Key questions from the second quarter earnings call conducted by SunTrust Banks Inc. on July 22, 2008.

Matthew O'Connor (UBS): One of the side benefits of getting the Coke treatment into Tier 1 is that you now have flexibility issue with hybrids if the market improves. Is that what you are referring to when you talked about issuing capital?

Mark Chancy: We have issued in the past the hybrid securities. I specifically referenced the preferred purchase securities, which is a transaction that we have done in the past, and so it is along those lines that we will evaluate the market as we move forward into the third quarter and the fourth. We have been evaluating the market for the past several quarters and made the overt decision not to try to access the market given the volatility and the increasing spread, given that we knew that the Coke related transactions were in imminent, and we did not feel that we needed the incremental capital at this point. We decided to defer that decision to the second half of the year, with credit spreads will tighten for us and the industry.

Matthew O'Connor (UBS): You have about 400 million of the Trust preferred capacity at this point which is a lot cheaper, at least in more normal environments than the regular preferred. Is that correct?

Mark Chancy: The number that I have in front of me is that we have about a half a billion dollars of the PPS capacity. I do not have the specific capacity level for the hybrids, but that would be something that we would also evaluate.

Matthew O'Connor (UBS): The credit related expenses are going up at a high clip here, and even if you back out the 25 million of the mortgage insurance reserve the 45 million year-over-year increase seems big. Are you trying to catch up to where some other banks are?

Mark Chancy: We have been aggressively adding to staff in both our mortgage and consumer lines of business in the collections area and related activities from a systems standpoint, etc, to make sure that we are well positioned to manage the increasing level of non-performing assets and to maximize the return on the investment in those assets that we have. That process has ramped up as you would expect in the second half. It started back, late 2006 but has accelerated in the second half of 2007, and into 2008, and that is why when you look on a year-over-year basis, the increase is significant. We also have OREO related costs that are also affecting that dollar amount, and the OREO costs back in the second quarter of 2007, were not at the same levels that we are experiencing today.
We are pleased that the average, when we dispose of a mortgage in connection with the foreclosure, and ultimate disposition process, our charge-off expectation that we take at the time it goes 180 days past due is relatively close to that ultimate disposition value, and the differential has been 4% or 5%, and that cost is being born through the OREO line as opposed through the charge-offs, and that is one of the primary reasons for the large up-tick along with the mortgage insurance cost that you referenced.

Tom Freeman: We have made a strong determination that we need to make sure we get as far out ahead out ahead of the credit related issues, specifically trying to make sure we have the right staff doing the right things; that we move the credits to work out areas as quickly as we possibly can, which has forced us to add significant resources on the collections and loss mitigation side. Additionally, we have added substantial amounts of people in doing the commercial work outs to make sure we work through those which is much alacrity as possible. We believe, relatively early here, and have been spending what is necessary to make sure that we identify our problems and work through them aggressively.

Mike Mayo (Deutsche Bank): Your guidance for loan losses was higher than where you came in at. Which areas did better than you expected?

Jim Wells: The couple of areas where we had better than expected charge-offs is in the consumer area, our charge-offs were not, it came it at less than what we expected, and in our commercial real estate area, we have had a couple of charge-offs which basically, we think will happen later this quarter rather in the third quarter rather than happened in the second quarter. Those were the two primary areas where charge-offs came in lower than expected.

Mike Mayo (Deutsche Bank): It is a timing issue on the commercial side but on the consumer side, why did it come in less?

Jim Wells: A lot of it has to do with some of our loss mitigation efforts in terms of how we have gotten in, made sure that we had clarity in terms of where the charge-offs were coming from, the timing of the charge-offs and making sure that the charge-offs were taken when they need to be taken plus, we have had some good success in doing restructuring of some of our mortgage and home equity products during the last quarter, and that has had a mitigating effect on some of the charge-offs specifically on the consumer side of that.

Mike Mayo (Deutsche Bank): What do you mean by restructuring or what are you doing?

Jim Wells: These are our efforts to make sure that, where we have a borrower who wants to stay in their home that we work with them to the best of our ability to put together either an extension in term, a modification in terms of mortgage payments, and just making sure that we restructure the mortgage facilities whether they be first or second mortgages, in a way that is affordable to the customer and protects the interest of the bank.

Mike Mayo (Deutsche Bank): Would that typical loan be a non-performer?

Jim Wells: What happens is, if we significantly modify or take a write-down on the loan, it in fact is a non-performer. We had about $160 million worth, or $130 million worth of that activity in the last quarter, so, we made modifications on those types of loans. Where we were able to keep that trouble debt restructures on an accruing basis, we also had had about $115 million worth of them which were non-accruals, and then we routinely do work with modification renewals and extensions against our customer base.

Nancy Bush (NAB Research): You have got a couple of high rate payers in the southeast now and indeed one of them nationally. There is a 4.25% 12 month CD out there. How are you responding to this particularly in light of your comments about deposit pricing getting better?

Gene Kirby: The competitive environment has gotten intense but we have been able to hold our pricing and specifically, target each region looking at the market conditions and have been able to manage our deposit pricing effectively and people are shopping around today. We are seeing a lot of activity in the branches as people are concerned about the safety and soundness of other institutions, and in fact we are seeing strong performance in some of our branches even without matching those rates. We do have the ability on a case-by-case basis to make decisions at the local level when it is appropriate to compete, but on a portfolio level, we have been able to see our deposit rates come down and the mix shift as CDs have matured and a lot of our clients have actually moved out of CDs into either money-market or NOW accounts.

Nancy Bush (NAB Research): You said last quarter that you were beginning to de-emphasize or lessen the marketing on My Cause. How that product is doing and what your attitude toward it is right now?

Gene Kirby: We have seen continued strong performance with My Cause and have continued that, and have intentions to continue that into the third and into the fourth quarter. We have seen strong growth in our core consumer checking households and our net new checking accounts, significantly outperforming the growth of the market in general and have been pleased with that. We are focused now on taking advantage of all of these new households that we have acquired through targeted cross-selling efforts, but it has been a successful campaign and we have decided to continue.