This summary is based on the second quarter fiscal 2007 earnings call conducted by SunTrust Banks Inc. (STI: chart) on July 22, 2008.

Management:

Director, IR: Steve Shriner
CEO: Jim Wells
CFO: Mark Chancy
Chief Risk and Credit Officer: Tom Freeman

Key Investors Issues

- EPS available to common stockholders fell to $1.53 per share compared to $1.89 per share last year.
- Net income available to common stockholders fell to $535.3 million from $673.9 million a year earlier.
- Revenue increased 9% to $2.6 billion.

Second Quarter Highlights

Net income available to common shareholders decreased 20.6% and net income per average common share decreased 19% from the second quarter of 2007 primarily due to higher provision for loan losses, higher credit-related expenses, impairment of a customer intangible asset, and valuation losses on publicly-traded debt and related hedges carried at fair value.

- These items were partially offset by the gain on sale of Coke common stock and the sale of a non-strategic operating subsidiary.
- Results included a number of gains and losses that were unrelated to the company''s core performance. Items that positively impacted results included the sale of 10 million shares of Coke common stock which contributed 99 cents and a gain on the sale of First Mercantile Trust which contributed 5 cents to earnings per share. Items that negatively impacted results included mark-to-market losses on the company''s debt which had a 17 cents impact, impairment of an intangible asset which had an 8 cents impact, Coke stock transaction costs which had a 2 cents impact, and costs associated with the company''s E2 Efficiency and Productivity Program which had a 2 cents impact on earnings per share.

Fully taxable-equivalent revenue was $2,598 million, an increase of 9.4% compared to the second quarter of 2007, driven by the incremental net securities gains primarily related to gains on the sale of the Coke stock and fee income.

- These growth items were partially offset by a 2.9% decline in net interest income and valuation losses related to our publicly-traded debt and related hedges carried at fair value. Excluding net securities gains, total revenue decreased 4.2%.

- Fully taxable-equivalent net interest income was $1,185 million, a decrease of 2.9% from the second quarter of 2007, despite a three basis point improvement in net interest margin.
- Earning assets declined $5.1 billion, or 3.2%, primarily due to a reduction in interest earning trading assets and loans held for sale, partially offset by growth in commercial loans. The increase in net interest margin and the decrease in trading assets were the result of balance sheet management strategies initiated in 2007. On a sequential quarter basis, net interest margin increased six basis points, as the decline in funding costs exceeded the decline in asset yields.

Total noninterest income was $1,413 million, up $258.4 million, or 22.4%, from the second quarter of 2007.

- The second quarter of 2008 included the gain on the sale of Coke stock of $548.8 million and a $29.6 million gain on the sale of First Mercantile Trust, a retirement plan services subsidiary, as compared to the second quarter of 2007, which included a gain on the sale of Coke stock of $234.8 million and a $23.4 million gain generated from a private equity transaction.

- The company recorded approximately $102.6 million in market valuation losses in trading account profits and commissions related primarily to the company''s publicly-traded debt and related hedges carried at fair value. These losses were related to the improvement in the credit spread on the company''s public debt. Also, contributing to the decline in trading accounts profits and commissions were costs associated with derivative contracts executed in connection with the Coke transaction. Partially offsetting these valuation related losses was an improvement in fixed income trading revenue relative to prior year. The second quarter of 2007 also included market value adjustments on financial assets and liabilities carried at fair value.

- Mortgage production income was $63.5 million as compared to $64.3 million in the second quarter of 2007. Lower loan production and related fees were offset by higher fee recognition due to the elimination of the FAS 91 income deferral upon adoption of FAS 159 during the second quarter of 2007. In addition, the company recognized valuation losses in the second quarter of 2007 on the Alt-A loans held in the warehouse. Mortgage servicing related income in the second quarter of 2008 declined $13 million primarily due to an $11.7 million gain on the sale of mortgage servicing rights during the second quarter of 2007.
- The company experienced strong growth in service charges on deposit accounts and card fees, which increased 17% and 14.6%, respectively, over the same period of 2007. Other income declined $53.4 million year over year primarily due to gains on private equity transactions and structured leasing transactions in 2007.

Total noninterest expense was $1,378.5 million, up $127.3 million, or 10.2%, from the second quarter of 2007, as credit related expenses grew by $69.5 million and an impairment charge of $45 million related to a customer intangible asset was recorded in the second quarter of 2008.

- Core expenses were well controlled as a result of the company''s E2 Efficiency and Productivity Program, which generated gross savings of approximately $135 million. The impairment charge pertains to client relationships that were valued in 2004 in connection with an acquisition. While the overall business has performed satisfactorily, the attrition level of the legacy clients has recently increased resulting in the acceleration of the amortization of this intangible asset.
- Personnel expenses increased $1.3 million, or 0.2%, from the same period in 2007. However, personnel expenses would have declined taking into account the impact related to loan origination costs that were deferred prior to the company''s election during the second quarter of 2007 to record at fair value certain newly-originated mortgage loans held for sale. Total personnel declined from 33,241 as of June 30, 2007 to 31,602 as of June 30, 2008. Compared to the first quarter of 2008, personnel expense declined $3.1 million due a reduction in seasonal employee benefits expenses. The decrease was offset by a $3.8 million increase in expenses from the acquisition of GB&T. Other expenses increased, including a $69.5 million increase in credit-related expenses such as collection services, valuation losses on other real estate owned, mortgage insurance reserves, and mortgage fraud related losses. Of particular mention is the $25 million increase in the mortgage insurance reserve which pertains to our mortgage insurance guaranty subsidiary, Twin Rivers. Twin Rivers'' loss exposure arises from third-party mortgage insurers transferring a portion of their first loss exposure when losses by mortgage origination year exceed certain thresholds. We estimate losses in Twin Rivers to be in the range of $25 million to $50 million for each of the remaining two quarters of 2008, and our estimated maximum exposure, net of premium income, to be less than $200 million with the timing and ultimate amount of loss recognition being uncertain.

As of June 30, 2008, SunTrust had total assets of $177.4 billion.

Shareholders'' equity of $17.9 billion as of June 30, 2008 represented 10.1% of total assets. Book value and tangible book value per common share were $49.24 and $29.99 as of June 30, 2008, respectively.