. For these instruments, the contractual amount of the financial instrument represents the maximum potential credit risk if the counterparty does not perform according to the terms of the contract. A large majority of these contracts expire without being drawn upon. As a result, total contractual amounts do not represent actual future credit exposure or liquidity requirements.
 
Commitments to extend credit are agreements to lend to a customer who has complied with predetermined contractual conditions. Commitments generally have fixed expiration dates and are subjected to the Company’s credit policy standards. As of December 31, 2003, the Company had outstanding commitments to extend credit to its customers totaling $56.6 billion.
 
The Company services mortgage loans other than those included in the accompanying Consolidated Financial Statements and, in some cases, accepts a recourse liability on the serviced loans. The Company’s exposure to credit loss in the event of nonperformance by the other party to these recourse loans is approximately $5.6 billion. In addition to the value of the property serving as collateral, approximately $4.2 billion of the balance of these loans serviced with recourse as of December 31, 2003, is insured by governmental agencies and private mortgage insurance firms.
 
WHEN-ISSUED SECURITIES
 
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 December 31, 2003, the Company did not have any commitments to purchase or sell when-issued securities.

SunTrust Banks, Inc.	  	82	  	Annual Report 2003	

OTHER OFF-BALANCE SHEET ARRANGEMENTS
 
SunTrust assists in providing liquidity to select corporate customers by directing them to SunTrust’s multi-seller commercial paper conduit, Three Pillars. Three Pillars provides financing for direct purchases of financial assets originated and serviced by SunTrust’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 customers.
 
As of December 31, 2002, accounting principles generally accepted in the United States did not require the Company to consolidate Three Pillars; however, in January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities,” which addressed the criteria for the consolidation of off-balance sheet entities similar to Three Pillars. Under the provisions of FIN 46, SunTrust consolidated Three Pillars as of July 1, 2003.
 
In December 2003, the FASB issued a revision to FIN 46 (FIN 46(R)) which replaced the Interpretation issued in January 2003. FIN 46(R) is effective for reporting periods ending after March 15, 2004. The Company will adopt FIN 46(R) for the quarter ended March 31, 2004, and will continue to apply FIN 46 in the interim.
 
Three Pillars remains consolidated at December 31, 2003; however, SunTrust is currently restructuring Three Pillars and expects consolidation will no longer be required as of March 31, 2004. As of December 31, 2003, Three Pillars had assets and liabilities included on the Consolidated Balance Sheet of approximately $3.2 billion, consisting of primarily secured loans, marketable asset-backed securities and short-term commercial paper liabilities. As of December 31, 2002, Three Pillars had assets and liabilities of approximately $2.8 billion which were not included in the Consolidated Balance Sheet.
 
For the year ended December 31, 2003, activities related to the Three Pillars relationship generated approximately $21.3 million in fee revenue for the Company. These activities include: client referrals and investment recommendations to Three Pillars; the issuing of a letter of credit, which provides partial credit protection to the commercial paper holders; and providing a majority of the temporary liquidity arrangements that would provide funding to Three Pillars in the event it can no longer issue commercial paper or in certain other circumstances.
 
As part of its community reinvestment initiatives, the Company invests in multi-family affordable housing properties throughout its footprint as a limited and/or general partner. The Company receives affordable housing federal and state tax credits for these limited partner investments. The partnerships are considered variable interest entities (VIEs) under FIN 46, and therefore, each partnership has been evaluated to determine the Company’s level of variable interests. For the partnerships in which SunTrust is the general partner, the Company consolidated $425.1 million in assets during 2003.
 
Conversely, partnership assets of approximately $723.8 million in partnerships where SunTrust is only a limited partner are not included in the Consolidated Balance Sheet. The Company’s maximum exposure to loss for these partnerships is $179.6 million, consisting of the limited partnership investments plus unfunded commitments. The investments in these partnerships represent a significant variable interest for the Company and will continue to be accounted for under the equity method of accounting.
 
In addition, the Company is also a general partner in a number of limited partnerships, which have been formed to provide investment opportunities for certain SunTrust customers. Assets under management, which are not included in the Consolidated Balance Sheet, totaled $ 3.6 billion as of December 31, 2003. FIN 46 did not require consolidation of these partnerships.
 
NOTE 18	GUARANTEES	
 
The Company has undertaken certain guarantee obligations in the ordinary course of business. In following the provisions of FIN 45, as addressed in Note 1, the Company must consider guarantees that have any of the following four characteristics (i) contracts that contingently require the guarantor to make payments to a guaranteed party based on changes in an underlying factor that is related to an asset, a liability, or an equity security of the guaranteed party; (ii) contracts that contingently require the guarantor to make payments to a guaranteed party based on another entity’s failure to perform under an obligating agreement; (iii) indemnification agreements that contingently require the indemnifying party to make payments to an indemnified party based on changes in an underlying factor that is related to an asset, a liability, or an equity security of the indemnified party; and (iv) indirect guarantees of the indebtedness of others.
 
The issuance of a guarantee imposes an obligation for the Company to stand ready to perform, and should certain triggering events occur, it also imposes an obligation to make future payments. Payments may be in the form of cash, financial instruments, other assets, shares of stock, or provisions of the Company’s services. The following is a discussion of the guarantees that the Company has issued as of December 31, 2003, which have characteristics as specified by FIN 45.
 
LETTERS OF CREDIT
 
Letters of credit are conditional commitments issued by the Company generally to guarantee the performance of a customer to a third party in borrowing arrangements, such as commercial paper, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers and may be reduced by selling participations to third parties. The Company issues letters of credit that are classified as either financial standby, performance standby or commercial letters of credit. Commercial letters of credit are specifically excluded from the disclosure and recognition requirements of FIN 45.

Annual Report 2003	  	83	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
As of December 31, 2003 and December 31, 2002, the maximum potential amount of the Company’s obligation was $9.7 billion and $9.2 billion, respectively, for financial and performance standby letters of credit. The Company has recorded $93.8 million in other liabilities for unearned fees related to these letters of credit as of December 31, 2003. The Company’s outstanding letters of credit generally have a term of less than one year. If a letter of credit is drawn upon, the Company may seek recourse through the customer’s underlying line of credit. If the customer’s line of credit is also in default, the Company may take possession of the collateral securing the line of credit.
 
CONTINGENT CONSIDERATION
 
The Company has contingent payment obligations related to certain business combination transactions. Payments are calculated using certain post-acquisition performance criteria. At December 31, 2003, the maximum potential liability associated with these arrangements was approximately $33.4 million.
 
OTHER
 
In the normal course of business, the Company enters into indemnification agreements and provides standard representations and warranties in connection with numerous transactions. These transactions include those arising from underwriting agreements, merger and acquisition agreements, loan sales, and various other business transactions or arrangements. The extent of the Company’s obligations under these indemnification agreements depends upon the occurrence of future events; therefore, the Company’s potential future liability under these arrangements is not determinable.
 
Third party investors hold Series B Preferred Stock in STB Real Estate Holdings (Atlanta), Inc. (STBREH), a subsidiary of SunTrust. The contract between STBREH and the third party investors contains an automatic exchange clause which, under certain circumstances, requires the Series B preferred shares to be automatically exchanged for guaranteed preferred beneficial interest in debentures of the Company. The guaranteed preferred beneficial interest in debentures is guaranteed to have a liquidation value equal to the sum of the issue price, $350 million, and an approximate yield of 8.5% per annum subject to reduction for any cash or property dividends paid to date. As of December 31, 2003 and December 31, 2002, $412.5 and $377.5 million is accrued in other liabilities for the principal and interest, respectively. This exchange agreement remains in effect as long as any shares of Series B Preferred Stock are owned by the third party investors, not to exceed 30 years.
 
SunTrust Securities, Inc. (STS) and SunTrust Capital Markets, Inc. (STCM), broker-dealer affiliates of SunTrust, use a common third party clearing broker to clear and execute their customers’ securities transactions and to hold customer accounts. Under their respective agreements, STS and STCM agree to indemnify the clearing broker for losses that result from a customer’s failure to fulfill its contractual obligations. As the clearing broker’s rights to charge STS and STCM have no maximum amount, the Company believes that the maximum potential obligation cannot be estimated. However, to mitigate exposure, the affiliate may seek recourse from the customer through cash or securities held in the defaulting customer’s account. For the years ended December 31, 2003 and 2002, STS and STCM experienced minimal net losses as a result of the indemnity. The clearing agreements expire in 2004 for STS and 2005 for STCM.
 
SunTrust Bank has guarantees associated with credit default swaps, an agreement in which the buyer of protection pays a premium to the seller of the credit default swap for protection against an event of default. Events constituting default under such agreements that would result in the Company making a guaranteed payment to a counterparty may include (i) default of the referenced asset; (ii) bankruptcy of the customer; or (iii) restructuring or reorganization by the customer. The notional amount outstanding at December 31, 2003 and December 31, 2002 is $195.0 million and $175.0 million, respectively. As of December 31, 2003, the notional amounts expire as follows: $45.0 million in 2004, $15.0 million in 2005, $0.0 in 2006, $20.0 million in 2007, $90.0 million in 2008, and $25.0 million in 2009. In the event of default under the contract, the Company would make a cash payment to the holder of credit protection and would take delivery of the referenced asset from which the Company may recover a portion of the credit loss.
 
NOTE 19	CONCENTRATIONS OF CREDIT RISK 	
 
Credit risk represents the maximum accounting loss that would be recognized at the reporting date if borrowers failed to perform as contracted and any collateral or security proved to be of no value. Concentrations of credit risk (whether on- or off-balance sheet) arising from financial instruments can exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries or certain regions of the country. Credit risk associated with these concentrations could arise when a significant amount of loans, related by similar characteristics, are simultaneously impacted by changes in economic or other conditions that cause their probability of repayment to be adversely affected. The Company does not have a significant concentration to any individual client except for the U.S. government and its agencies. The major concentrations of credit risk for the Company arise by collateral type in relation to loans and credit commitments. The only significant concentration in loans by collateral type that exists is in loans secured by residential real estate. At December 31, 2003, the Company had $24.2 billion in residential real estate loans, representing 29.9% of total loans, and an additional $7.8 billion in commitments to extend credit on such loans. A geographic concentration arises because the Company operates primarily in the Southeastern and Mid-Atlantic regions of the United States.
 
SunTrust engages in limited international banking activities. The Company’s total cross-border outstandings were $513.6 million as of December 31, 2003.

SunTrust Banks, Inc.	  	84	  	Annual Report 2003	

NOTE 20	FAIR VALUES OF FINANCIAL INSTRUMENTS 	
 
The following table presents the carrying amounts and fair values of the Company’s financial instruments at December 31, 2003 and 2002:

 	  	2003
	  	2002
	
(Dollars in thousands)
	  	Carrying
Amount
	  	Fair
Value
	  	Carrying
Amount
	  	Fair
Value
	
Financial assets	  	 	 	  	 	 	  	 	 	  	 	 	
Cash and short-term investments	  	$	5,321,374	  	$	5,321,374	  	$	5,558,295	  	$	5,558,295	
Trading assets	  	 	1,853,137	  	 	1,853,137	  	 	1,717,774	  	 	1,717,774	
Securities available for sale	  	 	25,606,884	  	 	25,606,884	  	 	23,445,182	  	 	23,445,182	
Loans held for sale	  	 	5,552,060	  	 	5,556,142	  	 	7,747,793	  	 	7,752,689	
Loans	  	 	79,790,399	  	 	80,474,925	  	 	72,237,821	  	 	73,858,294	
Mortgage servicing rights	  	 	449,293	  	 	560,628	  	 	383,918	  	 	442,701	
Financial liabilities	  	 	 	  	 	 	  	 	 	  	 	 	
Consumer and commercial deposits	  	 	72,924,646	  	 	73,058,073	  	 	70,226,810	  	 	70,491,118	
Brokered deposits	  	 	3,184,084	  	 	3,195,497	  	 	3,169,826	  	 	3,170,267	
Foreign deposits	  	 	5,080,789	  	 	5,080,789	  	 	6,309,992	  	 	6,309,992	
Short-term borrowings	  	 	13,680,661	  	 	13,680,661	  	 	11,770,961	  	 	11,770,961	
Long-term debt	  	 	15,313,922	  	 	16,018,678	  	 	11,879,820	  	 	12,795,905	
Trading liabilities	  	 	1,048,543	  	 	1,048,543	  	 	930,645	  	 	930,645	
Other financial instruments	  	 	 	  	 	 	  	 	 	  	 	 	
Commitments to extend credit	  	 	 	  	 	56,835	  	 	 	  	 	58,184	
Standby letters of credit	  	 	93,788	  	 	93,788	  	 	4,674	  	 	86,497	
 
The following methods and assumptions were used by the Company in estimating the fair value of financial instruments:
 
 	•	Short-term financial instruments are valued at their carrying amounts reported in the balance sheet, which are reasonable estimates of fair value due to the relatively short period to maturity of the instruments. This approach applies to cash and cash equivalents, short-term investments, short-term borrowings and certain other assets and liabilities.	
 
 	•	Trading assets and liabilities are substantially valued at quoted market prices. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments. Fair values for derivatives are based on quoted market prices, current settlement values, pricing models or other formulas.	
 
 	•	Securities available for sale are substantially valued at quoted market prices.	
 
 	•	Loans held for sale are valued based on quoted market prices in the secondary market.	
 
 	•	Loans are valued on the basis of estimated future receipts of principal and interest, discounted at rates currently being offered for loans with similar terms and credit quality. Loan prepayments are used to adjust future cash flows based on historical patterns. The carrying amount of accrued interest approximates its fair value.	
 
 	•	Mortgage servicing rights are valued through a review of valuation assumptions that are supported by market and economic data collected from various sources.	
 
 	•	Deposit liabilities with no defined maturity such as demand deposits, NOW/money market accounts and savings accounts have a fair value equal to the amount payable on demand at the reporting date, i.e., their carrying amounts. Fair values for certificates of deposit are estimated using a discounted cash flow calculation that applies current interest rates to a schedule of aggregated expected maturities. The intangible value of long-term relationships with depositors is not taken into account in estimating fair values.	
 
 	•	Fair values for long-term debt are based on quoted market prices for similar instruments or estimated using discounted cash flow analysis and the Company’s current incremental borrowing rates for similar types of instruments.	
 
NOTE 21	CONTINGENCIES 	
 
The Company and its subsidiaries are parties to numerous claims and lawsuits arising in the course of their normal business activities, some of which involve claims for substantial amounts. Although the ultimate outcome of these claims and lawsuits cannot be ascertained at this time, it is the opinion of management that none of these matters, when resolved, will have a material effect on the Company’s consolidated results of operations or financial position.

Annual Report 2003	  	85	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
NOTE 22 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 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 continues to enhance and refine its internal management reporting system. Future enhancements of 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 when possible.
 
The tables on pages 86 and 87 disclose selected financial information for SunTrust’s reportable business segments for the twelve months ended December 31, 2003, 2002, and 2001.

 	  	December 31, 2003
	
(Dollars in thousands)
	  	Retail
	  	Commercial
	  	Corporate &
Investment
Banking
	  	Mortgage
	  	Private
Client
Services
	  	Corporate/
Other
	 	 	Consolidated
	
Average total assets	  	$	25,682,775	  	$	23,395,794	  	$	22,386,327	  	$	22,494,200	  	$	2,183,274	  	$	26,182,991	 	 	$	122,325,361	
Average total liabilities	  	 	52,981,839	  	 	10,827,735	  	 	9,081,569	  	 	1,800,908	  	 	1,530,188	  	 	37,020,096	 	 	 	113,242,335	
Average total equity	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	9,083,026	 	 	 	9,083,026	
 	  			  			  			  			  			  				 			
Net interest income (FTE) 1	  	 	1,334,281	  	 	585,574	  	 	279,911	  	 	545,847	  	 	43,755	  	 	575,949	 	 	 	3,365,317	
Provision for loan losses 2	  	 	152,570	  	 	41,828	  	 	107,303	  	 	6,855	  	 	1,977	  	 	3,017	 	 	 	313,550	
 	  			  			  			  			  			  				 			
Net interest income after provision for loan losses	  	 	1,181,711	  	 	543,746	  	 	172,608	  	 	538,992	  	 	41,778	  	 	572,932	 	 	 	3,051,767	
Noninterest income	  	 	738,354	  	 	306,638	  	 	547,590	  	 	14,702	  	 	660,118	  	 	35,599	 	 	 	2,303,001	
Noninterest expense	  	 	1,277,990	  	 	358,618	  	 	368,441	  	 	307,415	  	 	513,762	  	 	574,390	 	 	 	3,400,616	
 	  			  			  			  			  			  				 			
Total contribution before taxes	  	 	642,075	  	 	491,766	  	 	351,757	  	 	246,279	  	 	188,134	  	 	34,141	 	 	 	1,954,152	
Provision for income taxes 3	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	621,855	 	 	 	621,855	
 	  			  			  			  			  			  				 			
Net income	  	$	642,075	  	$	491,766	  	$	351,757	  	$	246,279	  	$	188,134	  	$	(587,714	)	 	$	1,332,297	

1	Net interest income is fully taxable equivalent and is presented on a matched maturity funds transfer price basis for the lines 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 $45,014 for the twelve months ended December 31, 2003.	

SunTrust Banks, Inc.	  	86	  	Annual Report 2003	

																							
 	  	December 31, 2002
	
(Dollars in thousands)
	  	Retail
	  	Commercial
	  	Corporate &
Investment
Banking
	  	Mortgage
	  	Private
Client
Services
	  	Corporate/
Other
	 	 	Consolidated
	
Average total assets	  	$	23,292,791	  	$	21,264,843	  	$	21,686,410	  	$	18,675,398	  	$	1,763,362	  	$	21,833,292	 	 	$	108,516,096	
Average total liabilities	  	 	51,636,479	  	 	8,880,044	  	 	6,361,273	  	 	1,265,271	  	 	1,561,706	  	 	30,085,616	 	 	 	99,790,389	
Average total equity	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	8,725,707	 	 	 	8,725,707	
 	  			  			  			  			  			  				 			
Net interest income (FTE) 1	  	 	1,360,333	  	 	533,544	  	 	268,536	  	 	374,547	  	 	40,148	  	 	706,123	 	 	 	3,283,231	
Provision for loan losses 2	  	 	102,656	  	 	38,592	  	 	227,097	  	 	6,379	  	 	2,345	  	 	92,723	 	 	 	469,792	
 	  			  			  			  			  			  				 			
Net interest income after provision for loan losses	  	 	1,257,677	  	 	494,952	  	 	41,439	  	 	368,168	  	 	37,803	  	 	613,400	 	 	 	2,813,439	
Noninterest income	  	 	708,325	  	 	228,184	  	 	526,720	  	 	13,445	  	 	629,499	  	 	162,654	 	 	 	2,268,827	
Noninterest expense	  	 	1,247,210	  	 	339,035	  	 	365,592	  	 	223,960	  	 	472,720	  	 	570,903	 	 	 	3,219,420	
 	  			  			  			  			  			  				 			
Total contribution before taxes	  	 	718,792	  	 	384,101	  	 	202,567	  	 	157,653	  	 	194,582	  	 	205,151	 	 	 	1,862,846	
Provision for income taxes 3	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	531,037	 	 	 	531,037	
 	  			  			  			  			  			  				 			
Net income	  	$	718,792	  	$	384,101	  	$	202,567	  	$	157,653	  	$	194,582	  	$	(325,886	)	 	$	1,331,809	

																							
 	  	December 31, 2001
	
(Dollars in thousands)
	  	Retail
	  	Commercial
	  	Corporate &
Investment
Banking
	  	Mortgage
	  	Private
Client
Services
	  	Corporate/
Other
	 	 	Consolidated
	
Average total assets	  	$	19,838,803	  	$	19,645,631	  	$	23,141,626	  	$	18,800,620	  	$	1,449,470	  	$	20,008,058	 	 	$	102,884,208	
Average total liabilities	  	 	45,657,041	  	 	7,696,694	  	 	5,440,839	  	 	1,024,977	  	 	1,365,275	  	 	33,625,622	 	 	 	94,810,448	
Average total equity	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	8,073,760	 	 	 	8,073,760	
 	  			  			  			  			  			  				 			
Net interest income (FTE) 1	  	 	1,443,247	  	 	531,422	  	 	357,036	  	 	242,457	  	 	44,054	  	 	675,148	 	 	 	3,293,364	
Provision for loan losses 2	  	 	49,623	  	 	31,989	  	 	144,789	  	 	6,919	  	 	1,517	  	 	40,328	 	 	 	275,165	
 	  			  			  			  			  			  				 			
Net interest income after provision for loan losses	  	 	1,393,624	  	 	499,433	  	 	212,247	  	 	235,538	  	 	42,537	  	 	634,820	 	 	 	3,018,199	
Noninterest income	  	 	597,267	  	 	197,308	  	 	413,624	  	 	100,189	  	 	577,682	  	 	165,805	 	 	 	2,051,875	
Noninterest expense	  	 	1,165,023	  	 	348,132	  	 	406,261	  	 	217,683	  	 	408,783	  	 	453,988	 	 	 	2,999,870	
 	  			  			  			  			  			  				 			
Total contribution before taxes	  	 	825,868	  	 	348,609	  	 	219,610	  	 	118,044	  	 	211,436	  	 	346,637	 	 	 	2,070,204	
Provision for income taxes 3	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	—  	  	 	694,667	 	 	 	694,667	
 	  			  			  			  			  			  				 			
Net income	  	$	825,868	  	$	348,609	  	$	219,610	  	$	118,044	  	$	211,436	  	$	(348,030	)	 	$	1,375,537	

1	Net interest income is fully taxable equivalent and is presented on a matched maturity funds transfer price basis for the lines 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 $39,522 and $40,764 for the twelve months ended December 31, 2002 and 2001, respectively.	

Annual Report 2003	  	87	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
NOTE 23 COMPREHENSIVE INCOME
 
The Company’s comprehensive income, which includes certain transactions and other economic events that bypass the income statement, consists of net income and unrealized gains and losses on securities available for sale, and derivatives net of income taxes and other comprehensive income related to retirement plans.
 
Comprehensive income for the years ended December 31, 2003, 2002, and 2001 is calculated as follows:

(Dollars in thousands)
	  	2003
	 	 	2002
	 	 	2001
	 	
Unrealized gain (loss) on available for sale securities, net, recognized in other comprehensive income:	  	 	 	 	 	 	 	 	 	 	 	 	
Before income tax	  	$	177,314	 	 	$	(195,217	)	 	$	(356,603	)	
Income tax	  	 	(62,060	)	 	 	(68,326	)	 	 	(124,811	)	
 	  				 				 				
Net of income tax	  	 	115,254	 	 	 	(126,891	)	 	 	(231,792	)	
 	  				 				 				
Amounts reported in net income:	  	 	 	 	 	 	 	 	 	 	 	 	
Gain on sale of securities	  	 	123,876	 	 	 	204,547	 	 	 	153,080	 	
Net amortization (accretion)	  	 	172,434	 	 	 	47,654	 	 	 	(11,633	)	
 	  				 				 				
Reclassification adjustment	  	 	296,310	 	 	 	252,201	 	 	 	141,447	 	
Income tax	  	 	(103,709	)	 	 	(88,270	)	 	 	(49,506	)	
 	  				 				 				
Reclassification adjustment, net of tax	  	 	192,601	 	 	 	163,931	 	 	 	91,941	 	
 	  				 				 				
Unrealized gain (loss) on available for sale securities arising during period, net of tax	  	 	307,855	 	 	 	37,040	 	 	 	(139,851	)	
Reclassification adjustment, net of tax	  	 	(192,601	)	 	 	(163,931	)	 	 	(91,941	)	
 	  				 				 				
Net unrealized gain (loss) on available for sale securities recognized in other comprehensive income	  	 	115,254	 	 	 	(126,891	)	 	 	(231,792	)	
 	  				 				 				
Unrealized gain (loss) on derivative financial instruments, net, recognized in other comprehensive income:	  	 	 	 	 	 	 	 	 	 	 	 	
Before income tax	  	 	45,366	 	 	 	13,822	 	 	 	(85,737	)	
Income tax	  	 	(15,878	)	 	 	(4,838	)	 	 	30,008	 	
 	  				 				 				
Net of income tax	  	 	29,488	 	 	 	8,984	 	 	 	(55,729	)	
 	  				 				 				
Cumulative effect of change in accounting principle	  	 	—  	 	 	 	—  	 	 	 	(16,246	)	
Income tax benefit	  	 	—  	 	 	 	—  	 	 	 	5,686	 	
 	  				 				 				
Cumulative effect of change in accounting principle, net of tax	  	 	—  	 	 	 	—  	 	 	 	(10,560	)	
 	  				 				 				
Reclassification of losses from other comprehensive income to earnings	  	 	—  	 	 	 	4,786	 	 	 	11,460	 	
Income tax expense	  	 	—  	 	 	 	(1,675	)	 	 	(4,011	)	
 	  				 				 				
Reclassification adjustment, net of tax	  	 	—  	 	 	 	3,111	 	 	 	7,449	 	
 	  				 				 				
Unrealized gain (loss) on derivative financial instruments arising during period, net of tax	  	 	29,488	 	 	 	5,873	 	 	 	(52,618	)	
Reclassification adjustment, net of tax	  	 	—  	 	 	 	3,111	 	 	 	7,449	 	
 	  				 				 				
Net unrealized gain (loss) on derivative instruments recognized in other comprehensive income	  	 	29,488	 	 	 	8,984	 	 	 	(45,169	)	
 	  				 				 				
Accumulated other comprehensive income related to retirement plans	  	 	9,881	 	 	 	(27,876	)	 	 	—  	 	
 	  				 				 				
Total unrealized gains (losses) recognized in other comprehensive income	  	 	154,623	 	 	 	(145,783	)	 	 	(287,521	)	
Net income	  	 	1,332,297	 	 	 	1,331,809	 	 	 	1,375,537	 	
 	  				 				 				
Total comprehensive income	  	$	1,486,920	 	 	$	1,186,026	 	 	$	1,088,016	 	

The components of accumulated other comprehensive income at December 31 was as follows:

(Dollars in thousands)
	  	2003
	 	 	2002
	 	 	2001
	 	
Unrealized gain on available for sale securities	  	$	1,699,344	 	 	$	1,584,091	 	 	$	1,710,982	 	
Unrealized loss on derivative financial instruments	  	 	(17,257	)	 	 	(46,745	)	 	 	(55,729	)	
Accumulated other comprehensive income related to retirement plans	  	 	(17,995	)	 	 	(27,876	)	 	 	—  	 	
 	  				 				 				
Total accumulated other comprehensive income	  	$	1,644,092	 	 	$	1,509,470	 	 	$	1,655,253	 	

					
SunTrust Banks, Inc.	  	88	  	Annual Report 2003	

On January 1, 2001, an unrealized loss of $10.6 million, net of tax, was recorded as a transition adjustment to other comprehensive income for the current value of cash flow hedges that were not required to be marked to market prior to the adoption SFAS No. 133. $3.1 million and $7.5 million of this transition adjustment were reclassified from other comprehensive income as an expense in 2002 and 2001, respectively. As of December 31, 2002, all of the transition adjustment had been reclassified to income. Fair value adjustments to accumulated other comprehensive income for cash flow hedges in 2003 amounted to $29.5 million, net of tax.
 
Other comprehensive income on December 31, 2003 included an unrealized loss of $17.3 million. In the next twelve months, $12.6 million of these losses is expected to be reclassified from other comprehensive income to the net interest margin.
 
NOTE 24 OTHER NONINTEREST INCOME AND FEES AND OTHER CHARGES
 
Other noninterest income in the Consolidated Statements of Income includes:

 	  	Year Ended December 31
	
(Dollars in thousands)
	  	2003
	  	2002
	  	2001
	
Trading account profits and commissions	  	$	109,878	  	$	103,170	  	$	95,683	
Other income	  	 	150,980	  	 	130,953	  	 	160,486	
 	  			  			  			
Total other noninterest income	  	$	260,858	  	$	234,123	  	$	256,169	

Fees and other charges in the Consolidated Statements of Income include:
 	  	 	 	  	 	 	  	 	 	
Other charges and fees	  	$	326,311	  	$	296,860	  	$	240,284	
Investment banking income	  	 	192,480	  	 	176,960	  	 	108,486	
Retail investment services	  	 	161,753	  	 	136,659	  	 	107,758	
Credit card and other fees	  	 	119,585	  	 	119,982	  	 	113,640	
 	  			  			  			
Total fees and other charges	  	$	800,129	  	$	730,461	  	$	570,168	

NOTE 25 OTHER NONINTEREST EXPENSE
 
Other noninterest expense in the Consolidated Statements of Income includes:

 	  	Year Ended December 31
	
(Dollars in thousands)
	  	2003
	  	2002
	  	2001
	
Outside processing and software	  	$	246,654	  	$	225,169	  	$	199,093	
Credit and collection services	  	 	70,316	  	 	64,601	  	 	74,642	
Postage and delivery	  	 	69,036	  	 	69,377	  	 	63,991	
Amortization of intangible assets	  	 	64,515	  	 	58,898	  	 	46,258	
Communications	  	 	61,261	  	 	64,845	  	 	59,232	
Other staff expense	  	 	60,353	  	 	51,975	  	 	58,546	
Consulting and legal	  	 	57,421	  	 	91,067	  	 	87,704	
Operating supplies	  	 	39,837	  	 	46,795	  	 	48,297	
FDIC premiums	  	 	17,958	  	 	17,352	  	 	15,985	
Other expense	  	 	252,713	  	 	210,757	  	 	164,473	
 	  			  			  			
Total other noninterest expense	  	$	940,064	  	$	900,836	  	$	818,221	

					
Annual Report 2003	  	89	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENT continued
 
NOTE 26 SUNTRUST BANKS, INC. (PARENT COMPANY ONLY) FINANCIAL INFORMATION STATEMENTS OF INCOME — PARENT COMPANY ONLY

 	  	Year Ended December 31
	
(Dollars in thousands)
	  	2003
	  	2002
	 	 	2001
	
Operating Income	  	 	 	  	 	 	 	 	 	 	
From subsidiaries:	  	 	 	  	 	 	 	 	 	 	
Dividends – substantially all from the Bank	  	$	1,072,487	  	$	1,765,179	 	 	$	1,318,300	
Service fees	  	 	—  	  	 	—  	 	 	 	156,870	
Interest on loans	  	 	3,870	  	 	13,374	 	 	 	23,231	
Other income	  	 	1	  	 	3	 	 	 	18	
Other operating income	  	 	33,474	  	 	57,128	 	 	 	53,336	
 	  			  				 			
Total operating income	  	 	1,109,832	  	 	1,835,684	 	 	 	1,551,755	
 	  			  				 			
Operating Expense	  	 	 	  	 	 	 	 	 	 	
Interest on short-term borrowings	  	 	3,840	  	 	6,424	 	 	 	32,734	
Interest on long-term debt	  	 	132,954	  	 	156,833	 	 	 	170,868	
Employee compensation and benefits	  	 	41,163	  	 	23,095	 	 	 	84,320	
Amortization of intangible assets	  	 	—  	  	 	—  	 	 	 	7,644	
Service fees to subsidiaries	  	 	6,934	  	 	10,018	 	 	 	30,859	
Other operating expense	  	 	61,621	  	 	66,996	 	 	 	123,582	
 	  			  				 			
Total operating expense	  	 	246,512	  	 	263,366	 	 	 	450,007	
 	  			  				 			
Income before income taxes and equity in undistributed income of subsidiaries	  	 	863,320	  	 	1,572,318	 	 	 	1,101,748	
Income tax benefit	  	 	53,751	  	 	32,396	 	 	 	116,836	
 	  			  				 			
Income before equity in undistributed income of subsidiaries	  	 	917,071	  	 	1,604,714	 	 	 	1,218,584	
Equity in undistributed income of subsidiaries	  	 	415,226	  	 	(272,905	)	 	 	156,953	
 	  			  				 			
Net Income	  	$	1,332,297	  	$	1,331,809	 	 	$	1,375,537	

					
SunTrust Banks, Inc.	  	90	  	Annual Report 2003	

BALANCE SHEETS — PARENT COMPANY ONLY

 	  	December 31
	 	
(Dollars in thousands)
	  	2003
	 	 	2002
	 	
Assets	  	 	 	 	 	 	 	 	
Cash in subsidiary banks	  	$	3,767	 	 	$	71,922	 	
Interest-bearing deposits in banks	  	 	8,722	 	 	 	6,490	 	
Funds sold and securities purchased under agreements to resell	  	 	913,900	 	 	 	—  	 	
Trading account	  	 	91,432	 	 	 	—  	 	
Securities available for sale	  	 	572,639	 	 	 	334,455	 	
Loans to subsidiaries	  	 	377,656	 	 	 	867,182	 	
Investment in capital stock of subsidiaries stated on the basis of the Company’s equity in subsidiaries’ capital accounts	  	 	 	 	 	 	 	 	
Banking subsidiaries	  	 	10,618,566	 	 	 	9,723,792	 	
Nonbanking and holding company subsidiaries	  	 	1,365,197	 	 	 	1,336,819	 	
Premises and equipment	  	 	16,877	 	 	 	51,175	 	
Intangible assets	  	 	76,587	 	 	 	76,587	 	
Other assets	  	 	853,099	 	 	 	1,031,695	 	
 	  				 				
Total assets	  	$	14,898,442	 	 	$	13,500,117	 	
 	  				 				
Liabilities and Shareholders’ Equity	  	 	 	 	 	 	 	 	
Short-term borrowings from	  	 	 	 	 	 	 	 	
Subsidiaries	  	$	139,006	 	 	$	119,230	 	
Non-affiliated companies	  	 	311,490	 	 	 	358,945	 	
Long-term debt	  	 	3,485,621	 	 	 	3,383,934	 	
Trading liabilities	  	 	4,921	 	 	 	—  	 	
Other liabilities	  	 	1,226,238	 	 	 	868,512	 	
 	  				 				
Total liabilities	  	 	5,167,276	 	 	 	4,730,621	 	
 	  				 				
Preferred stock, no par value; 50,000,000 shares authorized; none issued	  	 	—  	 	 	 	—  	 	
Common stock, $1.00 par value	  	 	294,163	 	 	 	294,163	 	
Additional paid in capital	  	 	1,288,311	 	 	 	1,276,110	 	
Retained earnings	  	 	7,149,118	 	 	 	6,322,217	 	
Treasury stock and other	  	 	(664,518	)	 	 	(632,464	)	
 	  				 				
Realized shareholders’ equity	  	 	8,067,074	 	 	 	7,260,026	 	
Accumulated other comprehensive income	  	 	1,664,092	 	 	 	1,509,470	 	
 	  				 				
Total shareholders’ equity	  	 	9,731,166	 	 	 	8,769,496	 	
 	  				 				
Total liabilities and shareholders’ equity	  	$	14,898,442	 	 	$	13,500,117	 	
 	  				 				
Common shares outstanding	  	 	281,923,057	 	 	 	282,504,571	 	
Common shares authorized	  	 	750,000,000	 	 	 	750,000,000	 	
Treasury shares of common stock	  	 	12,239,700	 	 	 	11,658,186	 	

Annual Report 2003	  	91	  	SunTrust Banks, Inc.	

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
 
STATEMENTS OF CASH FLOW — PARENT COMPANY ONLY

 	  	Year Ended December 31
	 	
(Dollars in thousands)
	  	2003
	 	 	2002
	 	 	2001
	 	
Cash Flow from Operating Activities:	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	1,332,297	 	 	$	1,331,809	 	 	$	1,375,537	 	
Adjustments to reconcile net income to net cash provided by operating activities:	  	 	 	 	 	 	 	 	 	 	 	 	
Equity in undistributed income of subsidiaries	  	 	(469,779	)	 	 	272,905	 	 	 	(156,953	)	
Depreciation, amortization and accretion	  	 	5,304	 	 	 	6,016	 	 	 	8,703	 	
Deferred income tax provision (benefit)	  	 	8,037	 	 	 	2,184	 	 	 	(7,800	)	
Amortization of compensation element of performance stock	  	 	5,475	 	 	 	3,074	 	 	 	6,110	 	
Securities gains	  	 	(7,117	)	 	 	(4,326	)	 	 	(224	)	
Net decrease (increase) in other assets	  	 	86,767	 	 	 	(94,951	)	 	 	(232,957	)	
Net increase in other liabilities	  	 	467,473	 	 	 	76,108	 	 	 	30,869	 	
 	  				 				 				
Net cash provided by operating activities	  	 	1,428,457	 	 	 	1,592,819	 	 	 	1,023,285	 	
 	  				 				 				
Cash Flows from Investing Activities:	  	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from sales of securities available for sale	  	 	177,712	 	 	 	117,638	 	 	 	5,370	 	
Purchases of securities available for sale	  	 	(345,066	)	 	 	(118,919	)	 	 	(46,411	)	
Net change in loans to subsidiaries	  	 	489,526	 	 	 	(181,948	)	 	 	161,750	 	
Capital expenditures	  	 	(193	)	 	 	—  	 	 	 	(6,131	)	
Proceeds from the sale of assets	  	 	—  	 	 	 	759	 	 	 	—  	 	
Net cash proceeds used for acquisitions, net of cash acquired	  	 	(55,528	)	 	 	—  	 	 	 	—  	 	
Capital contributions to subsidiaries	  	 	(251,286	)	 	 	(543,227	)	 	 	(74,303	)	
Other, net	  	 	6,726	 	 	 	(67,351	)	 	 	(3,799	)	
 	  				 				 				
Net cash provided by (used in) investing activities	  	 	21,891	 	 	 	(793,048	)	 	 	36,476	 	
 	  				 				 				
Cash Flows from Financing Activities:	  	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in short-term borrowings	  	 	18,671	 	 	 	(93,604	)	 	 	(427,047	)	
Proceeds from the issuance of long-term debt	  	 	123,376	 	 	 	316,456	 	 	 	600,000	 	
Repayment of long-term debt	  	 	(137,805	)	 	 	(451,608	)	 	 	(22,161	)	
Proceeds from the exercise of stock options and stock compensation expense	  	 	36,667	 	 	 	12,824	 	 	 	19,013	 	
Proceeds from stock issuance	  	 	44,268	 	 	 	40,809	 	 	 	22,235	 	
Acquisition of treasury stock	  	 	(182,152	)	 	 	(340,656	)	 	 	(551,485	)	
Performance stock activity	  	 	—  	 	 	 	(2,606	)	 	 	—  	 	
Dividends paid	  	 	(505,396	)	 	 	(489,543	)	 	 	(463,529	)	
 	  				 				 				
Net cash used in financing activities	  	 	(602,371	)	 	 	(1,007,928	)	 	 	(822,974	)	
 	  				 				 				
Net increase (decrease) in cash and cash equivalents	  	 	847,977	 	 	 	(208,157	)	 	 	236,787	 	
 	  				 				 				
Cash and cash equivalents at beginning of year	  	 	78,412	 	 	 	286,569	 	 	 	49,782	 	
 	  				 				 				
Cash and cash equivalents at end of period	  	$	926,389	 	 	$	78,412	 	 	$	286,569	 	
 	  				 				 				
Supplemental Disclosure	  	 	 	 	 	 	 	 	 	 	 	 	
Income taxes received from subsidiaries	  	$	528,187	 	 	$	495,194	 	 	$	558,887	 	
Income taxes paid by Parent Company	  	 	(339,629	)	 	 	(433,341	)	 	 	(444,758	)	
 	  				 				 				
Net income taxes received by Parent Company	  	$	188,558	 	 	$	61,853	 	 	$	114,129	 	
 	  				 				 				
Interest paid	  	$	138,298	 	 	$	163,805	 	 	$	222,785	 	
Net non-cash contribution of premises and equipment (to) from subsidiaries	  	 	(32,689	)	 	 	24,234	 	 	 	—  	 	
Non-cash dividend from subsidiaries	  	 	54,554	 	 	 	—  	 	 	 	—  	 	

SunTrust Banks, Inc.	  	92	  	Annual Report 2003	

2003 FORM 10-K
 
Securities and Exchange Commission
Washington, DC 20549
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 2003
Commission file number 1-8918
 
SunTrust Banks, Inc.
Incorporated in the State of Georgia
IRS Employer Identification Number 58-1575035
Address: 303 Peachtree Street, NE, Atlanta, GA 30308
Telephone: (404) 588-7711
 
Securities Registered Pursuant to Section 12(b) of the Act: Common Stock–$1.00 par value, which is registered on the New York Stock Exchange.
 
As of January 31, 2004, SunTrust had 282,179,309 shares of common stock outstanding.
 
SunTrust (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.
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
 
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act.) þ
 
As of June 30, 2003, SunTrust had 281,392,725 shares of common stock outstanding. The aggregate market value of SunTrust common stock held by non-affiliates on June 30, 2003 was approximately $16.6 billion.

Annual Report 2003	  	93	  	SunTrust Banks, Inc.	

2003 FORM 10-K continued
 
DOCUMENTS INCORPORATED BY REFERENCE
 
Part III information is incorporated herein by reference, pursuant to Instruction G of Form 10-K, from SunTrust’s Proxy Statement for its 2004 Annual Shareholders’ Meeting, which will be filed with the Commission by March 8, 2004. Certain Part I and Part II information required by Form 10-K is incorporated by reference from the SunTrust Annual Report to Shareholders as indicated below. Except for parts of the SunTrust Annual Report to Shareholders expressly incorporated herein by reference, this Annual Report is not to be deemed filed with the Securities and Exchange Commission.

 	  	 	  	Page
	
Part I	  	 	  	 	
			
Item 1	  	Business	  	2–53, inside back cover	
Item 2	  	Properties	  	53	
Item 3	  	Legal Proceedings	  	53	
Item 4	  	Not Applicable	  	 	
			
Part II	  	 	  	 	
			
Item 5	  	Market for the Registrant’s Common Equity and Related Stockholder Matters	  	14, 45, inside front cover,	
 	  	 	  	inside back cover	
Item 6	  	Selected Financial Data	  	14	
Item 7	  	Management’s Discussion and Analysis of Financial Condition and Results of Operations	  	2–53	
Item 7A	  	Quantitative and Qualitative Disclosures about Market Risk	  	41–44	
Item 8	  	Financial Statements and Supplementary Data	  	45–50, 54–92	
Item 9	  	Not Applicable	  	 	
Item 9A	  	Controls and Procedures	  	53	
			
Part III	  	 	  	 	
			
Item 10	  	Directors and Executive Officers of the Registrant	  	Proxy Statement	
Item 11	  	Executive Compensation	  	Proxy Statement	
Item 12	  	Security Ownership of Certain Beneficial Owners and Management	  	Proxy Statement	
Item 13	  	Certain Relationships and Related Transactions	  	Proxy Statement	
Item 14	  	Principal Accountant Fees and Services	  	Proxy Statement	
			
Part IV	  	 	  	 	
			
Item 15	  	Exhibits, Financial Statement Schedules and Reports on Form 8-K	  	95	

Certain statistical data required by the Securities and Exchange Commission are included on pages 14–50.

SunTrust Banks, Inc.	  	94	  	Annual Report 2003	

EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
 
Financial Statement Filed. See Index To Consolidated Financial Statements on page 54 of this Annual Report and Form 10-K.
 
All financial statement schedules are omitted because the data is either not applicable or is discussed in the financial statements or related footnotes. The Company filed a Form 8-K dated January 12, 2004 to file a news release announcing financial results for the fourth quarter and year ended December 31, 2003.
 
The Company’s principal banking subsidiary is owned by SunTrust Bank Holding Company, a Florida corporation. A directory of the Company’s principal banking units and key subsidiaries are on pages 97–99 of this Annual Report and Form 10-K. The Company’s Articles of Incorporation, By-laws, certain instruments defining the rights of securities holders, including designations of the terms of outstanding indentures, constituent instruments relating to various employee benefit plans and certain other documents are filed as Exhibits to this Report or incorporated by reference herein pursuant to the Securities Exchange Act of 1934. Shareholders may obtain the list of such Exhibits and copies of such documents upon request to Corporate Secretary, SunTrust Banks, Inc., Mail Code 643, P.O. Box 4418, Atlanta, Georgia, 30302. A copying fee will be charged for the Exhibits.
 
CONSENT OF INDEPENDENT ACCOUNTANTS
 
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-28250, 33-58723, 333-50719, 333-86306, 333-69331, 333-91519, 333-91521, 333-43348, 333-106638) and Form S-3 (Nos. 333-61583, 333-86330) of SunTrust Banks, Inc. of our report dated January 12, 2004 relating to the financial statements, which appears in the Annual Report to Shareholders, which is incorporated in this Annual Report on Form 10-K.
 
PricewaterhouseCoopers LLP
 
Atlanta, GA
February 27, 2004
 
SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf on February 10, 2004 by the undersigned, thereunto duly authorized.

SunTrust Banks, Inc.
(Registrant)	 	 	 	L. Phillip Humann
Chairman of the Board of Directors,
President and Chief Executive Officer	
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on February 10, 2004 by the following persons on behalf of the Registrant and in the capacities indicated.

L. Phillip Humann
Chairman of the Board of Directors,
President and Chief Executive Officer	 	 	 	Jorge Arrieta
Senior Vice President
and Controller	

John W. Spiegel
Vice Chairman and
Chief Financial Officer	
 
All Directors of the Registrant listed on page 96.

Annual Report 2003	  	95	  	SunTrust Banks, Inc.	

BOARD OF DIRECTORS

L. Phillip Humann 1 	 	M. Douglas Ivester 2, 4 	 	Frank S. Royal, M.D. 2 	
Director since 1991	 	Director since 1998	 	Director since 1998	
Chairman of the Board,	 	(Retired) Chairman of the Board	 	President	
President and	 	and Chief Executive Officer	 	Frank S. Royal, M.D., P.C.	
Chief Executive Officer	 	The Coca-Cola Company	 	Richmond, VA	
SunTrust Banks, Inc.	 	Atlanta, GA	 	 	
Atlanta, GA	 	 	 	James B. Williams 1 	
 	 	Summerfield K. Johnston, Jr. 1 	 	Director since 1984	
J. Hyatt Brown 1 	 	Director since 1997	 	Chairman of the	
Director since 1984	 	Chairman of the	 	Executive Committee	
Chairman of the Board and	 	Executive Committee	 	SunTrust Banks, Inc.	
Chief Executive Officer	 	Coca-Cola Enterprises, Inc.	 	Atlanta, GA	
Brown & Brown, Inc.	 	Atlanta, GA	 	 	
Daytona Beach, FL	 	 	 	Karen Hastie Williams 2, 4 	
 	 	J. Hicks Lanier 2 	 	Director since 2002	
Alston D. Correll 3, 4 	 	Director since 2003	 	Partner	
Director since 1997	 	Chairman and	 	Crowell & Moring, L.L.P.	
Chairman of the Board and	 	Chief Executive Officer	 	Washington, DC	
Chief Executive Officer	 	Oxford Industries, Inc.	 	 	
Georgia-Pacific Corporation	 	Atlanta, GA	 	 	
Atlanta, GA	 	 	 	 	
 	 	G. Gilmer Minor, III 3, 4 	 	 	
Douglas N. Daft 1 	 	Director since 1998	 	 	
Director since 2000	 	Chairman of the Board and	 	 	
Chairman of the Board and	 	Chief Executive Officer	 	 	
Chief Executive Officer	 	Owens & Minor, Inc.	 	 	
The Coca-Cola Company	 	Richmond, VA	 	COMMITTEES OF THE BOARD	
Atlanta, GA	 	 	 	 	
 	 	Larry L. Prince 3 	 	1    Executive Committee	
Patricia C. Frist 2 	 	Director since 1996	 	     James B. Williams, Chair	
Director since 2000	 	Chairman of the Board and	 	 	
Partner in Frist Capital Partners	 	Chief Executive Officer	 	2    Audit Committee	
President, Frisco, Inc. and	 	Genuine Parts Company	 	     M. Douglas Ivester, Chair	
President, Patricia C. Frist and	 	Atlanta, GA	 	     Audit Committee Financial Expert	
Thomas F. Frist, Jr. Foundation	 	 	 	 	
Nashville, TN	 	R. Randall Rollins 2 	 	3    Compensation Committee	
 	 	Director since 1998	 	     Larry L. Prince, Chair	
David H. Hughes 3, 4 
Director since 1984
Chairman of the Board
Hughes Supply, Inc.
Orlando, FL	 	Chairman of the Board
Rollins, Inc. and
Chairman of the Board and
Chief Executive Officer
RPC, Inc.
Atlanta, GA	 	 
4    Governance and Nominating Committee
     David H. Hughes, Chair	

SunTrust Banks, Inc.	  	96	  	Annual Report 2003	

MANAGEMENT COMMITTEE

L. Phillip Humann	  	Donald S. Downing	  	Dennis M. Patterson	
Chairman, President and Chief Executive Officer
SunTrust Banks, Inc.
35 years of service.	  	Executive Vice President
Chief Strategy Officer
36 years of service.	  	Executive Vice President
Sales and Corporate
Administration
35 years of service.	
 	  	 	  	 	
John W. Clay, Jr.	  	Sterling Edmunds, Jr.	  	 	
Vice Chairman
Geographic Banking, Corporate	  	President and Chief Executive Officer	  	William H. Rogers, Jr.	
and Investment Banking Line	  	SunTrust Mortgage, Inc.	  	Executive Vice President	
of Business	  	17 years of service.	  	Private Client Services	
37 years of service.	  	 	  	Line of Business	
 	  	C.T. Hill	  	23 years of service.	
 	  	Chairman, President and Chief
Executive Officer	  	 	
Theodore J. Hoepner	  	Mid-Atlantic Banking Group	  	R. Charles Shufeldt	
Vice Chairman and Chief Risk Officer	  	34 years of service.	  	Executive Vice President	
Human Resources, Asset Quality,	  	 	  	Corporate and Investment	
Legal and Regulatory Affairs,	  	Sandra Jansky	  	Banking Line of Business	
Audit, and Efficiency and	  	Executive Vice President	  	20 years of service.	
Quality Initiatives	  	Chief Credit Officer	  	 	
36 years of service.	  	23 years of service.	  	Mary T. Steele	
 	  	 	  	Senior Vice President	
John W. Spiegel	  	Craig J. Kelly	  	Director of Human Resources	
Vice Chairman and Chief Financial Officer	  	Executive Vice President	  	25 years of service.	
Accounting, Funds Management,	  	Chief Marketing Officer	  	 	
Risk Management, Strategic	  	7 years of service.	  	Timothy E. Sullivan	
Finance & Taxes, Investor	  	 	  	Executive Vice President	
Relations, and Treasury	  	C. Eugene Kirby	  	Chief Information Officer	
39 years of service.	  	Executive Vice President	  	Joined SunTrust January, 2003.	
 	  	Retail Banking Line of Business	  	 	
James M. Wells III	  	19 years of service.	  	E. Jenner Wood, III	
Vice Chairman
Commercial, Retail, Mortgage,	  	 	  	Chairman, President and Chief Executive Officer	
Private Client Services Lines
of Business, Technology &	  	George W. Koehn	  	Central Banking Group
29 years of service.	
Operations, Corporate Strategy,
and Marketing	  	Chairman, President and Chief
Executive Officer	  	 	
36 years of service.	  	Florida Banking Group	  	 	
 	  	25 years of service.	  	 	
Robert H. Coords	  	 	  	 	
Executive Vice President	  	Carl F. Mentzer	  	 	
Chief Efficiency and	  	Executive Vice President	  	 	
Quality Officer	  	Commercial Banking	  	 	
31 years of service.	  	Line of Business	  	 	
 	  	26 years of service.	  	 	

 
					
Annual Report 2003	  	97	  	SunTrust Banks, Inc.	

BANKS

GEOGRAPHIC AREA
	  	LOCATION
	  	KEY EXECUTIVE(S)
	  	DEPOSITS
	  	BRANCHES
	
Central Group	  	Atlanta	  	E. Jenner Wood, III	  	$	19.2 billion	  	393	
Atlanta Region	  	Atlanta	  	J. Scott Wilfong	  	$	8.5 billion	  	174	
• SunTrust Bank, Atlanta	  	Atlanta	  	J. Scott Wilfong	  	 	8.0 billion	  	155	
• SunTrust Bank, Gainesville	  	Gainesville	  	Lana D. Nix	  	 	184 million	  	10	
• SunTrust Bank, Athens	  	Athens	  	Peter Hodgson, Jr.	  	 	321 million	  	9	
					
Chattanooga Region	  	Chattanooga	  	Margaret Lynch Callihan	  	$	2.5 billion	  	57	
• SunTrust Bank, Chattanooga	  	Chattanooga	  	Margaret Lynch Callihan	  	 	1.4 billion	  	30	
• SunTrust Bank, Northwest Georgia	  	Rome	  	W. Steven Jaynes	  	 	339 million	  	10	
• SunTrust Bank, Tennessee Valley	  	Florence, AL	  	W. David Jones	  	 	720 million	  	17	
					
East Tennessee Region	  	Knoxville	  	Larry D. Mauldin	  	$	1.8 billion	  	40	
• SunTrust Bank, East Tennessee	  	Knoxville	  	Larry D. Mauldin	  	 	1.4 billion	  	31	
• SunTrust Bank, Northeast Tennessee	  	Johnson City	  	R. Odie Major	  	 	358 million	  	9	
					
Georgia-Carolina Region	  	Savannah	  	William B. Haile	  	$	3.2 billion	  	82	
• SunTrust Bank, Augusta	  	Augusta	  	William R. Thompson	  	 	421 million	  	11	
• SunTrust Bank, Middle Georgia	  	Macon	  	Mardie R. Herndon, Jr.	  	 	510 million	  	17	
• SunTrust Bank, Savannah	  	Savannah	  	Gerald L. Rainey	  	 	692 million	  	13	
• SunTrust Bank, Southeast Georgia	  	Brunswick	  	Jack E. Hartman	  	 	422 million	  	12	
• SunTrust Bank, West Georgia	  	Columbus	  	Frank S. Etheridge, III	  	 	448 million	  	11	
• SunTrust Bank, South Georgia	  	Albany	  	D. Michael Marz	  	 	431 million	  	13	
• SunTrust Bank, Hilton Head	  	Hilton Head Island, SC	  	Phillip E. Wright	  	 	247 million	  	5	
					
Nashville Region	  	Nashville	  	Warren W. Woodring	  	$	3.2 billion	  	40	
• SunTrust Bank, Nashville	  	Nashville	  	Warren W. Woodring	  	 	3.2 billion	  	40	
					
Florida Group	  	Orlando	  	George W. Koehn	  	$	28.7 billion	  	422	
Central Florida Region	  	Orlando	  	Thomas H. Yochum	  	$	8.4 billion	  	113	
• SunTrust Bank, Central Florida	  	Orlando	  	Thomas H. Yochum	  	 	4.3 billion	  	39	
• SunTrust Bank, Mid-Florida	  	Lakeland	  	Charles W. McPherson	  	 	1.3 billion	  	25	
• SunTrust Bank, East Central Florida	  	Daytona Beach	  	William H. Davison	  	 	1.3 billion	  	26	
• SunTrust Bank, Brevard Co.	  	Melbourne	  	Julia Dunn Story	  	 	789 million	  	13	
• SunTrust Bank, Lake Co.	  	Leesburg	  	Bradley L. White	  	 	703 million	  	10	
					
North Florida Region	  	Jacksonville	  	John R. Schmitt	  	$	3.7 billion	  	59	
• SunTrust Bank, North Florida	  	Jacksonville	  	John R. Schmitt	  	 	1.6 billion	  	17	
• SunTrust Bank, North Central Florida	  	Ocala	  	William H. Evans	  	 	754 million	  	12	
• SunTrust Bank, Northwest Florida	  	Tallahassee	  	David B. Ramsay	  	 	522 million	  	12	
• SunTrust Bank, Pensacola	  	Pensacola	  	Henry E. Gonzales, Jr.	  	 	245 million	  	8	
• SunTrust Bank, Gainesville	  	Gainesville	  	Dick D. Mahaffey, Jr.	  	 	248 million	  	5	
• SunTrust Bank, Panama City	  	Panama City	  	Jan E. Shadburn	  	 	321 million	  	5	

SunTrust Banks, Inc.	  	98	  	Annual Report 2003	

										
GEOGRAPHIC AREA
	  	LOCATION
	  	KEY EXECUTIVE(S)
	  	DEPOSITS
	  	BRANCHES
	
South Florida Region	  	Ft. Lauderdale	  	Thomas G. Kuntz	  	$	7.7 billion	  	92	
• SunTrust Bank, South Florida	  	Ft. Lauderdale	  	Thomas G. Kuntz	  	 	4.0 billion	  	43	
• SunTrust Bank, Palm Beach	  	Palm Beach	  	Robert M. Strickland	  	 	1.1 billion	  	25	
• SunTrust Bank, Miami	  	Miami	  	Nicholas G. Bustle	  	 	2.6 billion	  	24	
					
Southwest Florida Region	  	Sarasota	  	Ray L. Sandhagen	  	$	3.7 billion	  	61	
• SunTrust Bank, Gulf Coast	  	Sarasota	  	Ray L. Sandhagen	  	 	2.6 billion	  	34	
• SunTrust Bank, Fort Myers	  	Ft. Myers	  	Bruce A. Schultz	  	 	673 million	  	15	
• SunTrust Bank, Naples	  	Naples	  	Daniel G. Waetjen	  	 	453 million	  	12	
					
Tampa Region	  	Tampa	  	Daniel W. Mahurin	  	$	5.2 billion	  	97	
 	  	 	  	James H. Kimbrough	  	 	 	  	 	
• SunTrust Bank, Tampa	  	Tampa	  	Daniel W. Mahurin	  	 	2.2 billion	  	40	
• SunTrust Bank, Nature Coast	  	Brooksville	  	James H. Kimbrough	  	 	1.9 billion	  	35	
• SunTrust Bank,North Pinellas Co./Clearwater	  	Clearwater	  	Kendel M. Jensen	  	 	728 million	  	12	
• SunTrust Bank, South Pinellas Co./St. Petersburg	  	St. Petersburg	  	Roy A. Binger	  	 	402 million	  	10	
					
Mid Atlantic Group	  	Richmond	  	C.T. Hill	  	$	18.2 billion	  	386	
Central Virginia Region	  	Richmond	  	A. Dale Cannady	  	$	2.2 billion	  	46	
• SunTrust Bank, Central Virginia	  	Richmond	  	A. Dale Cannady	  	 	2.2 billion	  	46	
					
Greater Washington Region	  	Washington, DC	  	Peter F. Nostrand	  	$	10.0 billion	  	170	
• SunTrust Bank, Greater Washington	  	Washington, DC	  	Peter F. Nostrand	  	 	10.0 billion	  	170	
					
Hampton Roads Region	  	Norfolk	  	William K. Butler II	  	 	2.0 billion	  	46	
• SunTrust Bank, Hampton Roads	  	Norfolk	  	William K. Butler II	  	 	1.1 billion	  	24	
• SunTrust Bank, Newport News	  	Newport News	  	Jerome F. Clark	  	 	511 million	  	11	
• SunTrust Bank, Williamsburg	  	Williamsburg	  	Bernard H. Ngo	  	 	444 million	  	11	
					
Maryland Region	  	Baltimore	  	Donald P. Hutchinson	  	$	1.9 billion	  	61	
• SunTrust Bank, Maryland	  	Baltimore	  	Donald P. Hutchinson	  	$	1.9 billion	  	61	
					
Western Virginia Region	  	Roanoke	  	Robert C. Lawson, Jr.	  	$	2.1 billion	  	63	
• SunTrust Bank, Roanoke	  	Roanoke	  	Robert C. Lawson, Jr.	  	 	599 million	  	16	
• SunTrust Bank, Charlottesville	  	Charlottesville	  	Steven C. Krohn	  	 	380 million	  	10	
• SunTrust Bank, Harrisonburg	  	Harrisonburg	  	Martha D. Shifflett	  	 	287 million	  	11	
• SunTrust Bank, Lynchburg	  	Lynchburg	  	Stuart C. Fauber	  	 	272 million	  	8	
• SunTrust Bank, Martinsville	  	Martinsville	  	James R. Austin	  	 	336 million	  	8	
• SunTrust Bank, Radford	  	Radford	  	David W. DeHart	  	 	92 million	  	4	
• SunTrust Bank, Staunton	  	Staunton	  	Gregory C. Godsey	  	 	146 million	  	6	

Annual Report 2003	  	99	  	SunTrust Banks, Inc.	

KEY SUBSIDIARIES

 	  	CHIEF EXECUTIVE
	
Asset Management Advisors, L.L.C.	  	Henry A. Perry	
Provides comprehensive financial, investment advisory and family wealth management services.	  	 	
		
Premium Assignment Corporation	  	Peter Kugelmann	
Provides insurance premium financing primarily to small businesses.	  	 	
		
SunTrust BankCard, N.A.	  	Ronald W. Eastburn	
Offers credit card services to commercial and corporate clients.	  	 	
		
SunTrust Capital Markets, Inc.	  	R. Charles Shufeldt	
SunTrust’s investment banking subsidiary. Includes SunTrust Robinson Humphrey Capital Markets,
which offers securities underwriting and investment advisory capabilities to corporate, institutional
and public entities, as well as Alexander Key Investments, a full-service brokerage serving the needs
of wealthy investors.	  	 	
		
SunTrust Community Development Corporation	  	William H. Pridgen	
Manages the Company’s investments in affordable housing.	  	 	
		
SunTrust Delaware Trust Company	  	Barbara B. O’Donnell	
A limited purpose trust company providing specialized investment-related services for high-net-worth
clients.	  	 	
		
SunTrust Insurance Company	  	Peter G. Bielan	
Re-insures credit life as well as accident and health insurance policies.	  	 	
		
SunTrust Leasing Corporation	  	Daniel E. McKew	
Provides equipment-related lease financing to businesses.	  	 	
		
SunTrust Mortgage, Inc.	  	Sterling Edmunds, Jr.	
One of the nation’s largest bank-owned mortgage companies.	  	 	
Originates, purchases, sells and services mortgage loans.	  	 	
		
SunTrust Securities, Inc.	  	Peter G. Bielan	
Provides full-service brokerage and investment advisory services primarily to retail investors.	  	 	
		
Trusco Capital Management, Inc.	  	Douglas S. Phillips	
An SEC-registered investment advisor that manages assets for institutional clients. Includes the STI
Classic Funds, SunTrust’s mutual fund family.	  	 	

SunTrust Banks, Inc.	  	100	  	Annual Report 2003	

SHAREHOLDER INFORMATION
 
SunTrust Banks, Inc.
 
CORPORATE HEADQUARTERS
 
SunTrust Banks, Inc.
303 Peachtree Street, NE
Atlanta, GA 30308
404/588-7711
 
CORPORATE MAILING ADDRESS
 
SunTrust Banks, Inc.
P.O. Box 4418
Center 645
Atlanta, GA 30302-4418
 
NOTICE OF ANNUAL MEETING
 
The Annual Meeting of Shareholders will be held on Tuesday, April 20, 2004 at 9:30 a.m. in Suite 105, first floor of the SunTrust Garden Offices at 303 Peachtree Center Avenue in Atlanta.
 
STOCK TRADING
 
SunTrust Banks, Inc. common stock is traded on the New York Stock Exchange under the symbol “STI.”
 
QUARTERLY COMMON STOCK PRICES AND DIVIDENDS
 
The quarterly high, low and close prices of SunTrust’s common stock for each quarter of 2003 and 2002 and the dividends paid per share are shown below.

 	  	Market Price
	  	 	
Quarter Ended
	  	High
	  	Low
	  	Close
	  	Dividends
Paid
	
2003	  	 	  	 	  	 	  	 	 	
December 31	  	71.73	  	60.45	  	71.50	  	$	0.45	
September 30	  	63.00	  	58.00	  	60.37	  	 	0.45	
June 30	  	61.98	  	51.44	  	59.34	  	 	0.45	
March 31	  	59.95	  	51.73	  	52.65	  	 	0.45	
 	  		  		  		  			
2002	  	 	  	 	  	 	  	 	 	
December 31	  	63.25	  	51.48	  	56.92	  	$	0.43	
September 30	  	69.12	  	55.90	  	61.48	  	 	0.43	
June 30	  	70.20	  	65.10	  	67.72	  	 	0.43	
March 31	  	68.47	  	58.32	  	66.73	  	 	0.43	

DEBT RATINGS
 
Ratings as of December 31, 2003.

 	  	Moody’s
Investors
	  	Standard
& Poor’s
	  	Fitch
	
Corporate Ratings	  	 	  	 	  	 	
Long Term Debt Ratings	  	 	  	 	  	 	
Senior Debt	  	Aa3	  	A+	  	AA-	
Subordinated Debt	  	A1	  	A	  	A+	
 	  		  		  		
Short Term	  	 	  	 	  	 	
Commercial Paper	  	P-1	  	A-1	  	F1+	
 	  		  		  		
Bank Ratings	  	 	  	 	  	 	
Long Term Debt Ratings	  	 	  	 	  	 	
Senior Debt	  	Aa2	  	AA-	  	AA-	
Subordinated Debt	  	Aa3	  	A+	  	A+	
 	  		  		  		
Short Term	  	P-1	  	A-1+	  	F1+	

NUMBER OF SHAREHOLDERS
 
As of December 31, 2003, 35,811 Registered Shareholders (Shareholders of Record)
Approximately 68,000 Street Name Shareholders
Approximately 28,000 Employee Shareholders
There could be overlapping shareholders among the three shareholder groups.
 
SHAREHOLDER SERVICES
 
Shareholders who wish to change the name, address or ownership of stock, to report lost certificates or to consolidate accounts should contact the Transfer Agent:
 
SunTrust Bank
P.O. Box 4625
Atlanta, GA 30302-4625
404/588-7815
800/568-3476
 
DIVIDEND REINVESTMENT
 
SunTrust offers a Dividend Reinvestment Plan that provides automatic reinvestment of dividends in additional shares of SunTrust common stock. For more information contact:
 
Stock Transfer Department
SunTrust Bank
P.O. Box 4625
Atlanta, GA 30302-4625
404/588-7822
 
FINANCIAL INFORMATION
 
To obtain information on SunTrust, contact:
 
Gary Peacock, Jr.
Director of Investor Relations and
Corporate Communications
404/658-4879
 
For information online, visit www.suntrust.com:
 
 	•	2003 Annual Report (including select information translated in Spanish)	
 
 	•	Quarterly earnings releases	
 
 	•	Press releases	
 
WEB SITE ACCESS TO UNITED STATES SECURITIES AND EXCHANGE COMMISSION FILINGS
 
All reports filed electronically by SunTrust Banks, Inc. with the United States Securities and Exchange Commission, including the annual report on Form 10-K, quarterly reports on Form 10-Q, and current event reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are accessible as soon as reasonably practicable at no cost in the Investor Relations section of the corporate Web site at www.suntrust.com
 
CORPORATE GOVERNANCE GUIDELINES
 
SunTrust has adopted the SunTrust Corporate Governance Guidelines, which can be found on the Corporate Governance Web page in the “About SunTrust” subsection on SunTrust’s corporate Web site at www.suntrust.com. In addition, SunTrust will provide a print version of the guidelines to shareholders who request it by contacting Gary Peacock, Jr., Director of Investor Relations and Corporate Communications, at 404/658-4879.
 
Magazine cover on page 4 courtesy of Florida Monthly magazine. Rendering on page 5 courtesy of Willey Brothers, Inc.

Annual Report 2003	  	 	  	SunTrust Banks, Inc.	

S UN T RUST
 
SunTrust Banks, Inc.
303 Peachtree Street
Atlanta, GA 30308

Exhibit 21.1
 
SUNTRUST BANKS, INC.
ORGANIZATION CHART
December 31, 2003

SunTrust Banks, Inc.	 	Atlanta, GA	
	
Lower Tier Bank Holding Company	
			
100%	 	SunTrust Bank Holding Company	 	Orlando, FL	
 	 	100%    (see pages 3 – 6 for subsidiaries)	 	 	
	
Direct Bank Subsidiaries	
			
100%	 	SunTrust BankCard, National Association	 	Orlando, FL	
	
Direct Non Bank Subsidiaries	
			
100%	 	AMA Holdings, Inc.	 	Jupiter, FL	
	 	100%	 	Teton Trust Company.	 	Jackson, WY	
	 	 	 	100%	 	TTC & Co, L.L.C.	 	Jackson, WY	
	 	88.666%	 	Asset Management Advisors Atlanta, L.L.C.	 	Atlanta, GA	
	 	100%	 	AMA/Lighthouse, Inc.	 	West Palm Beach, FL	
	 	 	 	80%	 	Lighthouse Partners, L.L.C.	 	Jupiter, FL	
	 	76.37%	 	Asset Management Advisors, L.L.C.	 	Jupiter, FL	
	 	100%	 	Abundance, L.L.C.	 	Jupiter, FL	
	 	91.591%	 	Asset Management Advisors, Charlotte L.L.C.	 	Charlotte, NC	
	 	95%	 	Asset Management Advisors – Eagle, L.L.C.	 	Greenwich, CT	
	 	88%	 	Asset Management Advisors of Greater Washington, DC, L.L.C.	 	Chevy Chase, MD	
			
100%	 	STI Investment Management (Collateral), Inc.	 	Newark, DE	
				
 	 	100%	 	STI Investment Management, Inc.	 	Newark, DE	
			
100%	 	SunTrust Capital I	 	Atlanta, GA	
			
100%	 	SunTrust Capital II	 	Atlanta, GA	
			
100%	 	SunTrust Capital III	 	Atlanta, GA	
			
100%	 	SunTrust Capital IV	 	Atlanta, GA	
			
100%	 	SunTrust Capital V	 	Atlanta, GA	
			
100%	 	SunTrust Capital VI	 	Atlanta, GA	
	
Direct Non Bank Subsidiaries (continued)	
 
Page 1 of 6

Exhibit 21.1
 
SUNTRUST BANKS, INC.
ORGANIZATION CHART
December 31, 2003

Sun Trust Banks, Inc.	 	Atlanta, GA	
			
100%	 	SunTrust Capital VII	 	Atlanta, GA	
			
100%	 	SunTrust Delaware Trust Company	 	Wilmington, DE	
			
100%	 	SunTrust Capital Markets, Inc	 	Nashville, TN	
				
 	 	100%	 	SunTrust Equitable Securities Corporation of Delaware, Inc.	 	Wilmington, DE	
			
100%	 	SunTrust Insurance Company	 	Chattanooga, TN	
			
99.99%	 	SunTrust Plaza Associates, L.L.C.	 	Atlanta, GA	
			
100%	 	SunTrust Real Estate Corporation	 	Richmond, VA	
			
100%	 	Trusco Capital Management, Inc.	 	Atlanta, GA	
			
100%	 	SunTrust Equity Funding, L.L.C.	 	Atlanta, GA	
			
100%	 	STBCT Corporation	 	Richmond, VA	
 
Page 2 of 6

Exhibit 21.1
 
SUNTRUST BANKS, INC.
ORGANIZATION CHART
December 31, 2003

		
100%	  	SunTrust Bank Holding Company	
				
 	  	100%	  	SunTrust Bank (see pages 3 – 5 for subsidiaries)	  	Atlanta, GA	
					
 	  	 	  	100%	  	Three Pillars Funding Corporation	  	Atlanta, GA	
					
 	  	 	  	100%	  	Three Pillars Credit Corporation	  	Atlanta, GA	
					
 	  	 	  	100%	  	Premium Assignment Corporation	  	Tallahassee, FL	
						
 	  	 	  	 	  	100%	  	Premium Assignment Corporation, II	  	Tallahassee, FL	
					
 	  	 	  	100%	  	Acquisition and Equity Corporation	  	Knoxville, TN	
					
 	  	 	  	100%	  	Kasalta Miramar, Inc.	  	Miami, FL	
					
 	  	 	  	100%	  	STB Capital, L.L.C.	  	Newark, DE	
					
 	  	 	  	100%	  	STB Receivables (Central Florida), Inc.	  	Newark, DE	
					
 	  	 	  	100%	  	STB Management Corporation	  	Newark, DE	
						
 	  	 	  	 	  	100%	  	STB FNC Corporation	  	Newark, DE	
							
 	  	 	  	 	  	 	  	100%	  	STB STR Corporation	  	Newark, DE	
					
 	  	 	  	100%	  	STB Real Estate (Georgia), Inc.	  	Newark, DE	
						
 	  	 	  	 	  	100%	  	STB Real Estate Parent (Georgia), Inc.	  	Newark, DE	
							
 	  	 	  	 	  	 	  	100%	  	STB Real Estate Holdings (Georgia), Inc.	  	Newark, DE	
								
 	  	 	  	 	  	 	  	 	  	100%	  	STB Holdings (Georgia) TRS, Inc.	  	Newark, DE	
								
 	  	 	  	 	  	 	  	 	  	100%	  	STB Real Estate Holdings (Atlanta), Inc.	  	Newark, DE	
								
 	  	 	  	 	  	 	  	 	  	100%	  	STB Real Estate Holdings (Conforming – GA), Inc.	  	Newark, DE	
								
 	  	 	  	 	  	 	  	 	  	100%	  	STB Real Estate Holdings (Non-Conforming – GA), Inc.	  	Newark, DE	
					
 	  	 	  	100%	  	STB Real Estate (Florida), Inc.	  	Newark, DE	
						
 	  	 	  	 	  	100%	  	STB Real Estate Parent (Florida), Inc.	  	Newark, DE	
							
 	  	 	  	 	  	 	  	100%	  	STB Real Estate Holdings (Florida), Inc.	  	Newark, DE	
								
 	  	 	  	 	  	 	  	 	  	100%	  	STB Holdings (Florida) TRS, Inc.	  	Newark, DE	
								
 	  	 	  	 	  	 	  	 	  	100%	  	STB Real Estate Holdings (Commercial – FL), Inc.	  	Newark, DE	
									
 	  	 	  	 	  	 	  	 	  	 	  	100%	  	STB Holdings (Commercial – FL) TRS, Inc. FL) TRS, Inc.	  	Newark, DE	
								
 	  	 	  	 	  	 	  	 	  	100%	  	STB Real Estate Holdings (Conforming – FL), Inc.	  	Newark, DE	
								
 	  	 	  	 	  	 	  	 	  	100%	  	STB Real Estate Holdings (Non-Conforming – FL), Inc.	  	Newark, DE	
					
 	  	 	  	100%	  	SunTrust Community Development Corporation*	  	Atlanta, GA	
						
 	  	 	  	 	  	100%	  	Regency Constructors, Inc.	  	Raleigh, NC	
						
 	  	 	  	 	  	100%	  	Regency Development Associates, Inc.	  	Raleigh, NC	
						
 	  	 	  	 	  	100%	  	CDC Manager, Inc.*	  	Atlanta, GA	
							
 	  	 	  	 	  	 	  	100%	  	98-02 CDC Manager, L.L.C.*	  	Atlanta, GA	
							
 	  	 	  	 	  	 	  	100%	  	2002 CDC Manager, L.L.C.*	  	Atlanta, GA	
							
 	  	 	  	 	  	 	  	100%	  	2003 CDC Manager, L.L.C.*	  	Atlanta, GA	
						
 	  	 	  	 	  	100%	  	SunTrust Community Development Enterprises, L.L.C.	  	Atlanta, GA	
 
*	See the supplemental list of legal entities.	
 
Page 3 of 6

Exhibit 21.1
 
SUNTRUST BANKS, INC.
ORGANIZATION CHART
December 31, 2003

			
100%	  	SunTrust Bank Holding Company (continued)	  	 	
				
 	  	100%	  	SunTrust Bank (continued)	  	 	
					
 	  	 	  	100%	  	SunTrust Insurance Services, Inc.	  	Madison, GA	
					
 	  	 	  	100%	  	SunTrust International Banking Company	  	Atlanta, GA	
						
 	  	 	  	 	  	100%	  	SunTrust Asia, Limited	  	Atlanta, GA	
					
 	  	 	  	100%	  	DC Properties, Inc.	  	Washington, DC	
					
 	  	 	  	100%	  	MD Properties, Inc.	  	Baltimore, MD	
					
 	  	 	  	100%	  	VA Properties, Inc.	  	Richmond, VA	
					
 	  	 	  	100%	  	Citizens Community Development Company	  	Baltimore, MD	
					
 	  	 	  	100%	  	Crestview, L.L.C.	  	Richmond, VA	
					
 	  	 	  	100%	  	CB Finance, Inc.	  	Newark, DE	
						
 	  	 	  	 	  	100%	  	STB Real Estate Parent (MA), Inc.	  	Newark, DE	
							
 	  	 	  	 	  	 	  	100%	  	SunTrust Real Estate Holdings (Mid-Atlantic), Inc.	  	Newark, DE	
								
 	  	 	  	 	  	 	  	 	  	100%	  	SunTrust TRS, Inc	  	Newark, DE	
								
 	  	 	  	 	  	 	  	 	  	100%	  	SunTrust Real Estate Investment Corporation	  	Newark, DE	
									
 	  	 	  	 	  	 	  	 	  	 	  	100%	  	STREIC TRS, Inc.	  	Newark, DE	
						
 	  	 	  	 	  	100%	  	CM Finance, L.L.C.	  	Newark, DE	
							
 	  	 	  	 	  	 	  	100%	  	CBP Finance, L.L.C.	  	Newark, DE	
					
 	  	 	  	100%	  	SunTrust Leasing Corporation	  	Richmond, VA	
					
 	  	 	  	100%	  	SunTrust Bank Atlanta One Pledge Plan, Inc.	  	Atlanta, GA	
					
 	  	 	  	100%	  	SunTrust Mortgage, Inc.	  	Richmond, VA	
						
 	  	 	  	 	  	100%	  	Cherokee Insurance Company	  	Burlington, VT	
						
 	  	 	  	 	  	100%	  	ValuTree Real Estate Services, L.L.C.	  	Richmond, VA	
							
 	  	 	  	 	  	 	  	100%	  	SunTrust Lender Management, L.L.C.	  	Richmond, VA	
						
 	  	 	  	 	  	100%	  	CMC Oreo Inc.	  	Richmond, VA	
						
 	  	 	  	 	  	51%	  	American Safety Mortgage Company, L.L.C.	  	Ponce Inlet, FL	
						
 	  	 	  	 	  	51%	  	Bosshardt Financial Services, L.L.C.	  	Gainesville, FL	
						
 	  	 	  	 	  	51%	  	Chesapeake Mortgage, L.L.C	  	Forest Hill, MD	
						
 	  	 	  	 	  	51%	  	Custom Builder Mortgage, L.L.C.	  	Maitland, FL	
						
 	  	 	  	 	  	51%	  	Green Oak Mortgage, L.L.C.	  	Hoschton, GA	
						
 	  	 	  	 	  	51%	  	Home Financial Group, L.L.C.	  	Brentwood, TN	
						
 	  	 	  	 	  	90%	  	Indy Preferred Mortgage, L.L.C.	  	Fishers, IN	
						
 	  	 	  	 	  	51%	  	New Horizon Mortgage, L.L.C.	  	Maitland, FL	
						
 	  	 	  	 	  	50.1%	  	Oak Crest Mortgage, L.L.C.	  	Winchester, VA	
						
 	  	 	  	 	  	51%	  	Palladian Mortgage, L.L.C.	  	Valrico, FL	
 
Page 4 of 6

Exhibit 21.1
 
SUNTRUST BANKS, INC.
ORGANIZATION CHART
December 31, 2003

100%	 	SunTrust Bank Holding Company (continued)	
			
 	 	100%	 	SunTrust Bank (continued)	
					
 	 	 	 	100%	 	SunTrust Mortgage, Inc. (continued)	 	Richmond, VA	
					
 	 	 	 	 	 	51%    Partnership Mortgage, L.L.C.	 	Oldsmar, FL	
					
 	 	 	 	 	 	51%    Sun Home Mortgage, L.L.C.	 	Port St. Lucie, FL	
					
 	 	 	 	 	 	51%    Universal Capital Mortgage, L.L.C.	 	Maitland, FL	
					
 	 	 	 	 	 	51%    Windward Mortgage of Georgia, L.L.C.	 	Alpharetta, GA	
					
 	 	 	 	 	 	51%    Windward Mortgage L.L.C.	 	Tampa, FL	
					
 	 	 	 	100%	 	Sunbelt Commercial Capital, Inc.	 	Greenville, SC	
					
 	 	 	 	100%	 	SunTrust Procurement Services, L.L.C.	 	Baltimore, MD	
					
 	 	 	 	100%	 	SunTrust Education Financial Services Corporation	 	Richmond, VA	
					
 	 	 	 	100%	 	CBRE II, Inc.	 	St. Thomas, Virgin Islands	
					
 	 	 	 	  99%	 	Crestar Securitization, L.L.C.	 	Richmond, VA	
					
 	 	 	 	100%	 	Crestar SP Corporation	 	Richmond, VA	
 
Page 5 of 6

Exhibit 21.1
 
SUNTRUST BANKS, INC.
ORGANIZATION CHART
December 31, 2003

100%	 	SunTrust Bank Holding Company (continued)	
				
 	 	100%	 	Carswell of Carolina, Inc.	 	Hilton Head Island, SC	
				
 	 	100%	 	CF Finance, L.L.C.	 	Newark, DE	
				
 	 	100%	 	Crestar Capital Trust I	 	Richmond, VA	
				
 	 	100%	 	SunTrust Securities, Inc.	 	Atlanta, GA	
				
 	 	100%	 	SunTrust Banks Trust Company (Cayman) LTD	 	Grand Cayman, Cayman Island, B.W.I.	
				
 	 	100%	 	SunTrust Personal Loans, Inc.	 	Atlanta, GA	
				
 	 	100%	 	Madison Insurance Company	 	Madison, GA	
 
Page 6 of 6

As of 12/31/03

Ownership Interest
	  	Name of Entity
	  	City
	  	State
	
 	  	SunTrust Community Development Corporation	  	 	  	 	
80% or more	  	SunTrust Community Development Enterprises, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	CDC Manager, Inc	  	Atlanta	  	Georgia	
80% or more	  	98-02 CDC Manager, L.L.C.	  	Atlanta	  	Georgia	
> 50% to 80%	  	Admiral Pointe Management, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	Admiral Pointe L.P.	  	Newport News	  	Virginia	
25% to 50%	  	Live Oak Plantation Management, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	Live Oak Plantation L.P.	  	Savannah	  	Georgia	
25% to 50%	  	Indigo Pointe Management, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	Indigo Pointe L.P.	  	Savannah	  	Georgia	
> 50% to 80%	  	Mountain Crest Management, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	Mountain Crest, L.P.	  	Stone Mountain	  	Georgia	
> 50% to 80%	  	Wesley Club Management, L.L.C.	  	Atlanta	  	Georgia	
25% to 50%	  	Artcraft Afton Gardens L.P.	  	Roanoke	  	Virginia	
25% to 50%	  	Artcraft James Crossing L.P.	  	Lynchburg	  	Virginia	
80% or more	  	Arrington Place L.P.	  	Columbia	  	South Carolina	
> 50% to 80%	  	Augusta Hills Apartments I L.P.	  	Atlanta	  	Georgia	
30%	  	Belton Woods L.P.	  	 	  	South Carolina	
80% or more	  	Berkley Square L.P.	  	Norfolk	  	Virginia	
25% to 50%	  	Blackwell Community L.P.	  	Richmond	  	Virginia	
25% to 50%	  	Blackwell Community II L.P.	  	Richmond	  	Virginia	
25% to 50%	  	Blount Crossing Apartments L.P.	  	Darien	  	Georgia	
80% or more	  	Briarwood L.P.	  	Tullahoma	  	Tennessee	
> 50% to 80%	  	Bridgewater Club Partners LTD	  	Spring Hill	  	Florida	
70%	  	Bryson Creek, L.P.	  	Bryson City	  	North Carolina	
80% or more	  	Caitlin Station L.P.	  	Shelby	  	North Carolina	
80% or more	  	Canterbury Place L.P.	  	Reidsville	  	North Carolina	
25% to 50%	  	Cedar Key L.P.	  	Summerville	  	South Carolina	
80% or more	  	Cedar Wood L.P. of North Carolina	  	Columbia	  	South Carolina	
80% or more	  	Chatham Woods L.P.	  	Elkin	  	North Carolina	
80% or more	  	CG Cary L.P.	  	Cary	  	North Carolina	
80% or more	  	CH Greenville L.P.	  	Greenville	  	South Carolina	
100%	  	Club Wildwood, L.P.	  	Wildwood	  	Florida	
> 50% to 80%	  	CN Portsmouth L.P.	  	Portsmouth	  	Virginia	
49%	  	College Hill, L.P.	  	West Point	  	Georgia	
25% to 50%	  	Commons at Ironbridge L.P.	  	Chesterfield	  	Virginia	
80% or more	  	Concord Chase L.P.	  	Concord	  	North Carolina	
80% or more	  	Courtyard Commons L.P.	  	Fuquay-Varina	  	North Carolina	
25% to 50%	  	ERA L.P.	  	Columbus	  	Georgia	
80% or more	  	Fern Hall L.P.	  	Lexington	  	South Carolina	
> 50% to 80%	  	FMPH Valdosta L.P.	  	Valdosta	  	Georgia	
80% or more	  	FV Fredericksburg L.P.	  	Fredericksburg	  	Virginia	
25% to 50%	  	Garden Circle L.P.	  	Sumter	  	South Carolina	
80% or more	  	Garden Lake Estates L.P.	  	Wilmington	  	North Carolina	
80% or more	  	Grove Park Apartments L.P.	  	Paris	  	Tennessee	
80% or more	  	GS Richmond L.P.	  	Richmond	  	Virginia	
80% or more	  	Holland Trace L.P.	  	Franklin	  	Virginia	

As of 12/31/03

Ownership Interest
	  	Name of Entity
	  	City
	  	State
	
 	  	SunTrust Community Development Corporation	  	 	  	 	
80% or more	  	Hollybrook L.P.	  	Edgefield	  	South Carolina	
25% to 50%	  	La Mirada Gardens LTD	  	Oneco	  	Florida	
80% or more	  	LP Wake Forest L.P.	  	Wake Forest	  	North Carolina	
80% or more	  	Maple Glen Apartments L.P.	  	Barnwell	  	South Carolina	
80% or more	  	May Rose Place Apartments L.P.	  	Savannah	  	Tennessee	
80% or more	  	Meadowbrook Apartments L.P.	  	Brownsville	  	Tennessee	
80% or more	  	Meadows at Milan Apartments L.P.	  	Milan	  	Tennessee	
25% to 50%	  	Medical Arts Senior Apartments L.P.	  	Newport News	  	Virginia	
67%	  	Northeast Winston Ventures L.P.	  	 	  	North Carolina	
40%	  	Pinecrest Manor, L.P.	  	Charlotte	  	North Carolina	
80% or more	  	Pine Wood Forest L.P.	  	South Hill	  	Virginia	
80% or more	  	PM Greenville L.P.	  	Greenville	  	South Carolina	
80% or more	  	PW Alexandria L.P.	  	Alexandria	  	Virginia	
80% or more	  	QC Quantico L.P.	  	Triangle	  	Virginia	
80% or more	  	Ridgewood Senior Apartments L.P.	  	Radford	  	Virginia	
80% or more	  	Ridge View L.P.	  	Martinsville	  	Virginia	
80% or more	  	Ridgewood L.P.	  	Radford	  	Virginia	
80% or more	  	River Wynd L.P.	  	Clarksville	  	Virginia	
80%	  	Robins Park, L.P.	  	Robinsville	  	North Carolina	
25% to 50%	  	Sam’s Partners L.P.	  	Ludowici	  	Georgia	
25% to 50%	  	Shea Terrace Senior Apartments L.P.	  	Portsmouth	  	Virginia	
> 50% to 80%	  	Spring Haven Partnership L.P.	  	Cave Spring	  	Georgia	
80% or more	  	Sterling Trace L.P.	  	Danville	  	Virginia	
80% or more	  	Summer Place L.P.	  	Wilson	  	North Carolina	
25% to 50%	  	Sycamore Run L.P.	  	Lancaster	  	South Carolina	
80% or more	  	SH Manassas L.P.	  	Manassas	  	Virginia	
80% or more	  	ST Spartanburg L.P.	  	Spartanburg	  	South Carolina	
> 50% to 80%	  	Stuart Pointe Partners LTD	  	Jensen Beach	  	Florida	
80% or more	  	Tinbridge Manor L.P.	  	Lynchburg	  	Virginia	
80% or more	  	Wesley Club L.P.	  	Decatur	  	Georgia	
80% or more	  	YS Portsmouth L.P.	  	Portsmouth	  	Virginia	
80% or more	  	2002 CDC Manager, L.L.C	  	Atlanta	  	Georgia	
80% or more	  	Spring Grove L.P.	  	Taylor	  	South Carolina	
80% or more	  	2003 CDC Manager, L.L.C	  	Atlanta	  	Georgia	
99.99%	  	Brentwood Crossing, L.L.C.	  	Raleigh	  	North Carolina	
99.99%	  	Barrington Oaks, L.L.C.	  	Raleigh	  	North Carolina	
99.99%	  	River Highlands Apartments, L.L.C.	  	Franklin	  	Tennessee	
80% or more	  	LH Partner, L.L.C	  	Atlanta	  	Georgia	
80% or more	  	CDC Azalea GP, L.L.C	  	Atlanta	  	Georgia	
80% or more	  	CDC Crossings GP, L.L.C	  	Atlanta	  	Georgia	
80% or more	  	CDC Olde Town GP, L.L.C	  	Atlanta	  	Georgia	
100%	  	CDC Special Limited Partner, L.L.C	  	Atlanta	  	Georgia	
100%	  	CDC Afton Garden, L.L.C	  	Atlanta	  	Georgia	
100%	  	CDC Ashwood Pointe, L.L.C	  	Atlanta	  	Georgia	
100%	  	CDC Barrington Oaks, L.L.C	  	Atlanta	  	Georgia	
100%	  	CDC Belton Woods, L.L.C	  	Atlanta	  	Georgia	
100%	  	CDC Berkley Square, L.L.C	  	Atlanta	  	Georgia	
100%	  	CDC Blackwell Community, L.L.C	  	Atlanta	  	Georgia	
100%	  	CDC Blackwell II, L.L.C	  	Atlanta	  	Georgia	
100%	  	CDC Brentwood Crossing, L.L.C	  	Atlanta	  	Georgia	
100%	  	CDC Canterbury Place, L.L.C	  	Atlanta	  	Georgia	
100%	  	CDC Cedar Bluffs, L.L.C	  	Atlanta	  	Georgia	
100%	  	CDC Cedar Creek, L.L.C	  	Atlanta	  	Georgia	

As of 12/31/03

Ownership Interest
	  	Name of Entity
	  	City
	  	State
	
 	  	SunTrust Community Development Corporation	  	 	  	 	
100%	  	CDC Cedar Forest, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Cedar Wood, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Charles Street Station II, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Commons at Ironbridge, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Friendly Heights, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Garden Lake Estates, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Gretna Village, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Happ Brothers Lofts, LLC	  	Atlanta	  	Georgia	
100%	  	CDC James Crossing, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Maple Glen, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Pine Wood Forest, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC QC Quantico, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Ridgewood Place, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Ridgewood Place Senior, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC River Highlands, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Rose Hill Partners, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC SH Manassas, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Shea Terrace, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Sterling Trace, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Summer Place, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Thomas Jefferson, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Tinbridge Manor, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Walton Ridge, L.L.C.	  	Atlanta	  	Georgia	
100%	  	Bolling Park Joint Venture	  	Atlanta	  	Georgia	
100%	  	CDC Village of College Park, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Lakemoor, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Lakeside Gardens, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Concord Chase, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC WDC I, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Walnut Ridge, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Cherokee Furniture Building, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Edgewood Seniors, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Casa/Melvid, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Big Bethel Village, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Admiral Pointe, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Chase View, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC River Wynd, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Rolling Hills, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC LP Wake Forest, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC PT Durham, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Arrington Place, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC CG Cary, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Linden Square, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Wesley Club, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Mountain Crest, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Medical Arts, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Dakota Park, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Willow Trace, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Mercury Court Apartments, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Teller Village, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Meadowbrook Apartments, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC La Mirada, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Meadows of Milan, L.L.C.	  	Atlanta	  	Georgia	

As of 12/31/03

Ownership Interest
	  	Name of Entity
	  	City
	  	State
	
 	  	SunTrust Community Development Corporation	  	 	  	 	
100%	  	CDC Sycamore Run, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Garden Circle, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Herrington Mill, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Cedar Key, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Reynolds Square, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Kimberly III, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Blount Crossings, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Carver II, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Oakley Square, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Spring Grove, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Hays Mill Court, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Lee Hall, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC FMPH Valdosta, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Mainstream Group V, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Harmony Ridge, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Country Gardens, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Briarwood, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Grove Park, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC May Rose Place, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Renaissance, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Hollybrook, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Fern Hall, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Magnolia Lake, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Bridgewater Club, L.L.C.	  	Atlanta	  	Georgia	

As of 12/31/03

Ownership Interest
	  	Name of Entity
	  	City
	  	State
	
 	  	SunTrust Community Development Corporation	  	 	  	 	
100%	  	CDC Stuart Pointe, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	ST GA Fund I Limited Partner, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	ST GA Fund I, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	ST GA Fund II Limited Partner, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Delmonte Townhomes, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Indigo Pointe, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Live Oak Plantation, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Spring Haven, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Eagles Trace, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Lincoln Square, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	ST GA Fund II, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	ST GA Fund III Limited Partner, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Kimberly II, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Peaks at West Atlanta, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Carver III, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Park Place South, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Crogman School, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	ST GA Fund III, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	ST NC Fund I Limited Partner, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Stewart Stream, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Caitlin Station, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Chatham Woods, L.L.C.	  	Atlanta	  	Georgia	
100%	  	CDC Courtyard Commons, L.L.C.	  	Atlanta	  	Georgia	
80% or more	  	ST NC Fund I, L.L.C.	  	Atlanta	  	Georgia	
 
Exhibit 23.1
 
Consent of Independent Accountants
 
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-28250, 33-58723, 333-50719, 333-86306, 333-69331, 333-91519, 333-91521, 333-43348, 333-106638) and Form S-3 (Nos. 333-61583, 333-86330) of SunTrust Banks, Inc. of our report dated January 12, 2004 relating to the financial statements, which appears in the Annual Report to Shareholders, which is incorporated in this Annual Report on Form 10-K.

 
February 27, 2004
 
EXHIBIT 31.1
 
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
SEC RELEASE NO. 33-8124
 
I, L. Phillip Humann, Chairman of the Board, President and Chief Executive Officer of the Company, certify that:
 
 	(1)	I have reviewed this annual report on Form 10-K of SunTrust Banks, Inc.;	
 
 	(2)	Based on my knowledge, this 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 report;	
 
 	(3)	Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) for the registrant and have:	
 
 	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;	
 
 	(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 
 	(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,	

 	or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	
 
 	(5)	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	
 
 	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 
 	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
 
Date: February 9, 2004

	
/s/ L. Phillip Humann	
	
L. Phillip Humann
Chairman of the Board, President and Chief Executive Officer	

EXHIBIT 31.2
 
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
SEC RELEASE NO. 33-8124
 
I, John Spiegel, Vice-Chairman and Chief Financial Officer of the Company, certify that:
 
 	(1)	I have reviewed this annual report on Form 10-K of SunTrust Banks, Inc.;	
 
 	(2)	Based on my knowledge, this 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 report;	
 
 	(3)	Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) for the registrant and have:	
 
 	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;	
 
 	(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 
 	(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

 	(5)	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	
 
 	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 
 	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
 
Date: February 9, 2004

	
/s/ John Spiegel	
	
John Spiegel
Vice-Chairman and Chief Financial Officer	

EXHIBIT 32.1
 
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 Annual Report on Form 10-K of SunTrust Banks, Inc. (the “Company”) for the annual period ended December 31, 2003, 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: February 9, 2004

EXHIBIT 32.2
 
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 Annual Report on Form 10-K of SunTrust Banks, Inc. (the “Company”) for the annual period ended December 31, 2003 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:
 
(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/ John W. Spiegel	
	
John W. Spiegel
Vice Chairman of the Board and Chief Financial Officer	
 
Date: February 9, 2004