SUNTRUST BANKS INC

FORM 10-K(Annual Report)

Filed 03/15/02 for the Period Ending 12/31/01

Address 303 PEACHTREE ST N E

ATLANTA, GA 30308Telephone 4045887711

CIK 0000750556Symbol STI

SIC Code 6021 - National Commercial BanksIndustry Regional Banks

Sector FinancialFiscal Year 12/31

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FORM 10-K

SUNTRUST BANKS INC

(Annual Report)

Filed 3/15/2002 For Period Ending 12/31/2001

Address 919 E MAIN ST

RICHMOND, Virginia 23219

Telephone 804-782-7107

CIK 0000750556

Industry Regional Banks

Sector Financial

Fiscal Year 12/31

74 SunTrust 2001 Annual Report

2001 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, 2001 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, 2002, SunTrust had 287,253,875 shares of common stock outstanding. The aggregate market value of SunTrust common stock held by non-affiliates on January 31, 2002 was approximately $17.5 billion.

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. [_]

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 2002 Annual Shareholders' Meeting, which will be filed with the Commission by March 8, 2002. 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.

Part I Page Item 1 Business 2-41 Item 2 Properties 41 Item 3 Legal Proceedings 41 Item 4 Not Applicable Part II Item 5 Market for the Registrant's Common Equity and Related Stockholder Matters Inside front cover, 13, 35, 80 Item 6 Selected Financial Data 13 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 2-41 Item 7a Quantitative and Qualitative Disclosures about Market Risk 30 Item 8 Financial Statements and Supplementary Data 35-38, 42-73 Part III Page

Certain statistical data required by the Securities and Exchange Commission are included on pages 13-38.

Item 9 Not Applicable 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 Part IV Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K 75

SunTrust 2001 Annual Report 75

EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORT S ON FORM 8-K

Financial Statement Filed. See Index To Consolidated Financial Statements on page 42 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 Form 8-K's dated October 11 and December 4, 2001 to file certain exhibits to be incorporated by reference into the Registration Statements on Form S-3.

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 78-79 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 Public Accountants

As independent public accountants, we hereby consent to the incorporation of our report included in this Annual Report and Form 10-K into the Registrant's previously filed Registration Statement Nos. 33-28250, 33-58723, 333-50719, 333-69331, 333-91519, 333-91521 and 333-43348 on Form S-8 and Registration Statement No. 333-61583 on Form S-3.

Arthur Andersen LLP

Atlanta, GA March 15, 2002

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 12, 2002 by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on February 12, 2002 by the following persons on behalf of the Registrant and in the capacities indicated.

All Directors of the Registrant listed on page 76.

SunTrust Banks, Inc. L. Phillip H umann (Registrant) Chairman of the Board of Directors, President an d Chief Executive Officer

L. Phillip Humann William P. O 'Halloran Chairman of the Board of Directors, Senior Vice President President and Chief Executive Officer and Controll er John W. Spiegel Vice Chairman and Chief Financial Officer

EXECUTIVE OFFICERS

--------------------------------------------------- --------------------------------------------------- -------------- Name Business Experience Age --------------------------------------------------- --------------------------------------------------- -------------- John W. Clay, Jr. A Vice Chairman of the Company since August 2000 with management overs ight 60 of banking function s, including corporate and investment banking. Fro m 1997 until August 2 000 he was an Executive Vice President of the Compa ny. Prior to 1997, he w as Chief Executive Officer of the Company's Tenness ee banking operations. --------------------------------------------------- --------------------------------------------------- -------------- Robert H. Coords An Executive Vice P resident of the Company and Chief Efficiency and Qu ality 59 Officer. --------------------------------------------------- --------------------------------------------------- -------------- Donald S. Downing An Executive Vice P resident of the Company and Mortgage Line of Busine ss 55 Head. --------------------------------------------------- --------------------------------------------------- -------------- Samuel O. Franklin III An Executive Vice P resident of the Company and Chief Executive Officer of 58 the Company's Tenne ssee banking operations. --------------------------------------------------- --------------------------------------------------- -------------- Charles T. Hill An Executive Vice P resident of the Company and, since January 2001, 51 Chairman, President and Chief Executive Officer of the Mid-Atlantic ba nking operations. From A ugust 2000 to January 2001, Mr. Hill was President and Chief Executive Off icer of the Mid-Atlantic banking operations. Prior to August 2000, Mr. Hi ll was Executive Vice President, Commercial Banking , and Senior Credit Offic er for the Mid-Atlantic region. --------------------------------------------------- --------------------------------------------------- -------------- Theodore J. Hoepner A Vice Chairman of the Company since August 2000 with responsibility f or 60 the Company's techn ology and operations functions, asset quality, efficiency and qual ity initiatives, human resources and legal and regulatory affairs. From 1997 until August 2000 he was an Executive V ice President of the Co mpany, with responsibility for the Company's Florid a banking operations, SunTrust Service Corporation, Human Resources and efficiency and qual ity initiatives. --------------------------------------------------- --------------------------------------------------- -------------- L. Phillip Humann Chairman of the Boa rd, President and Chief Executive Officer of the 56 Company. He is a D irector of Coca-Cola Enterprises Inc., Equifax Inc. and Haverty Furniture C ompanies, Inc. Mr. Humann has been a director of t he Company since 1991. --------------------------------------------------- --------------------------------------------------- -------------- Craig J. Kelly An Executive Vice P resident of the Company and Marketing Director sinc e 56 January 2000. From 1997 to 2000, Mr. Kelly served as Group Executive Vice President at Cresta r Bank responsible for Marketing. From 1987 to 199 7, he was Senior Vice Pre sident and Director of Marketing for Banc One Corporation. --------------------------------------------------- --------------------------------------------------- -------------- George W. Koehn An Executive Vice P resident of the Company and, since August 2000, Cha irman 58 and Chief Executive Officer of the Company's Florida banking operation s. Prior to August 200 0, Mr. Koehn was President of the Florida banking operations and Chai rman and Chief Executive Officer of the Central Flo rida banking unit. --------------------------------------------------- --------------------------------------------------- -------------- Carl F. Mentzer An Executive Vice P resident of the Company and Commercial Line of Busi ness 56 Head. In May 1995, Mr. Mentzer was elected Chairman of the Board and Chief Executive Officer o f SunTrust Bank, Tampa Bay and held that position u ntil December 31, 1999. --------------------------------------------------- --------------------------------------------------- -------------- William P. O'Halloran A Senior Vice Presi dent and Controller of the Company. 58 --------------------------------------------------- --------------------------------------------------- --------------

2

--------------------------------------------------- --------------------------------------------------- -------------- Name Business Experience Age --------------------------------------------------- --------------------------------------------------- -------------- Dennis M. Patterson An Executive Vice P resident of the Company and Retail Banking Line of 52 Business Head, whic h includes the branch system, small business bankin g, private banking, co nsumer lending, insurance and credit card business. Prior to this, Mr. Patterson served as the Company's Marketing Directo r, with additional res ponsibility for corporate strategy development and SunTrust's online s ubsidiary (telephone and Internet banking). --------------------------------------------------- --------------------------------------------------- -------------- William H. Rogers, Jr. An Executive Vice P resident of the Company. Since October 2000 Mr. Ro gers 44 has had responsibil ity for trust, investment and private client servic es. Prior to October 20 00, Mr. Rogers was head of Georgia community bankin g and the Georgia retail line of business. --------------------------------------------------- --------------------------------------------------- -------------- R. Charles Shufeldt An Executive Vice P resident and line of business head for the Company' s 51 Corporate and Inves tment Banking Unit since August 2000. Prior to tha t, Mr. Shufeldt served as Senior Vice President in the same unit. --------------------------------------------------- --------------------------------------------------- -------------- John W. Spiegel A Vice Chairman of the Company since August 2000 with responsibility f or 60 the Company's finan ce-related functions. Mr. Spiegel is also Chief Financial Officer, a position he has held for more than five years. P rior to August 2000 he w as an Executive Vice President of the Company. --------------------------------------------------- --------------------------------------------------- -------------- James M. Wells III A Vice Chairman of the Company since August 2000 with responsibility f or 55 oversight of the Co mpany's commercial, retail, mortgage and private cl ient services lines of b usiness. He also has senior executive responsibili ty for the Company's m arketing and corporate strategy units, as well as product management. From January 2000 to August 2000 Mr. Wells served as President and Chief Executive Officer of the Company's Mid-Atlantic region. From 1997 to January 2000 he served as President and Chief Operating Officer o f Crestar Financial Corporation and Crestar Bank. --------------------------------------------------- --------------------------------------------------- -------------- Robert C. Whitehead An Executive Vice P resident of the Company and Chief Information Offic er. 55 --------------------------------------------------- --------------------------------------------------- -------------- E. Jenner Wood, III Chairman, President and Chief Executive Officer of SunTrust Bank, Geor gia 50 since April 2001 an d an Executive Vice President of the Company. Prio r to April 2001, Mr. Woo d was President of SunTrust Bank, Georgia since Oct ober 2000 and prior to t hat he was responsible for trust, investment and pr ivate client services. --------------------------------------------------- --------------------------------------------------- --------------

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

EXHIBIT INDEX

Sequential Page Exhibit Description Number 3.1 Amended and Restated Articles of Incorpor ation of SunTrust Banks, Inc. ("Registrant") effective as o f November 14, 1989, and amendment effective as of April 24, 1 998, incorporated by reference to Exhibit 3.1 to Registrant's 1998 Annual Report on Form 10-K. * 3.2 Amendment to Restated Articles of Incorpo ration 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 a s of February 13, 2001 (filed herewith). 4.1 Indenture Agreement between Registrant an d Morgan Guaranty Trust Company of New York, as Trustee, incorpor ated by reference to Exhibit 4(a) to Registration Statement No. 33-000 84. * 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 Firs t 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 connectio n with the issuance of Subordinated Debt Securities, incorporate d by reference to Exhibit 4.4 to Registration Statement No. 333-253 81. * 4.5 Form of Indenture, dated as of February 1 , 1985, between SunTrust Bank Holding Company (as success or in interest to Crestar Financial Corporation) and The Ch ase Manhattan Bank, as Trustee, incorporated by reference to Exh ibit 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 success or in interest to Crestar Financial Corporation) and The Ch ase Manhattan Bank, as Trustee, incorporated by reference to Exh ibit 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, 19 92, between SunTrust Bank Holding Company (as successor in int erest 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 Direc tors of Crestar Financial Corporation (now known as SunTr ust Bank Holding Company) approving issuance of $150 milli on 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 success or in interest to Crestar Financial Corporation) and The Ch ase Manhattan Bank, as Trustee, incorporated by reference to Exh ibit 4.7 to

Registration Statement No. 333-61583. * Material Contracts and Executive Compensati on Plans and Arrangements 10.1 SunTrust Banks, Inc. Supplemental Executiv e Retirement Plan effective as of August 13, 1996, and amend ment effective as of November 10, 1998, incorporated by referen ce to Exhibit 10.9 to Registrant's 1998 Annual Report on Form 10 -K. * 10.2 Amendment to SunTrust Banks, Inc. Suppleme ntal Executive Retirement Plan effective as of February 1 0, 1998, incorporated by reference to Exhibit 10.9 of Registrant 's 2000 Annual Report on Form 10-K. * 10.3 Summary of amendments to the SunTrust Bank s, Inc. Supplemental Executive Retirement Plan adopted February 14, 2001 (filed herewith). The amended Agreement will be f iled after it is executed. 10.4 SunTrust Banks, Inc. ERISA Excess Retireme nt Plan, effective as of August 13, 1996, and amendment effectiv e as of November 10, 1998, incorporated by reference to Exhibit 10.10 to Registrant's 1998 Annual Report on Form 10 -K. * 10.5 SunTrust Banks, Inc. Performance Unit Plan , amended and restated as of August 11, 1998, incorporat ed by reference to Exhibit 10.11 to Registrant's 1998 Annual Report on Form 10-K. * 10.6 SunTrust Banks, Inc. Management Incentive Plan, amended and restated as of February 8, 2000, incorpora ted by reference to Exhibit 10.11 to Registrant's 1999 Annual Report on Form 10-K. * 10.7 SunTrust Banks, Inc. 401(k) Excess Plan Am ended and Restated as of July 1, 1999, incorporated by reference to Exhibit 10.12 to Registrant's 1999 Annual Report on Form 10 -K. * 10.8 Amendment Number One dated December 1, 200 1 to the SunTrust Banks, Inc. 401(k) Excess Plan Amended and Restat ed as of July 1, 1999 (filed herewith). 10.9 SunTrust Banks, Inc. Executive Stock Plan, incorporated by reference to Exhibit 10.16 to Registrant's 1998 Annual Report on Form 10-K. * 10.10 Amendment to SunTrust Banks, Inc. Executiv e Stock Plan, effective February 10, 1998, incorporated by referen ce to Exhibit 10.8 to Registrant's 1997 Annual Report on Form 10 -K. * 10.11 SunTrust Banks, Inc. Performance Stock Agr eement, effective February 11, 1992, and First Amendment to Performance Stock Agreement effective February 10, 1998, inc orporated by reference to Exhibit 10.9 to Registrant's 1997 Annua l Report on Form 10-K. * 10.12 SunTrust Banks, Inc. 1995 Executive Stock Plan, incorporated by reference to Exhibit 10.16 to Registrant's 1999 Annual Report on Form 10-K. * 10.13 Amendment to the SunTrust Banks, Inc. 1995 Executive Stock Plan, effective as of August 11, 1998, incorpora ted by reference to Exhibit 10.20 to Registrant's 1998 Annual Report on Form 10-K. * 10.14 SunTrust Banks, Inc. 2000 Stock Plan, effe ctive February 8, 2000, incorporated by reference to Exhibit A to Registrant's 2000 Proxy Statement on Form 14A. *

10.15 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. * 10.16 Amendment to Exhibit A to the SunTrust Bank s, Inc. Deferred Compensation Plan, effective January 1, 200 0, incorporated by reference to Exhibit 10.21 of Registrant's 2000 Annual Report on Form 10-K. * 10.17 SunTrust Banks, Inc. Directors Deferred Com pensation Plan effective as of January 1, 1994, incorporated by refe rence to Exhibit 10.21 to Registrant's 1998 Annual Report on Form 10-K. * 10.18 Crestar Financial Corporation Executive Lif e Insurance Plan, as amended and restated effective January 1, 1 991, 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 Regist rant and various executives, incorporated by reference to Ex hibits 10.1 through 10.10 of Registrant's Form 10-Q and Form 10 -QA as of March 31, 2001. * 10.21 Employment Agreement between Registrant and James M. Wells III, effective as of December 31, 1998, incorpor ated by reference to Exhibit 10.24 to Registrant's 1999 Annual R eport on Form 10-K. 10.22 Crestar Financial Corporation Excess Benefi t Plan, amended and restated effective December 26, 1990 and am endments thereto (effective December 18, 1992, March 30, 199 8 and December 30, 1998), incorporated by reference to Exhibit 10.29 to Registrant's 1998 Annual Report on Form 10-K. * 10.23 United Virginia Bankshares Incorporated Def erred Compensation Program under Incentive Compensation Plan o f United Virginia Bankshares Incorporated and Affiliated Corp oration, amended and restated through December 7, 1983, incorpor ated by reference to Exhibit 10.30 to Registrant's 1998 Annual R eport on Form 10-K. * 10.24 Amendments (effective January 1, 1987 and J anuary 1, 1988) to United Virginia Bankshares Incorporated Def erred Compensation Program Under Incentive Compensation Plan o f United Virginia Bankshares Incorporated and Affiliated Corp oration, incorporated by reference to Exhibit 10.29 of Registrant's 2000 Annual Report on Form 10-K. * 10.25 Amendment (effective January 1, 1994) to Cr estar Financial Corporation Deferred Compensation Program U nder Incentive Compensation Plan of Crestar Financial Corp oration and Affiliated Corporations, incorporated by reference to Exhibit 10.30 to Registrant's 2000 Annual Report on Form 10- K. * 10.26 Amendment (effective September 21, 1995) to Crestar Financial Corporation Deferred Compensation Program U nder Incentive Compensation Plan of Crestar Financial Corp oration and Affiliated Corporations, incorporated by reference to Exhibit 10.34 to Registrant's 1998 Annual Report on Form 10- K. * 10.27 Crestar Financial Corporation Deferred Comp ensation Plan for

Outside Directors of Crestar Financial Cor poration and Crestar Bank, amended and restated through Decembe r 13, 1983 and amendments thereto (effective January 1, 1 985, April 24, 1991, December 31, 1993 and October 23, 1998), i ncorporated by reference to Exhibit 10.35 to Registrant's 1998 Annual Report on Form 10-K. * 10.28 Amendment (effective January 1, 1999) to C restar Financial Corporation Deferred Compensation Plan for Outside Directors of Crestar Financial Corporation, incorporate d by reference to Exhibit 10.32 to Registrant's 1999 Annual Report on Form 10-K. * 10.29 Crestar Financial Corporation Additional N onqualified Executive Plan, amended and restated effective Decem ber 26, 1990 and amendments thereto (effective December 18, 1992, March 30, 1998 and December 30, 1998), incorporated by re ference to Exhibit 10.36 to Registrant's 1998 Annual Report on Form 10-K. * 10.30 Crestar Financial Corporation 1993 Stock I ncentive Plan, as amended and restated effective February 28 , 1997, incorporated by reference to Exhibit 10(af) to Crestar Financial Corporation's 1997 Annual Report on Form 10-K. * 10.31 Amendments (effective December 19, 1997) t o Crestar Financial Corporation 1993 Stock Incentive Plan, inc orporated by reference to Exhibit 10.38 to Registrant's 1998 Annual Report on Form 10-K. * 10.32 Crestar Financial Corporation Supplemental Executive Retirement Plan, effective January 1, 1995, incorpora ted by reference to Exhibit 10.37 to Registrant's 2000 Annual Report on Form 10-K. * 10.33 Amendments (effective December 20, 1996) t o the Crestar Financial Corporation Supplemental Executive Retirem ent Plan, incorporated by reference to Exhibit 10(aj) to Crestar Financial Corporation's 1997 Annual Report on Form 10-K. * 10.34 Amendments (effective December 17, 1997) t o Crestar Financial Corporation Supplemental Executive Retirem ent Plan, incorporated by reference to Exhibit 10(al) to Crestar Financial Corporation's 1997 Annual Report on Form 10-K. * 10.35 Amendments (effective December 19, 1997 an d December 29, 1998) to the Crestar Financial Corporation Suppleme ntal Executive Retirement Plan, incorporated by reference to Exhibit 10.42 to Registrant's 1998 Annual Report on Form 10 -K. * 10.36 Crestar Financial Corporation Directors' E quity Program, effective January 1, 1996 (filed herewith). 10.37 Amendment (effective December 20, 1996) to Crestar Financial Corporation Directors' Equity Program (fil ed herewith). 10.38 Amendment (effective September 26, 1997) t o Crestar Financial Corporation Directors' Equity Program, inc orporated by reference to Exhibit 10(ao) to Crestar Financial Cor poration's 1997 Annual Report on Form 10-K. *

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 13 thru AR 38.

10.39 Amendments (effective October 23, 1998) to Crestar Financial Corporation Directors' Equity Program, inco rporated by reference to Exhibit 10.47 to Registrant's 1998 Annual R eport on Form 10-K. * 10.40 Amendment (effective October 23, 1998) to C restar Financial Corporation Directors' Equity Program, inco rporated by reference to Exhibit 10.44 to Registrant's 1999 Annual Report on Form 10-K. * 11.1 Statement re computation of per share earni ngs (filed herewith). 12.1 Ratio of Earnings to Fixed Changes (filed h erewith). 13.1 Registrant's 2001 Annual Report to Sharehol ders (filed herewith). 21.1 Registrant's Subsidiaries (filed herewith). 22.1 Registrant's Proxy Statement relating to th e 2002 Annual Meeting of Shareholders, dated March 1, 2002, filed on March 1, 2002. 23.1 Consent of Independent Public Accountants ( filed herewith).

SIGNATURES

Pursuant to the requirements of the 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 12, 2002 by the undersigned, thereunto duly authorized.

SUNTRUST BANKS, INC. (Registrant)

Pursuant to the requirements of the Securities Act of 1934, this report has been signed on February 12, 2002 by the following persons on behalf of the Registrant and in the capacities indicated.

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

By: /s/ L. Phillip Humann ------------------------------------------ L. Phillip Humann Chairman of the Board, President and Chief Executive Officer By: /s/ John W. Spiegel ------------------------------------------ John W. Spiegel Vice Chairman and Chief Financial Officer By: /s/ William P. O'Halloran ------------------------------------------ William P. O'Halloran Senior Vice President and Controller (Chief Accounting Officer)

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints L. PHILLIP HUMANN, Chairman of the Board, President, Chief Executive Officer and a Director of the Registrant, JOHN W. SPIEGEL, Vice Chairman and Chief Financial Officer of the Registrant, RAYMOND D. FORTIN, Senior Vice President and Secretary of the Registrant, or any one of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any amendments to this report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or any of them, their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this report has been signed on February 12, 2002 by the following persons on behalf of the Registrant and in the capacities indicated.

/s/ J. Hyatt Brown Director --------------------------------------------------- -- J. Hyatt Brown /s/ Alston D. Correll Director --------------------------------------------------- -- Alston D. Correll /s/ Douglas N. Daft Director --------------------------------------------------- -- Douglas N. Daft /s/ A. W. Dahlberg Director --------------------------------------------------- -- A. W. Dahlberg /s/ Patricia C. Frist Director --------------------------------------------------- -- Patricia C. Frist /s/ David H. Hughes Director --------------------------------------------------- -- David H. Hughes /s/ M. Douglas Ivester Director --------------------------------------------------- -- M. Douglas Ivester /s/ Summerfield K. Johnston, Jr. Director --------------------------------------------------- -- Summerfield K. Johnston, Jr.

/s/ Joseph L. Lanier, Jr. Director -------------------------------------------- Joseph L. Lanier, Jr. /s/ G. Gilmer Minor, III Director -------------------------------------------- G. Gilmer Minor, III /s/ Larry L. Prince Director -------------------------------------------- Larry L. Prince /s/ R. Randall Rollins Director -------------------------------------------- R. Randall Rollins /s/ Frank S. Royal, M.D. Director -------------------------------------------- Frank S. Royal, M.D. /s/ James B. Williams Director -------------------------------------------- James B. Williams

Exhibit 3.3

SUNTRUST BANKS, INC.

BYLAWS

(As Amended February 13, 2001)

ARTICLE I

SHAREHOLDERS

SECTION 1. Annual Meeting. The annual meeting of the shareholders for the election of Directors and for the transaction of such other business as may properly come before the meeting shall be held at such place, on such date and at such time as the Board of Directors may by resolution provide. If the Board of Directors fails to provide such date and time, then such meeting shall be held at the corporate headquarters at 9:30 A.M. local time on the third Tuesday in April of each year, or, if such date is a legal holiday, on the next succeeding business day. The Board of Directors may specify by resolution prior to any special meeting of shareholders held within the year that such meeting shall be in lieu of the annual meeting.

SECTION 2. Special Meeting; Call of Meetings. Special meetings of the shareholders may be called at any time by the Chairman of the Board or the President. Special meetings of the shareholders may also be called at any time by the Board of Directors or the holders of at least twenty-five percent (25%) of the outstanding common stock of the Corporation. Such meetings shall be held at such place as is stated in the call and notice thereof.

SECTION 3. Notice of Meetings. Written notice of each meeting of shareholders, stating the place, day and hour of the meeting, and the purpose or purposes for which the meeting is called if a special meeting, shall be mailed to each shareholder entitled to vote at or to notice of such meeting at his address shown on the books of the Corporation not less than ten (10) nor more than sixty (60) days prior to such meeting unless such shareholder waives notice of the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his address as it appears on the records of shareholders of the Corporation, with postage thereon prepaid. Any shareholder may execute a waiver of notice, in person or by proxy, either before or after any meeting, and shall be deemed to have waived notice if he is present at such meeting in person or by proxy. Neither the business transacted at, nor the purpose of, any meeting need be stated in a waiver of notice of such meeting. Notice of any meeting may be given by the Chairman of the Board, President, the Corporate Secretary or any Assistant Secretary. No notice need be given of the time and place of reconvening of any adjourned meeting, if the time and place to which the meeting is adjourned are announced at the adjourned meeting.

SECTION 4. Quorum; Required Shareholder Vote. Each outstanding share of common stock of the Corporation is entitled to one vote on each matter submitted to a vote. A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at any meeting of the shareholders. If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting and entitled to vote on the subject matter shall be the act of the shareholders, unless a different vote is required by law, the Articles of Incorporation or these Bylaws, except in the case of elections for Director, for which the vote of a plurality of the votes cast by the shares entitled to vote for such election shall be the act of the shareholders. When a quorum is once present to organize a meeting, the shareholders present may continue to do business at the meeting or at any adjournment thereof (unless a

new record date is or must be set for the adjourned meeting) notwithstanding the withdrawal of enough shareholders to leave less than a quorum, and the holders of a majority of the voting shares present at such meeting shall be the act of the shareholders unless a different vote is required by law, the Articles of Incorporation or these Bylaws. The holders of a majority of the voting shares represented at a meeting, whether or not a quorum is present, may adjourn such meeting from time to time.

SECTION 5. Proxies. A shareholder may vote either in person or by proxy. A shareholder may appoint a proxy: (i) by executing a written document, which may be accomplished by any reasonable means, including facsimile transmission; (ii) orally, which may be by telephone; or (iii) by any other form of electronic communication. No proxy shall be valid for more than eleven (11) months after the date of such appointment, unless, in the case of a written proxy, a longer period is expressly provided for in the written document.

SECTION 6. Judges of Elections. At every meeting of shareholders, the vote shall be conducted by two or more judges appointed for that purpose by the Board of Directors or by the chairman of the meeting. All questions concerning the qualification of voters, the validity of proxies, or the acceptance or rejection of votes shall be decided by such judges.

ARTICLE II

DIRECTORS

SECTION 1. Board of Directors. The Board of Directors shall manage the business and affairs of the Corporation and may exercise all of the powers of the Corporation subject to any restrictions imposed by law.

SECTION 2. Composition of the Board. The Board of Directors of the Corporation shall consist of not less than ten (10) nor more than twenty (20) natural persons, the exact number to be set from time to time by the Board of Directors. No decrease in the number of Directors shall shorten the term of an incumbent Director. In the absence of the Board of Directors setting the number of Directors, the number shall be twelve (12). The Directors of the Corporation shall be divided into three classes, as nearly equal in size as practicable. The term of each class shall be three years. Each Director shall hold office for the term for which elected, which term shall end at the annual meeting of the shareholders, and until his successor has been elected and qualified, or until his earlier retirement, resignation, removal from office, or death.

SECTION 3. Election of Directors. Nominations for election to the Board of Directors may be made by the Board of Directors, or by any shareholder of any outstanding class of capital stock of the Corporation entitled to vote for the election of Directors. Nominations shall specify the class of Directors to which each person is nominated, and nominations, other than those made by the existing Board of Directors, shall be made in writing and shall be delivered or mailed to the Chairman of the Board not less than thirty (30) days nor more than seventy-five (75) days prior to any meeting of the shareholders called for the election of Directors; provided, however, that if less than thirty-five (35) days notice of the meeting is given to shareholders such nomination shall be mailed or delivered to the Chairman of the Board not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such nomination and notification shall contain the following information:

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(i) The names and addresses of the proposed nominee or nominees;

(ii) The principal occupation of each proposed nominee;

(iii) The total number of shares that, to the knowledge of the notifying or nominating shareholder, will be voted for each of the proposed nominees;

(iv) The name and residence address of each notifying or nominating shareholder;

(v) The number of shares owned by the notifying or nominating shareholder;

(vi) The total number of shares that, to the knowledge of the notifying or nominating shareholder, are owned by the proposed nominee; and

(vii) The signed consent of the proposed nominee to serve, if elected.

Nominations not made in accordance herewith may, in his discretion, be disregarded by the chairman of the meeting, and upon his instructions, the judges of election shall disregard all votes cast for each such nomination.

SECTION 4. Vacancies. Subject to the rights of the holders of any series of Preferred Stock then outstanding to fill director vacancies, vacancies resulting from retirement, resignation, removal from office (with or without cause), death or a vacancy resulting from an increase in the number of Directors comprising the Board, shall be filled by the Board of Directors. Any Director so elected shall hold office until the next annual meeting of shareholders. No decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director.

SECTION 5. Retirement. Each Director serving as an officer of the Corporation or any of its direct or indirect subsidiaries shall cease to be a Director on the date of the first to occur of (a) such Director's 65th birthday, (b) the date of his termination of employment, (c) the date of his resignation from employment, or (d) the date of his retirement from employment. The foregoing shall not apply to any Director serving as an officer of the Corporation who is the Chairman of the Executive Committee. Each Director who is not an officer of the Corporation or any of its direct or indirect subsidiaries, including any Director serving pursuant to the previous sentence, shall cease to be a Director at the end of such Director's term coinciding with or following such Director's 70th birthday.

SECTION 6. Removal. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any Director, or all Directors, may be removed from office at any time with or without cause, but only by the same affirmative vote of the shareholders required to amend this Article II as provided in the Corporation's Articles of Incorporation.

SECTION 7. Resignations. Any Director of the Corporation may resign at any time by giving written notice thereof to the Chairman of the Board, the President, or the Corporate Secretary. Such resignation shall take effect when delivered unless the notice specifies a later effective date; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

ARTICLE III

ACTION OF THE BOARD OF DIRECTORS; COMMITTEES

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SECTION 1. Quorum; Vote Requirement. A majority of the Directors holding office shall constitute a quorum for the transaction of business; if a quorum is present, a vote of a majority of the Directors present at such time shall be the act of the Board of Directors, unless a greater vote is required by law, the Articles of Incorporation, or by these Bylaws.

SECTION 2. Executive Committee. There is hereby established an Executive Committee which shall consist of not less than four (4) Directors. The Board of Directors shall at the Board of Directors' meeting immediately following the Corporation's annual shareholders' meeting, and may at such other time as the Board of Directors determines, elect the Directors who shall be members of the Executive Committee. The Executive Committee shall have and may exercise all the authority of the Board of Directors as permitted by law. The Board of Directors shall elect the Chairman of the Executive Committee who shall preside at all meetings of the Executive Committee and shall perform such other duties as may be designated by the Executive Committee. The Board of Directors may also elect one member of the Executive Committee as Vice Chairman of the Executive Committee who shall preside at Executive Committee meetings in the absence of the Chairman of the Executive Committee. The Executive Committee shall serve as the Nominating Committee and shall have the power to recommend candidates for election to the Board of Directors and shall consider other issues related to the size and composition of the Board of Directors.

SECTION 3. Audit Committee. There is hereby established an Audit Committee which shall consist of not less than four (4) Directors. No Director who is an officer of the Corporation or any direct or indirect subsidiary of the Corporation shall be a member of the Audit Committee. The Board of Directors shall at the Board of Directors' meeting immediately following the Corporation's annual shareholders' meeting, and may at such other time as the Board of Directors determine, elect the members of the Audit Committee. The Audit Committee shall require that an audit of the books and affairs of the Corporation be made at such time or times as the members of the Audit Committee shall choose. The Board of Directors shall elect the Chairman of the Audit Committee who shall preside at all meetings of the Audit Committee and shall perform such other duties as may be designated by the Audit Committee.

SECTION 4. Other Committees. The Board of Directors may designate from among its members one or more other committees, each consisting of one (1) or more Directors, and each of which, to the extent provided in the resolution establishing such committee, shall have and may exercise all authority of the Board of Directors to the extent permitted by law.

SECTION 5. Committee Meetings. Regular meetings of committees, of which no notice shall be necessary, shall be held at such times and at such places as shall be fixed, from time to time, by resolution adopted by such committees. Special meetings of any committee may be called by the Chairman of the Board or the President, or by the Chairman of such committee or by any other two members of the committee, at any time. Notice of any special meeting of any committee may be given in the manner provided in the Bylaws for giving notice of a special meeting of the Board of Directors, but notice of any such meeting need not be given to any member of the committee if waived by him before or after the meeting, in writing (including telegram, cablegram, facsimile, or radiogram) or if he shall be present at the meeting; and any meeting of any committee shall be a legal meeting, without any notice thereof having been given, if all the members shall be present thereat. A majority of any committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of the committee.

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SECTION 6. Committee Records. Each committee shall keep a record of its acts and proceedings and shall report the same, from time to time, to the Board of Directors.

SECTION 7. Alternate Members; Vacancies. The Board of Directors may designate one or more Directors as alternate members of any committee, and such alternate members may act in the place and stead of any absent member or members at any meeting of such committee. The Board of Directors may fill any vacancy or vacancies occurring in any committee.

SECTION 8. Place, Time, Notice and Call of Directors' Meetings. The annual meeting of the Board of Directors for the purpose of electing officers and transacting such other business as may be brought before the meeting shall be held each year immediately following the annual meeting of shareholders or at such other time and place as the Chairman of the Board may designate. Regular meetings of the Board of Directors shall be held at such times as the Board of Directors may determine from time to time. Regular meetings of the Board of Directors may be held without notice. Special meetings of the Board of Directors shall be held upon notice of the date, time and place of such special meetings as shall be given to each Director orally, either by telephone or in person, or in writing, either by personal delivery or by mail, telegram, facsimile, or cablegram no later than the day before such meeting. Notice of a meeting of the Board of Directors need not be given to any Director who signs and delivers to the Corporation a waiver of notice either before or after the meeting. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting and waiver of any and all objections to the place of the meeting, the time of the meeting, or the manner in which it has been called or convened, except when a Director states, at the beginning of the meeting (or promptly upon his arrival), any such objection or objections to the transaction of business and thereafter does not vote for or assent to action taken at the meeting.

Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting unless required by law or these Bylaws.

A majority of the Directors present, whether or not a quorum exists, may adjourn any meeting of the Board of Directors to another time and place. No notice of any adjourned meeting need be given.

Meetings of the Board of Directors may be called by the Chairman of the Board, the President or any two Directors.

SECTION 9. Action by Directors Without a Meeting; Participation in Meeting by Telephone. Except as limited by law, any action to be taken at a meeting of the Board, or by any committee of the Board, may be taken without a meeting if written consent, setting forth the action so taken, shall be signed by all the members of the Board or such Committee and shall be filed with the minutes of the proceedings of the Board or such committee. Such written consent shall have the same force and effect as a unanimous vote of the Board or such committee and any document executed on behalf of the Corporation may recite that the action was duly taken at a meeting of the Board or such committee.

Members of the Board or any committee of the Board may participate in a meeting of the Board or such committee by means of conference telephone or similar communications equipment by which means all persons participating in the meeting can hear each other, and participation in a meeting of the Board or such committee by such means shall constitute personal presence at such meeting.

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SECTION 10. Directors' Compensation. The Board of Directors shall have authority to determine from time to time the amount of compensation which shall be paid to its members for attendance at meetings of, or services on, the Board of Directors or any committee of the Board. The Board of Directors shall also have the power to reimburse Directors for reasonable expenses of attendance at Directors' meetings and committee meetings.

ARTICLE IV

OFFICERS

SECTION 1. Executive Structure. The Board of Directors shall elect the following officers: Chairman of the Board, President, Chief Financial Officer, Corporate Secretary, and Treasurer, and may elect one or more Vice Chairmen and Executive Vice Presidents, as the Board of Directors may deem necessary. The Board of Directors shall designate from among such elected officers a Chief Executive Officer. The Chief Executive Officer may appoint such assistant officers, whose duties shall consist of assisting one or more of the Officers in the discharge of the duties of any such Officer, as may be specified from time to time by the Chief Executive Officer, whose titles may include such designations as the Chief Executive Officer shall deem appropriate. All Officers (including assistant officers) shall be elected for a term of office running until the meeting of the Board of Directors following the next annual meeting of shareholders. All assistant officers shall be appointed for a term specified by the Chief Executive Officer but not later than the meeting of the Board of Directors following the next annual meeting of shareholders. Any two or more offices may be held by the same person.

SECTION 2. Chief Executive Officer. The Chief Executive Officer shall be the most senior officer of the Corporation, and all other officers and agents of the Corporation shall be subject to his direction. He shall be accountable to the Board of Directors for the fulfillment of his duties and responsibilities and, in the performance and exercise of all his duties, responsibilities and powers, he shall be subject to the supervision and direction of, and any limitations imposed by, the Board of Directors. The Chief Executive Officer shall be responsible for interpretation and required implementation of the policies of the Corporation as determined and specified from time to time by the Board of Directors and he shall be responsible for the general management and direction of the business and affairs of the Corporation. For the purpose of fulfilling his duties and responsibilities, the Chief Executive Officer shall have, subject to these Bylaws and the Board of Directors, plenary authorities and powers, including general executive powers, the authority to delegate and assign duties, responsibilities and authorities, and, in the name of the Corporation and on its behalf, to negotiate and make any agreements, waivers or commitments which do not require the express approval of the Board of Directors.

SECTION 3. Chairman of the Board. The Chairman of the Board shall be a member of the Board of Directors and shall preside at all meetings of the shareholders and Board of Directors.

SECTION 4. President. The President shall have such powers and perform such duties as may be assigned by the Board of Directors, the Chairman of the Board of Directors or the Chief Executive Officer.

SECTION 5. Vice Chairman. Any Vice Chairman elected shall have such duties and authority as may be conferred upon him by the Board of Directors or delegated to him by the Chief Executive Officer.

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SECTION 6. Chief Financial Officer. The Chief Financial Officer shall have the care, custody, control and handling of the funds and assets of the Corporation, and shall render a statement of the assets, liabilities and operations of the Corporation to the Board of Directors at its regular meetings.

SECTION 7. Treasurer. The Treasurer shall perform such duties as may be assigned to the Treasurer and shall report to the Chief Financial Officer or, in the absence of the Chief Financial Officer, to the President.

SECTION 8. Corporate Secretary. Due notice of all meetings of the shareholders and directors shall be given by the Corporate Secretary or the person or persons calling such meeting. The Corporate Secretary shall report the proceedings of all meetings in a book of minutes and shall perform all the duties pertaining to his office including authentication of corporate documents and shall have custody of the Seal of the Corporation. Each assistant Corporate Secretary appointed by the Chief Executive Officer may perform all duties of the Corporate Secretary.

SECTION 9. Other Duties and Authority. Each officer, employee and agent of the Corporation shall have such other duties and authority as may be conferred upon him by the Board of Directors or delegated to him by the Chief Executive Officer.

SECTION 10. Removal of Officers. Any officer may be removed by the Board of Directors with or without cause whenever in its judgment the best interests of the Corporation will be served thereby. In addition, an officer of the Corporation shall cease to be an officer upon ceasing to be an employee of the Corporation or any of its subsidiaries.

ARTICLE V

STOCK

SECTION 1. Stock Certificates. The shares of stock of the Corporation shall be represented by certificates in such form as may be approved by the Board of Directors, which certificates shall be issued to the shareholders of the Corporation and shall be signed by the Chairman of the Board, or the President, together with the Corporate Secretary or an Assistant Secretary of the Corporation; and which shall be sealed with the seal of the Corporation. The signatures of such officers upon a certificate may be facsimile if the certificate is countersigned by a transfer agent or registrar other than the Corporation itself or an employee of the Corporation. No share certificates shall be issued until consideration for the shares represented thereby has been fully paid. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue.

SECTION 2. Transfer of Stock. Shares of stock of the Corporation shall be transferred on the books of the Corporation only upon surrender to the Corporation of the certificate or certificates representing the shares to be transferred accompanied by an assignment in writing of such shares properly executed by the shareholder of record or his duly authorized attorney-in-fact and with all taxes on the transfer having been paid. The Corporation may refuse any requested transfer until furnished evidence satisfactory to it that such transfer is proper. Upon the surrender of a certificate for transfer of stock, such certificate shall be marked on its face "Canceled". The Board of Directors may make such additional rules concerning the issuance, transfer and registration of stock and requirements regarding the establishment of

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lost, destroyed or wrongfully taken stock certificates (including any requirement of an indemnity bond prior to issuance of any replacement certificate and provision for appointment of a transfer agent and a registrar) as it deems appropriate.

SECTION 3. Registered Shareholders. The Corporation may deem and treat the holder of record of any stock as the absolute owner thereof for all purposes and shall not be required to take any notice of any right or claim of right of any other person.

SECTION 4. Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other purpose, the Board of Directors of the Corporation may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than seventy (70) days and, in the case of a meeting of shareholders, not less than ten (10) days prior to the date on which the particular action requiring such determination of shareholders is to be taken.

ARTICLE VI

DEPOSITORIES, SIGNATURES AND SEAL

SECTION 1. Depositories. All funds of the Corporation shall be deposited in the name of the Corporation in such bank, banks, or other financial institutions as the Board of Directors may from time to time designate and shall be drawn out on checks, drafts or other orders signed on behalf of the Corporation by such person or persons as the Board of Directors may from time to time designate.

SECTION 2. Seal. The seal of the Corporation shall be as follows:

[SEAL]

If the seal is affixed to a document, the signature of the Corporate Secretary or an Assistant Secretary shall attest the seal. The seal and its attestation may be lithographed or otherwise printed on any document and shall have, to the extent permitted by law, the same force and effect as if it has been affixed and attested manually.

SECTION 3. Execution of Instruments. All bills, notes, checks, and other instruments for the payment of money, all agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments or documents may be signed, executed, acknowledged, verified, delivered, or accepted on behalf of the Corporation by the Chairman of the Board, the President, any Vice Chairman, Executive Vice President, Senior Vice President or Vice President, the Secretary or the Treasurer. Any such instruments may also be signed, executed, acknowledged, verified, delivered or accepted on behalf of the Corporation in such manner and by such other officers, employees

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or agents of the Corporation as the Board of Directors or Executive Committee may from time to time direct.

ARTICLE VII

INDEMNIFICATION OF OFFICERS, DIRECTORS, AND EMPLOYE ES

SECTION 1. Definitions. As used in this Article, the term:

(A) "Corporation" includes any domestic or foreign predecessor entity of this Corporation in a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction.

(B) "Director" means an individual who is or was a director of the Corporation or an individual who, while a director of the Corporation, is or was serving at the Corporation's request as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other entity. A "director" is considered to be serving an employee benefit plan at the Corporation's request if his duties to the Corporation also impose duties on, or otherwise involve services by, him to the plan or to participants in or beneficiaries of the plan. "Director" includes, unless the context requires otherwise, the estate or personal representative of a director.

(C) "Disinterested director" means a director who at the time of a vote referred to in Section 3(C) or a vote or selection referred to in Section 4(B), 4(C) or 7(A) is not: (i) a party to the proceeding; or (ii) an individual who is a party to a proceeding having a familial, financial, professional, or employment relationship with the director whose indemnification or advance for expenses is the subject of the decision being made with respect to the proceeding, which relationship would, in the circumstances, reasonably be expected to exert an influence on the director's judgment when voting on the decision being made.

(D) "Employee" means an individual who is or was an employee of the Corporation or an individual who, while an employee of the Corporation, is or was serving at the Corporation's request as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise. An "Employee" is considered to be serving an employee benefit plan at the Corporation's request if his duties to the Corporation also impose duties on, or otherwise involve services by, him to the plan or to participants in or beneficiaries of the plan. "Employee" includes, unless the context requires otherwise, the estate or personal representative of an employee.

(E) "Expenses" includes counsel fees.

(F) "Liability" means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or reasonable expenses incurred with respect to a proceeding.

(G) "Officer" means an individual who is or was an officer of the Corporation which for purposes of this Article VII shall include an assistant officer, or an individual who, while an Officer of the Corporation, is or was serving at the Corporation's request as a director, officer, partner, trustee, employee,

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or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other entity. An "Officer" is considered to be serving an employee benefit plan at the Corporation's request if his duties to the Corporation also impose duties on, or otherwise involve services by, him to the plan or to participants in or beneficiaries of the plan. "Officer" includes, unless the context requires otherwise, the estate or personal representative of an Officer.

(H) "Official capacity" means: (i) when used with respect to a director, the office of a director in a corporation; and (ii) when used with respect to an Officer, the office in a corporation held by the Officer. Official capacity does not include service for any other domestic or foreign corporation or any partnership, joint venture, trust, employee benefit plan, or other entity.

(I) "Party" means an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding.

(J) "Proceeding" means any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative or investigative and whether formal or informal.

SECTION 2. Basic Indemnification Arrangement.

(A) Except as provided in subsections 2(D) and 2(E) below and, if required by Section 4 below, upon a determination pursuant to Section 4 in the specific case that such indemnification is permissible in the circumstances under this subsection because the individual has met the standard of conduct set forth in this subsection (A), the Corporation shall indemnify an individual who is made a party to a proceeding because he is or was a director or Officer against liability incurred by him in the proceeding if he conducted himself in good faith and, in the case of conduct in his official capacity, he reasonably believed such conduct was in the best interest of the Corporation, or in all other cases, he reasonably believed such conduct was at least not opposed to the best interests of the Corporation and, in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.

(B) A person's conduct with respect to an employee benefit plan for a purpose he believes in good faith to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subsection 2(A) above.

(C) The termination of a proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the proposed indemnitee did not meet the standard of conduct set forth in subsection 2(A) above.

(D) The Corporation shall not indemnify a person under this Article in connection with (i) a proceeding by or in the right of the Corporation, except for reasonable expenses incurred in connection with the proceeding if it is determined that such person has met the relevant standard of conduct under this section, or (ii) with respect to conduct for which such person was adjudged liable on the basis that personal benefit was improperly received by him, whether or not involving action in his official capacity.

SECTION 3. Advances for Expenses.

(A) The Corporation may advance funds to pay for or reimburse the reasonable expenses incurred by a director or Officer who is a party to a proceeding because he is a director or Officer in advance of final disposition of the proceeding if: (i) such person furnishes the Corporation a written

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affirmation of his good faith belief that he has met the relevant standard of conduct set forth in subsection 2(A) above or that the proceeding involves conduct for which liability has been eliminated under the Corporation's Articles of Incorporation; and (ii) such person furnishes the Corporation a written undertaking meeting the qualifications set forth below in subsection 3(B), executed personally or on his behalf, to repay any funds advanced if it is ultimately determined that he is not entitled to any indemnification under this Article or otherwise.

(B) The undertaking required by subsection 3(A)(ii) above must be an unlimited general obligation of the director or Officer but need not be secured and shall be accepted without reference to financial ability to make repayment.

(C) Authorizations under this Section shall be made: (i) By the Board of Directors: (a) when there are two or more disinterested directors, by a majority vote of all disinterested directors (a majority of whom shall for such purpose constitute a quorum) or by a majority of the members of a committee of two or more disinterested directors appointed by such a vote; or (b) when there are fewer than two disinterested directors, by a majority of the directors present, in which authorization directors who do not qualify as disinterested directors may participate; or (ii) by the shareholders, but shares owned or voted under the control of a director who at the time does not qualify as a disinterested director with respect to the proceeding may not be voted on the authorization.

SECTION 4. Authorization of and Determination of Entitlement to Indemnification.

(A) The Corporation shall not indemnify a director or Officer under Section 2 above unless authorized thereunder and a determination has been made for a specific proceeding that indemnification of such person is permissible in the circumstances because he has met the relevant standard of conduct set forth in subsection 2(A) above; provided, however, that regardless of the result or absence of any such determination, to the extent that a director or Officer has been wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director or Officer, the Corporation shall indemnify such person against reasonable expenses incurred by him in connection therewith.

(B) The determination referred to in subsection 4(A) above shall be made:

(i) If there are two or more disinterested directors, by the board of directors by a majority vote of all the disinterested directors (a majority of whom shall for such purpose constitute a quorum) or by a majority of the members of a committee of two or more disinterested directors appointed by such a vote;

(ii) by special legal counsel:

(1) selected by the Board of Directors or its committee in the manner prescribed in subdivision (i); or

(2) If there are fewer than two disinterested directors, selected by the Board of Directors (in which selection directors who do not qualify as disinterested directors may participate); or

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(iii) by the shareholders; but shares owned by or voted under the control of a director who at the time does not qualify as a disinterested director may not be voted on the determination.

(C) Authorization of indemnification or an obligation to indemnify and evaluation as to reasonableness of expenses of a director or Officer in the specific case shall be made in the same manner as the determination that indemnification is permissible, as described in subsection 4(B) above, except that if there are fewer than two disinterested directors or if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subsection 4(B)(ii)(2) above to select counsel.

(D) The Board of Directors, a committee thereof, or special legal counsel acting pursuant to subsection (B) above or Section 5 below, shall act expeditiously upon an application for indemnification or advances, and cooperate in the procedural steps required to obtain a judicial determination under Section 5 below.

(E) The Corporation may, by a provision in its Articles of Incorporation or Bylaws or in a resolution adopted or a contract approved by its Board of Directors or shareholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification or advance funds to pay for or reimburse expenses consistent with this part. Any such obligatory provision shall be deemed to satisfy the requirements for authorization referred to in Section 3(C) or Section 4(C).

SECTION 5. Court-Ordered Indemnification and Advances for Expenses. A director or Officer who is a party to a proceeding because he is a director or Officer may apply for indemnification or advances for expenses to the court conducting the proceeding or to another court of competent jurisdiction. After receipt of an application and after giving any notice it considers necessary, the court shall order indemnification or advances for expenses if it determines that:

(i) The director is entitled to indemnification under this part; or

(ii) In view of all the relevant circumstances, it is fair and reasonable to indemnify the director or Officer or to advance expenses to the director or Officer, even if the director or Officer has not met the relevant standard of conduct set forth in subsection 2(A) above, failed to comply with Section 3, or was adjudged liable in a if proceeding referred to in subsections (i) or (ii) of Section 2(D), but the director or Officer was adjudged so liable, the indemnification shall be limited to reasonable expenses incurred in connection with the proceeding, unless the Articles of Incorporation of the Corporation or a Bylaw, contract or resolution approved or ratified by shareholders pursuant to Section 7 below provides otherwise.

If the court determines that the director or Officer is entitled to indemnification or advance for expenses, it may also order the Corporation to pay the director's or Officer's reasonable expenses to obtain court-ordered indemnification or advance for expenses.

SECTION 6. Indemnification of Officers and Employees.

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(A) Unless the Corporation's Articles of Incorporation provide otherwise, the Corporation shall indemnify and advance expenses under this Article to an employee of the Corporation who is not a director or Officer to the same extent, consistent with public policy, as to a director or Officer.

(B) The Corporation may indemnify and advance expenses under this Article to an Officer of the Corporation who is a party to a proceeding because he is an Officer of the Corporation: (i) to the same extent as a director; and (ii) if he is not a director, to such further extent as may be provided by the Articles of Incorporation, the Bylaws, a resolution of the Board of Directors, or contract except for liability arising out of conduct that is enumerated in subsections (A)(i) through (A)(iv) of Section 7.

The provisions of this Section shall also apply to an Officer who is also a director if the sole basis on which he is made a party to the proceeding is an act or omission solely as an Officer.

SECTION 7. Shareholder Approved Indemnification.

(A) If authorized by the Articles of Incorporation or a Bylaw, contract or resolution approved or ratified by shareholders of the Corporation by a majority of the votes entitled to be cast, the Corporation may indemnify or obligate itself to indemnify a person made a party to a proceeding, including a proceeding brought by or in the right of the Corporation, without regard to the limitations in other sections of this Article, but shares owned or voted under the control of a director who at the time does not qualify as a disinterested director with respect to any existing or threatened proceeding that would be covered by the authorization may not be voted on the authorization. The Corporation shall not indemnify a person under this Section 7 for any liability incurred in a proceeding in which the person is adjudged liable to the Corporation or is subjected to injunctive relief in favor of the Corporation:

(i) for any appropriation, in violation of his duties, of any business opportunity of the Corporation;

(ii) for acts or omissions which involve intentional misconduct or a knowing violation of law;

(iii) for the types of liability set forth in Section 14-2-832 of the Georgia Business Corporation Code; or

(iv) for any transaction from which he received an improper personal benefit.

(B) Where approved or authorized in the manner described in subsection 7(A) above, the Corporation may advance or reimburse expenses incurred in advance of final disposition of the proceeding only if:

(i) the proposed indemnitee furnishes the Corporation a written affirmation of his good faith belief that his conduct does not constitute behavior of the kind described in subsection 7(A)(i)-(iv) above; and

(ii) the proposed indemnitee furnishes the Corporation a written undertaking, executed personally, or on his behalf, to repay any advances if it is ultimately determined that he is not entitled to indemnification.

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SECTION 8. Liability Insurance. The Corporation may purchase and maintain insurance on behalf of an individual who is a director, officer, employee, or agent of the Corporation or who, while a director, officer, employee, or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other entity against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee, or agent, whether or not the Corporation would have power to indemnify him against the same liability under Section 2 or Section 3 above.

SECTION 9. Witness Fees. Nothing in this Article shall limit the Corporation's power to pay or reimburse expenses incurred by a person in connection with his appearance as a witness in a proceeding at a time when he is not a party.

SECTION 10. Report to Shareholders. If the Corporation indemnifies or advances expenses to a director in connection with a proceeding by or in the right of the Corporation, the Corporation shall report the indemnification or advance, in writing, to shareholders with or before the notice of the next shareholders' meeting.

SECTION 11. Severability. In the event that any of the provisions of this Article (including any provision within a single section, subsection, division or sentence) is held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, the remaining provisions of this Article shall remain enforceable to the fullest extent permitted by law.

SECTION 12. Indemnification Not Exclusive. The rights of indemnification provided in this Article VII shall be in addition to any rights which any such director, Officer, employee or other person may otherwise be entitled by contract or as a matter of law.

ARTICLE VIII

AMENDMENTS OF BYLAWS

The Board of Directors shall have the power to alter, amend or repeal the Bylaws or adopt new Bylaws, but any Bylaws adopted by the Board of Directors may be altered, amended or repealed and new Bylaws adopted by the shareholders. Action by the Directors with respect to the Bylaws shall be taken by an affirmative vote of a majority of all of the Directors then elected and serving, unless a greater vote is required by law, the Articles of Incorporation or these Bylaws.

ARTICLE IX

EMERGENCY TRANSFER OF RESPONSIBILITY

SECTION 1. Emergency Defined. In the event of a national emergency threatening national security or a major disaster declared by the President of the United States or the person performing his functions, which directly or severely affects the operations of the Corporation, the officers and employees of this Corporation will continue to conduct the affairs of the Corporation under such guidance from the

14

Directors as may be available except as to matters which by law or regulation require specific approval of the Board of Directors and subject to conformance with any applicable laws, regulations, and governmental directives during the emergency.

SECTION 2. Officers Pro Tempore. The Board of Directors shall have the power, in the absence or disability of any officer, or upon the refusal of any officer to act as a result of said national emergency directly and severely affecting the operations of the Corporation, to delegate and prescribe such officer's powers and duties to any other officer, or to any Director.

In the event of a national emergency or state of disaster of sufficient severity to prevent the conduct and management of the affairs and business of this Corporation by its Directors and officers as contemplated by the Bylaws, any two or more available members or alternate members of the then incumbent Executive Committee shall constitute a quorum of such Committee for the full conduct and management of the Corporation in accordance with the provisions of Articles II and III of the Bylaws. If two members or alternate members of the Executive Committee cannot be expeditiously located, then three available Directors shall constitute the Executive Committee for the full conduct and management of the affairs and business of the Corporation until the then remaining Board can be convened. These provisions shall be subject to implementation by resolutions of the Board of Directors passed from time to time, and any provisions of the Bylaws (other than this Section) and any resolutions which are contrary to the provisions of this Section or the provisions of any such implementary resolutions shall be suspended until it shall be determined by any such interim Executive Committee acting under this Section that it shall be to the advantage of this Corporation to resume the conduct and management of its affairs and business under all of the other provisions of these Bylaws.

SECTION 3. Officer Succession. If, in the event of a national emergency or disaster which directly and severely affects the operations of the Corporation, the Chief Executive Officer cannot be located expeditiously or is unable to assume or to continue normal duties, then the authority and duties of the office shall be automatically assumed, without Board of Directors action, in order of title, and subject only to willingness and ability to serve, by the Chairman of the Board, President, Vice Chairman, Executive Vice President, Senior Vice President, Vice President, Corporate Secretary or their successors in office at the time of the emergency or disaster. Where two or more officers hold equivalent titles and are willing and able to serve, seniority in title controls initial appointment. If, in the same manner, the Corporate Secretary or Treasurer cannot be located or is unable to assume or continue normal duties, the responsibilities attached thereto shall, in like manner as described immediately above, be assumed by any Executive Vice President, Senior Vice President, or Vice President. Any officer assuming authority and position hereunder shall continue to serve until the earlier of his resignation or the elected officer or a more senior officer shall become available to perform the duties of the position of Chief Executive Officer, Corporate Secretary, or Treasurer.

SECTION 4. Certification of Authority. In the event of a national emergency or disaster which directly and severely affects the operations of the Corporation, anyone dealing with this Corporation shall accept a certification by the Corporate Secretary or any three officers that a specified individual is acting as Chairman of the Board, Chief Executive Officer, President, Corporate Secretary, or Treasurer, in accordance with these Bylaws; and that anyone accepting such certification shall continue to consider it in force until notified in writing of a change, such notice of change to carry the signature of the Corporate Secretary or three officers of the Corporation.

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SECTION 5. Alternative Locations. In the event of a national emergency or disaster which destroys, demolishes, or renders the Corporation's offices or facilities unserviceable, or which causes, or in the judgment of the Board of Directors or the Executive Committee probably will cause, the occupancy or use thereof to be a clear and imminent hazard to personal safety, the Corporation shall temporarily lease or acquire sufficient facilities to carry on its business as may be designated by the Board of Directors. Any temporarily relocated place of business of this Corporation shall be returned to its legally authorized location as soon as practicable and such temporary place of business shall then be discontinued.

SECTION 6. Amendments to Article IX. At any meeting called in accordance with Section 2 of this Article IX, the Board of Directors or Executive Committee, as the case may be, may modify, amend or add to the provisions of this Article IX so as to make any provision that may be practical or necessary for the circumstances of the emergency.

ARTICLE X

BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS

All of the requirements of Article 11A of the Georgia Business Corporation Code (currently codified in Sections 14-2-1131 through 14-2-1133 thereof), as may be in effect from time to time (the "Business Combination Statute"), shall apply to all "business combinations" (as defined in Section 14-2-1131 of the Georgia Business Corporation Code) involving the Corporation. The requirements of the Business Combination Statute shall be in addition to the requirements of Article XI of the Corporation's Articles of Incorporation. Nothing contained in the Business Combination Statute shall be deemed to limit the provisions contained in Article XI of the Corporation's Articles of Incorporation, and nothing contained in Article XI of the Corporation's Articles of Incorporation shall be deemed to limit the provisions contained in the Business Combination Statute.

ARTICLE XI

INSPECTION OF BOOKS AND RECORDS

The Board of Directors shall determine whether and to what extent the accounts and books of the Corporation, or any of them, other than the share records, shall be open to the inspection of shareholders, and no shareholder shall have any right to inspect any account or books or document of the Corporation except as conferred by law or by resolution of the shareholders or the Board of Directors. Without prior approval of the Board of Directors in their discretion, the right of inspection set forth in Section 14-2-1602(c) of the Georgia Business Corporation Code shall not be available to any shareholder owning two (2%) percent or less of the shares outstanding.

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Exhibit 10.3 February 14, 2001

SUNTRUST SUMMARY OF MODIFICATIONS TO THE SUPPLEMENTAL EXECUT IVE RETIREMENT PLAN

The Compensation Committee of the Board of Directors of SunTrust Banks, Inc. approved a recommendation presented by the Human Resources staff to amend the SunTrust Supplemental Executive Retirement Plan (SERP). The purpose of the amendment to the plan is to provide for a second tier SERP benefit targeted at 50% of a covered executive's final average covered compensation. The Committee also approved a second recommendation to add 13 executives as participants in the amended SERP at the second tier SERP benefit level. The Committee also approved specific plan design features that are summarized below.

--------------------------------------------------- --------------------------------------------------- ------------------------------ PROVISION RECOMMENDATION COMMENTS --------------------------------------------------- --------------------------------------------------- ------------------------------ Purpose . To deliver competitive retirement benefits that help The definition of covered c ompensation for the attract and retain key talent and help mitigate the qualified retirement plan i ncludes base pay only. More erosion of retirement income bene fits resulting from recently, a greater percent age of an executive's pay statutory limitations is being delivered in the f orm of variable . To provide a retirement benefit w hich more compensation that is direct ly linked to organization appropriately takes into account the total cash and individual performance. Therefore, it is appropriate compensation of covered executive s to include variable pay in the definition of covered compensation to ensure appr opriate and competitive levels of retirement income are be ing provided to covered executives. --------------------------------------------------- --------------------------------------------------- ------------------------------ Participation Add 13 participants. Other companies in our indu stry group of comparable size would typically have 6 0+ participants. Discretionary, but with strong consi deration given to: . Grades 52+ (midpoint $170,000) . 5 SunTrust executives cu rrently in SERP . Historically high contributors . Mr. Wells currently in S unTrust SERP per Merger . Future senior level contribution anticipated Agreement . Management level: primarily Manag ement committee with . 13 Crestar executives ar e grandfathered participants consideration also given to LOB h eads, STI functional in Crestar SERP (5 have pulled chute including one heads, Bank CEOs and key line man agers of largest banks who is retiring soon) . Additional 13 executives to be covered Even with a total of 20-30 participants, SunTrust is still conservative with res pect to the total number of covered executives when com pared to our industry peer group. --------------------------------------------------- --------------------------------------------------- ------------------------------

--------------------------------------------------- --------------------------------------------------- ------------------------------ PROVISION RECOMMENDATION COMMENT S --------------------------------------------------- --------------------------------------------------- ------------------------------ Covered Includes base pay and short t erm cash incentive The current SERP provis ions include one year Compensation awards. Covered compensation is the sum of the of PUP in the definitio n of covered compensation participants' base pay plus t he annual cash due to the historical c ompensation mix. Since we incentive award for a calenda r year. The annual have recently shifted s ome portion of compensation cash incentive award is inclu ded in the calendar opportunity for PUP to MIP, it is appropriate to only year during which the award w as earned and not the include MIP for new par ticipants on a prospective calendar year during which it is paid. basis. Survey data ind icates that PUP awards are typically excluded from the definition of covered compensation. If a FIP participant becomes a SERP participant, should con sider limiting the amount of a FIP award that can be t aken into consideration when computing final average covered compensation. --------------------------------------------------- --------------------------------------------------- ------------------------------ Final Final average compensation wi ll be the sum of the The SERP will be amende d to provide that the Average three full calendar years of covered compensation definition of final ave rage compensation will Compensation out of the five full calendar years immediately apply to Tier I SERP pa rticipants also. However, the preceding the executive's ret irement, that will definition of covered c ompensation for Tier I SERP produce the highest average. participants will not c hange. Should consider capping the amount of a FIP awa rd at equivalent MIP level if a FIP particpant become s a covered executive. --------------------------------------------------- --------------------------------------------------- ------------------------------ Benefit 2% x years of creditable serv ice not to exceed Credit given for all cr editable SunTrust service Accrual 25 years x covered compensa tion Formula --------------------------------------------------- --------------------------------------------------- ------------------------------ Target Benefit 50% of final average covered compensation Current SunTrust SERP t arget retirement benefit Amount Offset by: is 60% of final average covered compensation. (Income . Benefits payable from Sun Trust Retirement Plan This was adopted in mid -eighties to be compatible Replacement . Benefits payable from Sun Trust ERISA Excess Plan with the qualified reti rement plan for employees. Ratio) . Benefits payable under an y previous employer's This plan has since bee n changed. 55% is the retirement plans (qualifi ed and/or non-qualified) market median for a ful l-service executive with 30 . Benefits payable from Soc ial Security years of service. Cres tar uses 50% (but also uses highest average co mp in three years). --------------------------------------------------- --------------------------------------------------- ------------------------------

--------------------------------------------------- --------------------------------------------------- ------------------------------ PROVISION RECOMMENDATION COMM ENTS --------------------------------------------------- --------------------------------------------------- ------------------------------ Payment The normal form of payment would cont inue to be a single The grandfathered PBGC rat e would not be available lump sum distribution. Other payment options, as provided to new participants for pu rposes of calculating the for in the retirement plan, would be available at the lump sum value of the accr ued SERP benefit. executive's election . --------------------------------------------------- --------------------------------------------------- ------------------------------ Vesting Age 60 with 10 years of service Current SERP specifies age 60. There have been no external hires added to th e SERP. Recently, as a Immediate vesting as a result of deat h, disability, or in precautionary measure, al l current SERP the event of a change in control participants were vested t o avoid the excise tax on excess parachute attributa ble to accelerated vesting in the event of a change i n control. Age 60 provides a "Golden Handcuff" until the executive attains age 60, and helps avoid some of the excise tax on excess parac hute payments in the event of a CIC. If an external hire become s a named participant in the SERP, a determination coul d be made regarding the appropriateness of this ve sting schedule or whether, on an individual basis, we de signate a specific amount of service or special vesting schedule as appropriate. --------------------------------------------------- --------------------------------------------------- ------------------------------ Early Eligible at age 60 with 10 years of s ervice Same early retirement redu ction factors as qualified Retirement pension plan. SERP service factor (which acts as an early retirement reduction) will not apply to new participants. --------------------------------------------------- --------------------------------------------------- ------------------------------ Survivor Pre-retirement: joint & 50% survivor annuity Benefit Post-retirement: none (unless executi ve had elected a joint and survivor payment option) --------------------------------------------------- --------------------------------------------------- ------------------------------

--------------------------------------------------- --------------------------------------------------- ------------------------------ PROVISION RECOM MENDATION COMMENTS --------------------------------------------------- --------------------------------------------------- ------------------------------ Change in Control Continue with current CIC pro visions: All SERP particip ants will also be provided . Within 3 years of a change in control, if there is with a change in control agreement. Therefore, involuntary termination or voluntary termination for it is possible th at all change in control good reason, SERP compensa tion is to be based on the protections, bene fits enhancements and benefit highest compensation for a ny 12 month period during continuation prov isions can be addressed in the the last five years; SERP service is to be increased change in control agreements and section 13 of by the lesser of 36 full m onths or the number of the SERP can be d eleted. months between the normal retirement date and the date of termination. The S ERP distribution is to be paid in a lump sum as soon as practical after a change in control. --------------------------------------------------- --------------------------------------------------- ------------------------------ Special Include consulting, non-compe te, and Provisions non-solicitation provisions b oth from a business perspective as well as to min imize impact of the excise tax on excess parachute payme nts in the event of a change in control. --------------------------------------------------- --------------------------------------------------- ------------------------------ Dispute Resolution . Require binding arbitratio n to resolve disputes . Losing party pays attorney s fees --------------------------------------------------- --------------------------------------------------- ------------------------------ Other Eligibility for an executive to receive benefits under the This has been an issue with a Crestar SERP will not be construed to be "retirement" under the participant and w e want this to be clearly SunTrust Retirement Plan for purposes of establishing stated. eligibility for other benefit s. --------------------------------------------------- --------------------------------------------------- ------------------------------ Cost Existing corporat e owned life insurance policies could po tentially provide sufficient underlying assets to offset the financial statement expense and balance sheet liabilities attri butable to the emerging benefit obligatio ns associated with adding participants to t he SERP. --------------------------------------------------- --------------------------------------------------- ------------------------------ Rabbi Trust Continue to have SERP secured by a Rabbi trust --------------------------------------------------- --------------------------------------------------- ------------------------------

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN SERP TIER 1

PURPOSE

The SunTrust Banks, Inc. Supplemental Executive Retirement Plan (SERP) is designed to provide a targeted level of post retirement income to certain key executives to supplement the benefits provided under the SunTrust Retirement and ERISA Excess Plans. This Plan is intended to better enable the Company to deliver more competitive levels of total retirement income to its senior executives and to aid in the recruitment and retention of critical executive talent.

PARTICIPANTS

Participation in the SERP is limited to a highly select group of key executives who have significant impact upon the long-term growth and profitability of the Company and who are designated as SERP Participants by the Compensation Committee.

SERP BENEFIT

The SERP Benefit is an annual retirement income benefit equal to 60% of the Participant's SERP Covered Compensation both earned and paid immediately prior to retirement. The SERP Benefit is reduced by any benefits payable to the Participant under the SunTrust Retirement Plan, Social Security, the SunTrust ERISA Excess Plan and certain other executive retirement arrangements. The benefit is calculated at the Participant's normal or early retirement date followed by a one-time adjustment to occur in January after the Participant's Management Incentive Plan (MIP) and Performance Unit Plan (PUP) awards are paid.

SERP COVERED COMPENSATION

SERP Covered Compensation is sum of the three full calendar years of a Participant's base salary, annual MIP award and PUP award payment out of the five full calendar years of a Participant's base salary, annual MIP award and PUP award payment immediately preceding the Participant's normal or early retirement date that will produce the highest average.

VESTING

A Participant becomes 100% vested in his/her accrued SERP Benefit after the completion of 10 years of service and the attainment of age 60.

RETIREMENT DATES

The SERP Benefit becomes fully accrued and payable to a Participant if retirement occurs at age 65 or later. Early retirement can occur at age 60 or thereafter, with the Participant receiving the benefit accrued up to the date of his/her early retirement actuarially adjusted for early commencement of payment. The early retirement SERP Benefit is calculated by applying a SERP service factor to the accrued SERP Benefit. The SERP service factor is derived by dividing the Participant's actual months of service at the early retirement date by his/her projected months of service had he/she remained with the Company until the normal retirement date. This factor is applied to the accrued SERP Benefit to obtain the early retirement SERP Benefit. No SERP benefit is payable to a Participant if retirement or termination occurs prior to the attainment of age 60.

DISABILITY PROVISION

In the event a Participant becomes disabled prior to retirement, the Participant will continue to accrue a SERP Benefit while disabled until the Retirement Plan benefit is payable or recovery, whichever is earlier. SERP Compensation during any period of disability when compensation is not earned or paid will be assumed at the same rate in effect at the time disability began. The benefit becomes payable under the SERP at age 65 or, if early retirement is elected under the Retirement Plan, at the early retirement date.

SURVIVOR BENEFIT

In the event of the death of a Participant prior to retirement, a survivor benefit will be paid to the Participant's spouse, or if unmarried, the named beneficiary under the SunTrust Retirement Plan. The SERP Survivor Benefit is equal to the accrued benefit that would have been payable to the Participant's spouse under a 100% joint and survivor annuity option if the Participant had retired on the date immediately preceding his/her death. The SERP Survivor Benefit will be paid in a lump sum as soon as practicable following the Participant's death. The computation of the SERP Survivor Benefit will be based on the survivor's annuity amount at the later of the date the deceased Participant would have otherwise attained age 55 or the actual date of the Participant's death. If the SERP Survivor Benefit is paid before age 60, it is actuarially reduced in the same manner as retirement payments under the SunTrust Retirement Plan.

PAYMENT OPTIONS

Upon retirement, the SERP Benefit will be paid from the general assets of the Company in the form of a single lump sum distribution. A Participant may make a written election to have his/her benefit paid in any form of benefit available under the Retirement Plan provided this election is made at least one year before the benefit is to be paid under this plan. For grandfathered participants designated prior to 1994, lump sum payments will be calculated using the PBGC interest rate (rather than the GATT interest rate used in the Retirement Plan). At such time that the PBGC rate is no longer published, a phantom PBGC rate will be used, as outlined in the plan document.

TAX CONSEQUENCES

The SERP is an unfunded, nonqualified deferred compensation plan. Distributions are treated as ordinary income. Required federal income tax, state income tax (if applicable) and FICA payroll taxes will be withheld according to the withholding tables in effect at the time of retirement.

FORFEITURE AND NONCOMPETE

The Compensation Committee may require a Participant to execute a release and waiver of claims form as a condition of receiving benefits under the SERP. The Committee may also forfeit, suspend or seek to recover SERP Benefit payments for a Participant's violation of applicable civil or criminal laws, corporate rules of conduct or engaging in activity which the Committee determines is detrimental to the interests of the Company. The release also serves as a non-compete agreement between Participant and the Company stating that the Participant agrees not to engage in any business with a direct competitor of the Company.

CHANGE IN CONTROL PROTECTION

In the event of a Change in Control and the constructive termination of the

Participant's employment within three years of the change in control date, the Participant's SERP Benefit will vest automatically and will be calculated based upon the following provisions:

. 36 months will be added to the SERP service factor (or if less the number of months to the Participant's 65/th/ birth date)

. SERP Compensation will be calculated using the highest 12 months out of the last 60 months.

. The benefit will be payable immediately with a reduction factor of 3% for every year below age 60.

. The payment will automatically be made as a lump sum.

Additionally, the Participant will continue to receive health, life and disability benefit coverage for up to two years after termination.

The SERP Benefit is secured by a rabbi trust (grantor trust). The purpose of this trust is to provide for the funding of the projected SERP Benefit in the event of a change in control. In addition, the trust would provide protection against a refusal to pay by future management. The trust would become irrevocable upon a change in control. This trust does not provide protection against insolvency or regulatory intervention.

***

This is a non-technical summary of the Plan. The Plan Document is the authoritative source for all questions on the SERP. A copy of the Plan Document can be obtained by calling Donna Daniel at (404) 827-6163. The Compensation Committee administers the Plan and has the authority to amend it prospectively or terminate the Plan at any time.

Revised February 15, 2001 (SERP Tier1)

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN SERP TIER 2

PURPOSE

The SunTrust Banks, Inc. Supplemental Executive Retirement Plan (SERP) is designed to provide a targeted level of post retirement income to certain key executives to supplement the benefits provided under the SunTrust Retirement and ERISA Excess Plans. This Plan is intended to better enable the company to deliver more competitive levels of total retirement income to its senior executives and to aid in the recruitment and retention of critical executive talent.

PARTICIPANTS

Participation in the SERP is limited to a highly select group of key executives who have significant impact upon the long-term growth and profitability of the Corporation and are designated as SERP Participants by the Compensation Committee.

SERP BENEFIT

The SERP Benefit is an annual retirement income benefit equal to a service related percentage of a Participant's SERP Covered Compensation. The SERP benefit formula is 2% X a Participant's years of service up to 25 years X a Participant's SERP Covered Compensation. Therefore, a SERP Participant with 25 or more years of service will have a SERP benefit factor of 50% (the target benefit level). The SERP Benefit is reduced by any benefits payable to the Participant under the SunTrust Retirement Plan, Social Security, the SunTrust ERISA Excess Plan and certain other executive retirement arrangements.

SERP COVERED COMPENSATION

SERP Covered Compensation is defined as the sum of the three full calendar years of a Participant's base salary and annual MIP award, out of the five full calendar years of a Participant's base salary and annual MIP award immediately preceding the Participant's normal or early retirement date, that will produce the highest average. The annual MIP award is included in the Participant's compensation for the year in which it is earned and not the year in which it is paid.

VESTING

A Participant becomes 100% vested in his/her accrued SERP Benefit after completion of 10 years of service and the attainment of age 60.

RETIREMENT DATES

The SERP Benefit becomes fully accrued and payable to a Participant if retirement occurs at age 65 or later. Early retirement can occur at age 60 or thereafter, with the Participant receiving the benefit accrued up to the date of his/her early retirement actuarially adjusted for early commencement of payment. The accrued SERP Benefit as of the early retirement date will be reduced by the same factors used to calculate early retirement benefits under the Retirement Plan. No SERP benefit is payable to a Participant if retirement or termination occurs prior to the attainment of age 60.

DISABILITY PROVISION

In the event a Participant becomes disabled prior to retirement, the Participant will continue to accrue a SERP Benefit while disabled until the Retirement Plan benefit is payable or recovery, whichever is earlier. SERP Compensation during any period of disability when compensation is not earned or paid will be assumed at the same rate in effect at the time disability began. The benefit becomes payable under the SERP at age 65 or, if early retirement is elected under the Retirement Plan at the early retirement date.

SURVIVOR BENEFIT

In the event of the death of a Participant prior to retirement, a survivor benefit will be paid to the Participant's spouse, or if unmarried, the named beneficiary under the SunTrust Retirement Plan. The SERP Survivor Benefit is equal to the accrued benefit that would have been payable to the Participant's spouse under a 50% joint and survivor annuity if the Participant had retired on the date immediately preceding his/her death. The SERP Survivor Benefit will be paid in a lump sum as soon as practicable after the Participant's death. The computation of the SERP Survivor Benefit will be based on the survivor's annuity amount at the later of the date the Participant would have otherwise attained the age of 55 or the actual date of the Participant's death. If the SERP Survivor Benefit is paid before age 60, it is actuarially reduced in the same manner as retirement payments under the SunTrust Retirement Plan.

PAYMENT OPTIONS

Upon retirement, the SERP Benefit will be paid from the general assets of the Company in the form of a single lump sum distribution. A Participant may make a written election to have his/her benefit paid in any form of benefit available under the Retirement Plan provided the election is made at least one year before the benefit is to be paid under this plan.

TAX CONSEQUENCES

The SERP is an unfunded, nonqualified deferred compensation plan. Distributions are treated as ordinary income. Federal income tax, state income tax (if applicable) and FICA payroll taxes will be withheld according to withholding tables in effect at the time of retirement.

FORFEITURE AND NONCOMPETE

The Compensation Committee may require a Participant to execute a release and waiver of claims form as a condition of receiving benefits under the SERP. The Committee may also forfeit, suspend or seek to recover SERP Benefit payments for a Participant's violation of applicable civil or criminal laws, corporate rules of conduct or engaging in activity which the Committee determines is detrimental to the interests of the Company. The release also serves as a non-compete agreement between Participant and the Company stating that the Participant agrees not to engage in any business with a direct competitor of the Company.

CHANGE IN CONTROL PROTECTION

In the event of a Change in Control and the constructive termination of the

Participant's employment within two years of the change in control date, the SERP Benefit will vest automatically. And, depending upon the age and service of the Participant at the date of termination, the SERP Benefit will be calculated in the same manner as an early retirement or vested terminated retirement benefit under the Retirement Plan. The payment of the SERP Benefit will automatically be made in the form of a single lump sum distribution.

The SERP Benefit is secured by a rabbi trust (grantor trust). The purpose of this trust is to provide for the funding of the projected SERP benefit in the event of a change in control. In addition, the trust would provide protection against a refusal to pay by future management. The trust would become irrevocable upon a change in control. This trust does not provide protection against insolvency or regulatory intervention.

***

This is a non-technical summary of the Plan. The Plan Document is the authoritative source for all questions on the SERP. A copy of the Plan Document can be obtained by calling Donna Daniel at (404) 827-6163. The Compensation Committee administers the Plan and has the authority to amend it prospectively or terminate the Plan at any time.

Revised February 15, 2001 SERP Tier 2

Exhibit 10.8

SunTrust Banks, Inc. Deferral Plan Committee

December 31, 2001

Amendment Number One to the SunTrust Banks, Inc. 401(k) Excess Plan Amended and Restated as of July 1, 1999

WHEREAS, SunTrust Banks, Inc. (the "Corporation") has adopted and currently sponsors the SunTrust Banks, Inc. 401(k) Excess Plan, as amended and restated effective July 1, 1999 (the "Excess Plan"); and

WHEREAS, the Compensation Committee of the Corporation's Board of Directors has sole discretionary authority pursuant to Section 8.1 of the Excess Plan for the operation, interpretation and administration of the Excess Plan and is authorized and empowered pursuant to Section 9.8 to amend or terminate the Excess Plan; and

WHEREAS, the Compensation Committee pursuant to paragraph 8.1.5 of the Excess Plan has delegated authority to the Deferral Plan Committee serving under the SunTrust Banks, Inc. Deferred Compensation Plan from time to time to handle the day-to-day administration of the Excess Plan and to make such determinations and to adopt such forms and rules and regulations as the Deferral Plan Committee may deem necessary or appropriate to carry out the administrative duties of the Compensation Committee; and

WHEREAS, the Deferral Plan Committee has determined that the Excess Plan should be amended to reflect certain benefit administrative changes occurring in 2002.

NOW THEREFORE, BE IT RESOLVED That Amendment Number One to the Excess Plan, as set forth in the attached Exhibit 1, is adopted effective January 1, 2002.

IN WITNESS WHEREOF, the Deferral Plan Committee has caused this Amendment Number One to be executed by its duly authorized member.

EXECUTED this 31/st/ day of December, 2001.

DEFERRAL PLAN COMMITTEE ATTEST

By: /s/ Mary S. Harrell By: / s/ Margaret U. Hodgson -------------------------------------- ----- ----------------------------- Title: First V. P., SunTrust Banks, Inc. Title: A ssistant Corporate Secretary ----------------------------------- -- -----------------------------

Exhibit 1 AMENDMENT NUMBER ONE TO THE

SUNTRUST BANKS, INC. 401(k) EXCESS PLAN AS AMENDED AND RESTATED EFFECTIVE JULY 1, 1999

The SunTrust Banks, Inc. 401(k) Excess Plan, as amended and restated effective July 1, 1999, is amended as set forth below, effective as of January 1, 2002.

1. The introductory paragraph of paragraph 2.1 is amended to read as follows to reflect a change in the deferral rate for the Excess Plan:

2.1 Election. An Eligible Employee who wishes to become a Participant in this Excess Plan must file an initial Deferral Election Form on or before the Election Date, designating the amount of elective contribution to be made to his Account for the Plan Year, which shall be expressed as a whole percentage of his Eligible Compensation (between one percent (1%) and fifteen percent (15%) unless otherwise announced by the Compensation Committee). If an Eligible Employee fails to designate a contribution rate, his contribution rate hereunder shall be the same rate he has elected under the 401(k) Plan as of the Election Date.

2. Paragraph 3.5 is amended to read as follows:

3.5 Matching Contributions made after June 30, 1999. That portion of a Participant's Account attributable to Employer matching contributions made after June 30, 1999 shall be deemed at all times to be invested in Employer Stock, except as provided in paragraph 4.3 for Employer matching contributions that are tentatively credited to a

Participant's Account.

3. Paragraph 4.3 of the Excess Plan is amended to read as follows to reflect a change in the matching contributions under the Excess Plan:

Matching Contributions. Subject to the compensation limits set forth in paragraph 2.3, each Participant's Account shall be credited with Employer matching contributions based on the rate of Matching Contribution in effect under the 401(k) Plan at the relevant time and the amount of Eligible Compensation that is deferred under this Excess Plan in accordance with the Participant's Deferral Election Form and

subject to adjustments by the Committee. Matching contributions under this Plan shall be credited to Participants' Accounts as of the dates that Matching Contributions are made to the 401(k) Plan or such other times as the Compensation Committee may determine in its sole discretion. For any Plan Year beginning on and after January 1, 2002, the Committee may determine in its sole discretion that Employer matching contributions for the Plan Year under this Plan shall be subject to a year-end or more frequent adjustment process. For any such year in which the adjustment process is in effect, matching contributions under this Plan shall be tentatively credited to

Participants' Accounts and shall be deemed to be invested in a money market fund or other Investment Fund selected by the Committee that provides fixed earnings until the adjustment process is complete. At the end of the Plan Year or other more frequent adjustment interval, the Compensation Committee, in its sole and complete discretion, may reduce matching contributions for any Participant whose matching contributions exceed the maximum permissible amount determined by the Committee for the Plan Year or other interval and may allocate additional matching contributions to each Participant who does not receive the maximum permissible amount of matching contribution under this Plan for the Plan Year or other interval. When the adjustment process is complete, the matching contributions as adjusted (which adjustment may be zero) shall be credited to Participants' Accounts and then deemed to be invested in Employer Stock. Any excess matching contributions shall be deemed a forfeiture.

4. Paragraph 5.1 is amended to read as follows:

5.1 Generally. Except as provided in paragraph 4.3 with respect to excess matching contributions which are deemed a forfeiture and in paragraph 5.2, a Participant's interest in his benefit under the Excess Plan is one hundred percent (100%) vested and nonforfeitable at all times.

Exhibit 10.36

CRESTAR FINANCIAL CORPORATION

DIRECTORS' EQUITY PROGRAM

Effective January 1, 1996

TABLE OF CONTENTS

Section Page ------- ---- 1. PURPOSE .................................. .................... 1 2. DEFINITIONS .............................. .................... 1 3. EQUITY AWARDS ............................ .................... 4 4. DEFERRAL ELECTION ........................ .................... 4 5. VESTING .................................. .................... 5 6. CREDITS TO ACCOUNTS ...................... .................... 6 7. DISTRIBUTION ............................. .................... 7 8. HARDSHIP DISTRIBUTIONS ................... .................... 8 9. COMPANY'S OBLIGATION ..................... .................... 8 10. CONTROL BY PARTICIPANT ................... .................... 9 11. CLAIMS AGAINST PARTICIPANT'S DEFERRED STOC K BENEFIT .......... 9 12. AMENDMENT OR TERMINATION ................. .................... 9 13. NOTICES .................................. .................... 10 14. WAIVER ................................... .................... 10 15. CONSTRUCTION ............................. .................... 10 16. EFFECTIVENESS ............................ .................... 10

1. PURPOSE. The Crestar Financial Corporation Directors' Equity Program is intended to assist the Company in promoting a greater identity of interest between the Company's non-employee directors and its shareholders and to assist the Company in attracting and retaining non-employee directors by affording Participants an opportunity to share in the future success of the Company. The Plan is also intended to constitute a deferred compensation program for corporate directors' fees. 2. DEFINITIONS. The following definitions apply to this Plan and to the

Deferral Election Forms.

(a) Account means that bookkeeping record established for each Participant and is the sum of the Participant's Equity Award Account and his Elective Deferral Account. An Account is established only for purposes of measuring a Deferred Stock Benefit and not to segregate assets or to identify assets that may or must be used to satisfy a Deferred Stock Benefit. (b) Administrator means the Company's Director of Human Resources. (c) Beneficiary or Beneficiaries means a person or persons or other entity designated on a Beneficiary Designation Form by a Participant as allowed in subsection 7(c) to receive a Deferred Stock Benefit. If there is no valid designation by the Participant, or if the designated Beneficiary or Beneficiaries fail to survive the Participant or otherwise fail to take the benefit, the Participant's Beneficiary is the first of the following who survives the Participant: the Participant's spouse (the person legally married to the Participant when the Participant dies); the Participant's surviving issue, per stirpes; the Participant's parents and the Participant's estate. (d) Beneficiary Designation Form means a form acceptable to the Administrator or his designee used by a Participant according to this Plan to name his or her Beneficiary or Beneficiaries who will receive the Participant's Deferred Stock Benefit under this Plan upon the Participant's death. (e) Board means the Board of Directors of the Company. (f) Company means Crestar Financial Corporation and any successor business by merger, purchase, or otherwise and any other business that maintains the Plan. (g) Compensation means a Director's Retainer Fee and Stock Award for the

Deferral Year.

(h) Deferral Election Form means a document governed by the provisions of section 4 of this Plan, including the portion that is the Distribution Election Form and the related Beneficiary Designation Form that applies to all of that Participant's Deferred Stock Benefit under the Plan. (i) Deferral Year means a calendar year for which a Director has submitted

a Deferral

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Election Form that is acceptable to the Administrator.

(j) Deferred Stock Benefit means the benefit that a Participant is entitled to receive under this Plan. (k) Director means a duly elected or appointed member of the Board who is not an employee of the Company, excluding any member of the Board who is required to transfer, assign or pay his or her Retainer Fee to the member's employer or firm. (l) Distribution Election Form means a form used by a Participant according to this Plan to establish the frequency of distributions from his or her Elective Deferral Account. If a Participant has no Distribution Election Form that is operative according to this Plan, distribution of that Deferred Stock Benefit is governed by section 7 of this Plan. (m) Effective Date means January 1, 1996. (n) Election Date means the date established by this Plan as the date on or before which a Director must submit a valid Deferral Election Form to the Administrator. For each Deferral Year, the Election Date is December 31 of the preceding calendar year. However, for an individual who becomes a Director during a Deferral Year, the Election Date is the thirtieth day following the date that he or she becomes a Director. Despite the three preceding sentences, the Administrator may set an earlier date as the Election Date for any Deferral Year. (o) Elective Deferral Account means that bookkeeping record established for each Participant who elects to defer his or her Retainer Fee, Stock Award, or both for a Deferral Year. An Elective Deferral Account is established only for purposes of measuring that portion of a Deferred Stock Benefit attributable to deferred Retainer Fees, Stock Awards, or both and not to segregate assets or to identify assets that may or must be used to satisfy a Deferred Stock Benefit. An Elective Deferral Account will be credited with the Participant's Compensation deferred according to a Deferral Election Form and according to section 6 of this Plan. An Elective Deferral Account will be credited periodically with amounts determined under subsection 6(b) of this Plan. (p) Equity Award means an award stated with reference to a number of whole shares of Company common stock that is credited to a Participant's Equity Award Account in accordance with section 3 of this Plan. (q) Equity Award Account means that bookkeeping record established for each Participant. An Equity Award Account is established only for purposes of

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measuring that portion of a Deferred Stock Benefit attributable to awards according to section 3 of this Plan and not to segregate assets or to identify assets that may or must be used to satisfy a Deferred Stock Benefit. An Equity Award Account will be credited periodically with amounts determined under subsection 6(b) of this Plan.

(r) Equity Award Date means the Effective Date and each January 1 that is a multiple of the fifth anniversary of the Effective Date. The initial Equity Award Date of a Participant who becomes a Director after the Effective Date shall be the first day of the month coincident with or next following the date that the individual becomes a Director. (s) Fair Market Value means, on any given date, the average (rounded to the nearest one-eighth of a dollar) of the high and low prices of a share of Company common stock as reported on the New York Stock Exchange composite tape on such day or, if the Company common stock was not traded on the New York Stock Exchange on such day, then the next day that the Company common stock is traded on such exchange, all as reported by such source as the Administrator may select. If shares of Company common stock are not then traded on the New York Stock Exchange, the Fair Market Value shall be determined by the Administrator using any reasonable method in good faith. (t) Participant means a member of the Board who is a Director on an Equity Award Date or, with respect to any Deferral Year, has a Deferral Election Form that is operative for that Deferral Year. (u) Plan means the Crestar Financial Corporation Directors' Equity

Program. (v) Retainer Fee means that portion of a Director's Compensation that is a fixed cash amount determined without regard to his or her attendance at meetings. (w) Stock Award means the number of shares of Company common stock that would have been issuable to a Participant under the Crestar Financial Corporation Directors' Stock Compensation Plan but for the Participant's election to defer such award under this Plan. (x) Terminate, Terminating, or Termination, with respect to a Participant, means cessation of his or her relationship with the Company as a member of the Board whether by death, disability or severance for any other reason. (y) Year of Service means a period of twelve consecutive full months of service as a member of the Board.

-4- 3. EQUITY AWARDS. Equity Awards are governed by the provisions of this section.

(a) As of the Effective Date and each subsequent Equity Award Date, the Equity Award Account of each Participant who is then a Director will be credited with an Equity Award. The Equity Award shall be stated with respect to a number of whole shares of Company common stock that has a Fair Market Value as of such date that most nearly equals $40,000.

(b) The preceding subsection 3(a) to the contrary notwithstanding, the initial Equity Award for a Director who becomes a Participant after the Effective Date shall be governed by this subsection 3(b). The initial Equity Award for a Participant described in the preceding sentence shall be credited to such Participant's Equity Award Account as of his or her first Equity Award Date and shall be stated with respect to a number of whole shares of Company common stock. The number of whole shares of Company common stock credited to the Equity Award Account shall be the product of (i) that number of whole shares of Company common stock that has a Fair Market Value as of such date that most nearly equals $40,000 and (ii) a fraction, the numerator of which is the number of whole months preceding the next Equity Award Date under subsection 3(a) and the denominator of which is 60.

4. DEFERRAL ELECTION. A deferral election is valid when a Deferral Election Form, that is acceptable to the Administrator, is completed, signed by the electing Director, and received by the Administrator no later than the applicable Election Date. Deferral elections are governed by the provisions of this section.

(a) A Director may submit a Deferral Election Form for any Deferral Year if he or she is a Director at the beginning of that Deferral Year or becomes a Director during that Deferral Year.

(b) Before each Deferral Year's Election Date, each Director will be provided with a Deferral Election Form and a Beneficiary Designation Form. Under the Deferral Election Form for a single Deferral Year, a Director may elect on or before the Election Date to defer the receipt of his or her Retainer Fee or his or her Stock Award or both for the Deferral Year which will be earned and payable after the Election Date.

(c) Each Distribution Election Form is part of the Deferral Election Form on which it appears or to which it states that it is related. The Administrator may allow a Participant to file one Distribution Election Form for his or her entire Elective Deferral Account or multiple Distribution Election Forms that each relate to Deferred Stock Benefits credited to his or her Elective Deferral Account for one or more Deferral Years. The provisions of section 7 of this Plan apply to any Deferred Stock Benefit credited to his or her Elective Deferral Account under this Plan if

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there is no operative Distribution Election Form for that Deferred Stock Benefit.

(d) If he or she does so on or before the Election Date for the Deferral Year, the Administrator may reject any Deferral Election Form or any Distribution Election Form, or both, and the Administrator is not required to state a reason for any rejection. The Administrator may modify any Distribution Election Form at any time to the extent necessary to comply with any federal securities laws or regulations. However, the Administrator's rejection of any Deferral Election Form or any Distribution Election Form or the Administrator's modification of any Distribution Election Form must be based upon action taken without regard to any vote of the Director whose Deferral Election Form or Distribution Election Form is under consideration, and the Administrator's rejections must be made on a uniform basis with respect to similarly situated Directors. If the Administrator rejects a Deferral Election Form, the Director must be paid the Compensation he or she would have been entitled to receive if he or she had not submitted the rejected Deferral Election Form.

(e) A Director may not revoke a Deferral Election Form after the Deferral Year begins. Any revocation before the beginning of the Deferral Year is the same as a failure to submit a Deferral Election Form or a Distribution Election Form unless the Director submits a new Deferral Election Form on or before that Deferral Year's Election Date. Any writing signed by a Director expressing an intention to revoke his or her Deferral Election Form that is delivered to the Administrator before the close of business on the relevant Election Date is a revocation.

(f) A Director who has not submitted a valid Deferral Election Form to the Administrator on or before the relevant Election Date may not defer any part of his or her Compensation for that Deferral Year under this Plan. The provisions of section 7 govern the distribution of amounts credited to the Elective Deferral Account of a Director who submits a valid Deferral Election Form but who fails to submit a valid Distribution Election Form for that portion of his or her Deferred Stock Benefit before the relevant Election Date or who otherwise has no valid Distribution Election Form for that Deferred Stock Benefit.

5. VESTING. A Participant's interest in his or her Elective Deferral Account is always 100% vested and nonforfeitable. A Participant whose service as a member of the Board terminates on account of death or disability (as determined by the Board in its discretion), shall have a 100% vested and nonforfeitable interest in his or her Equity Award Account. A Participant whose service as a member of the Board terminates for reasons other than death or disability shall have a vested and nonforfeitable interest in his or her Equity Award Account in accordance with the following schedule:

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Each Participant's interest in his or her Equity Award Account shall be 100% vested and nonforfeitable as of a Control Change Date (as such term is defined in the Crestar Financial Corporation 1993 Stock Incentive Plan).

6. CREDITS TO ACCOUNTS.

(a) An Equity Award Account and Elective Deferral Account will be established for each Participant and shall be credited with amounts determined under sections 3 and 4 and shall be further credited with earnings in accordance with subsection 6(b). A Deferred Stock Benefit attributable to a deferred Retainer Fee will be credited to the Participant's Elective Deferral Account as a number of whole and fractional shares of Company common stock based on the Fair Market Value on the date that the Retainer Fee would have been paid. A Deferred Stock Benefit attributable to a deferred Stock Award will be credited to the Participant's Elective Deferral Account as a number of whole and fractional shares of Common Stock based on the Fair Market Value on the date that the Stock Award would have been issued.

(b) The basis for additional credits to Accounts (in whole and fractional shares of Company common stock) will be variable rates based on the value of dividends paid on Company common stock and the Fair Market Value on the date that such dividends are paid on Company common stock. The value of an Account at any relevant time is determined as if the Equity Awards made to, and the Compensation deferred by, the Participant under the Plan and any additional credits under this subsection had been used to purchase Company common stock at the Fair Market Value on the date those amounts were credited to the Account. Additional credits are accrued through the end of the month preceding the distribution of a Deferred Stock Benefit.

(c) If a trust is established under section 9 of this Plan, an electing Participant may instruct the trustee under the governing trust agreement how to vote shares of Company common stock allocated to that Participant's separate account under the trust according to this subsection and the provisions of the governing trust agreement. Before each annual or special meeting of the Company shareholders, the trustee under the governing trust agreement must furnish each Participant with a

Years of Service Ve sted Percentage ---------------- -- --------------- Less than one 0% One but less than two 20% Two but less than three 40% Three but less than four 60% Four but less than five 80% Five or more 100%

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copy of the proxy solicitation and other relevant material for the meeting as furnished to the trustee by the Company, and a form addressed to the trustee requesting the Participant's confidential instructions on how to vote shares of Company common stock allocated to his or her account as of the valuation date established under the governing trust agreement preceding the record date. Upon receipt of those instructions, the trustee under the governing trust agreement must vote such stock as instructed.

7. DISTRIBUTIONS.

(a) According to a Participant's Distribution Election Form, but subject to Plan subsection 4(d), a Deferred Stock Benefit must be distributed in shares of Company common stock equal to the number of whole shares of Company common stock credited to the Participant's Account on the last day of the month preceding the month of distribution. However, cash must be paid in lieu of a fractional share of Company common stock credited the Participant's Deferred Stock Account on the last day of the month preceding the month of distribution.

(b) Deferred Stock Benefits will be paid in a lump sum unless the Participant's Distribution Election Form specifies annual installment payments over a period of 5 years. A Deferred Stock Benefit payable in installments will continue to accrue additional credits under Plan subsection 6(b) on the unpaid balance of the Account through the end of the month preceding the distribution. Distribution of a Deferred Stock Benefit attributable to a Participant's vested Equity Award Account will be paid or begin on the February 15 of the year after his or her Termination.

(c) Deferred Stock Benefits may not be assigned by a Participant or Beneficiary. Unless the Administrator announces otherwise, a Participant may use only one Beneficiary Designation Form to designate one or more Beneficiaries for all of his or her Deferred Stock Benefits under the Plan; such designations are revocable. Each Beneficiary will receive his or her portion of the Participant's Deferred Stock Benefit in a lump sum on February 15 of the year following the year of the Participant's death.

(d) Any Company common stock distributed pursuant to the Plan shall have been acquired by an "agent independent of the issuer" (i.e., the Company) within the meaning of 17 CFR 240.10b-18, as such regulation or any successor is in effect from time to time. Such acquisitions may be effected in all cases on the open market or, in the event that the Company makes available newly issued common stock, directly from the Company, provided that such common stock has been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or any successor thereto at the time such purchase is made or an exemption from such registration requirement is, in the opinion of counsel to the

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Company, available.

(e) No Participant or Beneficiary shall have any rights as a shareholder of the Company by virtue of having any interest under this Plan until, and to the extent that, shares of Company common stock are issued in satisfaction of a Deferred Stock Benefit payable in accordance with this Plan.

8. HARDSHIP DISTRIBUTIONS.

(a) At the Administrator's sole discretion and at the request of a Participant before or after the Participant's Termination, or at the request of any of the Participant's Beneficiaries after the Participant's death, the Administrator may accelerate and pay all or part of any amount attributable to a Participant's vested Deferred Stock Benefits under this Plan. Accelerated distributions may be allowed only in the event of a financial emergency beyond the Participant's or Beneficiary's control and only if disallowance of a distribution would create a severe hardship for the Participant or Beneficiary. An accelerated distribution must be limited to the amount determined by the Administrator to be necessary to satisfy the financial emergency.

(b) For purposes of an accelerated distribution under this section, the value of a Deferred Stock Benefit is determined by the value of the Participant's Account at the end of the month preceding the date of distribution.

(c) A distribution under this section is in lieu of that portion of the Deferred Stock Benefit that would have been paid otherwise. A Deferred Stock Benefit is adjusted for a distribution under this section by reducing the value of the Participant's Account by the amount of the distribution.

9. COMPANY'S OBLIGATION.

(a) The Plan is unfunded. A Deferred Stock Benefit is at all times a mere contractual obligation of the Company. A Participant and his or her Beneficiaries have no right, title, or interest in the Deferred Stock Benefits or any claim against them other than as general unsecured creditors of the Company. The Company will not segregate any funds or assets for Deferred Stock Benefits nor issue any notes or security for the payment of any Deferred Stock Benefit.

(b) Subject to Plan subsection 9(c), the Company may establish a grantor trust and transfer to that trust shares of Company common stock or other assets. Trust assets must be invested in Company common stock for the purpose of measuring the value of Accounts under the Plan to be distributed as Deferred Stock Benefits in the form of Company common stock, plus cash in lieu of fractional shares. The governing trust agreement must require a separate account to be established for each electing

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Participant. The governing trust agreement must also require that all Company assets held in trust remain at all times subject to the Company's creditors.

(c) The Company may only contribute to a trustee under a trust agreement by transferring cash or assets with a fair market value equal to the value (determined at the nearest month end) of the related Accounts if the trust agreement contains provisions sufficient (in the opinion of either the Internal Revenue Service or counsel selected by the Company) to allow the Participants to defer income taxation on their Deferred Stock Benefits until they are distributed according to this Plan and provisions sufficient (in the opinion of counsel selected by the Company) to exempt the Plan and the trust from sections 10(b) and 16(b) of the Securities Exchange Act of 1934 and applicable rules and regulations. If the Internal Revenue Service refuses to give the required opinion on such a trust, and if counsel selected by the Company is the opinion that no such trust can be created, Plan subsection 9(b) will not become effective.

10. CONTROL BY PARTICIPANT. A Participant has no control over Deferred Stock Benefits except according to his or her Deferral Election Forms, his or her Distribution Election Forms, and his or her Beneficiary Designation Forms. 11. CLAIMS AGAINST PARTICIPANT'S DEFERRED STOCK BENEFIT. No Account under this Plan is subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to do so is void. Deferred Stock Benefits are not subject to attachment or legal process for a Participant's debts or other obligations. Nothing contained in this Plan gives any Participant any interest, lien, or claim against any specific asset of the Company. A Participant or his or her Beneficiary has no rights to receive Deferred Stock Benefits other than as a general creditor of the Company. 12. AMENDMENT OR TERMINATION. Except as otherwise provided in this section, this Plan may be altered, amended, suspended, or terminated at any time by the Board. No amendment will become effective without the approval of the Company's shareholders if the amendment (i) materially increases the number of shares of Company common stock that may be issued under the Plan, (ii) materially increases the benefits accruing to Participants, under the Plan, or (iii) materially changes the class of individuals who may participate in the Plan. The Plan may not be amended more than once in any six month period other than to comply with changes in the Internal Revenue Code or the Employee Retirement Income Security Act of 1974. Except for a termination of the Plan caused by the determination of the Board that the laws upon which the Plan is based have changed in a manner that negates the Plan's objectives, the Board may not alter, amend, suspend, or terminate this Plan without the majority consent of all Directors who are Participants if that action would result either in a distribution of all Deferred Stock Benefits in any manner other than as provided in this Plan or that would result in immediate taxation of Deferred

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Stock Benefits to Participants. Notwithstanding the preceding sentence, if any amendment to the Plan, subsequent to the date the Plan becomes effective, adversely affects Deferred Stock Benefits hereunder, after the effective date of any such amendment, and the Internal Revenue Service declines to rule favorably on any such amendment or to rule favorably only if the Board makes amendments to the Plan not acceptable to the Board, the Board, in its sole discretion, may accelerate the distribution of part or all amounts attributable to affected Deferred Stock Benefits due Participants and Beneficiaries hereunder.

13. NOTICES. Notices and elections under this Plan must be in writing. A notice or election is deemed delivered if it is delivered personally or if it is mailed by registered or certified mail to the person at his or her last known business address. 14. WAIVER. The waiver of a breach of any provision in this Plan does not operate as and may not be construed as a waiver of any later breach. 15. CONSTRUCTION. This Plan is created, adopted, and maintained according to the laws of the Commonwealth of Virginia (except its choice-of-law rules). It is governed by those laws in all respects except to the extent that the laws of the United States apply to the Plan. Headings and captions are only for convenience; they do not have substantive meaning. If a provision of this Plan is not valid or not enforceable, that fact in no way affects the validity or enforceability of any other provision. Use of one gender includes all, and the singular and plural include each other. 16. EFFECTIVENESS. The Board adopted this Plan subject to the approval of the Company's shareholders at the 1996 annual meeting of the Company. If the requisite shareholder approval is not obtained (i) this Plan shall be deemed void ab initio, (ii) amounts credited to Participants' Accounts shall be forfeited and (iii) deferred Compensation (and any earnings credited under subsection 6(b)) shall be paid to participants as soon as practicable after such meeting or credited to Participants' accounts under the Company's Deferred Compensation Plan for Outside Directors in accordance with each Participant's written instructions delivered to the Administrator before the Effective Date.

IN WITNESS WHEREOF, Crestar Financial Corporation has caused this Plan to be executed by its duly authorized officer effective as of January 1, 1996.

CRESTAR FINANCIAL CORPORATION

By:______________________________

Title:_________________________

Exhibit 10.37

CRESTAR FINANCIAL CORPORATION

BOARD OF DIRECTORS MEETING Friday, December 20, 1996

RESOLUTIONS AMENDING THE DIRECTORS' EQUITY PROGRAM:

RESOLVED, that the Board of Directors of Crestar Financial Corporation hereby amends Section 2(k) of the Crestar Financial Corporation Directors' Equity Program to provide as follows:

Director means a duly elected or appointed member of the Board who is not an employee of the 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 Retainer Fee to the member's employer or firm.

FINALLY RESOLVED, that the appropriate officers of the Corporation are hereby authorized and directed to take such actions and to execute such documents as they deem necessary or appropriate to implement the foregoing resolution, 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)

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

Year Ended December 31 --------------- --------------------------------------------------- -------------------- 2001 2000 1999 1998 19 97 1996 ------------- ------------ ------------ ---------- ---- ------ ---------- Basic Income before extraordinary gain $ 1,369,219 $ 1,294,100 $ 1,123,952 $ 971,017 $ 97 5,923 $ 858,950 Extraordinary gain, net of taxes 6,318 - 202,648 - - - ------------- ------------ ------------ ---------- ---- ------ ---------- Net income $ 1,375,537 $ 1,294,100 $ 1,326,600 $ 971,017 $ 97 5,923 $ 858,950 ------------- ------------ ------------ ---------- ---- ------ ---------- Average basic common shares 287,702 297,834 317,079 314,908 31 6,436 326,502 ------------- ------------ ------------ ---------- ---- ------ ---------- Income before extraordinary gain $ 4.76 $ 4.35 $ 3.54 $ 3.08 $ 3.08 $ 2.63 Extraordinary gain, net of taxes 0.02 - 0.64 - - - ------------- ------------ ------------ ---------- ---- ------ ---------- Earnings per common share - basic $ 4.78 $ 4.35 $ 4.18 $ 3.08 $ 3.08 $ 2.63 ============= ============ ============ ========== ==== ====== ========== Diluted Income before extraordinary gain $ 1,369,219 $ 1,294,100 $ 1,123,952 $ 971,017 $ 97 5,923 $ 858,950 Extraordinary gain, net of taxes 6,318 - 202,648 - - - ------------- ------------ ------------ ---------- ---- ------ ---------- Net income $ 1,375,537 $ 1,294,100 $ 1,326,600 $ 971,017 $ 97 5,923 $ 858,950 ------------- ------------ ------------ ---------- ---- ------ ---------- Average common shares outstanding 287,702 297,834 317,079 314,908 31 6,436 326,502 Incremental shares outstanding (1) 3,882 3,122 4,095 4,803 4,496 4,540 ------------- ------------ ------------ ---------- ---- ------ ---------- Average diluted common shares 291,584 300,956 321,174 319,711 32 0,932 331,042 ------------- ------------ ------------ ---------- ---- ------ ---------- Income before extraordinary gain $ 4.70 $ 4.30 $ 3.50 $ 3.04 $ 3.04 $ 2.59 Extraordinary gain, net of taxes 0.02 - 0.63 - - - ------------- ------------ ------------ ---------- ---- ------ ---------- Earnings per common share - diluted $ 4.72 $ 4.30 $ 4.13 $ 3.04 $ 3.04 $ 2.59 ============= ============ ============ ========== ==== ====== ==========

Exhibit 12.1

SunTrust Banks, Inc.

Ratio of Earnings to Fixed Charges (In thousands)

Year Ended December 31 ------ --------------------------------------------------- ----------------------------- 20 01 2000 1999 1998 1997 1996 ------ --------------------------------------------------- ----------------------------- Ratio 1 - including deposit interest Earnings: Income before income taxes and extraordinary gain $2,01 9,720 $1,919,556 $1,695,657 $1,498,306 $1,499,599 $1,265,942 Fixed charges 3,06 5,973 3,775,173 2,852,180 2,784,251 2,489,432 2,193,744 ------ --------------------------------------------------- ----------------------------- Total $5,08 5,693 $5,694,729 $4,547,837 $4,282,557 $3,989,031 $3,459,686 ====== =================================================== ============================= Fixed charges: Interest on deposits $ 1,81 2,385 $ 2,452,919 $ 1,626,132 $ 1,644,229 $ 1,627,417 $ 1,585,707 Interest on funds purchased 41 2,218 651,235 749,561 634,086 461,724 356,879 Interest on other short-term borrowings 6 3,359 97,903 79,521 127,800 133,814 81,683 Interest on long-term debt 73 9,012 534,924 359,538 340,664 230,509 134,530 Portion of rents representative of the interest factor (1/3) of rental expense 3 8,999 38,192 37,428 37,472 35,968 34,945 ------ --------------------------------------------------- ----------------------------- Total $ 3,06 5,973 $ 3,775,173 $ 2,852,180 $ 2,784,251 $ 2,489,432 $ 2,193,744 ====== =================================================== ============================= Earnings to fixed charges 1.66 x 1.51 x 1.59 x 1.54 x 1.60 x 1.58 x Ratio 2 - excluding deposit interest Earnings: Income before income taxes and extraordinary gain $2,01 9,720 $1,919,556 $1,695,657 $1,498,306 $1,499,599 $1,265,942 Fixed charges 1,25 3,588 1,322,254 1,226,048 1,140,022 862,015 608,037 ------ --------------------------------------------------- ----------------------------- Total $3,27 3,308 $3,241,810 $2,921,705 $2,638,328 $2,361,614 $1,873,979 ====== =================================================== ============================= Fixed charges: Interest on funds purchased $ 41 2,218 $ 651,235 $ 749,561 $ 634,086 $ 461,724 $ 356,879 Interest on other short-term borrowings 6 3,359 97,903 79,521 127,800 133,814 81,683 Interest on long-term debt 73 9,012 534,924 359,538 340,664 230,509 134,530 Portion of rents representative of the interest factor (1/3) of rental expense 3 8,999 38,192 37,428 37,472 35,968 34,945 ------ --------------------------------------------------- ----------------------------- Total $ 1,25 3,588 $ 1,322,254 $ 1,226,048 $ 1,140,022 $ 862,015 $ 608,037 ====== =================================================== ============================= Earnings to fixed charges 2.61 x 2.45 x 2.38 x 2.31 x 2.74 x 3.08 x

[SUNTRUST LOGO]

SunTrust Banks, Inc.

2001 Annual Report

[PHOTO]

2001 was another year of consistent, solid performance for SunTrust. But that's not all. We're seeing real benefits from a quiet transformation that's taken place at our Company in recent years under which our historical competitive strengths were reaffirmed while some big changes were made to ensure we're well positioned for the future.

About The Company

SunTrust Banks, Inc., with year-end 2001 assets of

$104.7 billion, is one of the nation's largest and strongest financial

holding companies. Through its flagship subsidiary, SunTrust Bank, the

Company provides deposit, credit, trust and investment services to a broad range of retail, business and institutional clients. Other subsidiaries provide mortgage banking, credit-related insurance, asset management, brokerage and capital market services. SunTrust enjoys leading market positions in some of the highest-growth markets in the United States and also serves customers in selected markets nationally. SunTrust's more than 1,100 retail branches and 1,990 ATMs are located in Alabama, Florida, Georgia, Maryland, Tennessee, Virginia and the District of Columbia. In addition, SunTrust provides customers with a full range of technology-based banking channels including Internet, PC and Telephone Banking. As of December 31, 2001, SunTrust had total trust assets of $128.8 billion. Discretionary trust assets under management--which include $24 billion in the STI Classic Funds, one of the nation's top-ranked mutual fund families--were $89.5 billion. SunTrust's mortgage servicing portfolio grew to $47.6 billion at year end.

Table Of Contents

Financial Highlights - 1

Letter To Shareholders - 2

Management's Discussion And Analysis Of Operations And Financial Condition - 14

Consolidated Financial Statements - 42

2001 Form 10-K - 74

Board Of Directors - 76

Management Committee - 77

General Information - 80

[SUNTRUST LOGO]

SunTrust 2001 Annual Report 1

Financial Highlights

In this report, SunTrust presents a return on average realized shareholders' equity, as well as a return on average total shareholders' equity. The return on average realized shareholders' equity excludes net unrealized security gains. Due to its ownership of 48 million shares of common stock of The Coca-Cola Company resulting in an unrealized net gain of $2.3 billion, the Company believes that this measure is more indicative of its return on average shareholders' equity when comparing performance to other companies.

Earnings Per Share Before Extraordinary Gain 5 Year Compounded Growth Rate 12.7% ($ per diluted common share)

[GRAPH]

Dividends Declared 5 Year Compounded Growth Rate 14.0%

Year Ended December 31 (Dollars in millions except per share data) 2001 2000 1999 --------------------------------------------------- --------------------------------------------------- For the Year Income before extraordinary gain $ 1,369.2 $ 1,294.1 $ 1,124.0 Extraordinary gain, net of taxes 6.3 -- 202.6 --------------------------------------------------- --------------------------------------------------- Net income 1,375.5 1,294.1 1,326.6 =================================================== =================================================== Common dividends paid 463.5 443.4 440.6 Per Common Share Income - diluted before extraordinary gain $ 4.70 $ 4.30 $ 3.50 Extraordinary gain 0.02 -- 0.63 --------------------------------------------------- --------------------------------------------------- Net income - diluted 4.72 4.30 4.13 =================================================== =================================================== Dividends declared 1.60 1.48 1.38 Common stock closing price 62.70 63.00 68.81 Book value 28.97 27.81 24.73 --------------------------------------------------- --------------------------------------------------- Financial Ratios Return on average assets (ROA) 1.37% 1.35% 1.48 % Return on average realized shareholders' equity 21.74 21.46 20.83 Return on average total shareholders' equity 17.04 17.25 16.20 Net interest margin (taxable-equivalent) 3.58 3.55 3.88 Efficiency ratio 56.96 57.47 60.35 Tier 1 capital ratio 8.02 7.09 7.48 Total capital ratio 12.18 10.85 11.31 --------------------------------------------------- --------------------------------------------------- Selected Average Balances Total assets $ 102,884.2 $ 98,397.8 $ 92,820.8 Earning assets 92,034.1 88,609.0 82,255.7 Loans 70,023.0 70,044.3 62,749.4 Deposits 64,568.7 66,691.9 57,842.1 Realized shareholders' equity 6,328.0 6,031.6 6,368.3 Total shareholders' equity 8,073.8 7,501.9 8,190.7 Common shares - diluted (thousands) 291,584 300,956 321,174 --------------------------------------------------- --------------------------------------------------- At December 31 Total assets $ 104,740.6 $ 103,660.4 $ 95,390.0 Earning assets 93,327.5 92,147.8 85,193.4 Loans 68,959.2 72,239.8 66,002.8 Allowance for loan losses 867.1 874.5 871.3 Deposits 67,536.4 69,533.3 60,100.5 Realized shareholders' equity 6,704.3 6,296.4 6,064.0 Total shareholders' equity 8,359.6 8,239.2 7,626.9 Common shares outstanding (thousands) 288,602 296,266 308,353 Market value of investment in common stock of The Coca-Cola Company (48,266,496 shares) $ 2,276 $ 2,941 $ 2,812 =================================================== ===================================================

1996 2.59 1997 3.04 1998 3.04 1999 3.50 2000 4.30 2001 4.70

($ per common share)

[GRAPH]

Cash Basis and Operating Earnings Per Share Cash Basis EPS 5 Year Compounded Growth Rate 12.4% Operating EPS 5 Year Compounded Growth Rate 13.0% ($ per diluted common share)

[GRAPH]

1996 .83 1997 .93 1998 1.00 1999 1.38 2000 1.48 2001 1.60

Year Cash Basis EPS Operating EPS 1996 2.70 2.59 1997 3.15 3.04 1998 3.16 3.28 1999 4.23 3.59 2000 4.41 4.39 2001 4.85 4.79

2 SunTrust 2001 Annual Report

To Our Shareholders

Any discussion of 2001 at SunTrust would be incomplete without first noting that for the men and women of our Company, as for all Americans, the year was one whose haunting images and sobering realities have been seared in our memories. While no SunTrust facilities were affected directly by the September 11 terrorist attacks, shareholders can be proud of the way we reached out to support those in need--and demonstrated our commitment to reaffirming America's enduring positive spirit. Specifically, our Company, along with our employees, retirees and directors, contributed more than $1 million to the American Red Cross to assist in its September 11-related relief efforts.

From a business perspective, September 11 removed any doubt as to the fragility of the U.S. economy. It turned out that the economy, which had been steadily weakening, actually slipped into recession in the first quarter of 2001. For banks, the state of the economy is a major factor in the outlook for our business. SunTrust is as well positioned as anyone for economic adversity. But we, like our customers, began 2002 under the cloud of an uncertain operating environment.

Earnings Consistency

Despite the economic slowdown, 2001 was another year of consistent earnings growth for SunTrust Banks, Inc. Strong operating earnings were based on good, solid revenue gains. We're doing an increasingly effective job on expense discipline. And credit quality measures, although reflecting the impact of a sluggish economy, continued to compare very well with industry standards.

[LOGO] SUNTRUST

SunTrust 2001 Annual Report 3

In general, 2001 results reflect SunTrust's success in positioning our balance sheet to permit the generation of consistent earnings under different economic and interest rate scenarios.

We are particularly proud that 2001 represented SunTrust's 26th consecutive year of growth in operating earnings. In terms of reported net income per share, there has never been a year in which we earned less than in the prior year. Our track record of consistency in earnings growth is matched by only a handful of well-known U.S. banking organizations.

[PHOTO] SunTrust L. Phillip Humann Chairman, President and Chief Executive Officer

A detailed discussion of the year's earnings performance and other financial considerations is included in the "Management Discussion and Analysis" section of this report. It begins on page 14.

Financial highlights of 2001 include:

. Operating earnings were $1.40 billion, a record level and up 6 percent from the prior year. Operating income per diluted share was $4.79, an increase of 9 percent from 2000.

. Reported net income, which included certain non-recurring charges in both 2001 and 2000, was $1.38 billion in 2001, up 6 percent from a year earlier. Net income per diluted share was $4.72, a 10 percent increase from the full year 2000.

. Non-interest income, which accounts for a healthy 40 percent of total revenue, was up 22 percent over the prior year as we stepped up sales of fee-generating products and services. Increasing the portion of earnings attributable to fee income has been a priority in recent years.

4 SunTrust 2001 Annual Report

. Growth in net interest income was attributable in part to the success of a Company-wide drive to increase core deposits. Core deposits were up $5.6 billion, or almost 10 percent from the prior year end. This impressive growth went a long way toward offsetting the less-than-robust loan demand typical at this stage of the business cycle.

For the stock market in general, and for investors in bank stocks, 2001 was not a good year. SunTrust stock outperformed that of most large banks. Still, our share price did not display the growth pattern we would have liked--and the growth we think is warranted given the strengths of our Company and our performance relative to our peers.

Looking ahead, we believe we are well positioned to meet the expectations of both customers and shareholders. We also remain confident that, over time, our share price will more accurately reflect SunTrust's solid performance and prospects, especially as the economy turns around.

In the meantime, we are pleased to report that the Board of Directors in February 2002 voted to increase the cash dividend paid on the Company's common stock by 7.5 percent, bringing the annual dividend per share to $1.72.

Credit Quality

SunTrust has historically maintained a record of credit quality among the best of all major U.S. banks. Our loan portfolio is well diversified. And on both the consumer and commercial sides, we seek to avoid concentrated exposure to high-risk loan categories, industries and borrowers.

SunTrust 2001 Annual Report 5

[PHOTO]

During periods of economic weakness--such as we experienced in 2001--superior credit quality is particularly important. As borrowers come under pressure, bank credit quality predictably suffers. SunTrust was by no means insulated from this industry trend last year. Nonperforming assets (NPAs) increased by roughly a third, a sizeable increase although not out of line with what might be expected in this kind of economy.

It is important to note that despite the year-over-year increase in the absolute level of NPAs, SunTrust's ratio of nonperforming assets to total loans and foreclosed properties -- perhaps the most relevant measure of credit quality--remains one of the lowest among all large banks. Our charge-off experience was also among the lowest in our peer group. And our reserve coverage remains strong.

So while certain measures of credit quality have deteriorated somewhat from the unsustainably high levels enjoyed in recent years, we continue to maintain a record in this area that compares very favorably with peer banks. We are confident that will remain the case.

E F F I C I E N C Y & S T A N D A R D I Z A T I O N

SunTrust's intensified focus on efficiency and was reflected in 2001 results with the promise of further gains in 2002 and beyond. The Company's efficiency ratio dropped to below 57 percent in 2001, a meaningful improvement compared with an efficiency ratio of more than 60 percent in 1999. That is when we launched a formal, Company-wide effort to reduce expense levels at SunTrust while maintaining the customer service for which we're recognized in the marketplace.

[PHOTO]

6 SunTrust 2001 Annual Report

As one example of how this works, core employment at SunTrust at year-end 2001 was down nearly 10 percent (or 2,900 full-time-equivalent positions) from 1999. This reduction was accomplished without the broad-scale employee layoffs that can hurt morale and impact customer service.

Also in 2001, we made significant progress in implementing what we call our "One-Bank" initiatives. These are a series of inter-related systems consolidation and operations standardization moves. They are designed to achieve maximum efficiencies from SunTrust's 1999 decision to move away from its historical multi-bank legal structure to a more streamlined model.

We estimate that SunTrust's annual operating efficiency will improve significantly from these changes. The resulting savings help support continued investment in product development, new technology--and the talented people--necessary to maintain a competitive advantage in the future. For customers, the One-Bank effort has practical benefits today; it's now much easier to conduct a wide range of banking transactions at any SunTrust location. We can also more quickly implement change to meet future customer needs.

S E L E C T I V E A C Q U I S I T I O N S

SunTrust's approach to mergers and acquisitions is very deliberate and highly selective. As a $100 billion-plus institution whose geographic footprint already covers some of the best markets in the United States, we don't need to grow for the sake of growth alone. As a rule, we only pursue acquisition opportunities that meet high standards for financial return while enhancing our geographic franchise or extending business line capabilities consistent with our strategic goals.

Three transactions in 2001 illustrate our deliberate approach to mergers. In April, we

SunTrust 2001 Annual Report 7

[PHOTO] [PHOTO]

acquired Asset Management Advisors (AMA), a specialized wealth management firm in Jupiter, Florida. Expansion of AMA, which operates as a SunTrust unit under its own well-regarded name, is now a key element in our overall strategy to serve the high-net-worth market. AMA is uniquely positioned to provide what is known in the industry as "family office" services to high-net-worth clients. AMA investment and other professionals utilize a variety of sophisticated financial products and tools to provide a comprehensive approach to multi-generational wealth management. As part of SunTrust, additional AMA offices have opened in Orlando and Atlanta.

In May, we announced the purchase of the institutional business of The Robinson-Humphrey Company, LLC from Citigroup's Salomon Smith Barney unit. The acquisition of Robinson-Humphrey's investment banking and capital markets divisions, along with associated areas such as equity research, significantly enhanced SunTrust's equity capital markets-related capabilities. The establishment of SunTrust Robinson-Humphrey complements our already-strong debt capital markets business to create a powerful combination with excellent growth potential, especially as equity markets improve.

Four months later, we signed an agreement to acquire the very attractive Florida banking franchise of Huntington Bancshares, Inc. Included are Huntington's retail, small business, commercial, treasury management and investment related businesses. The acquisition, which closed in early 2002, added 57 branches, approximately $4.6 billion in deposits and some 1,000 employees to SunTrust's Florida banking organization. In addition to bolstering our historically strong position in

8 SunTrust 2001 Annual Report

the State overall, the Huntington move propels us into the number one position in the high-growth Orlando and Lakeland/Winter Haven markets.

Elsewhere in the merger-related arena, SunTrust made news during 2001 when we unveiled a proposal to acquire the former North Carolina-based Wachovia Corporation. Our proposal led to a highly visible proxy solicitation effort over the course of the summer.

We perceived a SunTrust-Wachovia combination as attractive...but only at a price we considered consistent with our own shareholders' interests. When it became clear that a higher price would likely be required, we elected not to increase it. Wachovia shareholders chose another merger partner.

Business Momentum

Each of our major lines of business--Retail Banking, Commercial Banking, Corporate and Investment Banking, Mortgage Banking and Private Client Services--contributed to our earnings in 2001.

Equally important, momentum displayed within our business units suggests how we are positioned to capitalize on a rebound in economic activity.

Some business highlights of the past year with positive implications for future performance include:

. Measurable success in building a sales culture at SunTrust.

More than 5,000 retail employees

[PHOTO]

SunTrust 2001 Annual Report 9

[PHOTO]

participated in a targeted training program to equip them to provide "needs-based" products and services to clients. Simultaneously, standardized sales management practices were instituted across the Company. The sharp jump in deposits in 2001 is one illustration of how an intensified sales focus pays off. Another is SunTrust Online (STOLI), our telephone and internet banking channel. STOLI sales were up more than 66 percent over 2000 and now account for roughly 20 percent of all new consumer loans and equity credit lines.

. Enhanced capabilities to meet the needs of our corporate and commercial clients for investment banking, capital markets, treasury management and other services that go beyond the traditional extension of credit. A substantial increase in debt capital market revenues, up 46 percent over the prior year, reflects our success in providing clients access to debt capital at a time when equity markets were challenging. In line with our intensified emphasis on the commercial, or "middle market," a separate capital markets origination team focuses on businesses with up to $250 million in annual revenues. In addition, to leverage the investment banking capabilities we acquired with Robinson-Humphrey, we created in late 2001 SunTrust R-H Advisors, a merger and acquisition advisory unit focused solely on our commercial client base.

. A record year in mortgage production as we benefited from a lower interest rate environment that spurred refinancing activity. Mortgage production volume for 2001 was $24.2 billion, up more than 80 percent from the prior year. SunTrust Mortgage Corporation has evolved into one of the nation's leading bank-affiliated mortgage operations, consistently ranking among the top 20 of all mortgage lenders nationally. SunTrust Mortgage originates loans directly within the SunTrust market area and nationally through a variety of channels. Cross-selling bank products to mortgage customers is also

10 SunTrust 2001 Annual Report

a high priority for the organization; during 2001, over 40,000 additional products were sold by teams focused on this particular opportunity.

. The sagging stock market took its toll on SunTrust's Private Client Services business last year as it did on virtually the entire securities industry. Despite a decline in our stock market-driven revenues, performance of the STI Classic Mutual Funds, which was recognized as the nation's third best performing mutual fund family by Barron's, improved substantially in 2001. Additionally, Trusco Capital Management's investment performance again outpaced the market. These accomplishments helped spur sales of investment products and significantly reduce client attrition. In addition, the development in late 2001 of a new, full-service brokerage operation called "Alexander Key," plus the additional capabilities afforded by Asset Management Advisors, represent significant steps to position us for improved performance as markets rebound.

. Enhancement of eBusiness capabilities with the redesign of www.suntrust.com, our popular web site, and the launch of some innovative new services. One example is "Online Treasury Manager," which offers commercial and corporate clients a full suite of web-based treasury management tools. Another new service provides web-based access to asset and transaction information for trust, portfolio management and custody account customers.

. Introduction of a distinctive SunTrust "brand" in the marketplace that provides a unifying theme for advertising and other marketing efforts. Based on extensive customer research, the new brand picks up on SunTrust's track record of providing superior customer service and revolves around the question: "How can we help you?"

. Launching a comprehensive Corporate Quality Initiative to ensure that we consistently apply the principles of exceptional quality and service to the overall management of our business. Specific quality standards are being set within every unit of the Company on dimensions of service that matter most to clients, and processes for monitoring client satisfaction and identifying and correcting deficiencies in service delivery are being implemented.

SunTrust 2001 Annual Report 11

. Increased focus on Diversity as a corporate initiative with real business potential. A senior-level Corporate Diversity Council serves as the focal point for a variety of programs in areas such as marketing, hiring and promotion, corporate contributions and procurement. They're all aimed at increasing awareness and confirming Diversity as a business imperative at SunTrust.

Quiet Transformation

As 2001 unfolded, we began seeing more and more benefits from a transformation process that's quietly taken place at SunTrust over the past few years. Through this process which was initiated in 1998, we identified-and then validated-SunTrust's historical competitive strengths. These include things like superior credit quality, our focus on high-growth geographic markets, our emphasis on deepening customer relationships and our reliance on strong local management teams.

At the same time, we instituted a series of fairly major changes aimed at streamlining our organizational structure, improving our operating efficiency and beefing up our infrastructure. In short, we enhanced the capacity of our organization to continue to deliver sustainable and consistent earnings growth in the years ahead.

[PHOTO]

12 SunTrust 2001 Annual Report

[PHOTO]

Looking back on 2001, one distinct message begins to emerge: today's SunTrust is more focused on performance...more efficient...more sales-oriented...and better able to meet the needs of a demanding customer base than at any point in our recent history. In large measure, that is what our "quiet transformation" process has been all about.

This process is not finished. We believe we have a winning formula today and excellent prospects for the future. Yet we are always looking for ways to fine-tune our approach to our business, our organization, our markets and our customers. This is as it should be. Shareholders expect us to keep pace with a changing, performance-driven world. We are committed to doing so.

Much has changed at SunTrust in recent years. Yet one thing remains the same: our employees work extraordinarily hard, every day, to deliver customer service and financial results that positively differentiate us from the - competition. I trust that shareholders will therefore agree it is appropriate to close this letter with a salute to SunTrust's employees for their accomplishments in 2001.

The business outlook for financial services is, as always, characterized by uncertainty. But given the strengths of our institution and the capabilities of our people, we approach the year ahead with confidence it will be a good one for SunTrust Banks, Inc.

Thank you for your investment in SunTrust-and for permitting us to serve your banking needs.

L. Phillip Humann

Chairman, President and Chief Executive Officer February 12, 2002

SunTrust 2001 Annual Report 13

/1/ Includes securities gains of $100.2 million and securities losses of $114.9 million related to the securities portfolio repositioning in 2001 and 1999, respectively. An additional $52.9 million security gain was recorded in 2001 on the sale of Star Systems, Inc.

/2/ Includes merger-related expenses of $42.4 million in 2000, $45.6 million in 1999 and $119.4 million in 1998 related to the acquisition of Crestar in the fourth quarter of 1998.

/3/ Includes expenses of $32.0 million from the proposal to acquire the former Wachovia Corporation in 2001.

SELECTED FINANCIAL DATA =================================================== =================================================== ============================== Year Ended December 3 1 (In millions except per share and other data) 2001 2000 1999 1998 1997 1996 --------------------------------------------------- --------------------------------------------------- ------------------------------ Summary of Operations Interest and dividend income $ 6,279.6 $ 6,845.4 $ 5,960.2 $ 5,675.9 $ 5,238.2 $ 4,818.5 Interest expense 3,027.0 3,736.9 2,814.7 2,746.8 2,453.5 2,158.8 --------------------------------------------------- --------------------------------------------------- ------------------------------ Net interest income 3,252.6 3,108.5 3,145.5 2,929.1 2,784.7 2,659.7 Provision for loan losses 275.2 134.0 170.4 214.6 225.1 171.8 --------------------------------------------------- --------------------------------------------------- ------------------------------ Net interest income after provision for loan losses 2,977.4 2,974.5 2,975.1 2,714.5 2,559.6 2,487.9 Noninterest income/1/ 2,155.8 1,773.6 1,625.9 1,653.9 1,329.2 1,146.1 Noninterest expense/2,3/ 3,113.5 2,828.5 2,905.3 2,870.1 2,389.2 2,368.0 --------------------------------------------------- --------------------------------------------------- ------------------------------ Income before provision for income taxes and extraordinary gain 2,019.7 1,919.6 1,695.7 1,498.3 1,499.6 1,266.0 Provision for income taxes 650.5 625.5 571.7 527.3 523.7 407.0 --------------------------------------------------- --------------------------------------------------- ------------------------------ Income before extraordinary gain 1,369.2 1,294.1 1,124.0 971.0 975.9 859.0 Extraordinary gain, net of taxes/4/ 6.3 -- 202.6 -- -- -- --------------------------------------------------- --------------------------------------------------- ------------------------------ Net income $ 1,375.5 $ 1,294.1 $ 1,326.6 $ 971.0 $ 975.9 $ 859.0 =================================================== =================================================== ============================== Net interest income (taxable-equivalent) $ 3,293.4 $ 3,148.4 $ 3,188.0 $ 2,973.5 $ 2,832.6 $ 2,709.7 Per Common Share Diluted Income before extraordinary gain $ 4.70 $ 4.30 $ 3.50 $ 3.04 $ 3.04 $ 2.59 Extraordinary gain 0.02 -- 0.63 -- -- -- --------------------------------------------------- --------------------------------------------------- ------------------------------ Net income 4.72 4.30 4.13 3.04 3.04 2.59 Basic Income before extraordinary gain 4.76 4.35 3.54 3.08 3.08 2.63 Extraordinary gain 0.02 -- 0.64 -- -- -- --------------------------------------------------- --------------------------------------------------- ------------------------------ Net income 4.78 4.35 4.18 3.08 3.08 2.63 Dividends declared 1.60 1.48 1.38 1.00 0.925 0.825 Market price: High 72.35 68.06 79.81 87.75 75.25 52.50 Low 57.29 41.63 60.44 54.00 44.13 32.00 Close 62.70 63.00 68.81 76.50 71.38 49.25 Selected Average Balances Total assets $ 102,884.2 $ 98,397.8 $ 92,820.8 $ 85,536.9 $ 76,017.3 $ 69,252.0 Earning assets 92,034.1 88,609.0 82,255.7 74,880.9 66,944.0 61,644.4 Loans 70,023.0 70,044.3 62,749.4 57,590.5 51,788.1 46,338.4 Deposits 64,568.7 66,691.9 57,842.1 53,725.3 51,673.7 50,317.6 Realized shareholders' equity 6,328.0 6,031.6 6,368.3 5,641.4 5,116.7 5,101.3 Total shareholders' equity 8,073.8 7,501.9 8,190.7 7,853.6 6,953.4 6,434.3 At December 31 Total assets $ 104,740.6 $ 103,660.4 $ 95,390.0 $ 93,169.9 $ 82,840.8 $ 75,264.2 Earning assets 93,327.5 92,147.8 85,193.4 81,295.1 72,258.9 65,921.8 Loans 68,959.2 72,239.8 66,002.8 61,540.6 55,476.4 49,301.4 Allowance for loan losses 867.1 874.5 871.3 944.6 933.5 897.0 Deposits 67,536.4 69,533.3 60,100.5 59,033.3 54,580.8 52,577.1 Long-term debt 12,660.6 8,945.4 6,017.3 5,807.9 4,010.4 2,427.7 Realized shareholders' equity 6,704.3 6,296.4 6,064.0 6,090.4 5,263.9 5,133.1 Total shareholders' equity 8,359.6 8,239.2 7,626.9 8,178.6 7,312.1 6,713.6 Ratios and Other Data Return on average assets 1.37% 1.35% 1.48% 1.18% 1.34% 1.28% Return on average realized shareholders' equity 21.74 21.46 20.83 17.21 19.07 16.84 Return on average total shareholders' equity 17.04 17.25 16.20 12.36 14.04 13.35 Net interest margin 3.58 3.55 3.88 3.97 4.23 4.40 Efficiency ratio 56.96 57.47 60.35 62.02 57.41 61.41 Total shareholders' equity to assets 7.98 7.95 8.00 8.78 8.83 8.92 Allowance to year-end loans 1.26 1.21 1.32 1.53 1.68 1.82 Nonperforming assets to total loans plus other real estate owned 0.84 0.59 0.42 0.39 0.43 0.74 Common dividend payout ratio 33.7 34.3 33.4 32.9 30.4 31.9 Full-service banking offices 1,128 1,129 1,114 1,079 1,072 1,073 ATMs 1,994 1,991 1,968 1,839 1,691 1,394 Full-time equivalent employees 28,391 28,268 30,222 30,452 29,442 29,583 Average common shares - diluted (thousands) 291,584 300,956 321,174 319,711 320,932 331,042 Average common shares - basic (thousands) 287,702 297,834 317,079 314,908 316,436 326,502 =================================================== =================================================== ==============================

/4/ Represents the gain on the early extinguishment of long-term debt in 2001, net of $3.4 million in taxes, and the gain on sale of the Company's consumer credit card portfolio in 1999, net of $124.6 million in taxes.

14 SunTrust 2001 Annual Report

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 42 through 73. 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.

On December 31, 1998, SunTrust Banks, Inc. ("SunTrust" or "Company") completed its merger with Crestar Financial Corporation ("Crestar"), a $27.6 billion asset bank holding company headquartered in Richmond, Virginia. The merger was accounted for as a pooling-of-interests business combination. Accordingly, the accompanying consolidated financial information reflects the results of operations of both SunTrust and Crestar, on a combined basis, for all periods presented. Certain reclassifications have been made to prior year financial statements and related information to conform them to the 2001 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 39 through 40 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 48, 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.

SunTrust 2001 Annual Report 15

MANAGEMENT'S DISCUSSION

Earnings Overview

SunTrust's net income for 2001 totaled $1,375.5 million, or $4.72 per diluted share, up 6.3% from the net income of $1,294.1 million, or $4.30 per diluted share, earned in 2000. Results included the following unusual items:

. Extraordinary gain of $24.1 million, net of tax, or $0.08 per diluted share, offset by an extraordinary loss of $17.8 million, net of tax, or $0.06 per diluted share, for the early extinguishments of long-term debt in the fourth and second quarters of 2001, respectively.

. Net of tax securities gains of $65.1 million, or $0.22 per diluted share, related to the balance sheet repositioning during 2001.

. After-tax non-recurring expenses totaling $20.2 million, or $0.07 per diluted share, associated with the Company's proposal to acquire the former Wachovia Corporation in 2001.

. One Bank initiative costs of $35.5 million, net of tax, or $0.12 per diluted share, for the Company's enhancements during 2001 to customer based systems that are expected to yield further operating efficiencies in the future.

. Merger related charges for 2000 of $27.6 million, net of tax, or $0.09 per diluted share.

Operating results for 2001 were impacted by a slowing economy causing increased charge-offs and nonperforming assets resulting in a $141.2 million increase in the provision for loan losses. Net interest income increased $145.0 million to $3,293.4 million and the net interest margin increased 3 basis points in 2001. The declining rate environment coupled with sluggish loan growth impacted the Company's net interest margin throughout 2001.

Net charge-offs were $272.4 million, or .39% of average loans for 2001, compared to $130.8 million, or .19% of average loans for 2000. The 2001 loan loss provision of $275.2 million was 105.4% higher than the $134.0 million recorded in 2000. These increases were primarily due to the continued economic slowdown that resulted in deterioration in some large corporate credits.

Noninterest income, excluding securities gains and losses, was $2,002.7 million, a 13.3% increase compared to 2000. This increase was driven by a $64.0 million, or 201.4%, growth in trading account profits and commissions as the Company benefited from increased customer derivative transaction fees due to the lower interest rate environment. Also positively impacting non-interest income was a $96.1 million, or 106.7%, increase in mortgage production related income as the low rate environment led to significant refinancing activity during 2001. Negatively impacting noninterest income was a $38.9 million, or 118.5%, decrease in mortgage servicing related income due to accelerated amortization of mortgage servicing rights resulting from increased prepayments.

Noninterest expense, excluding merger-related expenses, increased $327.4 million or 11.8% compared to 2000. Personnel expenses increased $137.4 million, or 8.4%, primarily attributable to increased incentive payments related to mortgage production, bonus payments from the acquisition of the institutional business of The Robinson-Humphrey Company, LLC and expenditures for the One Bank initiative. Other expenses in 2001 included $32.0 million associated with the Company's proposal to acquire the former Wachovia Corporation. Also contributing to the increase was a $10.8 million, or 30.5%, increase in amortization of intangible assets due to the write-off of the remaining $12.7 million of goodwill associated with the sale of the assets and liabilities of SunTrust Credit Corporation during 2001.

Net Income Before Extraordinary Gain Return On Average 5 Year Compounded Growth Rate 9.8% Realized Equity ($ per common share) (percent) '96 '97 '98 '99 '00 '01 '96 '97 '98 '99 '00 '01 859.0 975.9 971.0 1,124.0 1,294.1 1,369.2 16.84 19.07 17.21 20.83 21.46 21.74

16 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

Cash Basis Financial Data

Effective January 1, 2002, in accordance with the provisions of Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets," SunTrust will no longer amortize goodwill.

See "Recent Accounting Developments" on page 50 of the Notes to the Consolidated Financial Statements for further information. Table 1 presents financial data excluding the impact of the after-tax amortization of goodwill and core deposit intangibles.

Table 1 Cash Basis Selected Financial Data

Year Ended Dec ember 31 (In millions except per share data) 2001 2000 1999 1998 1997 1996 --------------------------------------------------- --------------------------------------------------- ------------------------------ Operations Noninterest expense $ 3,057.7 $ 2,793.3 $ 2,869.5 $ 2,828.3 $ 2,351.9 $2,331.5 Net income 1,414.8 1,325.8 1,358.8 1,009.4 1,010.4 892.8 Per Common Share Diluted Income before extraordinary gain $ 4.83 $ 4.41 $ 3.60 $ 3.16 $ 3.15 $ 2.70 Extraordinary gain 0.02 -- 0.63 -- -- -- --------------------------------------------------- --------------------------------------------------- ----------------------------- Net income 4.85 4.41 4.23 3.16 3.15 2.70 Average common shares - diluted (thousands) 291,584 300,956 321,174 319,711 320,932 331,042 Performance Ratios Return on average assets 1.42% 1.39% 1.52% 1.24% 1.39% 1.34% Return on average realized shareholders'equity 24.23 24.02 23.32 19.80 21.47 19.12 Return on average total shareholders' equity 18.65 18.97 17.77 13.81 15.44 14.88 Efficiency ratio 56.96 56.75 55.82 61.12 56.53 60.49 Goodwill and Core Deposit Intangibles (CDI) Goodwill average balance $ 469.8 $ 488.9 $ 511.5 $ 524.9 $ 389.0 409.2 CDI average balance 19.8 23.7 30.3 19.4 21.7 24.0 Goodwill amortization (after tax) 36.1 27.9 27.8 34.2 30.6 30.1 CDI amortization (after tax) 3.1 3.8 4.5 4.2 3.9 3.7 =================================================== =================================================== =============================

SunTrust 2001 Annual Report 17

MANAGEMENT'S DISCUSSION

Table 2 Analysis Of Changes In Net Interest Income/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.

Table 3 Loan Portfolio By Types Of Loans

200 1 Compared to 2000 2000 Compared to 1999 Increas e (Decrease) Due to Increase (Decrease) Due to (In millions on a -------- -------------------- ------------------------- ---- taxable-equivalent basis) Volume Rate Net Volume Rate Net --------------------------------------------------- --------------------------------------------------- ----- Interest Income Loans Taxable $ (6.0) $ (683.7) $ (689.7) $ 579.2 $ 282.0 $ 861.2 Tax-exempt/2/ 4.1 (8.7) (4.6) (1.9) 4.8 2.9 Securities available for sale Taxable 86.6 (34.1) 52.5 (8.6) 62.4 53.8 Tax-exempt/2/ (1.6) 1.9 0.3 (6.8) (2.4) (9.2) Funds sold (11.0) (30.6) (41.6) 5.9 13.5 19.4 Loans held for sale 107.8 (6.9) 100.9 (83.2) 21.6 (61.6) Other short-term investments/2/ 30.1 (12.7) 17.4 14.8 1.3 16.1 --------------------------------------------------- --------------------------------------------------- ----- Total interest income 210.0 (774.8) (564.8) 499.4 383.2 882.6 --------------------------------------------------- --------------------------------------------------- ----- Interest Expense NOW/Money market accounts 118.4 (123.9) (5.5) 5.4 102.0 107.4 Savings deposits (12.5) (44.5) (57.0) (14.9) 39.6 24.7 Consumer time deposits (44.1) (15.6) (59.7) 5.3 54.6 59.9 Brokered deposits (39.3) (61.3) (100.6) 215.4 0.1 215.5 Foreign deposits (229.5) (152.7) (382.2) 341.7 55.9 397.6 Other time deposits (14.5) (20.9) (35.4) (9.9) 31.6 21.7 Funds purchased 30.8 (269.8) (239.0) (248.9) 150.5 (98.4) Other short-term borrowings 2.6 (37.1) (34.5) (7.0) 25.4 18.4 Long-term debt 269.9 (65.8) 204.1 142.8 32.6 175.4 --------------------------------------------------- --------------------------------------------------- ----- Total interest expense 81.8 (791.6) (709.8) 429.9 492.3 922.2 --------------------------------------------------- --------------------------------------------------- ----- Net change in net interest income $ 128.2 $ 16.8 $ 145.0 $ 69.5 $ (109.1) $ (39.6) =================================================== =================================================== =====

At December 31 (In millions) 2001 2000 1999 1998 1997 1996 --------------------------------------------------- --------------------------------------------------- -- Commercial $ 28,945.9 $ 30,781.1 $ 26,933.5 $ 24,589.6 $ 19,043.7 $ 15,761 .4 Real estate Construction 3,627.3 2,966.1 2,457.1 2,085.0 1,809.8 1,686 .6 Residential mortgages 17,297.1 19,953.0 19,619.3 16,880.9 17,297.2 15,629 .5 Other 8,152.0 8,121.4 7,794.9 8,254.3 7,457.6 6,455 .0 Credit card 92.0 76.8 77.4 1,563.5 2,195.6 2,367 .4 Consumer loans 10,844.9 10,341.4 9,120.6 8,167.3 7,672.5 7,401 .5 --------------------------------------------------- --------------------------------------------------- -- Total loans $ 68,959.2 $ 72,239.8 $ 66,002.8 $ 61,540.6 $ 55,476.4 $ 49,301 .4 =================================================== =================================================== ==

18 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

Table 4 Consolidated Daily Average Balances, Income/Expense And Average Yields Earned And Rates Paid

/1/ Interest income includes loan fees of $148.7, $135.6, $142.3, $118.4, $108.5, and $102.1 million in the six years ended December 31, 2001. 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 $40.8, $39.9, $42.5, $44.4, $47.9, and $50.0 million in the six years ended December 31, 2001.

2001 2000 1999 ------------------- ------------ -------------------------------- - ------------------------------ (Dollars in millions; yields Average Income / Yields/ Average Income/ Yields/ A verage Income/ Yields/ on taxable-equivalent basis) Balances Expens e Rates Balances Expense Rates B alances Expense Rates --------------------------------------------------- --------------------------------------------------- ------------------------------ Assets Loans:/1/ Taxable $ 68,892.8 $4,862 .7 7.06% $ 68,968.8 $ 5,552.4 8.05% $ 61,648.3 $4,691.2 7.61% Tax-exempt/2/ 1,130.2 78 .4 6.94 1,075.5 83.0 7.72 1,101.1 80.1 7.27 --------------------------------------------------- --------------------------------------------------- ----------------------------- Total loans 70,023.0 4,941 .1 7.06 70,044.3 5,635.4 8.05 62,749.4 4,771.3 7.60 Securities available for sale Taxable 15,904.8 1,033 .9 6.50 14,593.7 981.4 6.73 14,728.7 927.6 6.30 Tax-exempt/2/ 448.7 35 .7 7.95 469.7 35.4 7.54 558.2 44.6 7.99 --------------------------------------------------- --------------------------------------------------- ----------------------------- Total securities available for sale 16,353.5 1,069 .6 6.54 15,063.4 1,016.8 6.75 15,286.9 972.2 6.36 Funds sold 1,250.3 51 .2 4.09 1,439.8 92.8 6.44 1,338.0 73.4 5.48 Loans held for sale 2,949.9 211 .5 7.17 1,451.1 110.6 7.62 2,577.1 172.2 6.68 Other short-term investments/2/ 1,457.4 47 .1 3.23 610.4 29.7 4.87 304.3 13.6 4.48 --------------------------------------------------- --------------------------------------------------- ----------------------------- Total earning assets 92,034.1 6,320 .5 6.87 88,609.0 6,885.3 7.77 82,255.7 6,002.7 7.30 Allowance for loan losses (876.3) (869.0) (942.1) Cash and due from banks 3,383.4 3,316.4 3,630.3 Premises and equipment 1,599.7 1,625.4 1,596.3 Other assets 4,043.3 3,362.2 3,332.5 Unrealized gains on securities available for sale 2,700.0 2,353.8 2,948.1 --------------------------------------------------- --------------------------------------------------- ----------------------------- Total assets $102,884.2 $ 98,397.8 $ 92,820.8 =================================================== =================================================== ============================= Liabilities and Shareholders' Equity Interest-bearing deposits NOW/Money market accounts $ 24,301.4 $ 628 .8 2.59% $ 20,129.0 $ 634.3 3.15% $ 19,926.0 $ 527.0 2.64% Savings 6,066.6 171 .5 2.83 6,434.2 228.5 3.55 6,918.8 203.8 2.95 Consumer time 9,092.6 468 .8 5.16 9,935.5 528.5 5.32 9,824.3 468.6 4.77 Other time 3,823.9 200 .6 5.25 4,085.3 236.0 5.78 4,275.0 214.3 5.01 --------------------------------------------------- --------------------------------------------------- ---------------------------- Total interest-bearing consumer and commercial deposits 43,284.5 1,469 .7 3.40 40,584.0 1,627.3 4.01 40,944.1 1,413.7 3.45 Brokered Deposits 2,617.7 115 .3 4.40 3,308.7 215.9 6.52 7.0 0.4 5.27 Foreign Deposits 5,175.4 227 .5 4.39 9,621.7 609.7 6.34 4,087.8 212.0 5.19 --------------------------------------------------- --------------------------------------------------- -------------------------- Total interest-bearing deposits 51,077.6 1,812 .5 3.55 53,514.4 2,452.9 4.58 45,038.9 1,626.1 3.61 Funds purchased 11,283.6 412 .2 3.65 10,754.4 651.2 6.06 15,220.8 749.6 4.92 Other short-term borrowings 1,593.8 63 .4 3.98 1,550.6 97.9 6.31 1,689.9 79.5 4.71 Long-term debt 12,497.2 739 .0 5.91 8,034.6 534.9 6.66 5,858.6 359.5 6.14 --------------------------------------------------- --------------------------------------------------- -------------------------- Total interest-bearing liabilities 76,452.2 3,027 .1 3.96 73,854.0 3,736.9 5.06 67,808.2 2,814.7 4.15 Noninterest-bearing deposits 13,491.1 13,177.5 12,803.2 Other liabilities 4,867.1 3,864.4 4,018.7 Realized shareholders' equity 6,328.0 6,031.6 6,368.3 Accumulated other comprehensive income 1,745.8 1,470.3 1,822.4 --------------------------------------------------- --------------------------------------------------- -------------------------- Total liabilities and shareholders' equity $102,884.2 $ 98,397.8 $ 92,820.8 =================================================== =================================================== ========================== Interest Rate Spread 2.91% 2.71% 3.15% --------------------------------------------------- --------------------------------------------------- -------------------------- Net Interest Income $3,293 .4 $ 3,148.4 $3,188.0 --------------------------------------------------- --------------------------------------------------- --------------------------- Net Interest Margin/3/ 3.58% 3.55% 3.88% =================================================== =================================================== ===========================

SunTrust 2001 Annual Report 19

MANAGEMENT'S DISCUSSION

/3/ Derivative instruments used to help balance the Company's interest- sensitivity position decreased net interest income by $37.4 and $0.5 million in 2001 and 2000, respectively, increased net interest income by $16.3 million and $0.7 million in 1999 and 1998, decreased net interest income by $7.7 million in 1997 and increased net interest income by $0.1 million in 1996. Without these derivative instruments, the net interest margin would have been 3.62% in 2001,3.55% in 2000, 3.86% in 1999, 3.97% in 1998, 4.24% in 1997, and 4.40% in 1996.

Compounded Growth Rate in Average Balances 1998 1 997 1996 One Year Five Year --------------------------------- --------------- ------------------ ------------------------------ ------------------------ Average Income/ Yields/ Average Income/ Yields/ Average Income/ Yields/ 2001- 2001- Balances Expense Rates Balances E xpense Rates Balances Expense Rates 2000 1996 --------------------------------------------------- --------------------------------------------------- ------------------------ $ 56,537.1 $ 4,499.6 7.96% $50,813.7 $4 ,198.8 8.26% $45,472.0 $3,798.5 8.35% (0.1)% 8.7% 1,053.4 81.9 7.78 974.4 79.2 8.13 866.4 74.0 8.54 5.1 5.5 --------------------------------------------------- --------------------------------------------------- ---------------------- 57,590.5 4,581.5 7.96 51,788.1 4 ,278.0 8.26 46,338.4 3,872.5 8.36 -- 8.6 12,618.9 819.7 6.50 11,882.4 779.9 6.56 12,297.7 778.8 6.33 9.0 5.3 633.8 52.2 8.23 749.8 64.0 8.53 850.9 75.8 8.90 (4.5) (12.0) --------------------------------------------------- --------------------------------------------------- ---------------------- 13,252.7 871.9 6.58 12,632.2 843.9 6.68 13,148.6 854.6 6.50 8.6 4.5 1,306.2 71.6 5.48 1,378.5 80.4 5.83 1,044.0 56.5 5.41 (13.2) 3.7 2,414.7 180.4 7.47 865.4 70.0 8.09 984.4 77.9 7.91 103.3 24.5 316.8 14.9 4.70 279.8 13.8 4.94 129.0 7.0 5.44 138.8 62.4 --------------------------------------------------- --------------------------------------------------- ---------------------- 74,880.9 5,720.3 7.64 66,944.0 5 ,286.1 7.90 61,644.4 4,868.5 7.90 3.9 8.3 (940.5) (913.3) (923.8) 0.8 (1.1) 3,306.9 3,156.7 3,186.2 2.0 1.2 1,486.6 1,395.1 1,164.7 (1.6) 6.6 3,219.1 2,459.3 2,025.1 20.3 14.8 3,583.9 2,975.5 2,155.4 14.7 4.6 --------------------------------------------------- --------------------------------------------------- ---------------------- $ 85,536.9 $76,017.3 $ 69,252.0 4.6 8.2 =================================================== =================================================== ====================== $ 18,253.6 $ 524.5 2.87% $16,360.5 $ 462.2 2.82% $ 16,110.3 $ 457.4 2.84% 20.7% 8.6% 6,645.9 216.9 3.26 6,810.1 227.5 3.34 7,065.7 240.5 3.40 (5.7) (3.0) 10,390.4 534.4 5.14 11,032.1 562.4 5.10 12,049.4 625.4 5.19 (8.5) (5.5) 4,423.9 244.4 5.53 4,082.2 227.6 5.57 3,080.1 168.7 5.48 (6.4) 4.4 --------------------------------------------------- --------------------------------------------------- ---------------------- 39,713.8 1,520.2 3.86 38,284.9 1 ,479.7 3.83 38,305.5 1,492.0 3.90 6.7 2.5 394.0 21.6 5.47 108.1 6.1 5.64 71.5 3.7 5.18 -- 121.8 1,906.2 102.4 5.37 2,574.7 141.7 5.50 1,670.5 90.0 5.39 (46.2) 25.4 --------------------------------------------------- --------------------------------------------------- ---------------------- 42,014.0 1,644.2 3.91 40,967.7 1 ,627.5 3.97 40,047.5 1,585.7 3.96 (4.6) 5.0 12,164.9 634.1 5.21 8,641.9 461.7 5.34 6,965.8 356.9 5.12 4.9 10.1 2,391.8 127.8 5.34 2,591.9 133.8 5.16 1,501.4 81.7 5.44 2.8 1.2 5,368.0 340.7 6.35 3,275.4 230.5 7.04 1,961.8 134.5 6.86 55.5 44.8 --------------------------------------------------- --------------------------------------------------- ---------------------- 61,938.7 2,746.8 4.43 55,476.9 2 ,453.5 4.42 50,476.5 2,158.8 4.28 3.5 8.7 11,711.3 10,706.0 10,270.1 2.4 5.6 4,033.3 2,881.0 2,071.1 25.9 18.6 5,641.4 5,116.7 5,101.3 4.9 4.4 2,212.2 1,836.7 1,333.0 18.7 5.5 --------------------------------------------------- --------------------------------------------------- ---------------------- $ 85,536.9 $76,017.3 $ 69,252.0 4.6 8.2 =================================================== =================================================== ====================== 3.21% 3.48% 3.62% --------------------------------------------------- --------------------------------------------------- ---------------------- $ 2,973.5 $2 ,832.6 $2,709.7 --------------------------------------------------- --------------------------------------------------- ---------------------- 3.97% 4.23% 4.40% =================================================== =================================================== ======================

20 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

Net Interest Income/Margin

Net interest income for 2001 was $3,293.4 million or 4.6% higher than the prior year. The increase was primarily due to decreasing interest rates in 2001 and strong retail deposit growth. The Federal Reserve Bank lowered the fed funds rate and SunTrust concurrently lowered its prime rate 475 basis points throughout 2001. Additionally, SunTrust was successful in its initiative to grow retail deposits and reduce its reliance on higher interest bearing wholesale funding. As a result, average consumer and commercial deposits increased 5.6% and brokered and foreign deposits decreased 39.7%. In addition, the Company took advantage of the low interest rate environment to secure long-term funding resulting in an increase in average long-term debt of 55.5% during 2001.

Average earning assets were up 3.9%, average loans adjusted for securitizations increased 3.4% and the net interest margin was 3.58% in 2001 compared to 3.55% in 2000. Lower cost consumer and commercial deposit growth funded a significant portion of the earning asset growth, which helped improve the margin. The average rate on earning assets decreased 90 basis points to 6.87% and the average rate on interest-bearing liabilities decreased 110 basis points to 3.96%. These decreases were primarily due to the falling rates and a liability sensitive balance sheet structure through the third quarter of 2001 that provided for liabilities to be repriced to a greater degree than assets. SunTrust continually restructured the balance sheet throughout the year to a slightly asset sensitive position by the end of 2001, which is discussed in greater detail under "Interest Rate and Market Risk."

As part of its on-going balance sheet management, the Company continues to take steps to obtain alternative lower cost funding sources such as developing initiatives to grow retail deposits to maximize net interest income. During the first quarter of 2001, the Company initiated a campaign to attract money market accounts. As a result, average money market accounts have grown 30.9% during 2001.

Interest income that the Company was unable to recognize on nonperforming loans had a negative impact of three and two basis points on the net interest margin for 2001 and 2000, respectively. Table 4 contains more detailed information concerning average balances, yields earned 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 and lease losses. The analysis includes the evaluation of impaired loans as prescribed under Statement of Financial Accounting Standards (SFAS) No.'s 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. The 2001 loan loss provision of $275.2 million was 105.4% higher than the $134.0 million recorded in 2000. The increase in the provision for loan losses was primarily due to deterioration in large corporate credits (national and large business clients generally with total annual revenue in excess of $250 million) in various industries due to the economic downturn that led to higher nonperforming loans and net charge-offs. Large corporate net charge offs totaled about $142 million in 2001, compared to $58 million in 2000.

Loans

Loan demand was modest in 2001 as average loans, adjusted for securitizations, increased 3.4% over the prior year. Compared to the prior year-end, the Company's portfolio of commercial loans declined 6.0%, real estate loans declined 6.3% and consumer lending grew 4.9%.

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 2000 to 2001, with real estate loans accounting for the largest loan segment (42.2% of total loans). Residential real estate represented 25.1% of total loans at year-end, including $14.5 billion in home mortgages and $2.8 billion in home equity lines. During 2001 and 2000, in order to improve liquidity, the Company securitized $1,903.5 and $925.4 million, respectively, in residential mortgages. Approximately $1,667.5 million of securitized mortgages were carried on the Consolidated Balance Sheet as "Securities Available for Sale" at December 31, 2001. As a part of its on-going balance sheet management, the Company may securitize additional residential mortgages and other loans during 2002. Commercial loans and consumer loans comprised 42.0% and 15.7% of the total loans at year-end, respectively, compared to 42.6% and 14.3% in 2000. From an industry concentration perspective, the Financial services, Manufacturing and Business services sectors are the only areas that represent more than 5% of year-end loans outstanding.

Su nTrust 2001 Annual Report 21 MANAGEMENT'S DISCUSSION --------------------------------------------------- ----------------------------- Average Earning Asset Mix ($ in millions) [GRAPH] Loans 70,023.0 76.08% Securities Available for Sale 16,353.5 17.77% Loans Held for Sale 2,949.9 3.21% Trading Account 1,289.8 1.40% Funds Sold 1,250.3 1.36% Interest Bearing Deposits in Other Banks 167.6 0.18% Loan Mix ($ in millions) [GRAPH] Commercial 28,945.9 41.98% Residential Mortgage 17,297.1 25.08% Consumer Loans 10,844.9 15.73% Other Real Estate 8,152.0 11.82% Construction 3,627.3 5.26% Business Credit Card 92.0 0.13% Efficiency Ratio (percent) 1996 61.41 1997 57.41 1998 62.02 1999 60.35 2000 57.47 2001 56.96

22 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

Table 5 Noninterest Income

Noninterest Income

The Company continues to make significant progress in the diversification of its sources of income. Noninterest income has grown to comprise 40% of total revenues compared with 30% in 1996. Noninterest income, excluding securities gains and losses, was $2,002.7 million in 2001, an increase of $235.7 million or 13.3% compared to 2000.

Trust and investment management income declined $7.8 million or 1.6% compared to 2000. The market value of SunTrust's assets under management and associated fee income was adversely impacted by the 16% average year-to-date decline in the S&P 500. As of December 31, 2001, SunTrust's total managed and non-managed trust assets were $128.8 billion, which excluded $41.8 billion in non-managed assets held in corporate trust accounts. Included in total trust assets were $89.5 billion of discretionary assets under management, which included the STI Classic Funds, institutional assets managed by Trusco Capital Management and participant-directed retirement accounts. As of December 31, 2000, discretionary assets under management were $91.6 billion. The market-related decline in assets under management was offset by strong net new business in 2001. Total trust and investment management sales increased 9% over prior year, and the client retention rate improved significantly compared to 2000. The contributing factors to the net new business results were improved client retention, new business initiatives and client management which were aided by the favorable investment performance of the STI Classic Funds and Trusco Capital Management. Management expects these positive trends will continue in 2002 leading to improved performance, provided the market environment improves.

Retail investment income was unchanged on a year-to-date basis, which was favorable relative to industry results. Additionally, retail investment income compared to the prior and comparable quarters was up significantly indicating positive momentum heading into year-end. Total brokerage assets which consist of client assets held in brokerage accounts in which SunTrust serves as an advisor but does not possess discretionary authority were $14.5 billion as of December 31, 2001 compared to $13.1 billion as of December 31, 2000.

Service charges on deposit accounts increased $50.5 million or 11.0% compared to 2000. Increased usage of products and services, a more consistent pricing strategy and lower earnings credit rate contributed to the increase in this line item. Trading account profits and commissions increased $64.0 million, or 201.4%, as the Company benefited from increased customer derivative transaction fees due to the lower interest rate environment. Mortgage production related income increased by $96.1 million or 106.7%, due primarily to an increase in refinancing activity resulting from the declining rate environment. Total mortgage production for 2001 was $24.2 billion, an 81.7% increase from $13.3 billion in 2000. Also associated with the high volume of refinancing activity, mortgage servicing related income decreased $38.9 million or 118.5%, due to accelerated amortization of mortgage servicing rights related to increased prepayments. As a result of SunTrust's conservative capitalization policy, no valuation allowance was required for mortgage servicing rights as of December 31, 2001 and 2000. Additionally, there were no impairment charges related to mortgage servicing rights during 2001 and 2000. Other charges and fees were up $29.5 million or 14.0%, as a result of increased loan commitment fee income and line-of-credit fees.

Credit card and other fees increased $17.9 million or 18.8%. Debit card interchange income of $59.3 million for 2001 compared to $47.3 million for 2000 is included in credit card fees. The increase in debit card income is as a result of increased acceptance and utilization of this product by customers. The Company incurred net securities gains during 2001 of $153.1 million com-

Year Ended December 31 (In millions) 200 1 2000 1999 1998 1997 1996 --------------------------------------------------- --------------------------------------------------- ------- Service charges on deposit accounts $ 510. 2 $ 459.7 $ 438.1 $ 401.1 $ 374.1 $ 346.9 Trust and investment management income 486. 1 493.9 495.6 453.4 387.3 339.4 Other charges and fees 240. 3 210.8 200.1 191.0 166.9 143.4 Mortgage production related income 186. 1 90.0 153.0 238.3 97.0 70.5 Mortgage servicing related income (6. 1) 32.8 27.1 2.8 20.8 25.7 Securities gains (losses) 153. 1 6.6 (109.1) 8.2 6.9 17.6 Credit card and other fees 113. 6 95.7 106.2 87.3 81.1 59.3 Investment banking income 108. 5 111.3 67.8 55.8 16.8 12.2 Trading account profits and commissions 95. 7 31.7 35.1 44.6 22.7 18.2 Retail investment services 107. 8 108.2 97.4 64.6 51.5 37.7 Other income 160. 5 132.9 114.6 106.8 104.1 75.2 --------------------------------------------------- --------------------------------------------------- ------- Total noninterest income $2,155. 8 $1,773.6 $ 1,625.9 $1,653.9 $1,329.2 $ 1,146.1 =================================================== =================================================== =======

SunTrust 2001 Annual Report 23

MANAGEMENT'S DISCUSSION

Table 6 Noninterest Expense

pared to $6.6 million in 2000. The 2001 net securities gains included a gain of $100.2 million due to the Company repositioning its securities portfolio by shortening its average life and a gain of $52.9 million on the sale of Star Systems Inc. representing a historical ownership in the ATM network. Other income included net gains on the sale of mortgage and student loans of $5.6 million, $11.4 million, and $15.3 million in 2001, 2000, and 1999, respectively.

Noninterest Expense

Noninterest expense increased 10.1% in 2001. During 2001, total personnel expense increased $137.4 million or 8.4% primarily because of increased incentive payments related to mortgage production, bonus payments in conjunction with the acquisition of the institutional business of The Robinson-Humphrey Company, LLC and the One Bank initiative. The One Bank initiative represents enhancements to customer based systems across the Company's geographic footprint and is expected to yield operating efficiencies in the future. Other expense increased $104.5 million or 76.0% in 2001. In addition to on-going miscellaneous expenses, other expense in 2001 included $44.7 million related to the Wachovia proposal, the acquisition of the institutional business of The Robinson-Humphrey Company, LLC and the sale of SunTrust Credit Corporation. Amortization of intangible assets increased $10.8 million or 30.4% as a result of the write-off of the remaining $12.7 million of goodwill associated with SunTrust Credit Corporation, due to the sale of the assets and liabilities of the company. Consulting and legal increased $28.1 million or 47.2% due to data processing and consulting fees related to the One Bank initiative. Credit and collection services increased $17.7 million or 31.1% due to increased loan closing expense associated with mortgage production. The efficiency ratio for 2001 was 57.0%, an improvement from 57.5% for 2000.

Provision For Income Taxes

The provision for income taxes covers federal and state income taxes. In 2001, the provision was $653.9 million, compared to $625.5 million in 2000. Included in the 2001 provision, the Company recorded $3.4 million in income tax expense related to the early extinguishment of long-term debt. The provision represents an effective tax rate of 32.2% for 2001 compared to 32.6% for 2000. The extraordinary gain on the consolidated financial statements is shown net of taxes.

Allowance For Loan Losses

SunTrust maintains an allowance for loan losses sufficient to absorb inherent losses in the loan portfolio. The Company is committed to the early recognition of problem loans and to a conservative allowance. The Company believes the current allowance is appropriate and adequate to cover such inherent losses. At year-end 2001,

Year Ended December 31 (In millions) 2001 2000 1999 1998 1997 1996 --------------------------------------------------- --------------------------------------------------- ---------- Salaries $ 1,166.4 $ 1,139.9 $ 1,174.5 $ 1,095.5 $ 977.9 $ 924.1 Other compensation 422.0 329.1 348.1 338.2 218.1 198.5 Employee benefits 193.0 175.0 175.8 181.8 176.9 169.5 --------------------------------------------------- --------------------------------------------------- ---------- Total personnel expense 1,781.4 1,644.0 1,698.4 1,615.5 1,372.9 1,292.1 Net occupancy expense 210.4 202.6 197.4 192.2 187.2 203.0 Outside processing and software 199.1 172.3 150.3 138.4 112.7 103.8 Equipment expense 189.8 193.7 198.5 178.8 167.7 158.6 Marketing and customer development 104.0 106.2 105.4 107.1 95.4 104.6 Consulting and legal 87.7 59.6 62.5 67.5 51.7 55.0 Credit and collection services 74.6 56.9 68.7 70.4 59.5 54.1 Postage and delivery 64.0 63.3 68.1 64.4 64.1 63.3 Communications 59.2 59.8 66.3 62.1 52.7 50.7 Other staff expense 58.5 51.5 50.1 47.8 40.3 39.5 Operating supplies 48.3 47.3 51.9 54.0 50.0 52.9 Amortization of intangible assets 46.3 35.5 32.8 43.1 38.5 37.4 FDIC premiums 10.9 11.2 7.9 8.4 8.5 59.3 Merger-related expenses -- 42.4 45.6 119.4 -- -- Other real estate (income) expense (4.2) (3.8) (4.8) (9.8) (8.6) 8.2 Other expense 183.5 86.0 106.2 110.8 96.6 85.5 --------------------------------------------------- --------------------------------------------------- ---------- Total noninterest expense $ 3,113.5 $ 2,828.5 $ 2,905.3 $ 2,870.1 $ 2,389.2 $ 2,368.0 =================================================== =================================================== ========== Efficiency ratio 56.96% 57.47% 60.35% 62.02% 57.41% 61.41% =================================================== =================================================== ==========

24 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

the Company's total allowance was $867.1 million, which represented 1.26% of period-end loans.

The Company prepares a comprehensive analysis of its allowance for loan losses at least quarterly and conducts a peer review of allowance levels of other large banks. In addition, the SunTrust Allowance for Loan Losses Review Committee has the responsibility of affirming the allowance methodology and assessing the general and specific allowance factors in relation to estimated and actual net charge-off trends. This committee meets at least quarterly and is also responsible for assessing the appropriateness of the allowance for loan losses for each loan category for the Company.

The allowance for loan losses consists of three elements: (i) specific allowances for individual loans (per SFAS No.'s 114 and 118), (ii) general allowances for loan pools (per SFAS No. 5) based on historical loan loss experience and current trends, and (iii) allowances based on economic conditions and other risk factors in the Company's individual markets (per various Joint Interagency Statements issued by the bank regulatory agencies).

The first element -- specific allowance -- is based on a regular analysis of classified loans where the internal risk ratings are below a predetermined classification. This analysis is performed by the relationship manager for those loans with total credit exposure of $0.5 million or greater. The specific allowance established for these classified loans is based on a careful analysis of probable and potential sources of repayment, including cash flow, collateral value and guarantor capacity (if applicable). As of December 31, 2001 and 2000, the specific allowance was $254 million and $152 million, respectively.

The second element -- general allowance -- is determined by the mix of loan products within the portfolio, an internal loan grading process and associated allowance factors. These general allowance factors are updated at least annually and are based on a statistical loss migration analysis and current loan charge-off trends. The loss migration analysis examines loss experience for commercial credits in relation to internal loan grades. Charge-off trends are analyzed for homogeneous loan categories (e.g., residential real estate, open- and closed-end consumer loans, etc.). While formal loss migration and charge-off trend analyses are conducted annually, the Company continually monitors credit quality in all portfolio segments and may revise the general allowance factors whenever necessary in order to address improving or deteriorating credit quality trends or specific risks associated with a given loan category. As of December 31, 2001 and 2000, the general allowance was $425 million and $448 million, respectively.

The third element -- economic conditions, concentrations and other risk factors -- is based on national and local marketplace conditions and/or events that may affect loan repayment in the near-term. This element requires a high degree of management judgement to anticipate the impact that economic trends, legislative or governmental actions or other unique market and/or portfolio issues will have on credit losses. Consideration of other risk factors typically includes such issues as recent loss experience in specific portfolio segments, trends in loan quality, changes in account acquisition strategy or market focus and concentrations of credit, together with any internal administrative risk components. These factors are based on the influence of current external variables on portfolio risk, so there will typically be some movement between this element and the specific allowance component during various stages of the economic cycle. Because of their subjective characteristics, these risk factors are carefully reviewed by management and are revised as conditions indicate. As of December 31, 2001 and 2000, the allowance for economic conditions, concentrations and other risk factors was $179 million and $275 million, respectively.

Concentrations of credit risk, discussed in Note 16 to the consolidated financial statements, may affect the Company's analysis of other risks and, ultimately, the level of the allowance. Concentrations typically involve a group of borrowers whose loans are supported by the same type of collateral, borrowers engaged in or dependent upon the same industry, or loans to one borrower or an affiliated group of borrowers. SunTrust has a significant concentration of credit in loans secured by residential real estate. At December 31, 2001, the Company had $17.3 billion in loans secured by residential real estate, representing 25.1% of total loans, down from 27.6% at December 31, 2000. In addition, the Company is subject to a geographic concentration of credit because it operates primarily in the Southeastern and Mid-Atlantic regions of the United States. Although not material enough to constitute a significant credit concentration, the Company has meaningful credit exposure to various industry sectors, including manufacturing, financial services and business services. Levels of exposure to these and other industry groups, together with an assessment of current trends and expected future financial performance are carefully analyzed for each industry in order to determine an adequate allowance level.

SunTrust engages in limited international banking activities. The Company's total cross border outstandings were $308 million as of December 31, 2001. Only minor exposure exists in areas of concern in Latin America, South America and Asia.

The Company's provision for loan losses in 2001 was $275.2 million, which exceeded net charge-offs of $272.4 million by $2.8 million. The comparable provision and net charge-off amounts for 2000 were $134.0 million and $130.8 million, respectively. Provision

SunTrust 2001 Annual Report 25

MANAGEMENT'S DISCUSSION

expense increased from 2000 to 2001 due to continued deterioration in large corporate credits.

The SunTrust charge-off policy is consistent with regulatory standards, although a somewhat more conservative policy governs the unsecured consumer loan portfolio. Losses on unsecured consumer loans are recognized at 90 days past due, compared to the regulatory loss criteria of 120 days. Secured installment 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 (i.e., bankruptcy or repossession). Net charge-offs for 2001 represented .39% of average loans, compared to .19% of average loans for 2000. Actual recoveries in 2001 were slightly lower than in 2000, and the ratio of recoveries to total charge-offs decreased to 16.4% from 31.1% due to higher gross charge-offs. The allowance at year-end represented 3.18 years coverage of 2001 net charge-offs.

Nonperforming assets increased to $578.8 million at December 31, 2001 from $428.3 million at December 31, 2000 (See "Nonperforming Assets" and Table 10 for further discussion). Many of the nonperforming loans are of the size where the Company's allowance for loan loss methodology requires that they be specifically analyzed by a relationship manager as previously described. These analyses establish specific allowances and will typically cause a shift of overall reserves from the general, economic or other risk categories to the specific category. The ratio of the allowance for loan losses to total nonper-forming loans (excluding other real estate owned) decreased to 155.4% at December 31, 2001 from 215.8% at December 31, 2000.

Table 8 Allowance For Loan Losses

Table 7 Loans By Industry At December 31, 2001 (Dollars in millions) Loans % of Total Loans --------------------------------------------------- -------------------- Manufacturing $ 4,825.3 7.0 Financial services 4,146.8 6.0 Business services 3,545.6 5.1 Construction/Contractors 3,120.1 4.5 Transportation 2,846.3 4.1 Investment services 2,684.1 3.9 Real estate investors 2,487.3 3.6 Healthcare 2,035.2 3.0 Wholesale trade 1,856.2 2.7 Hospitality/Entertainment 1,729.7 2.5 Textiles 1,270.8 1.8 Telecommunications 1,169.3 1.7 Retail trade 1,070.8 1.6 =================================================== ====================

At December 31 (Dollars in millions) 20 01 2000 1999 1998 1997 199 6 --------------------------------------------------- --------------------------------------------------- - Allocation by Loan Type Commercial $ 435 .8 $ 389.0 $ 286.7 $ 251.4 $ 247.8 $ 229. 9 Real estate 145 .5 190.2 208.0 229.8 229.3 262. 8 Consumer loans 251 .3 252.3 339.3 420.9 406.9 350. 5 Unallocated 34 .5 43.0 37.3 42.5 49.5 53. 8 --------------------------------------------------- --------------------------------------------------- - Total $ 867 .1 $ 874.5 $ 871.3 $ 944.6 $ 933.5 $ 897. 0 =================================================== =================================================== = Allocation as a Percent of Total Allowance Commercial 50 .2% 44.5% 32.9% 26.6% 26.5% 25. 6% Real estate 16 .8 21.7 23.9 24.3 24.6 29. 3 Consumer loans 29 .0 28.9 38.9 44.6 43.6 39. 1 Unallocated 4 .0 4.9 4.3 4.5 5.3 6. 0 --------------------------------------------------- --------------------------------------------------- - Total 100 .0% 100.0% 100.0% 100.0% 100.0% 100. 0% =================================================== =================================================== = Year-end Loan Types as a Percent of Total Loans Commercial 42 .0% 42.6% 40.8% 40.0% 34.3% 32. 0% Real estate 42 .3 43.0 45.3 44.2 47.9 48. 2 Consumer loans 15 .7 14.4 13.9 15.8 17.8 19. 8 --------------------------------------------------- --------------------------------------------------- - Total 100 .0% 100.0% 100.0% 100.0% 100.0% 100. 0% =================================================== =================================================== =

26 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

Table 9 Summary Of Loan Loss Experience

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. Once a loan has been classified as nonaccrual, it also meets the criteria for an impaired loan. Accordingly, secured loans may be charged down to the estimated value of the collateral and previously accrued unpaid interest is reversed. Subsequent charge-offs may be required as a result of changes in the market value of collateral or other repayment prospects.

Nonperforming Assets Nonperforming assets were $578.8 million at December 31, 2001, increasing 35.1% from December 31, 2000. At year-end, the ratio of nonperforming assets to total loans plus other real estate owned was .84% compared to .59% at December 31, 2000.

The increase in nonperforming assets was driven by large corporate bankruptcies in multiple industry sectors. The energy sector accounted for a significant amount of the 2001 net increase. Other industry segments contributing to the rise in nonperforming assets included textiles, agribusiness, fast foods and retail. The Company expects nonperforming assets to remain manageable with moderate increases during 2002.

Year Ended December 31 (Dollars in millions) 2001 2000 1999 1998 1997 1996 --------------------------------------------------- --------------------------------------------------- -------- Allowance for Loan Losses Balance - beginning of year $ 874.5 $ 871.3 $ 944.6 $ 933.5 $ 897.0 $ 915.8 Allowance from acquisitions and other activity - net (10.2) -- (13.3) (10.0) 2.2 0.3 Provision for loan losses 275.2 134.0 170.4 214.6 225.1 171.8 Charge-offs Commercial (217.3) (115.6) (142.0) (49.0) (30.0) (44.5) Real estate Construction (0.3) (0.2) (2.2) (3.2) (4.0) (4.0) Residential mortgages (10.8) (7.8) (15.0) (13.8) (11.8) (10.1) Other (5.9) (3.3) (5.2) (5.2) (6.9) (11.3) Credit card (2.7) (5.4) (78.9) (129.5) (143.2) (129.6) Consumer loans (89.0) (57.5) (52.8) (63.6) (79.3) (74.8) --------------------------------------------------- --------------------------------------------------- -------- Total charge-offs (326.0) (189.8) (296.1) (264.3) (275.2) (274.3) Recoveries Commercial 23.8 22.7 15.5 14.8 22.0 24.2 Real estate Construction 0.4 0.3 0.7 0.3 2.5 2.3 Residential mortgages 2.2 3.3 3.4 2.7 2.8 2.3 Other 1.8 3.9 6.1 8.4 8.9 12.7 Credit card 1.6 3.1 11.9 14.9 17.7 13.5 Consumer loans 23.8 25.7 28.1 29.7 30.5 28.4 --------------------------------------------------- --------------------------------------------------- -------- Total recoveries 53.6 59.0 65.7 70.8 84.4 83.4 --------------------------------------------------- --------------------------------------------------- -------- Net charge-offs (272.4) (130.8) (230.4) (193.5) (190.8) (190.9) --------------------------------------------------- --------------------------------------------------- -------- Balance - end of year $ 867.1 $ 874.5 $ 871.3 $ 944.6 $ 933.5 $ 897.0 =================================================== =================================================== ======== Total loans outstanding at year end $68,959.2 $72,239.8 $66,002.8 $61,540.6 $55,476.4 $4 9,301.4 --------------------------------------------------- --------------------------------------------------- -------- Average loans $70,023.0 $70,044.3 $62,749.4 $57,590.5 $51,788.1 $4 6,338.4 Ratios Allowance to year-end loans 1.26% 1.21% 1.32% 1.53% 1.68% 1.82% Allowance to nonperforming loans 155.4 215.8 350.0 456.0 494.6 305.5 Net charge-offs to average loans 0.39 0.19 0.37 0.34 0.37 0.41 Provision to average loans 0.39 0.19 0.27 0.37 0.43 0.37 Recoveries to total charge-offs 16.4 31.1 22.2 26.8 30.7 30.4 =================================================== =================================================== ========

SunTrust 2001 Annual Report 27

MANAGEMENT'S DISCUSSION

Table 10 Nonperforming Assets And Accruing Loans Past Due 90 Days Or More

Interest income on nonaccrual 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 if it was accrued in the current year and is charged to the allowance for loan losses if it was accrued in prior years. When a nonac-crual loan is returned to accruing status, any unpaid interest is recorded as interest income only after all principal has been collected.

For the year 2001, the gross amount of interest income that would have been recorded on nonaccrual loans and restructured loans at December 31, 2001, if all such loans had been accruing interest at the original contractual rate, was $45.6 million. Interest payments recorded in 2001 as interest income (excluding reversals of previously accrued interest) for all such nonperforming loans at December 31, 2001, were $15.8 million.

Securities Available For Sale

The investment portfolio is managed as part of the overall asset and liability management process to optimize income and market performance over an entire interest rate cycle while mitigating risk. As interest rates declined to their lowest levels in over forty years and are forecasted to begin rising in 2002, the Company shifted its interest rate sensitivity position to being slightly asset sensitive to benefit from rising rates. In conjunction with interest rate risk management, the portfolio was repositioned during 2001 to shorten its average life and shift its mix toward more floating rate assets. The average life shortened from 5.6 years to 4.0 years and the percentage of floating rate securities increased from 6% to 17% of the total portfolio. The portfolio yield decreased from 6.75% in 2000 to 6.54% in 2001, primarily from purchasing shorter term securities at lower market rates. Net securities gains of $100.2 million were realized in 2001 from selling longer term, fixed rate securities as part of the repositioning. An additional $52.9 million security gain was recorded in 2001 on the sale of Star Systems, Inc. Portfolio turnover from sales totaled $5.4 billion in 2001, representing 28.4% of the average portfolio size.

The average portfolio size increased $1.3 billion for the year on an amortized cost basis. Most of the increase was from the retention of mortgage-backed securities created from securitizing single-family mortgage loans in the fourth quarter of 2000 and first quarter of 2001.

The carrying value of the investment portfolio, all of which is classified as "securities available for sale," reflected $2.6 billion in net unrealized gains at December 31, 2001, including a $2.3 billion unrealized gain on the Company's investment in common stock of The Coca-Cola Company. The market value of this common stock investment decreased $665 million while the unrealized gain on the remainder of the portfolio increased $249 million during 2001. These changes in market value did not affect the net income of SunTrust, but were included in comprehensive income.

At December 31 (Dollars in millions) 2001 2000 1999 1998 1997 1996 --------------------------------------------------- ------------------------------------------ Nonperforming Assets Nonaccrual loans Commercial $377.6 $ 273.6 $105.0 $ 50.1 $ 35.1 $ 68.2 Real estate Construction 4.0 2.2 9.0 13.5 16.0 23.7 Residential mortgages 79.9 81.8 82.6 83.9 75.2 74.7 Other 62.8 29.0 34.9 46.6 47.6 103.7 Consumer loans 33.8 18.7 17.4 12.5 12.1 13.4 --------------------------------------------------- ------------------------------------------ Total nonaccrual loans 558.1 405.3 248.9 206.6 186.0 283.7 Restructured loans -- -- -- 0.6 2.7 9.9 --------------------------------------------------- ------------------------------------------ Total nonperforming loans 558.1 405.3 248.9 207.2 188.7 293.6 Other real estate owned 20.7 23.0 26.8 34.9 48.2 71.1 --------------------------------------------------- ------------------------------------------ Total nonperforming assets $578.8 $ 428.3 $275.7 $242.1 $236.9 $364.7 =================================================== ========================================== Ratios Nonperforming loans to total loans 0.81% 0.56% 0.38% 0.34% 0.34% 0.60% Nonperforming assets to total loans plus other real estate owned 0.84 0.59 0.42 0.39 0.43 0.74 Accruing Loans Past Due 90 Days or More $185.5 $ 181.2 $117.4 $108.2 $109.0 $106.1 =================================================== ==========================================

28 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

Table 11 Securities Available For Sale

/1/ Includes the Company's investment in 48,266,496 shares of common stock of The Coca-Cola Company.

Liquidity

Liquidity is managed to ensure there is sufficient funding to satisfy demand for credit, deposit withdrawals and attractive investment opportunities. A large, stable core deposit base, strong capital position and excellent credit ratings are the solid foundation for the Company's liquidity position.

Funding sources primarily include customer-based core deposits, but also include borrowed funds and cash flows from operations. Customer-based core deposits, the Company's largest and most cost-effective source of funding, accounted for 63% of the funding base on average for 2001 compared to 62% in 2000. The increase is attributable to strong consumer and commercial deposit growth in 2001; these deposits grew 5.6% on average in 2001. Net borrowed funds, which primarily include short term funds purchased and sold, wholesale domestic and foreign deposits, other short term borrowings and long term debt, were $28.2 billion at December 31, 2001, compared with $33.2 billion at December 31, 2000. Cash flows from operations are also a significant source of liquidity. Net cash from operations primarily results from net income adjusted for noncash items such as depreciation and amortization, provision for loan losses, and deferred tax items.

Liquidity is strengthened by ready 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 (see below), and commercial paper issuance by the Company. Liquidity is also available through unpledged securities in the investment portfolio and capacity to securitize some loans, including single-family mortgage loans. The Company securitized $925.4 and $1,903.5 million of single-family mortgage loans in the fourth quarter of 2000 and first quarter of 2001, respectively.

At December 31 ------- ------------------------------------------ Amorti zed Fair Unrealized Unrealized (In millions) C ost Value Gains Losses --------------------------------------------------- ------------------------------------------ U.S. Treasury and other U.S. government agencies and corporations 2001 $ 2,22 9.5 $ 2,340.2 $ 111.2 $ 0.5 2000 2,76 3.5 2,845.3 82.3 0.5 1999 2,54 3.5 2,510.3 2.5 35.7 States and political subdivisions 2001 43 4.1 443.7 11.1 1.5 2000 44 9.3 455.6 8.0 1.7 1999 53 0.3 528.6 5.9 7.6 Asset-backed securities 2001 3,50 8.4 3,544.1 45.5 9.8 2000 1,86 5.1 1,887.7 24.3 1.7 1999 2,13 5.3 2,091.7 -- 43.6 Mortgage-backed securities 2001 8,14 2.5 8,291.7 163.2 14.0 2000 7,65 1.4 7,679.5 62.5 34.4 1999 7,76 9.3 7,620.4 9.0 157.9 Corporate bonds 2001 1,96 9.5 1,983.5 62.6 48.6 2000 2,36 2.2 2,300.8 37.0 98.4 1999 1,92 0.2 1,848.3 -- 71.9 Other securities/1/ 2001 74 0.1 3,053.2 2,313.1 -- 2000 67 0.5 3,641.4 2,970.9 -- 1999 89 1.0 3,718.0 2,829.4 2.4 --------------------------------------------------- ------------------------------------------ Total securities available for sale 2001 $ 17,02 4.1 $ 19,656.4 $ 2,706.7 $ 74.4 2000 15,76 2.0 18,810.3 3,185.0 136.7 1999 15,78 9.6 18,317.3 2,846.8 319.1 =================================================== ==========================================

A $10 billion Senior and Subordinated Global Bank Note program was established in November of 2000 to expand the funding and capital sources to include both domestic and international investors. This program was designed to provide structural flexibility with maturities from 7 days to 30 years, and increase the bank's ability to access a wider investor base. SunTrust Bank issued $1 billion of subordinated debt under the program as of December 31, 2001. The Company also issued $600 million of Trust Preferred Securities in 2001.

As is common in the Financial Services Industry, SunTrust Bank assists in providing liquidity to select corporate customers by directing them to a third party owned commercial paper conduit. SunTrust's conduit relationship is with Three Pillars Funding Corporation (Three Pillars). Three Pillars provides financing for or direct purchases of financial assets originated and serviced by SunTrust Bank's corporate customers. Three Pillars finances this activity by issuing A-1/P-1 rated commercial paper. The result is a favorable funding arrangement for these SunTrust Bank customers.

Three Pillars had assets and liabilities, not included in the Consolidated Balance Sheet, of approximately $2.2 billion as of December 31, 2001, which primarily consisted of secured loans, marketable asset-backed securities and short-term commercial paper liabilities. Activities related to the Three Pillars relationship generated approximately $8 million in fee revenue for SunTrust Bank. These activities include: client referrals and investment recommendations to Three Pillars; the issuing of a letter-of-credit, which provides partial credit protection to commercial paper holders; and providing a majority of the temporary liquidity arrangements that would provide funding to Three Pillars in the event that it can no longer issue commercial paper. SunTrust Bank has never had to fund under either the liquidity arrangements or credit enhancement to Three Pillars.

In addition, as part of its CRA initiatives, the Company invests in multi- family low income housing throughout its footprint as a limited partner in various properties which are not included in the Consolidated Financial Statements. During development, the properties obtain financing first through construction loans of which many are obtained from SunTrust Bank. After the property is completed, permanent financing is primarily obtained from third parties.

Collateral for these loans is limited to the assets of the partnerships. As of December 31, 2001, the amount of the Company's investment in limited partnerships included in other assets totaled $169.5 million.

The Company has a contingency funding plan that stress tests liquidity needs that may arise from certain events such as 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 such potential events.

Su nTrust 2001 Annual Report 29 MANAGEMENT'S DISCUSSION --------------------------------------------------- ----------------------------- Average Funding Mix ($ in millions) [GRAPH] Average for 2001 % of Total ---------------- ---------- Interest-bearing Consumer and Commercial Deposits 43,284.5 48.12% Noninterest Bearing Deposits 13,491.1 15.00% Long-term Debt 12,497.2 13.90% Funds Purchased 11,283.6 12.55% Foreign Deposits 5,175.4 5.75% Brokered Deposits 2,617.7 2.91% Other Short-term Borrowings 1,593.8 1.77% Average Deposit Mix ($ in millions) [GRAPH] Average for 2001 % of Total ---------------- ---------- NOW/Money market accounts 24,301.4 37.64% Noninterest Bearing Deposits 13,491.1 20.89% Consumer Time 9,092.6 14.08% Savings 6,066.6 9.40% Foreign Deposits 5,175.4 8.02% Other Time 3,823.9 5.92% Brokered Deposits 2,617.7 4.05%

30 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

Table 12 Composition Of Average Deposits

Funds Purchased

Average funds purchased increased $529.2 million or 4.9% in 2001 as the Company benefited from lower interest rates.

Table 13 Funds Purchased/1/

/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.

Deposits

Average consumer and commercial deposits increased $3,014.1 million, or 5.6%, in 2001 and comprised 87.9%, 80.6% and 92.9% of average total deposits in 2001, 2000 and 1999, respectively. In order to reduce its reliance on higher priced wholesale funding, the Company initiated a campaign to attract retail deposits, specifically money market accounts. As a result, average money market accounts increased by 30.9% and brokered and foreign deposits decreased 39.7% compared to 2000.

Capital Resources

Regulatory agencies measure capital adequacy within a framework that makes capital requirements sensitive to the risk profiles of individual banking companies. The guidelines define capital as either Tier 1 (primarily common shareholders' equity, as defined to include certain debt obligations) or Tier 2 (to include certain other debt obligations and a portion of the allowance for loan losses and since 1998, 45% of the unrealized gains on equity securities). The Company is subject to a minimum Tier 1 capital ratio (Tier 1 capital to risk-weighted assets) of 4%, total capital ratio (Tier 1 plus Tier 2 to risk-weighted assets) of 8% and Tier 1 leverage ratio (Tier 1 to average quarterly assets) of 3%. To be considered a "well capitalized" institution, the Tier 1 capital ratio, the total capital ratio, and the Tier 1 leverage ratio must equal or exceed 6%, 10% and 5%, respectively. SunTrust is committed to remaining well capitalized.

SunTrust Bank raised an additional $1.0 billion of regulatory capital through its initial issuance under the Global Bank Note program in 2001. The Company also raised $600 million of regulatory capital through the issuance of Trust Preferred Securities during 2001.

The Company purchased 8.2 million shares of its common stock during 2001. As of December 31, 2001, the Company was authorized to purchase up to 5.2 million shares under current Board resolutions.

Year Ended December 31 Percent of Total ------------------- -------------------- -------------------------- - (Dollars in millions) 2001 2000 1999 2001 2000 199 9 --------------------------------------------------- --------------------------------------------------- - Noninterest-bearing $ 13,491.1 $ 13 ,177.5 $ 12,803.2 20.9% 19.8% 22. 1% NOW/Money market accounts 24,301.4 20 ,129.0 19,926.0 37.6 30.2 34. 4 Savings 6,066.6 6 ,434.2 6,918.8 9.4 9.6 12. 0 Consumer time 9,092.6 9 ,935.5 9,824.3 14.1 14.9 17. 0 Other time 3,823.9 4 ,085.3 4,275.0 5.9 6.1 7. 4 --------------------------------------------------- --------------------------------------------------- - Total consumer and commercial deposits 56,775.6 53 ,761.5 53,747.3 87.9 80.6 92. 9 Brokered deposits 2,617.7 3 ,308.7 7.0 4.1 5.0 0. 0 Foreign deposits 5,175.4 9 ,621.7 4,087.8 8.0 14.4 7. 1 --------------------------------------------------- --------------------------------------------------- - Total deposits $ 64,568.7 $ 66 ,691.9 $ 57,842.1 100.0% 100.0% 100. 0% =================================================== =================================================== =

Maximum At December 31 Daily Average Outstanding ------------------ -- ---------------- at Any (Dollars in millions) Balance Rate Balance Rate Month-End --------------------------------------------------- ----------------------------- 2001 $10,104.3 4.08% $1 1,283.6 3.65% $13,546.6 2000 10,895.9 5.04 1 0,754.4 6.06 12,451.4 1999 15,911.9 4.69 1 5,220.8 4.92 16,982.3 =================================================== =============================

Interest Rate And Market Risk

The normal course of business activity exposes SunTrust to interest rate risk. Fluctuations in interest rates may result in changes in the fair market value of the Company's financial instruments, cash flows and net interest income. SunTrust's asset/liability management

SunTrust 2001 Annual Report 31

MANAGEMENT'S DISCUSSION

Table 14 Capital Ratios

/1/ Tier 1 capital includes trust preferred obligations of $1,050 million at the end of 2000, 1999 and 1998, respectively and $100 million of preferred shares issued by a real estate investment trust subsidiary during 2000.

Table 15 Loan Maturity

/1/ Excludes $2,926.9 million in lease financing.

process manages the Company's interest rate risk position. The objective of this process is the optimization of the Company's financial position, liquidity and net interest income, while limiting the volatility to net interest income from changes in interest rates.

SunTrust uses a simulation modeling process to measure interest rate risk and evaluate potential strategies. These simulations incorporate assumptions regarding balance sheet growth and mix, pricing, and the repricing and maturity characteristics of the existing and projected balance sheet. Other interest-rate-related risks such as prepayment, basis and option risk are also considered. Simulation results quantify interest rate risk under various interest rate scenarios. Senior management regularly reviews the overall interest rate risk position and develops and implements appropriate strategies to manage the risk. Management estimates the Company's net interest income for the next twelve months would increase 0.3% under a gradual increase in interest rates of 100 basis points, versus the projection under stable rates. Net interest income would decrease 0.4% under a gradual decrease in interest rates of 100 basis points, versus the projection under stable rates.

A fair market value analysis of the Company's on and off balance sheet positions calculated under an instantaneous 100 basis point increase in rates over December 31, 2001 estimates a 0.8% decrease in net market value as a percent of assets compared to a 0.9% decrease at December 31, 2000. SunTrust estimates a like decrease in rates from December 31, 2001 would increase net market value 0.6% compared to an increase of 0.6% based on 2000 year-end balances.

The computations of interest rate risk do not necessarily include certain actions that management may undertake to manage this risk in response to anticipated changes in interest rates.

Throughout 2001, SunTrust took advantage of the rapidly declining interest rate environment and restructured the balance sheet to shift interest rate risk from a liability sensitive position to a slightly asset sensitive position by the end of 2001. The restructuring was concentrated in the investment and debt portfolios. The restructuring in the investment portfolio is described in greater detail under the Securities Available for

At December 31 (Dollars in millions) 2001 2000 1999 1998 199 7 1996 --------------------------------------------------- --------------------------------------------------- -------------- Tier 1 capital/1/ $ 7,994.2 $ 6,850.6 $ 6,579.6 $ 6,586.5 $ 5,587. 2 $ 4,920.6 Total capital 12,144.2 10,488.9 9,939.1 10,307.9 8,608. 2 6,807.9 Risk-weighted assets 100,651.8 96,656.7 87,866.1 80,586.4 69,503. 3 58,112.8 Risk-based ratios Tier 1 capital 8.02 % 7.09% 7.48% 8.17% 8.0 4% 8.47% Total capital 12.18 10.85 11.31 12.79 12.3 9 11.71 Tier 1 leverage ratio 7.94 6.98 7.17 7.68 7.7 0 7.12 Total shareholders' equity to assets 7.98 7.95 8.00 8.78 8.8 3 8.92 =================================================== =================================================== ==============

At December 31, 2001 Remai ning Maturities of Selected Loans ------------- ------------------------------------------ Within 1-5 After (In millions) Total 1 Year Years 5 Years --------------------------------------------------- ------------------------------------------ Loan Maturity Commercial/1/ $ 26,019.0 $ 9,760.4 $ 11,593.9 $ 4,664.7 Real estate - construction 3,627.3 1,888.5 850.7 888.1 --------------------------------------------------- ------------------------------------------ Total $ 29,646.3 $ 11,648.9 $ 12,444.6 $ 5,552.8 =================================================== ========================================== Interest Rate Sensitivity Selected loans with Predetermined interest rates $ 1,933.6 $ 2,703.2 Floating or adjustable interest rates 10,511.0 2,849.6 --------------------------------------------------- ------------------------------------------ Total $ 12,444.6 $ 5,552.8 =================================================== ==========================================

Sale section of Management's Discussion. The restructuring in the debt portfolio consisted of retiring higher rate,

32 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

Table 16 Maturity Distribution Of Securities Available For Sale

/1/ Distribution of maturities is based on the expected average life of the asset.

Table 17 Maturity Of Consumer Time And Other Time Deposits In Amounts Of $100,000 Or More

shorter-term borrowings from the Federal Home Loan Bank and replacing the retired debt with lower rate, longer-term fixed rate advances. In addition to the debt restructuring, SunTrust added fixed rate, longer-term debt in 2001. The net effect of the debt restructuring and additional borrowings extended the weighted average life of the debt portfolio.

The Company is also subject to risk from changes in equity prices. SunTrust owns 48,266,496 shares of common stock of The Coca-Cola Company which had a carrying value of $2.3 billion at December 31, 2001. A 10% decrease in share price of The Coca-Cola Company at December 31, 2001 would result in a decrease, net of deferred taxes, of approximately $145 million in total shareholders' equity.

At December 31, 2001 --------- --------------------------------------------------- -------------------- Average 1 Year 1-5 5-10 After 10 Maturity (Dollars in millions) or Less Years Years Years Total in Years --------------------------------------------------- --------------------------------------------------- -------------------- Distribution of Maturities: Amortized Cost U.S. Treasury and other U.S. government agencies and corporations $ 267.4 $ 1,944.1 $ 14.4 $ 3.6 $ 2 ,229.5 2.4 States and political subdivisions 63.3 182.7 120.6 67.5 434.1 5.4 Asset-backed securities/1/ 214.1 2,904.2 378.1 12.0 3 ,508.4 3.1 Mortgage-backed securities/1/ 804.7 6,856.4 355.4 126.0 8 ,142.5 2.6 Corporate bonds 6.9 985.7 167.2 809.7 1 ,969.5 12.7 --------------------------------------------------- --------------------------------------------------- ------ Total debt securities $1,356.4 $12,873.1 $1,035.7 $1,018.8 $16 ,284.0 4.0 =================================================== =================================================== ==================== Fair Value U.S. Treasury and other U.S. government agencies and corporations $ 270.9 $ 2,050.9 $ 14.5 $ 3.9 $ 2 ,340.2 States and political subdivisions 63.9 188.4 122.9 68.5 443.7 Asset-backed securities/1/ 217.8 2,938.7 374.9 12.7 3 ,544.1 Mortgage-backed securities/1/ 808.2 6,993.9 365.0 124.6 8 ,291.7 Corporate bonds 7.0 1,023.0 168.4 785.1 1 ,983.5 --------------------------------------------------- --------------------------------------------------- ------ Total debt securities $1,367.8 $13,194.9 $1,045.7 $ 994.8 $16 ,603.2 =================================================== =================================================== ==================== Weighted Average Yield (FTE) U.S. Treasury and other U.S. government agencies and corporations 6.17% 6.04% 5.14% 7.64% 6.05% States and political subdivisions 7.24 7.30 7.08 7.05 7.18 Asset-backed securities/1/ 5.55 3.82 5.75 7.38 4.15 Mortgage-backed securities/1/ 4.42 6.04 6.39 5.28 5.89 Corporate bonds 5.22 6.54 6.60 5.59 6.15 --------------------------------------------------- --------------------------------------------------- ------ Total debt securities 5.08% 5.60% 6.30% 5.68% 5.61% =================================================== =================================================== ====================

At December 31, 2001 --------- --------------------------------------------------- -------------------- Consumer Brokered Foreign Oth er (In millions) Time Time Time Ti me Total --------------------------------------------------- --------------------------------------------------- -------------------- Months to maturity 3 or less $1,256.1 $ 434.7 $2,425.5 $58 .1 $4,174.4 Over 3 through 6 578.1 -- -- -- 578.1 Over 6 through 12 579.9 50.0 -- -- 629.9 Over 12 868.8 2,345.0 -- -- 3,213.8 --------------------------------------------------- --------------------------------------------------- -------------------- Total $3,282.9 $2,829.7 $2,425.5 $58 .1 $8,596.2 =================================================== =================================================== ====================

SunTrust 2001 Annual Report 33

MANAGEMENT'S DISCUSSION

Derivative Instruments

Derivative financial instruments, such as interest rate swaps, options, caps, floors, futures, forward contracts and equity collars are components of the Company's risk management profile. The Company also enters into derivative instruments as a service to banking customers. Where contracts have been created for customers, the Company generally enters into offsetting positions to eliminate the Company's exposure to market risk.

The Company monitors its sensitivity to changes in interest rates and may use derivative instruments to limit the volatility of net interest income. Derivative instruments decreased net interest income in 2001 and 2000 by $37.4 million and $0.5 million, respectively and increased net interest income by $16.3 million in 1999.

The Company adopted SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities," as amended, on January 1, 2001. In accordance with the transition provisions of SFAS No. 133, the following net-of-tax effect on earnings and equity was recorded in January 2001:

Earnings increased $1.6 million

. $16.6 million gain for the fair value adjustment on fair-value hedging instruments

. $16.6 million loss for the fair value adjustment on related hedged assets and liabilities

. $0.4 million gain for the fair value on the mortgage pipeline

. $1.2 million gain for the derecognition of a previously deferred gain

Equity (Other Comprehensive Income)

. $10.6 million loss from cash flow hedging instruments

For a detailed discussion of the impact of SFAS No. 133 on Accumulated Other Comprehensive Income see "Note 20 Comprehensive Income."

The following table summarizes the derivative instruments entered into by the Company as an end-user. See "Note 15 Derivatives and Off-Balance Sheet Financial Instruments" for a complete description of the derivative instruments and activity for 2001.

Table 18 Derivative Instruments

/1/ Average option strike price.

/2/ Carrying amount includes net interest payable.

As of December 31, 2001 ----------------- --------------------------------------------------- ------------------------ Weigh ted Estimated Fa ir Value Aver age Average --------------------- ------------------------ Notional Matur ity Received Average Carrying Unrealiz ed Unrealized (Dollars in millions) Balance In Mon ths Rate Pay Rate Amount/2/ Gai ns Losses Net --------------------------------------------------- --------------------------------------------------- ------------------------ Mortgage Lending Commitments Forward Contracts $ 5,834.0 2 -- -- $ -- $ 80 .5 $ -- $ 80.5 Interest Rate Lock Commitments 2,522.1 2 -- -- -- 0 .6 (37.2) (36.6) Option Contracts 90.0 1 5.00%/1/ -- -- -- -- -- --------------------------------------------------- --------------------------------------------------- ------------------------- Total Mortgage Related Derivatives 8,446.1 -- -- -- -- 81 .1 (37.2) 43.9 Foreign Currency Forward Contracts 1,167.2 5 -- -- -- 15 .7 (16.7) (1.0) Interest Rate Swaps/ Caps/Floors 4,892.0 43 3.02%/1/ 4.81% (6.5) 95 .8 (101.7) (12.4) Other Derivatives 1,111.1 13 -- -- -- 0 .9 (17.6) (16.7) --------------------------------------------------- --------------------------------------------------- ------------------------- Total Derivatives $15,616.4 $(6.5) $193 .5 $(173.2) $ 13.8 =================================================== =================================================== =========================

34 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

Earnings And Balance Sheet Analysis 2000 vs. 1999

Net income was $1,294.1 million in 2000 compared with $1,326.6 million in 1999, a decrease of 2.4%. Diluted earnings per common share were $4.30 in 2000 and $4.13 in 1999. Excluding after-tax merger-related charges in both periods, net income was $1,321.7 million in 2000, a 2.7% decrease from 1999, and diluted earnings per share were $4.39, a 3.8% increase over 1999. In addition to the merger costs, two other unusual items effected the 1999 results. An extraordinary gain of $202.6 million, net of tax, or $0.63 per diluted share related to the sale of the Company's $1.5 billion consumer credit card portfolio was recorded during the fourth quarter of 1999. Additionally, the Company incurred securities losses of $70.2 million, net of tax, or $0.22 per diluted share related to the securities portfolio repositioning during the fourth quarter of 1999.

Operating results for 2000 were impacted by rising interest rates, moderate fee income growth and reduced expenses including a $36.4 million decrease in the provision for loan losses. Net interest income was $3,148.4 million in 2000, down $39.6 million from 1999. The Company's net interest margin declined from 3.88% in 1999 to 3.55% in 2000, but the impact of the decline was more than offset by a 7.7% increase in average earning assets. The provision for loan losses decreased 21.4% from $170.4 million in 1999 to $134.0 million in 2000 primarily due to the Company's sale of its consumer credit card portfolio in the fourth quarter of 1999. The allowance for loan losses as a percentage of loans decreased from 1.32% to 1.21%. Net charge-offs to average loans were 0.19% in 2000 versus 0.37% in 1999. Nonperforming assets increased 55.4% from $275.7 million at December 31, 1999 to $428.3 million at December 31, 2000.

Noninterest income, excluding securities gains and losses, was $1,767.0 million, a 1.8% increase compared to 1999. The increase was driven by a $43.5 million, or 64.2%, increase in corporate and institutional investment services income, a $21.6 million, or 4.9%, increase in service charges on deposit accounts and an $18.3 million, or 16.0% increase in other income.

Noninterest expense, excluding merger-related expenses, was $2,786.1 million in 2000, a decrease of $73.6 million, or 2.6%, from 1999. Contributing to the decline was a $54.4 million, or 3.2%, decrease in personnel expense and an $18.8 million, or 12.0% decrease in other expenses. The lower personnel costs reflected a reduction of 1,954 positions across the Company during 2000. Partially offsetting these declines was a $22.0 million, or 14.6%, increase in outside processing and software expense. Loans at December 31, 2000 were $72.2 billion, an increase of 9.4%. At December 31, 2000, deposits were $69.5 billion, an increase of $9.4 billion, or 15.7%, from December 31, 1999.

Fourth Quarter Results

SunTrust's net income for the fourth quarter of 2001 totaled $356.7 million, or $1.24 per diluted share, compared with $330.4 million, or $1.11 per diluted share, for the fourth quarter of 2000. Results included the following unusual items:

. Extraordinary gain of $24.1 million, net of tax, or $0.08 per diluted share, for the early extinguishment of long-term debt in the fourth quarter of 2001. . Merger related charges of $1.5 million, net of tax, or $0.01 per diluted share for 2000.

Operating results for the fourth quarter of 2001 were also impacted by the following:

. Fully taxable net interest income increased $34.0 million, or 4.3%, and the net interest margin increased 7 basis points from the fourth quarter of 2000 to the fourth quarter of 2001. These increases are primarily due to the lower interest rate environment in 2001 and strong retail deposit growth. Average consumer and commercial deposits increased $5.0 billion, or 9.2%, compared to the fourth quarter of 2000. The increase in consumer and commercial deposits enabled the Company to be less reliant on higher priced wholesale funding.

. Consistent with the slowing economy, the Company's charge-offs and provision for loan loss levels rose during the fourth quarter as the Company experienced deterioration in some large corporate credits. Net loan charge-offs for the fourth quarter of 2001 were at $87.4 million, $34.0 million, or 63.7%, more than in the same period last year. The 2001 fourth quarter provision for loan losses of $88.1 million was $34.6 million, or 64.8%, higher than the $53.5 million in 2000.

. Noninterest income, excluding securities gains and losses, increased by $78.9 million, or 17.7%, in the 2001 fourth quarter compared to the fourth quarter of 2000. The increase was partially due to a $31.3 million, or 115.5%, increase in mortgage production related income as the low rate environment led to significant refinancing activity in 2001. Mortgage production in the fourth quarter of 2001 was $7.3 billion, a 119.3% increase from $3.3 billion in the fourth quarter of 2000. Also contributing to the growth in nonin-terest income were increases in investment banking income, loan fee income and fixed annuity income. Negatively impacting noninterest income was a $20.5 million, or 215.0%, decrease in mortgage servicing income due to accelerated amortization of mortgage servicing rights resulting from increased prepayments.

. Noninterest expense, excluding merger-related charges, increased $134.7 million, or 19.4%, from the fourth quarter of 2000. Personnel expense was up $61.0 million, or 14.9%, primarily due to increased bonus payments from the acquisition of the institutional business of The Robinson-Humphrey Company, LLC, mortgage production incentives and expenditures from the One Bank initiative. Also contributing were

increases in equipment expense and outside processing and software.

SunTrust 2001 Annual Report 35

MANAGEMENT'S DISCUSSION

Table 19 Quarterly Financial Data

/1/ Includes securities gains of $32.1, $36.2, $27.7 and $4.2 million for the fourth, third, second and first quarters of 2001, respectively, related to the Company's securities portfolio repositioning. An additional $52.9 million security gain was recorded in the first quarter of 2001 on the sale of Star Systems, Inc.

/2/ Includes enhancements to customer-based systems of $15.5, $17.5, $14.7 and $7.0 million for the fourth, third, second and first quarters of 2001, respectively, related to the One Bank initiative.

/3/ Includes merger-related expenses of $2.4, $8.3, $18.2 and $13.6 million for the fourth, third, second, and first quarters of 2000, respectively, related to the acquisition of Crestar.

(Dollars in millions except per share data) 2001 2000 --------------- --------------------------------- ---------------- ----------------------------- Summary of Operations 4 3 2 1 4 3 2 1 Interest and dividend income $ 1,391.1 $ 1,509.9 $ 1,634.7 $ 1,743.9 $ 1,798.3 $ 1 ,764.2 $ 1,672.0 $ 1,610.8 Interest expense 571.1 706.1 810.8 939.0 1,012.9 992.8 903.0 828.2 --------------------------------------------------- --------------------------------------------------- ----------------------------- Net interest income 820.0 803.8 823.9 804.9 785.4 771.4 769.0 782.6 Provision for loan losses 88.1 80.2 39.6 67.3 53.5 30.5 27.7 22.3 --------------------------------------------------- --------------------------------------------------- ----------------------------- Net interest income after provision for loan losses 731.9 723.6 784.3 737.6 731.9 740.9 741.3 760.3 Noninterest income/1/ 557.7 550.4 521.8 525.9 445.6 447.2 444.0 436.9 Noninterest expense/2,3,4/ 830.2 776.8 763.8 742.7 697.9 706.6 719.8 704.2 --------------------------------------------------- --------------------------------------------------- ----------------------------- Income before provision for income taxes and extraordinary items 459.4 497.2 542.3 520.8 479.6 481.5 465.5 493.0 Provision for income taxes 126.8 163.1 177.3 183.3 149.2 154.7 148.0 173.6 --------------------------------------------------- --------------------------------------------------- ----------------------------- Income before extraordinary items 332.6 334.1 365.0 337.5 330.4 326.8 317.5 319.4 Extraordinary gain (loss), net of taxes/5/ 24.1 -- (17.8) -- -- -- -- -- Net income $ 356.7 $ 334.1 $ 347.2 $ 337.5 $ 330.4 $ 326.8 $ 317.5 $ 319.4 --------------------------------------------------- --------------------------------------------------- ----------------------------- Net interest income (taxable-equivalent) $ 830.1 $ 813.9 $ 834.1 $ 815.2 $ 796.1 $ 781.5 $ 778.7 $ 792.1 Per Common Share Diluted Income before extraordinary items $ 1.16 $ 1.15 $ 1.25 $ 1.14 $ 1.11 $ 1.10 $ 1.05 $ 1.04 Extraordinary gain (loss), net of taxes 0.08 -- (0.06) -- -- -- -- -- --------------------------------------------------- --------------------------------------------------- ----------------------------- Net income 1.24 1.15 1.19 1.14 1.11 1.10 1.05 1.04 Basic Income before extraordinary items 1.17 1.17 1.27 1.16 1.13 1.11 1.06 1.05 Extraordinary gain (loss), net of taxes 0.08 -- (0.06) -- -- -- -- -- --------------------------------------------------- --------------------------------------------------- ----------------------------- Net income 1.25 1.17 1.21 1.16 1.13 1.11 1.06 1.05 Dividends declared 0.40 0.40 0.40 0.40 0.37 0.37 0.37 0.37 Book value 28.97 28.40 27.29 26.83 27.81 25.85 25.10 23.51 Market Price High 67.93 72.35 66.38 68.07 64.38 54.19 66.00 68.06 Low 58.10 60.10 59.25 57.29 41.63 45.63 45.06 46.81 Close 62.70 66.60 64.78 64.80 63.00 49.88 45.69 57.75 Selected Average Balances Total assets $103,882.0 $10 1,246.0 $103,194.2 $103,225.4 $101,246.0 $99 ,392.2 $97,497.3 $95,413.4 Earning assets 92,440.9 9 0,588.0 92,570.8 92,553.9 90,679.6 89 ,663.7 88,200.6 85,857.5 Loans 69,547.1 6 9,024.0 69,900.5 71,654.4 71,774.6 71 ,506.9 69,830.6 67,030.0 Consumer and commercial deposits 59,085.8 5 7,081.1 56,343.6 54,538.6 54,099.2 53 ,641.4 55,942.5 53,360.3 Brokered and foreign deposits 6,268.1 6,086.6 8,017.1 10,870.0 13,082.7 13 ,516.8 12,923.9 12,190.0 Realized shareholders' equity 6,530.6 6,305.4 6,208.8 6,264.6 6,140.5 6 ,012.8 5,948.9 6,023.3 Total shareholders' equity 8,334.5 7,996.1 7,873.4 8,089.2 7,844.4 7 ,487.4 7,195.9 7,476.2 Common shares -diluted (thousands) 289,319 289,601 291,677 295,832 296,461 2 98,558 302,141 306,739 Common shares -basic (thousands) 285,645 285,570 287,878 291,805 293,390 2 95,575 298,986 303,461 Financial Ratios (Annualized) Return on average assets 1.40% 1.34% 1.38% 1.36% 1.33% 1.34% 1.34% 1.38% Return on average realized shareholders' equity 21.67 21.02 22.43 21.85 21.40 21.62 21.46 21.33 Return on average total shareholders' equity 16.98 16.58 17.68 16.92 16.75 17.36 17.74 17.18 Net interest margin 3.56 3.56 3.61 3.57 3.49 3.47 3.55 3.71 --------------------------------------------------- --------------------------------------------------- -----------------------------

/4/ Includes Wachovia proposal expenses of $32.0 million for the third quarter of 2001.

/5/ Represents the gain on the Company's early extinguishment of long-term debt during the fourth quarter of 2001, net of $13.0 million in taxes, and the loss on the Company's early extinguishment of long-term debt during the second quarter of 2001, net of $9.6 million in taxes.

36 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

Table 20 Consolidated Daily Average Balances, Income/Expense And Average Yields Earned And Rates Paid

/1/ Interest income includes loan fees of $40.2 million and $36.8 million in the quarters ended December 31, 2001 and 2000, 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 $10.1 million and $10.7 million in the quarters ended December 31, 2001 and 2000, respectively.

/3/ Derivative instruments used to help balance the Company's interest-sensitivity position decreased net interest income by $16.8 million in the fourth quarter of 2001 and increased net interest income by $0.1 million in the fourth quarter of 2000. Without these derivative instruments, the net interest margin would have been 3.49% in 2000.

Quarters Ended ----- --------------------------------------------------- ---------------------------- December 31, 2001 Dece mber 31, 2000 ----- -------------------------------- ----------- ---------------------------- (Dollars in millions; A verage Income/ Yields/ Average Income/ Yields/ yields on taxable-equivalent basis) B alances Expense Rates Balances Expense Rates --------------------------------------------------- --------------------------------------------------- ---------------------------- Assets Loans/1/ Taxable $ 68,348.8 $ 1,057.0 6.14% $ 70,647.7 $ 1,461.7 8.23% Tax-exempt/2/ 1,198.3 18.6 6.16 1,126.9 22.5 7.93 --------------------------------------------------- --------------------------------------------------- ---------------------------- Total loans 69,547.1 1,075.6 6.14 71,774.6 1,484.2 8.23 Securities available for sale Taxable 15,798.9 236.8 5.95 14,715.5 251.2 6.79 Tax-exempt/2/ 441.7 7.8 6.99 444.0 8.4 7.53 --------------------------------------------------- --------------------------------------------------- ---------------------------- Total securities available for sale 16,240.6 244.6 5.98 15,159.5 259.6 6.81 Funds sold 1,193.8 7.3 2.41 1,324.4 22.3 6.70 Loans held for sale 3,777.0 65.5 6.88 1,690.7 33.3 7.83 Other short-term investments/2/ 1,682.4 8.2 1.94 730.4 9.6 5.24 --------------------------------------------------- --------------------------------------------------- ---------------------------- Total earning assets 92,440.9 1,401.2 6.01 90,679.6 1,809.0 7.94 Allowance for loan losses (867.0) (858.6) Cash and due from banks 3,521.6 3,464.7 Premises and equipment 1,586.4 1,618.2 Other assets 4,430.0 3,661.1 Unrealized gains on securities available for sale 2,770.1 2,681.0 --------------------------------------------------- --------------------------------------------------- ---------------------------- Total assets $1 03,882.0 $101,246.0 =================================================== =================================================== ============================ Liabilities and Shareholders' Equity Interest-bearing deposits NOW/Money market accounts $ 26,925.1 $ 121.8 1.80% $ 20,023.3 $ 169.3 3.36% Savings 5,989.3 28.4 1.88 6,306.9 60.8 3.84 Consumer time 8,556.8 97.6 4.53 9,964.6 141.5 5.65 Other time 3,457.0 38.5 4.42 4,334.7 66.4 6.09 --------------------------------------------------- --------------------------------------------------- ---------------------------- Total interest-bearing consumer and commercial deposits 44,928.2 286.3 2.53 40,629.5 438.0 4.29 Brokered deposits 2,910.8 21.3 2.90 4,059.7 68.6 6.72 Foreign deposits 3,357.3 18.3 2.16 9,023.0 149.6 6.60 --------------------------------------------------- --------------------------------------------------- ---------------------------- Total interest bearing deposits 51,196.3 325.9 2.53 53,712.2 656.2 4.86 Funds purchased 10,339.0 47.1 1.81 11,225.2 177.5 6.29 Other short-term borrowings 1,582.2 8.8 2.19 1,885.9 31.2 6.57 Long-term debt 12,870.5 189.3 5.84 8,725.0 148.0 6.75 --------------------------------------------------- --------------------------------------------------- ---------------------------- Total interest-bearing liabilities 75,988.0 571.1 2.98 75,548.3 1,012.9 5.33 Noninterest-bearing deposits 14,157.6 13,469.7 Other liabilities 5,401.9 4,383.6 Realized shareholders' equity 6,530.6 6,140.5 Accumulated other comprehensive income 1,803.9 1,703.9 --------------------------------------------------- --------------------------------------------------- ---------------------------- Total liabilities and shareholders' equity $1 03,882.0 $101,246.0 =================================================== =================================================== ============================ Interest Rate Spread 3.03% 2.61% --------------------------------------------------- --------------------------------------------------- ---------------------------- Net Interest Income $ 830.1 $ 796.1 --------------------------------------------------- --------------------------------------------------- ---------------------------- Net Interest Margin/3/ 3.56% 3.49% =================================================== =================================================== ============================

SunTrust 2001 Annual Report 37

MANAGEMENT'S DISCUSSION

Table 21 Quarterly Noninterest Income And Expense

/1/ Includes $52.9 million gain on the sale of Star Systems, Inc. in the first quarter of 2001.

/2/ Includes securities gains of $32.1, $36.2, $27.7 and $4.2 million in the fourth, third, second and first quarters of 2001, respectively, related to the securities portfolio repositioning.

/3/ Includes expenses of $32.0 million in the third quarter of 2001 for the proposal to acquire the former Wachovia Corporation.

Quarters -------------- --------------------------------------------------- --- 2001 2000 -------------- ------------------- ------------------------------ --- (In millions) 4 3 2 1 4 3 2 1 --------------------------------------------------- --------------------------------------------------- --- Noninterest Income Trust and investment management income $117.2 $119.8 $124.8 $124.3 $121.4 $120.2 $123.7 $12 8.6 Service charges on deposit accounts 135.5 129.1 125.6 120.0 118.9 116.9 112.6 11 1.3 Other charges and fees 65.9 61.3 57.5 55.6 55.1 56.3 50.4 4 9.1 Mortgage production related income 58.4 43.1 53.0 31.7 27.1 23.8 20.5 1 8.7 Mortgage servicing related income (10.9) 0.8 (2.7) 6.7 9.5 7.9 7.7 7.7 Investment banking income 41.6 33.4 19.4 14.1 20.3 36.0 35.3 1 9.7 Trading account profits (losses) and commissions 11.0 30.0 24.9 29.7 16.3 4.9 (1.4) 1 2.0 Securities gains (losses)/1,2/ 32.1 36.2 27.7 57.1 (1.2) (0.6) 1.5 6.9 Credit card and other fees 29.4 28.7 30.0 25.6 24.9 24.2 24.4 2 2.1 Retail investment services 28.9 26.8 27.3 24.8 22.8 24.0 30.5 3 0.8 Other income 48.6 41.2 34.3 36.3 30.5 33.6 38.8 3 0.0 --------------------------------------------------- --------------------------------------------------- --- Total noninterest income $557.7 $550.4 $521.8 $525.9 $445.6 $447.2 $444.0 $43 6.9 =================================================== =================================================== === Noninterest Expense Salaries $301.3 $293.3 $285.8 $286.0 $282.0 $278.5 $292.1 $28 7.3 Other compensation 125.8 108.5 97.3 90.3 89.3 82.9 73.1 8 3.8 Employee benefits 42.4 45.5 48.4 56.7 37.2 39.5 41.4 5 6.9 --------------------------------------------------- --------------------------------------------------- --- Total personnel expense 469.5 447.3 431.5 433.0 408.5 400.9 406.6 42 8.0 Net occupancy expense 53.6 55.1 51.8 50.0 50.7 51.9 49.9 5 0.1 Outside processing and software 57.0 51.6 45.3 45.1 43.9 42.4 44.4 4 1.6 Equipment expense 51.0 49.9 44.3 44.5 44.2 47.2 50.7 5 1.6 Marketing and customer development 32.7 25.3 23.0 23.0 30.7 25.3 27.9 2 2.3 Consulting and legal 32.4 25.0 20.6 9.7 13.2 16.4 18.2 1 1.8 Credit and collection services 22.4 20.6 18.0 13.6 12.4 14.2 16.0 1 4.3 Other staff expense 17.4 15.3 15.0 10.8 11.0 15.5 13.8 1 1.2 Communications 16.8 15.0 14.1 13.3 14.2 15.0 15.4 1 5.2 Postage and delivery 16.7 15.3 15.8 16.2 14.9 15.4 16.3 1 6.7 Operating supplies 13.3 12.3 11.4 11.3 11.2 11.3 12.6 1 2.2 Amortization of intangible assets 8.6 8.4 21.0 8.3 8.8 8.9 8.8 9.0 FDIC premiums 2.7 2.6 2.8 2.8 2.8 2.8 2.8 2.8 Other real estate (income) expense (0.4) 0.1 (3.1) (0.7) (2.3) (0.4) (0.3) ( 0.8) Merger-related expenses -- -- -- -- 2.4 8.3 18.2 1 3.6 Other expense/3/ 36.5 33.0 52.3 61.8 31.3 31.5 18.5 4.7 --------------------------------------------------- --------------------------------------------------- --- Total noninterest expense $830.2 $776.8 $763.8 $742.7 $697.9 $706.6 $719.8 $70 4.3 =================================================== =================================================== ===

38 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

Table 22 Summary Of Loan Loss Experience, Nonperforming Assets And Accruing Loans Past Due 90 Days Or More

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"). As of December 31, 1999, the Company had 29 bank subsidiaries which were subject to supervision and regulation by applicable state and federal banking agencies, including the Federal Reserve, the Office of the Comptroller of the Currency (the "Comptroller") and the Federal Deposit Insurance Corporation (the "FDIC"). Effective January 1, 2000, 27 of these bank subsidiaries merged into SunTrust Bank, Atlanta, which changed its name to SunTrust Bank. SunTrust Bank (the "Bank") is a Georgia state bank which now has branches in Georgia, Florida, Tennessee, Alabama, Virginia, Maryland, 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.

Quarters ----------- --------------------------------------------------- ----------------------------- 2001 2000 ----------- --------------------------------- --------------- ----------------------------- (Dollars in millions) 4 3 2 1 4 3 2 1 --------------------------------------------------- --------------------------------------------------- ----------------------------- Allowance for Loan Losses Balance - beginning of quarter $ 866.4 $ 866.1 $ 872.0 $ 874.5 $ 874.5 $ 874.5 $ 874.0 $ 871.3 Allowance from acquisitions and other activity - net -- -- (6.7) (3.5) (0.1) -- -- -- Provision for loan losses 88.1 80.2 39.6 67.3 53.5 30.5 27.7 22.3 Charge-offs (101.5) (92.0) (53.2) (79.4) (67.1) (47.1) (40.2) (35.3) Recoveries 14.1 12.1 14.4 13.1 13.7 16.6 13.0 15.7 --------------------------------------------------- --------------------------------------------------- ----------------------------- Balance - end of quarter $ 867.1 $ 866.4 $ 866.1 $ 872.0 $ 874.5 $ 874.5 $ 874.5 $ 874.0 =================================================== =================================================== ============================= Ratios Allowance to quarter-end loans 1.26% 1.24% 1.26% 1.24% 1.21% 1.21% 1.22% 1.27% Allowance to nonperforming loans 155.4 176.7 210.6 250.1 215.8 229.6 309.6 306.8 Net loan charge-offs to average loans (annualized) 0.50 0.46 0.22 0.38 0.30 0.17 0.16 0.12 Provision to average loans (annualized) 0.50 0.46 0.23 0.38 0.30 0.17 0.16 0.13 Nonperforming Assets Nonperforming loans $ 558.1 $ 490.2 $ 411.1 $ 348.7 $ 405.3 $ 380.9 $ 282.5 $ 284.9 Other real estate owned 20.7 18.9 20.3 20.6 23.0 23.6 23.2 27.0 --------------------------------------------------- --------------------------------------------------- ----------------------------- Total nonperforming assets $ 578.8 $ 509.1 $ 431.4 $ 369.3 $ 428.3 $ 404.5 $ 305.7 $ 311.9 =================================================== =================================================== ============================= Ratios Nonperforming loans to total loans 0.81% 0.70% 0.60% 0.50% 0.56% 0.53% 0.40% 0.42% Nonperforming assets to total loans plus other real estate owned 0.84 0.73 0.63 0.52 0.59 0.56 0.43 0.45 Accruing Loans Past Due 90 Days or More $ 185.5 $ 177.0 $ 211.8 $ 223.7 $ 181.2 $ 150.8 $ 189.4 $ 160.1 =================================================== =================================================== =============================

SunTrust 2001 Annual Report 39

MANAGEMENT'S DISCUSSION

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 undercapi-talized" 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 Comptroller.

On November 12, 1999, financial modernization legislation known as the Gramm-Leach-Bliley Act (the "Act") was signed into law. The Act creates a new type of financial services company called a financial holding company. 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. Securities firms and insurance companies may also choose to become financial holding companies and acquire banks, subject 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. Forward-looking statements include statements

40 SunTrust 2001 Annual Report

MANAGEMENT'S DISCUSSION

preceded by, followed by or that include the words "believes," "expects," "anticipates," "plans," "estimates" or similar expressions. 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: (i) competitive pressures among depository and other financial institutions may increase significantly; (ii) changes in the interest rate environment may reduce margins; (iii) general economic or business conditions in the geographic regions and industries in which SunTrust operates, including the impact of the events of September 11, 2001 and the energy crisis, 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; (iv) legislative or regulatory changes, including changes in accounting standards, may adversely affect the business in which SunTrust is engaged; (v) changes may occur in the securities markets; and (vi) 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: (i) the timely development of competitive new products and services by the Company and the acceptance of such products and services by customers; (ii) changes in consumer spending and saving habits; (iii) the effects of competitors' pricing policies; (iv) 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 (v) 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

As SunTrust continues to consolidate functions and create uniform products, it has maintained its community focus. "Build your community and you build your bank" has always been and remains the operating philosophy of SunTrust.

The SunTrust market area is extremely diverse, ranging from major metropolitan areas to small rural communities, and SunTrust recognizes that each community has unique needs and resources. SunTrust's community reinvestment program emphasizes local management's accountability for achieving lending, investment and service goals, with support, coordination and strategic direction from the corporate level. In each market, the local CEO is charged to oversee SunTrust's community activities and ensure that the Company is doing its part. A senior level CRA Committee, consisting of line-of-business heads and state-level executives and led by Senior Management, provides policy direction and oversight to the Company's community reinvestment efforts. This approach ensures that even as the One Bank operating model is implemented, SunTrust's traditional commitment to its local communities remains unchanged.

SunTrust provides financial support to community building efforts through its extensive corporate contributions, investments and lending activities. In 2001, SunTrust approved 17,742 loans totaling approximately $1.8 billion to provide housing in low- to moderate-income areas. Additionally, 43,463 loans totaling $3.6 billion have been approved for families classified as low-to moderate-income to purchase or rehabilitate their homes. These figures represent continued growth in the

SunTrust 2001 Annual Report 41

MANAGEMENT'S DISCUSSION

volume of SunTrust's housing-related lending to low- and moderate-income communities. Businesses in these communities received 40,807 loans from SunTrust totaling almost $5 billion. Of these loans 29,760, or 73%, had an original principal balance of $100,000 or less. Also in 2001, SunTrust made 23,805 loans totaling over $1.8 billion to small businesses with annual revenues of $1 million or less. In rural markets, small farms also received support in the form of 1,398 loans totaling almost $100 million. Seventy-eight percent of these loans were for $100,000 or less. In addition, SunTrust made $667 million in community development loans during 2001. Through membership in the Federal Home Loan Bank (FHLB), SunTrust has provided funding for affordable housing projects under the FHLB's Affordable Housing Program and Community Reinvestment Program.

SunTrust's two community development corporations and its Regency Housing Group subsidiary have become significant developers of affordable housing for low- and moderate-income families. Since Regency became part of SunTrust, it has developed more than 4,500 units of affordable housing in communities from Virginia to Florida. Through its investments in low income housing tax credits, SunTrust has now provided equity capital for more than 18,000 affordable housing units across the southeast.

SunTrust supports its communities through a variety of investments and contributions such as low-income housing tax credits, funding for local and regional groups engaging in providing affordable housing or promoting small business development and targeted mortgage-backed securities. By participating in the public finance efforts of state, county and municipal governments, SunTrust has financed activities such as school construction, public housing and environmental cleanup and protection programs. The Company's combined investment in community development projects and organizations now totals more than $500 million.

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, 2001, SunTrust Bank owned 684 of its 1,128 full-service banking offices, and leased the remaining banking offices. (See Note 8 to the Consolidated Financial Statements.)

42 SunTrust 2001 Annual Report

MANAGEMENT'S STATEMENT OF RESPONSIBILITY FOR FINANC IAL 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, it maintains 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 public accountants, Arthur Andersen 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 the second paragraph of 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, 2001, 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, 2001, 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

William P. O'Halloran 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 44 Consolidated Balance Sheets 45 Consolidated Statements Of Shareholders' Eq uity 46 Consolidated Statements Of Cash Flow 47 Notes To Consolidated Financial Statements 48

SunTrust 2001 Annual Report 43

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To SunTrust Banks, Inc.

We have audited the accompanying consolidated balance sheets of SunTrust Banks, Inc. (a Georgia corporation) and subsidiaries as of December 31, 2001 and 2000 and the related consolidated statements of income, comprehensive income, shareholders' equity and cash flow for each of the three years in the period ended December 31, 2001. 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 in accordance with auditing standards generally accepted in the United States. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of SunTrust Banks, Inc. and subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flow for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.

Atlanta, Georgia February 12, 2002

Arthur Andersen LLP

44 SunTrust 2001 Annual Report

CONSOLIDATED STATEMENTS OF INCOME

Year Ended December 31 (Dollars in thousands except per share data) 2001 2000 1999 --------------------------------------------------- --------------------------------------------------- ---- Interest Income Interest and fees on loans $ 4,908,775 $ 5,605,320 $ 4,744 ,609 Interest and fees on loans held for sale 211,471 110,563 172 ,153 Interest and dividends on securities available for sale Taxable interest 965,694 916,573 859 ,002 Tax-exempt interest 27,669 25,794 30 ,682 Dividends/1/ 68,207 64,885 66 ,906 Interest on funds sold 51,164 92,782 73 ,382 Interest on deposits in other banks 5,743 865 2 ,665 Other interest 40,851 28,637 10 ,809 --------------------------------------------------- --------------------------------------------------- ---- Total interest income 6,279,574 6,845,419 5,960 ,208 --------------------------------------------------- --------------------------------------------------- ---- Interest Expense Interest on deposits 1,812,385 2,452,919 1,626 ,132 Interest on funds purchased 412,218 651,235 749 ,561 Interest on other short-term borrowings 63,359 97,903 79 ,521 Interest on long-term debt 739,012 534,924 359 ,538 --------------------------------------------------- --------------------------------------------------- ---- Total interest expense 3,026,974 3,736,981 2,814 ,752 --------------------------------------------------- --------------------------------------------------- ---- Net Interest Income 3,252,600 3,108,438 3,145 ,456 Provision for loan losses - Note 7 275,165 133,974 170 ,437 --------------------------------------------------- --------------------------------------------------- ---- Net interest income after provision for loan losses 2,977,435 2,974,464 2,975 ,019 --------------------------------------------------- --------------------------------------------------- ---- Noninterest Income Trust and investment management income 486,116 493,929 495 ,613 Other charges and fees 570,168 525,920 471 ,486 Service charges on deposit accounts 510,249 459,653 438 ,107 Mortgage production related income 186,114 90,061 153 ,055 Mortgage servicing related income (6,073) 32,832 27 ,056 Other noninterest income - Note 21 256,169 164,614 149 ,675 Securities gains (losses) - Note 5 153,080 6,616 (109 ,076) --------------------------------------------------- --------------------------------------------------- ---- Total noninterest income 2,155,823 1,773,625 1,625 ,916 --------------------------------------------------- --------------------------------------------------- ---- Noninterest Expense Salaries and other compensation - Note 14 1,588,431 1,468,967 1,522 ,570 Employee benefits - Note 14 192,969 175,035 175 ,801 Equipment expense 189,763 193,709 198 ,464 Net occupancy expense 210,436 202,608 197 ,439 Marketing and customer development 103,998 106,215 105 ,429 Merger-related expenses -- 42,444 45 ,556 Other noninterest expense - Note 22 827,941 639,555 660 ,019 --------------------------------------------------- --------------------------------------------------- ---- Total noninterest expense 3,113,538 2,828,533 2,905 ,278 --------------------------------------------------- --------------------------------------------------- ---- Income before provision for income taxes and extrao rdinary gain 2,019,720 1,919,556 1,695 ,657 Provision for income taxes - Note 13 650,501 625,456 571 ,705 --------------------------------------------------- --------------------------------------------------- ---- Income before extraordinary gain 1,369,219 1,294,100 1,123 ,952 Extraordinary gain, net of taxes - Notes 3 and 13 6,318 -- 202 ,648 --------------------------------------------------- --------------------------------------------------- ---- Net Income $ 1,375,537 $ 1,294,100 $ 1,326 ,600 =================================================== =================================================== ==== Net income per average common share - Note 12: Diluted Income before extraordinary gain $ 4.70 $ 4.30 $ 3.50 Extraordinary gain 0.02 -- 0.63 --------------------------------------------------- --------------------------------------------------- ---- Net income $ 4.72 $ 4.30 $ 4.13 =================================================== =================================================== ==== Basic Income before extraordinary gain $ 4.76 $ 4.35 $ 3.54 Extraordinary gain 0.02 -- 0.64 --------------------------------------------------- --------------------------------------------------- ---- Net income $ 4.78 $ 4.35 $ 4.18 =================================================== =================================================== ==== Dividends declared per common share $ 1.60 $ 1.48 $ 1.38 Average common shares - diluted 291,584 300,956 321 ,174 Average common shares - basic 287,702 297,834 317 ,079 /1/Includes dividends on 48,266,496 shares of commo n stock of The Coca-Cola Company $ 34,752 $ 32,821 $ 30 ,891

See notes to consolidated financial statements.

=================================================== =================================================== ====

SunTrust 2001 Annual Report 45

CONSOLIDATED BALANCE SHEETS

See notes to consolidated financial statements.

At December 3 1 (Dollars in thousands) 2001 2000 --------------------------------------------------- --------------------------------------------------- ------ Assets Cash and due from banks $ 4,229,074 $ 4,1 10,489 Interest-bearing deposits in other banks 185,861 13,835 Funds sold - Note 4 1,495,109 1,2 67,028 Trading account 1,343,602 1,1 05,848 Securities available for sale/1/ - Note 5 19,656,391 18,8 10,311 Loans held for sale 4,319,594 1,7 59,281 Loans - Notes 6, 15 and 16 68,959,222 72,2 39,820 Allowance for loan losses - Note 7 (867,059) (8 74,547) --------------------------------------------------- --------------------------------------------------- ------ Net loans 68,092,163 71,3 65,273 Premises and equipment - Note 8 1,584,869 1,6 29,071 Intangible assets 811,276 8 10,860 Customers' acceptance liability 55,171 1 84,157 Other assets - Note 14 2,967,534 2,6 04,221 --------------------------------------------------- --------------------------------------------------- ------ Total assets $104,740,644 $103,6 60,374 =================================================== =================================================== ====== Liabilities and Shareholders' Equity - Notes 12 and 14 Noninterest-bearing consumer and commercial deposit s $ 16,369,823 $ 15,0 64,017 Interest-bearing consumer and commercial deposits 45,911,419 41,5 72,310 --------------------------------------------------- --------------------------------------------------- ------ Total consumer and commercial deposits 62,281,242 56,6 36,327 Brokered deposits 2,829,687 3,1 79,100 Foreign deposits 2,425,493 9,7 17,910 --------------------------------------------------- --------------------------------------------------- ------ Total deposits 67,536,422 69,5 33,337 Funds purchased 10,104,287 10,8 95,944 Other short-term borrowings - Note 9 1,651,639 1,7 61,985 Long-term debt - Note 11 11,010,580 7,8 95,430 Guaranteed preferred beneficial interests in debent ures - Note 11 1,650,000 1,0 50,000 Acceptances outstanding 55,171 1 84,157 Other liabilities - Note 13 4,372,977 4,1 00,313 --------------------------------------------------- --------------------------------------------------- ------ Total liabilities 96,381,076 95,4 21,166 --------------------------------------------------- --------------------------------------------------- ------ Commitments and contingencies - Notes 8, 11, 15 and 18 Preferred stock, no par value; 50,000,000 shares au thorized; none issued -- -- Common stock, $1.00 par value 294,163 3 23,163 Additional paid in capital 1,259,609 1,2 74,416 Retained earnings 5,479,951 6,3 12,044 Treasury stock and other (329,408) (1,6 13,189) --------------------------------------------------- --------------------------------------------------- ------ Realized shareholders' equity 6,704,315 6,2 96,434 Accumulated other comprehensive income - Notes 5 an d 20 1,655,253 1,9 42,774 --------------------------------------------------- --------------------------------------------------- ------ Total shareholders' equity 8,359,568 8,2 39,208 --------------------------------------------------- --------------------------------------------------- ------ Total liabilities and shareholders' equity $104,740,644 $103,6 60,374 =================================================== =================================================== ====== Common shares outstanding 288,601,607 296,2 66,329 Common shares authorized 750,000,000 750,0 00,000 Treasury shares of common stock 5,561,150 26,8 96,428 /1/ Includes net unrealized gains on securities ava ilable for sale $ 2,632,266 $ 3,0 48,313 =================================================== =================================================== ======

46 SunTrust 2001 Annual Report

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

/1/ Balance at December 31, 2001 includes $291,891 for treasury stock and $37,517 for compensation element of restricted stock.

See notes to consolidated financial statements.

Accumulated Additional Treasury Other Com- Comm on Paid in Retained Stock and prehensive (In thousands) Sto ck Capital Earnings Other/1/ Income Total --------------------------------------------------- --------------------------------------------------- ----------------------------- Balance, January 1, 1999 $ 322,4 85 $ 1,293,011 $ 4,575,382 $ (100,441) $ 2,088,207 $ 8,178,644 Net income -- -- 1,326,600 -- -- 1,326,600 Other comprehensive income: Change in unrealized gains (losses) on securities, net of taxes -- -- -- -- (525,385) (525,385) ------------- Total comprehensive income 801,215 Cash dividends declared, $1.38 per share -- -- (440,631) -- -- (440,631) Exercise of stock options 5 75 (8,661) -- 23,116 -- 15,030 Acquisition of stock -- -- -- (954,642) -- (954,642) Restricted stock activity 11 735 -- (746) -- -- Amortization of compensation element of restricted stock -- -- -- 15,557 -- 15,557 Issuance of stock for employee benefit plans 92 8,302 -- 3,295 -- 11,689 --------------------------------------------------- --------------------------------------------------- ----------------------------- Balance, December 31, 1999 323,1 63 1,293,387 5,461,351 (1,013,861) 1,562,822 7,626,862 Net income -- -- 1,294,100 -- -- 1,294,100 Other comprehensive income: Change in unrealized gains (losses) on securities, net of taxes -- -- -- -- 379,952 379,952 ------------- Total comprehensive income 1,674,052 Cash dividends declared, $1.48 per share -- -- (443,407) -- -- (443,407) Exercise of stock options -- (11,767) -- 29,672 -- 17,905 Acquisition of stock -- -- -- (668,391) -- (668,391) Restricted stock activity -- (795) -- 795 -- -- Amortization of compensation element of restricted stock -- -- -- 9,408 -- 9,408 Issuance of stock for employee benefit plans -- (6,409) -- 29,188 -- 22,779 --------------------------------------------------- --------------------------------------------------- ----------------------------- Balance, December 31, 2000 323,1 63 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, $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 (29,0 00) -- (1,744,101) 1,773,101 -- -- Restricted stock activity -- 103 -- (103) -- -- Amortization of compensation element of restricted stock -- -- -- 6,110 -- 6,110 Issuance of stock for employee benefit plans -- 861 -- 21,374 -- 22,235 --------------------------------------------------- --------------------------------------------------- ----------------------------- Balance, December 31, 2001 $ 294,1 63 $ 1,259,609 $ 5,479,951 $ (329,408) $ 1,655,253 $ 8,359,568 =================================================== =================================================== =============================

SunTrust 2001 Annual Report 47

CONSOLIDATED STATEMENTS OF CASH FLOW

See notes to consolidated financial statements.

Year Ended December 31 (Dollars in thousands) 2001 2000 1999 --------------------------------------------------- --------------------------------------------------- ----- Cash Flows from Operating Activities Net income $ 1,375,537 $ 1,294,100 $ 1,32 6,600 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Extraordinary gain, net of taxes (6,318) -- (20 2,648) Depreciation, amortization and accretion 357,371 299,957 28 4,993 Provisions for loan losses and foreclosed prope rty 275,541 134,353 17 3,789 Deferred income tax provision 42,035 190,103 18 3,842 Amortization of compensation element of restric ted stock 6,110 9,408 1 5,557 Securities (gains) losses (153,080) (6,616) 10 9,076 Net gain on sale of assets (8,467) (9,777) (2 8,887) Originated loans held for sale (21,455,760) (9,947,904) (9,40 7,592) Sales of loans held for sale 18,895,447 9,720,410 11,42 4,360 Net increase in accrued interest receivable, prepaid expenses and other assets (978,362) (1,525,061) (10 8,769) Net increase (decrease) in accrued interest pay able, accrued expenses and other liabilities 359,155 323,302 (16 4,030) --------------------------------------------------- --------------------------------------------------- ----- Net cash (used in) provided by operating acti vities (1,290,791) 482,275 3,60 6,291 --------------------------------------------------- --------------------------------------------------- ----- Cash Flows from Investing Activities Proceeds from maturities of securities available fo r sale 3,114,827 2,195,575 3,66 8,622 Proceeds from sales of securities available for sal e 5,419,095 1,365,509 5,85 7,310 Purchases of securities available for sale (7,754,258) (2,620,549) (11,24 9,089) Net decrease (increase) in loans 418,389 (7,567,454) (5,02 4,748) Proceeds from sale of loans 762,405 286,527 56 9,821 Capital expenditures (89,224) (145,821) (25 7,179) Proceeds from the sale of other assets 35,889 40,234 5 9,577 Loan recoveries 53,576 58,910 6 5,650 --------------------------------------------------- --------------------------------------------------- ----- Net cash provided by (used in) investing activiti es 1,960,699 (6,387,069) (6,31 0,036) --------------------------------------------------- --------------------------------------------------- ----- Cash Flows from Financing Activities Net increase in consumer and commercial deposits 5,644,915 983,457 48 2,854 Net (decrease) increase in foreign and brokered dep osits (7,641,830) 8,449,351 58 4,392 Net (decrease) increase in funds purchased and other short-term borrowings (902,003) (5,512,998) 2,23 8,108 Proceeds from the issuance of long-term debt 7,114,068 4,191,114 1,09 5,872 Repayment of long-term debt (3,392,600) (1,263,030) (88 6,395) Proceeds from the exercise of stock options 19,013 17,905 1 5,030 Proceeds from stock issuance 22,235 22,779 1 1,689 Proceeds used in the acquisition of stock (551,485) (668,391) (95 4,642) Dividends paid (463,529) (443,407) (44 0,631) --------------------------------------------------- --------------------------------------------------- ----- Net cash (used in) provided by financing activiti es (151,216) 5,776,780 2,14 6,277 --------------------------------------------------- --------------------------------------------------- ----- Net increase (decrease) in cash and cash equivalent s 518,692 (128,014) (55 7,468) Cash and cash equivalents at beginning of year 5,391,352 5,519,366 6,07 6,834 --------------------------------------------------- --------------------------------------------------- ----- Cash and cash equivalents at end of period $ 5,910,044 $ 5,391,352 $ 5,51 9,366 =================================================== =================================================== ===== Supplemental Disclosure Interest paid $ 3,118,383 $ 3,618,302 $ 2,81 2,819 Income taxes paid 446,814 540,212 53 0,786 Non-cash impact of securitizing loans 1,903,518 925,380 -- Non-cash impact of STAR Systems Inc. sale 52,919 -- -- =================================================== =================================================== =====

48 SunTrust 2001 Annual Report

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 generally accepted accounting principles 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 with the 2001 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 and added to or deducted from realized shareholders' equity to determine total shareholders' equity.

Trading account securities are carried at market value with the gains and losses, determined using the specific identification method, recognized currently in the 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 noninter-est 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 mortgage loans will be sold, or if the loans are not committed for sale, the current market price.

The Company classifies only residential mortgage 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 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 real estate loans are typically placed on nonaccrual when payments have been in default for 90 days or more.

SunTrust measures the impairment of a loan in accordance with Statement of Financial Accounting Standards ("SFAS") No.'s 114 and 118 by using either the present value of expected future cash flows discounted at the loan's effective interest rate, the estimated fair value of the collateral or the market value of the loan itself. If the value indicated by the most appropriate of these valuation methods is less than the recorded investments in the loans (principal, accrued interest, net deferred loan fees or costs, and unamortized premium or discount), SunTrust includes this deficiency in evaluating the overall adequacy of the allowance for loan losses.

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 by 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 inherent losses in the portfolio based on management's evaluations of the size

SunTrust 2001 Annual Report 49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and current risk characteristics of the loan portfolio. Such evaluations consider the level of problem loans and prior loan loss experience as well as the impact of current economic conditions and other risk factors. Specific allowances for loan losses are established for impaired loans based on a comparison of the recorded carrying value of the loan to either the present value of the loan's expected cash flow, the loan's estimated market price or the estimated fair value of the underlying collateral. Prior loss experience is based on a statistical loss migration analysis that examines loss experience and the related internal risk ratings of loans charged-off. The general economic conditions and other risk elements are based on local and national economic factors that are impacting borrowers in SunTrust markets and that could affect the collectibility of loans.

Long-lived Assets 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 betterments are capitalized.

Intangible assets consist primarily of goodwill and mortgage servicing rights. Goodwill associated with purchased companies was amortized on the straight-line method over various periods ranging from 25 to 40 years through December 31, 2001. Beginning January 1, 2002, goodwill is no longer amortized under the rules of SFAS No. 142.

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 mortgage servicing rights are capitalized at cost. 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. Mortgage servicing rights are amortized over the estimated period of the related net servicing revenues.

Long-lived assets are evaluated regularly for other-than-temporary impairment under SFAS No. 121, which has been superceded by SFAS No. 144. If circumstances suggest that their value may be impaired and the write-down would be material, an assessment of recoverability is performed prior to any write-down of the asset.

Impairment on intangibles is evaluated at each balance sheet date or whenever events or changes in circumstances indicate that the carrying amount should be assessed. Impairment for mortgage servicing rights 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 (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. SunTrust uses derivative instruments to hedge interest rate exposure by modifying the characteristics of the related balance sheet instruments. Derivatives that

50 SunTrust 2001 Annual Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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. The specific criteria required for derivatives used as hedges are described below.

The Company adopted SFAS No. 133 on January 1, 2001. Accordingly, all derivatives were recognized on the balance sheet at their fair value on this date. In accordance with the transition provisions of SFAS No. 133, the Company recorded certain transition adjustments. The impact of such transition adjustments to net income was a gain of $1.6 million and a net transition loss of $10.6 million included in Other Comprehensive Income on January 1, 2001. Under the provisions of SFAS No. 133, 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 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 the 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 either current-period earnings, if the hedged item is an over hedge, or in other comprehensive income. Changes in the fair value of derivative trading instruments are reported in current-period earnings.

The Company formally documents all relationships between hedging instruments and hedged items, including the risk management objective for the hedge and an assessment that the derivatives are expected to be highly effective in offsetting changes in the fair values or cash flows of hedged items. This process includes linking all derivatives that are designated as fair value, cash flow or foreign currency hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions.

Recent Accounting Developments In July of 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141, "Business Combinations," and No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 establishes accounting and reporting standards for business combinations. This Statement eliminates the use of the pooling-of-interest method of accounting for business combinations, requiring future business combinations to be accounted for using the purchase method of accounting. Additionally, SFAS No. 141 enhances the disclosures related to business combinations and requires that all intangible assets acquired in a business combination be reported separately from goodwill. These intangible assets must then be assigned to a specifically identified reporting unit and assigned a useful life. The provisions of this Statement apply to all business combinations initiated after June 30, 2001. This Statement also applies to all business combinations accounted for using the purchase method for which the date of acquisition is July 1, 2001 or later. The adoption of this Statement did not have a material impact on the Company's financial position or results of operations.

SFAS No. 142 establishes accounting and reporting standards for goodwill and other intangible assets. With the adoption of this Statement, goodwill is no longer subject to amortization over its estimated useful life. Year-to-date December 31, 2001 earnings included net-of-tax amortization of goodwill totaling $36.1 million. Goodwill will be subject to, at least, an annual assessment for impairment by applying a two step fair-value based test. Additionally, SFAS No. 142 enhances the disclosures related to goodwill and intangible assets. SunTrust adopted SFAS No. 142, in its entirety, effective January 1, 2002. Goodwill currently carried on the balance sheet was subject to an initial assessment for impairment. The Company completed its initial assessment review and determined that there was no impairment of goodwill as of December 31, 2001. With the exception of no longer amortizing goodwill, the adoption of this statement did not have a material impact on the Company's financial position or results of operations.

In August of 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." This Statement amends SFAS No. 19, "Financial Accounting and Reporting by Oil and Gas Producing Companies." SFAS No. 143 applies to all entities and addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. Because all asset retirement obligations that fall within the scope of this Statement and their related asset retirement cost will be accounted for consistently, financial statements of different entities will be more comparable. This Statement is effective for financial statements issued for fiscal years beginning after June 15, 2002; however, earlier application is encouraged. The Company will adopt SFAS No. 143 on January 1, 2003. The adoption of this statement is not expected to have a material impact on the Company's financial position or results of operations.

SunTrust 2001 Annual Report 51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," was issued during the fourth quarter of 2001. SFAS No. 144 supercedes both SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," which previously governed impairment of long-lived assets, and APB Opinion No. 30, "Reporting the Results of Operations -- Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions," which addressed the disposal of a business segment. This Statement improves financial reporting by requiring one accounting model be used for long-lived assets to be disposed of by sale and by broadening the presentation of discontinued operations to include more disposal transactions. The Company adopted SFAS No. 144 effective January 1, 2002 and it did not have a material impact on the Company's financial position or results of operations.

Note 2 Acquisitions On September 25, 2001, SunTrust entered into a purchase agreement with Huntington Bancshares Incorporated to acquire the Florida banking franchise of Huntington National Bank. The Company will acquire Huntington's retail, small business, commercial, treasury management and investment-related businesses and plans to integrate the franchise into its existing Florida banking organization. It is anticipated that the Company will acquire approximately $4.6 billion in assets and liabilities related to this transaction. In addition, the agreement calls for a payment equal to 15% of deposits acquired (as defined in the agreement) for the franchise value acquired. This transaction is expected to close in the first quarter of 2002, at which time the final purchase price will be determined and will be accounted for in accordance with SFAS No. 141.

On May 14, 2001, SunTrust announced a proposal to acquire the former Wachovia Corporation and subsequently engaged in a related proxy solicitation effort. On August 3, 2001, Wachovia shareholders voted to approve a merger with First Union Corporation. During the third quarter of 2001, SunTrust recorded $20.2 million of net-of-tax expenses, or $.07 per diluted share, related to the proposed Wachovia merger.

During the three-year period ended December 31, 2001, the Company has consummated the following acquisitions that were accounted for as purchases and individually did not have a material effect on the consolidated financial statements.

Note 3 Extraordinary Gain During 2001, the Company recorded an extraordinary gain of $9.7 million, before taxes of $3.4 million, for the early extinguishment of $2.3 billion in long-term debt. During 1999, the Company recorded an extraordinary gain of $327.2 million, before taxes of $124.6 million, for the sale of the Company's $1.5 billion consumer credit card portfolio to MBNA America Bank, N.A.

Note 4 Funds Sold Funds sold at December 31 were as follows:

Date Entity Co nsideration Assets Acquired --------------------------------------------------- ------------------------------------------- 7/01 The institutional business of The $1 0.4 million in cash $25.4 million Robinson-Humphrey Co., LLC (Atlanta, Georgia) 3/01 AMA Holdings, Inc. $2 2.0 million in cash $2.5 million (Jupiter, Florida)

(Dollars in thousands) 2001 2000 --------------------------------------------------- -------------------------------------------- Federal funds $ 324,100 $ 230,175 Repurchase agreements 1,171,009 1,036,853 --------------------------------------------------- -------------------------------------------- Total funds sold $1,495,109 $1,267,028 =================================================== ============================================

52 SunTrust 2001 Annual Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Securities purchased under agreement 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 $1,194.2 million at December 31, 2001, of which $715.2 million was repledged.

Note 5 Securities Available For Sale Securities available for sale at December 31 were as follows:

The amortized cost and fair value of investments in debt securities at December 31, 2001 by contractual maturities are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Proceeds from the sales of investments in debt securities were $5.4, $1.4 and $5.9 billion in 2001, 2000 and 1999, respectively. Gross realized gains were $166.8, $63.0 and $10.9 million and gross realized losses on such sales were $13.7, $56.4 and $117.2 million in 2001, 2000 and 1999, respectively.

Securities available for sale that were pledged to secure public deposits, trust and other funds had fair values of $12.9, $12.2 and $11.7 billion at December 31, 2001, 2000 and 1999, respectively.

2001 --------- -------------------------------------------- Amortiz ed Fair Unrealized Unrealized (In thousands) Co st Value Gains Losses --------------------------------------------------- -------------------------------------------- U.S. Treasury and other U.S. government agencies and corporations $ 2,229,5 47 $ 2,340,245 $ 111,242 $ 544 States and political subdivisions 434,0 53 443,690 11,074 1,437 Asset-backed securities 3,508,4 16 3,544,101 45,455 9,770 Mortgage-backed securities 8,142,4 67 8,291,643 163,220 14,044 Corporate bonds 1,969,5 44 1,983,489 62,612 48,667 Common stock of The Coca-Cola Company 1 10 2,275,765 2,275,655 -- Other securities 739,9 88 777,458 37,470 -- --------------------------------------------------- -------------------------------------------- Total securities available for sale $17,024,1 25 $19,656,391 $ 2,706,728 $ 74,462 =================================================== ============================================ 2000 --------- -------------------------------------------- Amortiz ed Fair Unrealized Unrealized (In thousands) Co st Value Gains Losses --------------------------------------------------- -------------------------------------------- U.S. Treasury and other U.S. government agencies and corporations $ 2,763,4 79 $ 2,845,283 $ 82,327 $ 523 States and political subdivisions 449,2 68 455,640 8,025 1,653 Asset-backed securities 1,865,0 80 1,887,726 24,297 1,651 Mortgage-backed securities 7,651,4 05 7,679,466 62,459 34,398 Corporate bonds 2,362,2 38 2,300,800 36,943 98,381 Common stock of The Coca-Cola Company 1 10 2,941,240 2,941,130 -- Other securities 670,4 18 700,156 29,786 48 --------------------------------------------------- -------------------------------------------- Total securities available for sale $15,761,9 98 $18,810,311 $ 3,184,967 $ 136,654 =================================================== ============================================

Amortized Fair (In thousands) Cost Value --------------------------------------------------- ----------------------------- Due in one year or less $ 339,804 $ 344,063 Due in one year through five years 3,917,581 4,095,250 Due after five years through ten years 1,806,240 1,840,737 After ten years 10,220,402 10,323,118 --------------------------------------------------- ----------------------------- Total $16,284,027 $16,603,168 =================================================== =============================

SunTrust 2001 Annual Report 53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6 Loans The composition of the Company's loan portfolio at December 31 is shown in the following table:

Total nonaccrual and restructured loans at December 31, 2001 and 2000 were $558.1 and $405.3 million, respectively. The gross amounts of interest income that would have been recorded in 2001, 2000 and 1999 on nonaccrual and restructured loans at December 31 of each year, if all such loans had been accruing interest at their contractual rates, were $45.6, $35.9 and $25.9 million, while interest income actually recognized totaled $15.8, $17.8 and $16.5 million, respectively.

In the normal course of business, the Company's banking subsidiaries have 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 amounts were $874.6 million at December 31, 2001 and $1,147.6 million at December 31, 2000. During 2001, $2,409.9 million of such loans were made and repayments totaled $2,682.9 million. None of these loans has been restructured in accordance with SFAS No. 15 "Accounting by Debtors and Creditors for Troubled Debt Restructurings," nor were any related party loans charged off during 2001 and 2000.

At December 31, 2001 and 2000, impaired loans amounted to $444.4 million and $304.8 million, respectively. Included in the allowance for loan losses was $147.8 million related to $444.4 million of impaired loans at December 31, 2001, and $63.0 million related to $304.8 million of impaired loans at December 31, 2000. For the years ended December 31, 2001 and 2000, the average recorded investment in impaired loans was $342.6 million and $206.9 million, respectively; and $12.2 million and $13.3 million, respectively, of interest income was recognized on loans while they were impaired.

Note 7 Allowance For Loan Losses Activity in the allowance for loan losses is summarized in the table below:

It is the opinion of management that the allowance was adequate at December 31, 2001, based on conditions reasonably known to management; however, the allowance may be increased or decreased in the future based on loan balances outstanding, changes in internally generated credit quality ratings of the loan portfolio, trends in credit losses, changes in general economic conditions or other risk factors.

(In thousands) 2001 2000 --------------------------------------------------- ---------------------------- Commercial $28,945,880 $30,781,090 Real estate Construction 3,627,312 2,966,087 Residential mortgages 17,297,055 19,953,027 Other 8,152,029 8,121,441 Business credit card 91,996 76,747 Consumer loans 10,844,950 10,341,428 --------------------------------------------------- ---------------------------- Total loans $68,959,222 $72,239,820 =================================================== ============================

(In thousands) 2001 2000 1999 --------------------------------------------------- ---------------------------- Balance at beginning of year $ 874,547 $ 871,323 $ 944,557 Allowance from acquisitions and other activity - net (10,210 ) -- (13,331) Provision 275,165 133,974 170,437 Loan charge-offs (326,019 ) (189,706) (295,990) Loan recoveries 53,576 58,956 65,650 --------------------------------------------------- ---------------------------- Balance at end of year $ 867,059 $ 874,547 $ 871,323 =================================================== ============================

54 SunTrust 2001 Annual Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 Premises And Equipment

Premises and equipment at December 31 were as follows:

The carrying amounts of premises and equipment subject to mortgage indebtedness (included in long-term debt) were not significant at December 31, 2001 and 2000.

Various Company facilities and equipment 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, 2001 were as follows:

Net premises and equipment include $13.5 and $14.5 million at December 31, 2001 and 2000, respectively, related to capital leases.

Aggregate rent expense for all operating leases (including contingent rental expense) amounted to $117.0, $120.4 and $118.9 million for 2001, 2000 and 1999, respectively.

Note 9 Other Short-Term Borrowings

Other short-term borrowings at December 31 includes:

At December 31, 2001, $290.0 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

(In thousands) Useful Life 2001 2000 --------------------------------------------------- --------------------------------------------------- ------------- Land $ 348,220 $ 344,116 Buildings and improvements 5 - 40 years 1,343,242 1,243,640 Leasehold improvements 5 - 20 years 256,136 235,921 Furniture and equipment 3 - 20 years 1,143,017 1,089,107 Construction in progress 88,972 161,186 --------------------------------------------------- --------------------------------------------------- ------------- 3,179,587 3,073,970 Less accumulated depreciation and amortization 1,594,718 1,444,899 --------------------------------------------------- --------------------------------------------------- ------------- Total premises and equipment $ 1,584,869 $ 1,629,071 =================================================== =================================================== =============

Operating Capital (In thousands) Leases Leases --------------------------------------------------- --------------------------------------------------- ------------- 2002 $ 90,700 $ 3,927 2003 79,403 3,873 2004 70,136 3,769 2005 52,946 2,993 2006 43,452 2,414 Thereafter 127,359 25,651 --------------------------------------------------- --------------------------------------------------- ------------- Total minimum lease payments 463,996 42,627 --------------------------------------------------- --------------------------------------------------- ------------- Amounts representing interest 23,186 --------------------------------------------------- --------------------------------------------------- ------------- Present value of net minimum lease payments $ 19,441 =================================================== =================================================== =============

2001 2000 ------------------------- ------------------ ------------- (In thousands) Balance Rates Balance Rates --------------------------------------------------- --------------------------------------------------- ------------- Commercial paper $ -- -- $ 545,800 6.51% - 6.57% Federal funds purchased maturing in over one day -- -- 226,000 6.20% - 6.62% Master notes 340,929 1.20% 357,258 5.70% U.S. Treasury demand notes 1,249,996 1.40% 593,425 5.16% Other 60,714 various 39,502 various --------------------------------------------------- --------------------------------------------------- ------------- Total other short-term borrowings $ 1,651,639 $ 1,761,985 =================================================== =================================================== =============

borrowings for the years ended December 31, 2001, 2000 and 1999, were $1.6, $1.6 and $1.7 billion, respectively, while the maximum amount outstanding at any month-end during the years ended December 31, 2001, 2000 and 1999, were $2.9, $2.0 and $2.3 billion, respectively.

SunTrust 2001 Annual Report 55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10 Loan Servicing

The following is an analysis of capitalized mortgage servicing rights included in intangible assets in the Consolidated Balance Sheets:

No valuation allowances were required at December 31, 2001, 2000 and 1999 for the Company's mortgage servicing rights.

During 2001, the Company transferred a total of $1,903 million of single family mortgages to securities available for sale in two securitization transactions. These securities, less securities sold, are maintained in the Company's available for sale securities portfolio.

The first securitization of $468 million was recorded in February 2001. The securitization was guaranteed by Fannie Mae with the Company maintaining one-percent recourse on the losses incurred in the securitized loan portfolio. A second securitization of $1,435 million was recorded in March 2001. This was a private securitiza-tion with SunTrust maintaining full recourse on the losses incurred in the securitized loan portfolio.

A reserve of $3.6 million has been established on the balance sheet in other liabilities representing Management's estimate of recourse exposure on securi-tized loans. The reserves were established based on Management's evaluation of the size and risk characteristics of the securitized loan portfolio. The reserve is periodically evaluated by management for adequacy, with consideration given to the balance of problem loans, prior loan loss experience, current economic conditions, value of collateral and other risk factors.

SunTrust retained the servicing rights for all of the securitized single-family mortgages. The carrying value of the retained servicing rights is maintained on the balance sheet in intangible assets. Key economic assumptions used to measure total mortgage servicing rights as of December 31, 2001 were as follows:

At December 31, 2001, 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)

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

(In thousands) 2001 2000 1999 --------------------------------------------------- --------------------------------------------------- Balance at beginning of year $ 314,996 $ 273,526 $ 235,691 Rights acquired 36,308 33,826 50,534 Rights originated 122,970 71,785 43,620 Rights sold -- (15,677) -- Change in provision for valuation allowance -- -- 6,384 Amortization (123,074) (48,464) (62,703) --------------------------------------------------- --------------------------------------------------- Balance at end of year $ 351,200 $ 314,996 $ 273,526 =================================================== ===================================================

2001 --------------------------------------------------- ---------------------------- Payment rate 12.7% annual Weighted average life 7.25 years Discount rate 10.3% =================================================== ============================

--------------------------------------------------- ----------------------------- Fair value of retained servicing rights $ 426.9 Weighted-average life (in years) 7.25 --------------------------------------------------- ----------------------------- Prepayment speed assumption (annual rate) 12.7% Decline in fair value of 10% adverse change $ 21.5 Decline in fair value of 20% adverse change 41.0 Residual cash flows discount rate (annual rate) 10.3% Decline in fair value of 10% adverse change $ 14.8 Decline in fair value of 20% adverse change 28.5 =================================================== =============================

result in lower prepayments and increased credit losses), which might magnify or counteract the sensitivities.

56 SunTrust 2001 Annual Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Sensitivity analyses were not performed on the retained securities or the retained reserve for probable recourse exposure. The securities, less securities sold, resulting from the securitizations had a market and book value of $1.7 billion as of December 31, 2001. If quoted market prices were to increase 10 percent, then there would be an exact corresponding effect on the value of those securities. The total reserve representing Management's estimate of recourse exposure on securi-tized loans had a balance of $3.6 million as of December 31, 2001.

Quantitative information about delinquencies, net credit losses, and components of securitized residential mortgage loans at December 31 is as follows:

Note 11 Long-Term Debt And Guaranteed Preferred Beneficial Interests In Debentures

Long-term debt and guaranteed preferred beneficial interests in debentures at December 31 consisted of the following:

(In thousands) 2001 2000 --------------------------------------------------- --------------------------------------------------- ------------- Securitized mortgage loans held for investment $ 1,667,525 $ 910,264 Securitized mortgage loans past due 60 days 3,630 44 Securitized Mortgage loan net charge-offs -- -- =================================================== =================================================== =============

(In thousands) 2001 2000 --------------------------------------------------- --------------------------------------------------- ------------- Parent Company Only Floating rate notes due 2002 $ 250,000 $ 250,000 7.375% notes due 2002 200,000 200,000 6.125% notes due 2004 200,000 200,000 7.375% notes due 2006 200,000 200,000 6.25% notes due 2008 297,250 297,250 7.75% notes due 2010 300,000 300,000 Floating rate notes due 2019 50,563 50,563 6.0% notes due 2026 200,000 200,000 SunTrust Capital I, floating rate due 2027 350,000 350,000 SunTrust Capital II, 7.9% notes due 2027 250,000 250,000 SunTrust Capital III, floating rate due 2028 250,000 250,000 6.0% notes due 2028 219,925 219,925 SunTrust Capital IV, 7.125% 2031 300,000 -- SunTrust Capital V, 7.05% 2031 300,000 -- Capital lease obligations 2,770 3,497 Payment agreement due 2001 -- 7,843 Other (4,680) -- --------------------------------------------------- --------------------------------------------------- ------------- Total Parent Company (excluding intercompany of $154,235 in 2001 and $163,146 in 2000) 3,365,828 2,779,078 --------------------------------------------------- --------------------------------------------------- ------------- Subsidiaries 8.25% notes due 2002 125,000 125,000 8.75% notes due 2004 149,888 149,849 7.25% notes due 2006 249,401 250,000 6.9% notes due 2007 99,603 100,000 6.375% notes due 2011 1,001,205 -- 6.5% notes due 2018 141,667 141,942 Crestar Capital Trust I, 8.16% notes due 2026 200,000 200,000 Capital lease obligations 16,671 17,970 FHLB advances (2001: 0.50 - 8.79%, 2000: 0.50 - 8.7 9%) 7,211,556 5,177,661 Other 99,761 3,930 --------------------------------------------------- --------------------------------------------------- ------------- Total subsidiaries 9,294,752 6,166,352 --------------------------------------------------- --------------------------------------------------- ------------- Total long-term debt and guaranteed preferred ben eficial interest in debentures $12,660,580 $8,945,430 =================================================== =================================================== =============

SunTrust 2001 Annual Report 57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Principal amounts due for the next five years on long-term debt at December 31, 2001 are: 2002 -$1,660.7 million; 2003 - $198.4 million; 2004 -$375.3 million; 2005 - $3.2 million and 2006 -$451.8 million.

Parent Company Only other long-term debt includes an adjustment of $4.7 million related to hedging activities. This amount includes $24.2 million in unrealized gains on fair value hedges and $19.5 million as an adjustment to the carrying value of long-term debt.

Subsidiaries other long-term debt includes an adjustment of $3.4 million related to hedging activities. This amount includes $24.1 million in unrealized gains on fair valued hedges and $27.5 million as an adjustment to the carrying value of long-term debt.

Subsidiaries other long-term debt also includes a derivative market value adjustment for the unrealized loss related to cash flow hedges of $100.2 million. This adjustment includes $14.5 million recorded as interest payable and $85.7 million which is recorded in other comprehensive income (see Note 20).

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, 2001, the Company was in compliance with all covenants and provisions of long-term debt agreements.

In 2001 and 2000, $1,650.0 and $1,050.0 million of long-term debt qualifies as Tier 1 capital, respectively. As currently defined by Federal bank regulators, $2,242.0 million in 2001 and $1,426.9 million in 2000 qualifies as Tier 2 capital.

SunTrust has established special purpose trusts, which have collectively issued $1,650.0 million in trust preferred securities. The proceeds from these issuances, together with the proceeds of the related issuances of common securities of the trusts, were invested in junior subordinated deferrable interest debentures of the Parent Company and Bank Parent Company. The sole assets of these special purpose trusts are the debentures. These debentures rank junior to the senior and subordinated debt of the issuing company. The Parent Company and Bank Parent Company own all of the common securities of the special purpose trusts. The preferred securities issued by the trusts rank senior to the trusts' common securities. The obligations of the Parent Company and Bank Parent Company under the debentures, the indentures, the relevant trust agreements and the guarantees, in the aggregate, constitute a full and unconditional guarantee by the Parent Company and Bank Parent Company of the obligations of the trusts under the trust preferred securities and rank subordinate and junior in right of payment to all liabilities of the Parent Company and Bank Parent Company. The trust preferred securities may be called prior to maturity at the option of the Parent Company or Bank Parent Company.

Note 12 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 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. SunTrust is committed to remaining well capitalized. Management believes, as of December 31, 2001, 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 subsidiaries as of December 31 is as follows:

2001 2000 ---------------- ----- -------------------- (Dollars in millions) Amount R atio Amount Ratio --------------------------------------------------- ---------------------------- SunTrust Banks, Inc. Tier 1 capital $ 7,994 8.02% $ 6,851 7.09% Total capital 12,144 1 2.18 10,489 10.85 Tier 1 leverage 7.94 6.98 SunTrust Bank Tier 1 capital 7,654 7.83 7,546 8.08 Total capital 10,752 1 1.00 9,969 10.68 Tier 1 leverage 7.81 7.85 =================================================== ============================

SunTrust 2001 Annual Report 58

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 $672.9 million at December 31, 2001.

In the calculation of basic and diluted EPS, net income is identical. Shares of 6.6 million and 3.8 million for the years ended December 31, 2001 and 2000, 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, 2001, of the difference between average basic common shares outstanding and average diluted common shares outstanding.

Note 13 Income Taxes The provision for income taxes for the three years ended December 31, 2001 consisted of the following:

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

(In thousands) 2001 2000 1999 --------------------------------------------------- --------------------------------------------------- ------ Average common shares - basic 287,702 297,834 3 17,079 Effect of dilutive securities Stock options 1,971 1,312 2,396 Performance restricted stock 1,911 1,810 1,699 --------------------------------------------------- --------------------------------------------------- ------ Average common shares - diluted 291,584 300,956 3 21,174 =================================================== =================================================== ======

(In thousands) 2001 2000 1999 --------------------------------------------------- --------------------------------------------------- ------ Provision for federal income taxes Current $ 579,773 $ 400,679 $ 3 99,097 Deferred 41,741 182,312 1 75,742 --------------------------------------------------- --------------------------------------------------- ------ Provision for federal income taxes 621,514 582,991 5 74,839 Provision (benefit) for state income taxes Current 28,693 34,674 ( 11,234) Deferred 294 7,791 8,100 --------------------------------------------------- --------------------------------------------------- ------ Provision (benefit) for state income taxes 28,987 42,465 (3,134) --------------------------------------------------- --------------------------------------------------- ------ Provision for income taxes 650,501 625,456 5 71,705 --------------------------------------------------- --------------------------------------------------- ------ Current provision for federal income taxes on extra ordinary gain 3,112 -- 1 09,118 Current provision for state income taxes on extraor dinary gain 290 -- 15,463 --------------------------------------------------- --------------------------------------------------- ------ Provision for income taxes on extraordinary gain 3,402 -- 1 24,581 --------------------------------------------------- --------------------------------------------------- ------ Total provision for income taxes $ 653,903 $ 625,456 $ 6 96,286 =================================================== =================================================== ======

SunTrust 2001 Annual Report 59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company's provisions for income taxes for the three years ended December 31, 2001, which exclude the effects of the extraordinary gain, 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:

Temporary differences create deferred tax assets and liabilities that are detailed below as of December 31, 2001 and 2000:

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.

(In thousands) 2001 2000 1999 --------------------------------------------------- -------------------------------------------------- Tax provision at federal statutory rate $ 706,902 $ 671,845 $ 593,480 Increase (decrease) resulting from Tax-exempt interest (29,848) (30,087) (29,198) Disallowed interest deduction 5,165 7,657 8,599 Income tax credits (net) (17,320) (18,126) (4,341) State income taxes, net of federal benefit 13,943 27,602 (2,037) Dividend exclusion (8,942) (9,282) (9,085) Goodwill 8,981 8,814 8,778 Disposition of minority interest -- (44,613) -- Other (28,380) 11,646 5,509 --------------------------------------------------- -------------------------------------------------- Provision for income taxes $ 650,501 $ 625,456 $ 571,705 =================================================== ==================================================

Deferred Tax Assets (Liabilities) (In thousands) 2001 2000 --------------------------------------------------- -------------------------------------------------- Allowance for loan losses $ 325,065 $ 305,032 Intangible assets 5,182 4,974 Employee benefits (96,761) (83,130) Fixed assets (7,540) (17,876) Securities 8,050 (15,033) Loans (21,282) (16,963) Mortgage (94,068) (104,622) Leasing (435,289) (320,982) Other real estate 6,783 7,174 Unrealized gains on securities available for sale (891,264) (1,105,551) Other 143,458 38,398 --------------------------------------------------- -------------------------------------------------- Total deferred tax liability $(1,057,666) $(1,308,579) =================================================== ==================================================

60 Suntrust 2001 Annual Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14 Employee Benefit Plans SunTrust sponsors various incentive plans for eligible employees. The nonqualified Performance Bonus Plan has the broadest participation among employees. This plan rewards employees based on the employees' compensation and the Company's earnings performance. The Company provides a match of 50% of eligible employees' pretax contributions up to 6% for all employees who have one year of service and participate in the 401(k) plan. The Management Incentive Plan for key executives provides for annual cash awards, if any, based on four measures: net income performance; revenue growth; leadership goals; and achievement of corporate, business unit and individual performance objectives. The Performance Unit Plan for key executives provides awards, if any, based on multi-year earnings performance in relation to earnings goals established by the Compensation Committee (Committee) of the Company's Board of Directors.

The Company also sponsors a 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 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. The Company does not record expense as a result of the grant or exercise of any of the stock options.

With respect to Performance Stock, shares must be granted, awarded and vested before participants take full title. After Performance Stock is granted by the Committee, specified portions are awarded based on increases in the average market value of SunTrust common stock from the initial price specified by the Committee. 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.

The compensation element for Performance Stock (which is deferred and shown as a reduction of shareholder's 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. Approximately 40% of Performance Stock fully vested on February 10, 2000 and is no longer subject to the forfeiture condition set forth in the agreements. This early vested Performance Stock was converted into an equal number of "Phantom Stock Units" as of that date. 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 will not carry voting privileges.

Compensation expense related to the incentive plans for the three years ended December 31 were as follows:

(In thousands) 2001 2000 1999 --------------------------------------------------- -------------------------------------- 401(k) Plan, Performance Bonus Plan, and Thrift Pla n $ 52,184 $ 47,184 $ 52,553 Management Incentive Plan and Performance Unit Plan 28,618 13,047 31,580 Performance Stock 6,110 9,408 15,557 =================================================== ======================================

SunTrust 2001 Annual Report 61

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents information on Stock Options and Performance Stock:

The Company does not recognize compensation cost in accounting for its stock option plans. If the Company had elected to recognize compensation cost for options granted in 2001, 2000 and 1999 based on the fair value of the options granted at the grant date, net income and earnings per share would have been reduced to the pro forma amounts indicated below:

Stock Options Performa nce Stock --------------- ------------------------------------- ----------- -------------- Weighted (Dollars in thousands Price Average Deferred except per share data) Shares Range Exercise Price Shares Compensation --------------------------------------------------- --------------------------------------------------- -------------- Balance, January 1, 1999 6,624,070 $ 3.46 - 76.50 $ 39.90 3,269,200 $ 71,761 Granted 2,654,680 62.87 - 73.06 71.71 13,980 958 Exercised/Vested (1,025,930) 3.46 - 70.81 20.21 (10,000) -- Cancelled, Expired/Forfeited (148,032) 33.19 - 71.94 64.27 (14,400) (713) Amortization of compensation for Performance Stock (15,557) --------------------------------------------------- --------------------------------------------------- -------------- Balance, December 31, 1999 8,104,788 3.46 - 76.50 52.54 3,258,780 56,449 Granted 2,849,425 48.56 - 56.13 51.12 18,220 1,023 Exercised/Vested (507,866) 3.46 - 58.11 24.20 (67,326) -- Cancelled/Expired/Forfeited (444,694) 46.63 - 73.06 69.34 (81,200) (3,667) Amortization of compensation for Performance Stock (9,408) --------------------------------------------------- --------------------------------------------------- -------------- Balance, December 31, 2000 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 Exercised/Vested (627,840) 9.23 - 70.81 28.96 (105,399) -- Cancelled/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 =================================================== =================================================== ==============

(In millions except per share amounts) 2001 2000 1999 --------------------------------------------------- --------------------------------------------------- -------------- Net income - as reported $ 1,375.5 $ 1,294.1 $ 1,326.6 Net income - pro forma 1,361.0 1,281.2 1,312.5 Diluted earnings per share - as reported 4.72 4.30 4.13 Diluted earnings per share - pro forma 4.67 4.26 4.10 Basic earnings per share - as reported 4.78 4.35 4.18 Basic earnings per share - pro forma 4.73 4.30 4.15 =================================================== =================================================== ==============

62 SunTrust 2001 Annual Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The weighted average fair values of options granted during 2001, 2000 and 1999 were $7.96, $7.51, and $13.16 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:

At December 31, 2001, options for 4,625,806 shares were exercisable with a weighted average exercise price of $48.80. The weighted average remaining contractual life of all options at December 31, 2001 was 7.6 years.

SunTrust maintains a noncontributory qualified retirement plan covering all employees meeting certain service requirements. The plan provides benefits based on salary and years of service. The Company funds the Plans with at least the minimum amount required by federal regulations. The SunTrust benefits plan committee establishes investment policies and strategies and regularly monitors the performance of the funds and portfolio managers. As of December 31, 2001, the Plan's assets included 58,789 shares of SunTrust Banks, Inc. common stock. SunTrust also maintains nonqualified supplemental retirement plans that cover key executives of the Company.

Although not under contractual obligation, SunTrust provides certain healthcare 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 Company. Retirees are required to share the cost of retiree health coverage, while the cost of the retiree life insurance benefits currently are paid by the Company. Certain retiree health benefits are funded in an Employee Benefit Trust. In addition, certain retiree life insurance benefits are funded in a Voluntary Employees' Beneficiary Association (VEBA). As of December 31, 2001, the assets of both Trusts consist of common trust funds, mutual funds, municipal and corporate bonds and a cash equivalent cash reserve fund.

Components of the net periodic benefit cost for the various plans are as follows:

Assumed healthcare cost trend rates have a significant effect on the amounts reported for the healthcare plans. A one-percentage point change in assumed healthcare cost trend rates would have the following effects:

2001 2000 1999 --------------------------------------------------- ---------------------------- Expected dividend yield 2.48% 2.90% 1.92% Expected stock price volatility 10.05% 10.52% 10.76% Risk-free interest rate 4.42% 5.76% 5.77% Expected life of options 5 years 5 years 5 years =================================================== =============================

Supplemental Other Retirement Benefit s Retirement Plans Post retirement Benefits -------------------------- ------- ---------------------------- ------ ----------------------- (In thousands) 2001 2000 1999 2001 2000 1999 200 1 2000 1999 --------------------------------------------------- --------------------------------------------------- ----------------------- Service cost $ 39,506 $ 36,243 $ 41,997 $ 773 $ 755 $ 710 $ 3,90 5 $ 3,795 $ 3,205 Interest cost 62,976 56,156 51,954 4,678 4,396 3,779 11,64 3 11,146 10,905 Expected return on assets (103,451) (96,845) (91,466) -- -- -- (9,12 4) (7,089) (7,541) Prior service cost amortization (1,422) (4,429) (2,562) 2,446 1,462 1,431 - - 173 163 Actuarial (gain)/loss -- -- (307) 2,581 2,522 3,020 2,44 3 982 875 Transition amount amortization (510) (4,917) (4,940) 275 417 417 3,80 9 3,963 4,603 --------------------------------------------------- --------------------------------------------------- ----------------------- Net periodic benefit (income) cost $ (2,901) $(13,792) $ (5,324) $10,753 $ 9,552 $9,357 $12,67 6 $12,970 $12,210 =================================================== =================================================== =======================

(In thousands) 1% Increas e 1% Decrease --------------------------------------------------- --------------------------------------------------- ----------------------- Effect on total of service and interest cost compon ents $ 62 3 $ (544) Effect on postretirement benefit obligation 9,13 8 (7,959) =================================================== =================================================== =======================

SunTrust 2001 Annual Report 63

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The funded status of the plans at December 31 were as follows:

The supplemental retirement plans cover key executives of the Company, for which the cost is accrued but may be unfunded. At December 31, 2001 and 2000, the projected benefit obligation for these plans was $64.7 million and $60.4 million. Included in other liabilities at December 31, 2001 and 2000 are $53.0 million and $52.9 million representing accumulated benefit obligations.

Note 15 Derivatives And Off-Balance Sheet Financial Instruments

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 sheet, 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.

Other Retireme nt Benefits Postretirement Benefits ----------- --------------- --------------------------- (Dollars in thousands) 2001 2000 2001 2000 --------------------------------------------------- -------------------------------------------- Change in Benefit Obligation Benefit obligation $ 780,035 $ 702,188 $151,608 $142,142 Service cost 39,506 36,243 3,905 3,795 Interest cost 62,976 56,156 11,643 11,146 Plan participants' contributions -- -- 6,993 2,899 Plan amendments 5,210 (1,074) -- (5,966) Actuarial loss 75,886 31,682 11,542 18,546 Benefits paid (49,523) (45,160) (21,636) (20,954) --------------------------------------------------- -------------------------------------------- Benefit obligation $ 914,090 $ 780,035 $164,055 $151,608 --------------------------------------------------- -------------------------------------------- Change in Plan Assets Fair value of plan assets $1,072,576 $1,010,390 $135,399 $113,124 Actual return on plan assets 17,404 66,171 (1,711) 4,779 Company contribution 56,421 41,175 3,749 35,551 Plan participants' contributions -- -- 6,993 2,899 Benefits paid (49,523) (45,160) (21,636) (20,954) --------------------------------------------------- -------------------------------------------- Fair value of plan assets $1,096,878 $1,072,576 $122,794 $135,399 --------------------------------------------------- -------------------------------------------- Funded status of plan $ 182,788 $ 292,541 $(41,261) $(16,209) Unrecognized actuarial loss 224,034 62,100 56,839 38,499 Unrecognized prior service cost 1,765 (4,867) -- -- Unrecognized net transition obligation -- (510) 41,898 45,706 --------------------------------------------------- -------------------------------------------- Net amount recognized $ 408,587 $ 349,264 $ 57,476 $ 67,996 =================================================== ============================================ Weighted-average Assumptions: Discount rate 7.25% 7.50% 7.25% 7.50% Expected return on plan assets 9.50% 9.50% 7.00% 6.50% Rate of compensation increase 4.00% 4.00% 4.00% 4.00% =================================================== ============================================

64 SunTrust 2001 Annual Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Derivatives

The Company enters into various derivative contracts to manage interest rate risk. The objective is to manage interest rate sensitivity by modifying the characteristics of certain assets and liabilities to reduce the adverse effect of changes in interest rates. The Company also enters into certain derivative contracts in a dealer capacity as a service for customers. Where contracts have been created for customers, the Company generally enters into offsetting positions to eliminate the risk exposure.

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.

Foreign exchange derivative contracts are accounted for as trading activities entered into for risk management purposes. They reduce exposure, often on a macro basis, to changes in the market value of SunTrust positions. The Company also provides foreign exchange derivatives as a service to customers.

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.

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

At De cember 31, 2001 At December 31, 2000 ------------ ----------------------- ---------------------- ------------ Contrac t or Contract or Notional Amount Notional Amount ------------ -------- -------------------- For Credit Risk For Credit Risk (In millions) End User Customers Amount End User Customers Amount --------------------------------------------------- --------------------------------------------------- ------------- Derivatives Contracts Interest rate contracts Swaps $ 4,392 $ 31,339 $ 271 $ 2,880 $ 20,071 $ 176 Futures and forwards 6,339 7,020 3,362 4,485 -- Caps/Floors 500 6,889 750 6,079 -- --------------------------------------------------- --------------------------------------------------- ------------- Total interest rate contracts 11,231 45,248 271 6,992 30,635 176 Foreign exchange rate contracts 1,167 1,588 41 420 632 36 Interest rate lock commitments 2,522 -- -- -- -- -- Commodity and other contracts 696 24 38 40 32 33 --------------------------------------------------- --------------------------------------------------- ------------- Total derivatives contracts $ 15,616 $ 46,860 $ 350 $ 7,452 $ 31,299 $ 245 --------------------------------------------------- --------------------------------------------------- ------------- Credit-related Arrangements Commitments to extend credit $ 45,312 $ 45,312 $ 46,151 $ 46,151 Standby letters of credit and similar arrangements 7,798 7,798 6,727 6,727 --------------------------------------------------- --------------------------------------------------- ------------- Total credit-related arrangements $ 53,110 $ 53,110 $ 52,878 $ 52,878 --------------------------------------------------- --------------------------------------------------- ------------- Total Credit Risk Amount $ 53,460 $ 53,123 =================================================== =================================================== =============

Sun Trust 2001 Annual Report 65

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 counter-party 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.

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 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 commercial loan and fixed rate funding exposure to a floating rate. For the year ended December 31, 2001, the Company recognized additional income in the net interest margin of $13.4 million related to cash payments from net settlements and income accrued for interest rate swaps accounted for as fair value hedges. The initial assessment of hedge effectiveness was based on the expected change in fair value of the hedged asset or liability caused by changes in the benchmark interest rate. Each of these hedges qualified for the short cut method of accounting as described in SFAS No. 133. Therefore, no ineffectiveness was recorded in earnings and periodic effectiveness tests are not required.

The Company maintains a risk management program to protect and manage interest rate risk and pricing risk associated with its mortgage loan inventory and pipeline. 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. Complete documentation is maintained regarding the identification of each loan in each pool of hedged loans. 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 $2.3 million in ineffectiveness being recorded in the financial statements at December 31, 2001.

The Company did not hedge any firm commitments in 2001.

Cash Flow Hedges

The Company uses various types of 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. The initial assessment of hedge effectiveness was based on the expected change in cash flows of the hedged liability caused by changes in the benchmark interest rate. Each of these hedges qualified for the short cut method of accounting as described in SFAS No. 133. Therefore, no ineffectiveness was recorded in earnings and periodic effectiveness tests are not required.

For the year ended December 31, 2001, the Company recognized expense in the net interest margin of $50.9 million 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, 2001, $54.4 million of the deferred net losses on derivative instruments that are recorded in accumulated other comprehensive income are expected to be reclassified to funding expense in the next twelve months as derivatives mature or as payments are made.

Trading Activities

The Company enters into various foreign exchange derivative contracts as part of its other trading activities. These contracts are used to manage the Company's foreign currency exchange risk and to provide derivative products to customers. The Company does not have any hedges of foreign currency exposure within the guidelines of SFAS No. 133. The Company began buying and selling credit protection to customers using Credit Default

66 SunTrust 2001 Annual Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Swaps in 2001. These derivative instruments allow the Company to pay or receive a stream of payments in return for receiving or providing protection in the event of default. These derivatives are accounted for as trading assets and any gain or loss in market value is recorded in trading income. As of December 31, 2001, the outstanding credit exposure under these agreements totaled $150 million.

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. 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, 2001, the Company had outstanding commitments to extend credit to its customers totaling $45.3 billion.

Standby letters of credit and guarantees 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 standby 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 holds collateral to support those standby letters of credit and guarantees for which collateral is deemed necessary. As of December 31, 2001, the Company had outstanding standby letters of credit and guarantees totaling $9.7 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 $3.5 billion. In addition to the value of the property serving as collateral, approximately $2.4 billion of the balance of these loans serviced with recourse as of December 31, 2001, is insured by governmental agencies and private mortgage insurance firms.

Other Off-Balance Sheet Arrangements

As is common in the Financial Services Industry, SunTrust Bank assists in providing liquidity to select corporate customers by directing them to a third party owned commercial paper conduit. SunTrust's conduit relationship is with Three Pillars Funding Corporation (Three Pillars). Three Pillars provides financing for or direct purchases of financial assets originated and serviced by SunTrust Bank's corporate customers. Three Pillars finances this activity by issuing A-1/P-1 rated commercial paper. The result is a favorable funding arrangement for these SunTrust Bank customers.

Three Pillars had assets and liabilities, not included in the Consolidated Balance Sheet, of approximately $2.2 billion as of December 31, 2001, which primarily consisted of secured loans, marketable asset-backed securities and short-term commercial paper liabilities. Activities related to the Three Pillars relationship generated approximately $8 million in fee revenue for SunTrust Bank. These activities include: client referrals and investment recommendations to Three Pillars; the issuing of a letter-of-credit, which provides partial credit protection to commercial paper holders; and providing a majority of the temporary liquidity arrangements that would provide funding to Three Pillars in the event that it can no longer issue commercial paper. SunTrust Bank has never had to fund under either the liquidity arrangements or credit enhancement to Three Pillars.

Note 16 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 or types of collateral (whether on or off-balance sheet) arising from financial instruments exist in relation to certain groups of customers. A group concentration arises when a number of obligors have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. The Company does not have a significant concentration to any individual customer, borrower or guarantor 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 that exists is in loans secured by residential real estate. At December 31, 2001, the Company had $17.3 billion in residential real estate loans and an additional $3.9 billion in commitments to extend credit for such loans. A geographic concentration arises because the Company operates primarily in the Southeastern and Mid-Atlantic regions of the United States.

SunTrust 2001 Annual Report 67

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 17 Fair Values Of Financial Instruments

The following table presents the carrying amounts and fair values of the Company's financial instruments at December 31, 2001 and 2000:

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 account assets 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 except in the case of certain options and swaps where pricing models are used.

. 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.

. 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 and guaranteed preferred beneficial interests in debentures 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.

. Fair values for derivatives and unfunded commitments (futures, swaps, forwards, options, guarantees, and lending commitments) are based on quoted market prices, current settlement values, or pricing models or other formulas.

2001 2000 ------- --------------------- -------------------------- - Car rying Fair Carrying Fai r (In thousands) A mount Value Amount Valu e --------------------------------------------------- --------------------------------------------------- - Financial assets Cash and short-term investments $ 5,91 0,044 $ 5,910,044 $ 5,391,352 $ 5,391,35 2 Trading account 1,34 3,602 1,343,602 941,854 941,85 4 Securities available for sale 19,65 6,391 19,656,391 18,810,311 18,810,31 1 Loans held for sale 4,31 9,594 4,321,983 1,759,281 1,759,41 4 Loans 68,09 2,163 68,808,789 71,365,273 71,742,78 0 Financial liabilities Consumer and commercial deposits 62,28 1,242 62,482,209 56,636,327 56,721,45 7 Brokered deposits 2,82 9,687 2,824,428 3,179,100 3,189,61 3 Foreign deposits 2,42 5,493 2,425,493 9,717,910 9,718,90 1 Short-term borrowings 11,75 5,926 11,755,926 12,657,929 12,657,92 9 Long-term debt and guaranteed preferred beneficial interests in debentures 12,66 0,580 13,139,444 8,945,430 8,929,78 6 Derivatives and unfunded commitments Interest rate swaps/caps/floors In a net gain position 95,731 31,94 7 In a net loss position (101,687) (23,73 9) Commitments to extend credit 58,685 51,02 5 Standby letters of credit 5,491 6,38 1 Other derivatives 26,164 (22,19 6) =================================================== =================================================== =

68 SunTrust 2001 Annual Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 18 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 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.

Note 19 Segment Reporting

The Company's prior business segment disclosures have been aligned with its geographic regions as defined by its former multiple bank charters. During 2000, as a result of the consolidation of its multiple bank charters into a single legal entity, the Company began to redefine its operating model and created a line of business management structure to overlay its former multiple bank management structure. Beginning in January 2001, the Company implemented significant changes to its internal management reporting system to begin to measure and manage certain business activities by line of business. The Lines of Business are defined as follows:

Retail

Retail includes loans, deposits and other fee based services for consumer, private banking and business clients with less than $5 million in sales. The Retail Line of Business also includes the traditional branches, in-stores and ATM networks of the Company.

Commercial

Commercial includes loans, deposits and other fee based services for business clients generally with total annual revenues from $5 million to $250 million. In addition, other specialty groups include such areas as Financial Institutions, Commercial Real Estate and Receivables Financing.

Corporate and Investment Banking

Corporate and Investment Banking ("CIB") includes loans, deposits and other fee-based services for national and large business clients generally with total annual revenues in excess of $250 million. CIB also includes the management of debt and equity capital markets, principal investing, corporate leasing and international banking services, all of which are provided both to customers of CIB and to other lines of business.

Mortgage

Mortgage includes the investment in residential mortgage loans and the production, sale and service of residential mortgage loans for third party investors.

Private Client Services

Private Client Services includes asset management services provided through Trusco Capital Management, Inc., comprehensive wealth management services provided to high net worth clients (fiduciary trust, investment management, loans, deposits, and other fee-based), retail and full service brokerage (via subsidiary broker/dealers SunTrust Securities, Inc. and Alexander Key Investments), and Institutional Trust (Corporate Trust, Stock Transfer, Retirement Services, and Endowments and Foundations).

Corporate/Other

Corporate/Other includes the investment securities portfolio, long-term debt, capital, derivative instruments, short-term liquidity and funding activities, balance sheet risk management, office premises and certain support activities not currently allocated to the aforementioned Lines of Business. Any transactions between the separate Lines of Business not already eliminated in the results of the Lines of Business are also reflected in the Corporate/ Other Line of Business.

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 the 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 transferred 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

SunTrust 2001 Annual Report 69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the Corporate/Other Line of Business segment. The Company also utilizes an internal credit risk transfer pricing 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 and leases. The offset to the aggregate credit risk premium charges is matched against the Company's current provision for loan and lease losses with any difference reported in the Corporate/Other segment.

The provision for income taxes is also reported in the Corporate/Other segment. The Company is currently in the process of building and implementing further enhancements to its internal management reporting system that are expected to be implemented throughout 2002. Once complete, the items reported for each Line of Business segment are expected to include: assets, liabilities and attributed economic capital; matched maturity funds transfer priced interest income, net of credit risk premiums; direct non-interest 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 segment. The implementation of these enhancements to the internal management reporting system is expected to materially affect the net income disclosed for each segment.

Due to the significant nature of the changes implemented to the internal management reporting system in 2001, it is not practicable to conform prior year financial data for the new business segments nor current year financial data for the prior business segments for reporting.

The following table discloses selected financial information for SunTrust's new reportable business segments for the year ended December 31, 2001.

/1/ Net interest income is fully taxable equivalent and is presented on a matched maturity funds transfer price basis net of the credit risk premium for the Lines of Business.

/2/ Includes regular income tax provision and taxable-equivalent income adjustment reversal of $40,764.

Year Ended December 31, 2001 ------------------- --------------------------------------------------- -------------------------- Corporate & Private Investment Client Corp orate/ Retail Commerci al Banking Mortgage Services Other Consolidated --------------------------------------------------- --------------------------------------------------- ----------------------- Average total assets $19,866,963 $20,752,4 58 $21,534,514 $19,363,155 $ 1,455,129 $19,9 11,989 $ 102,884,208 Average total liabilities 45,776,816 8,862,8 20 4,493,346 1,046,382 1,369,855 33,2 61,229 94,810,448 Average total equity -- -- -- -- -- 8,0 73,760 8,073,760 --------------------------------------------------- --------------------------------------------------- ----------------------- Net interest revenue/1/ 1,668,604 578,5 04 215,495 244,210 52,599 2 58,787 3,018,199 Noninterest revenue 618,745 263,0 00 441,289 209,868 593,184 29,737 2,155,823 Noninterest expense 1,171,253 382,4 16 362,497 323,249 406,136 4 67,987 3,113,538 --------------------------------------------------- --------------------------------------------------- ----------------------- Total contribution before taxes and extraordinary gain 1,116,096 459,0 88 294,287 130,829 239,647 (1 79,463) 2,060,484 Provision for income taxes/2/ -- -- -- -- -- 6 91,265 691,265 --------------------------------------------------- --------------------------------------------------- ----------------------- Income before extraordinary gain 1,116,096 459,0 88 294,287 130,829 239,647 (8 70,728) 1,369,219 Extraordinary gain, net of tax -- -- -- -- -- 6,318 6,318 --------------------------------------------------- --------------------------------------------------- ----------------------- Net income $ 1,116,096 $ 459,0 88 $ 294,287 $ 130,829 $ 239,647 $ (8 64,410) $ 1,375,537 =================================================== =================================================== =======================

70 SunTrust 2001 Annual Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 20 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, net of income taxes.

Comprehensive income for the years ended December 31, 2001, 2000, and 1999 is calculated as follows:

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. $7.4 million of this transition adjustment was reclassified from other comprehensive income as an expense in 2001. The remaining balance of the transition adjustment is a loss of $3.1 million and will be reclassified to income in 2002. Fair value adjustments to accumulated other comprehensive income for cash flow hedges this year amounted to $52.6 million, net of tax.

Other comprehensive income on December 31, 2001 included an unrealized loss, net of tax, of $55.7 million related to market value adjustments in the current year for cash flow hedges. In the next 12 months, $54.4 million of these losses are expected to be reclassified from other comprehensive income to the net interest margin.

(In thousands) 2001 2000 1999 --------------------------------------------------- --------------------------------------------------- ---------------------- Unrealized (loss) gain on available for sale securi ties, net, recognized in other comprehensive income: Before Income Tax $ (356,603) $ 621,8 53 $ (859,877) Income Tax (124,811) 241,9 01 (334,492) --------------------------------------------------- --------------------------------------------------- ---------------------- Net of Income Tax $ (231,792) $ 379,9 52 $ (525,385) =================================================== =================================================== ====================== Amounts reported in net income: Gain (loss) on sale of securities $ 153,080 $ 6,6 16 $ (109,076) Net accretion (11,633) (15,9 42) (291) --------------------------------------------------- --------------------------------------------------- ---------------------- Reclassification adjustment 141,447 (9,3 26) (109,367) Income tax (expense) benefit (49,506) 3,2 64 42,544 --------------------------------------------------- --------------------------------------------------- ---------------------- Reclassification adjustment, net of tax $ 91,941 $ (6,0 62) $ (66,823) =================================================== =================================================== ====================== Unrealized (loss) gain on available for sale secu rities arising during period, net of tax $ (139,851) $ 373,8 90 $ (592,208) Reclassification adjustment, net of tax (91,941) 6,0 62 66,823 --------------------------------------------------- --------------------------------------------------- ---------------------- Net unrealized loss on available for sale secur ities recognized in other comprehensive income $ (231,792) $ 379,9 52 $ (525,385) =================================================== =================================================== ====================== Unrealized loss on derivative financial instruments , net, recognized in other comprehensive income: Before Income Tax $ (85,737) $ -- $ -- Income Tax 30,008 -- -- --------------------------------------------------- --------------------------------------------------- ---------------------- Net of Income Tax $ (55,729) $ -- $ -- =================================================== =================================================== ====================== Adoption of SFAS No. 133 $ (16,246) $ -- $ -- Income tax benefit 5,686 -- -- --------------------------------------------------- --------------------------------------------------- ---------------------- Adoption of SFAS No. 133, net of tax $ (10,560) $ -- $ -- =================================================== =================================================== ====================== Reclassification of losses from other comprehensi ve income to earnings $ 11,460 $ -- $ -- Income tax expense (4,011) -- -- --------------------------------------------------- --------------------------------------------------- ---------------------- Reclassification adjustment, net of tax $ 7,449 $ -- $ -- =================================================== =================================================== ====================== Unrealized loss on derivative financial instruments arising during period, net of tax $ (52,618) $ -- $ -- Reclassification adjustment, net of tax 7,449 -- -- --------------------------------------------------- --------------------------------------------------- ---------------------- Net unrealized loss on derivative instruments recognized in other comprehensive income $ (45,169) $ -- $ -- =================================================== =================================================== ====================== Total unrealized (losses) gains recognized in other comprehensive income $ (287,521) $ 379,9 52 $ (525,385) Net income 1,375,537 1,294,1 00 1,326,600 --------------------------------------------------- --------------------------------------------------- ---------------------- Total comprehensive income $ 1,088,016 $ 1,674,0 52 $ 801,215 =================================================== =================================================== ======================

SunTrust 2001 Annual Report 71

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 21 Other Noninterest Income

Other noninterest income in the Consolidated Statements of Income includes:

Note 22 Other Noninterest Expense

Other noninterest expense in the Consolidated Statements of Income includes:

Note 23 SunTrust Banks, Inc. (Parent Company Only) Financial Information Statements of Income -- Parent Company Only

Year Ended December 31 (In thousands) 2001 2000 1999 --------------------------------------------------- -------------------------------------- Trading account profits and commissions $ 95,683 $ 31,749 $ 35,075 Other income 160,486 132,865 114,600 --------------------------------------------------- -------------------------------------- Total other noninterest income $256,169 $164,614 $149,675 =================================================== ======================================

Year Ended December 31 (In thousands) 2001 2000 1999 --------------------------------------------------- --------------------------------------- Outside processing and software $ 199,093 $172,263 $150,263 Consulting and legal 87,704 59,560 62,544 Credit and collection services 74,642 56,887 68,701 Postage and delivery 63,991 63,335 68,081 Communications 59,232 59,797 66,280 Other staff expense 58,546 51,509 50,086 Operating supplies 48,297 47,279 51,903 Amortization of intangible assets 46,258 35,452 32,755 FDIC premiums 10,867 11,205 7,936 Other real estate income (4,231) (3,809) (4,789) Other expense 183,542 86,077 106,259 --------------------------------------------------- --------------------------------------- Total other noninterest expense $ 827,941 $639,555 $660,019 =================================================== =======================================

Year Ended December 31 (In thousands) 2001 2000 1999 --------------------------------------------------- --------------------------------------------------- ----------- Operating Income From subsidiaries: Dividends - substantially all from the Bank $1,318,300 $1,486,922 $1,074,010 Service fees 156,870 140,012 146,161 Interest on loans 23,231 46,766 55,909 Other income 18 5 11 Other operating income/1/ 53,336 70,531 74,736 --------------------------------------------------- --------------------------------------------------- ----------- Total operating income 1,551,755 1,744,236 1,350,827 --------------------------------------------------- --------------------------------------------------- ----------- Operating Expense Interest on short-term borrowings 32,734 57,361 48,498 Interest on long-term debt/2/ 170,868 183,732 162,456 Salaries and employee benefits 84,320 52,845 91,784 Amortization of intangible assets 7,644 7,644 7,644 Service fees to subsidiaries 30,859 60,887 81,467 Other operating expense/3/ 123,582 85,403 91,866 --------------------------------------------------- --------------------------------------------------- ----------- Total operating expense 450,007 447,872 483,715 --------------------------------------------------- --------------------------------------------------- ----------- Income before income taxes and equity in undistribu ted income of subsidiaries 1,101,748 1,296,364 867,112 Income tax benefit 116,836 21,010 99,087 --------------------------------------------------- --------------------------------------------------- ----------- Income before equity in undistributed income of sub sidiaries 1,218,584 1,317,374 966,199 Extraordinary gain, net of taxes 6,318 -- 202,648 Equity in undistributed income of subsidiaries, net of extraordinary gain 150,635 (23,274) 157,753 --------------------------------------------------- --------------------------------------------------- -----------

/1/ Other operating income includes $56.1, $63.6 and $57.6 million in 2001, 2000 and 1999, respectively, for interest income on Company owned trust preferred securities.

/2/ Interest on long-term debt includes $71.9, $74.2 and $73.9 million in 2001, 2000 and 1999, respectively, for interest expense from Company issued trust preferred securities.

/3/ Other operating expense for 2000 and 1999 includes merger-related expenses of $42.4 and $45.6 million, respectively.

Net Income $1,375,537 $1,294,100 $1,326,600 =================================================== =================================================== ===========

72 SunTrust 2001 Annual Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheets -- Parent Company Only

December 31 (In thousands) 2001 2000 --------------------------------------------------- -------------------------------------------- Assets Cash in subsidiary banks $ 3,819 $ 9,428 Interest-bearing deposits in banks 4,273 10,565 Funds sold 278,477 29,789 Securities available for sale 341,269 306,381 Loans to subsidiaries 685,234 846,984 Investment in capital stock of subsidiaries stated on the basis of the Company's equity in subsidiaries' capital accounts Banking subsidiaries 9,631,634 9,886,692 Nonbanking and holding company subsidiaries 1,213,130 1,044,412 Premises and equipment 24,216 28,555 Intangible assets 76,587 84,230 Other assets 940,916 711,735 --------------------------------------------------- -------------------------------------------- Total assets $ 13,199,555 $ 12,958,771 =================================================== ============================================ Liabilities and Shareholders' Equity Short-term borrowings from Subsidiaries $ 184,500 $ 49,445 Non-affiliated companies 340,929 903,031 Long-term debt - Note 11 3,520,063 2,942,224 Other liabilities 794,495 824,863 --------------------------------------------------- -------------------------------------------- Total liabilities 4,839,987 4,719,563 =================================================== ============================================ Preferred stock, no par value; 50,000,000 shares authorized; none issued -- -- Common stock, $1.00 par value 294,163 323,163 Additional paid in capital 1,259,609 1,274,416 Retained earnings 5,479,951 6,312,044 Treasury stock and other (329,408) (1,613,189) --------------------------------------------------- -------------------------------------------- Realized shareholders' equity 6,704,315 6,296,434 Accumulated other comprehensive income 1,655,253 1,942,774 --------------------------------------------------- -------------------------------------------- Total shareholders' equity 8,359,568 8,239,208 --------------------------------------------------- -------------------------------------------- Total liabilities and shareholders' equity $ 13,199,555 $ 12,958,771 =================================================== ============================================ Common shares outstanding 288,601,607 296,266,329 Common shares authorized 750,000,000 750,000,000 Treasury shares of common stock 5,561,150 26,896,428 =================================================== ============================================

SunTrust 2001 Annual Report 73

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Statements Of Cash Flow -- Parent Company Only

Year Ended December 31 (In thousands) 2001 2000 1999 --------------------------------------------------- --------------------------------------------------- --------- Cash Flow from Operating Activities: Net income $ 1,375,537 $ 1,294,100 $ 1,326,600 Adjustments to reconcile net income to net cash provided by operating activities: Extraordinary gain, net of taxes (6,318) -- (202,648) Equity in undistributed income of subsidiaries (150,635) 23,274 (157,753) Depreciation and amortization 8,703 12,912 12,392 Amortization of compensation element of restric ted stock 6,110 9,408 15,557 Securities (gains) losses (224) (10,993) 851 Deferred income tax (benefit) provision (7,800) 15,271 22,313 Changes in period end balances of: Prepaid expenses (65,449) (82,746) (54,830) Other assets (167,508) (120,417) (66,298) Taxes payable (20,488) (3,950) (9,221) Interest payable (18,173) 11,102 4,928 Other accrued expenses 69,530 64,983 20,779 --------------------------------------------------- --------------------------------------------------- --------- Net cash provided by operating activities 1,023,285 1,212,944 912,670 --------------------------------------------------- --------------------------------------------------- --------- Cash Flow from Investing Activities: Proceeds from sales and maturities of securities av ailable for sale 5,370 63,053 125,946 Purchase of securities available for sale (46,411) (20,136) (184,930) Net change in loans to subsidiaries 161,750 77,662 152,431 Capital expenditures (6,131) (9,103) (15,077) Capital contributions to subsidiaries (74,303) (79,250) (317,595) Other, net (3,799) (301) 11,000 --------------------------------------------------- --------------------------------------------------- --------- Net cash provided by (used in) investing activiti es 36,476 31,925 (228,225) --------------------------------------------------- --------------------------------------------------- --------- Cash Flow from Financing Activities: Net change in short-term borrowings (427,047) (443,268) 546,248 Proceeds from issuance of long-term debt 600,000 300,000 140,563 Repayment of long-term debt (22,161) (65,773) (207,527) Proceeds from the exercise of stock options 19,013 17,905 15,030 Proceeds from stock issuance 22,235 22,779 11,689 Proceeds used in acquisition and retirement of stoc k (551,485) (668,391) (954,642) Dividends paid (463,529) (443,407) (440,631) --------------------------------------------------- --------------------------------------------------- --------- Net cash (used in) financing activities (822,974) (1,280,155) (889,270) --------------------------------------------------- --------------------------------------------------- --------- Net increase (decrease) in cash and cash equivalent s 236,787 (35,286) (204,825) Cash and cash equivalents at beginning of year 49,782 85,068 289,893 --------------------------------------------------- --------------------------------------------------- --------- Cash and cash equivalents at end of year $ 286,569 $ 49,782 $ 85,068 =================================================== =================================================== ========= Supplemental Disclosure Income taxes received from subsidiaries $ 558,887 $ 591,326 $ 631,626 Income taxes paid by Parent Company (444,758) (535,346) (520,412) --------------------------------------------------- --------------------------------------------------- --------- Net income taxes received by Parent Company $ 114,129 $ 55,980 $ 111,214 =================================================== =================================================== ========= Interest paid $ 222,785 $ 236,214 $ 206,033 =================================================== =================================================== =========

76 SunTrust 2001 Annual Report

Board Of Directors

L. Phillip Humann Director since 1991 Chairman of the Board, President and Chief Executive Officer

J. Hyatt Brown Director since 1984 Chairman of the Board, President and Chief Executive Officer, Brown & Brown, Inc. Daytona Beach, Florida

Alston D. Correll Director since 1997 Chairman of the Board and Chief Executive Officer, Georgia-Pacific Corporation Atlanta, Georgia

Douglas N. Daft Director since 2000 Chairman of the Board and Chief Executive Officer, The Coca-Cola Company Atlanta, Georgia

A. W. Dahlberg Director since 1996 Chairman of the Board, Mirant Corporation Atlanta, Georgia

Patricia C. Frist Director since 2000 Partner in Frist Capital Partners, President, Frisco, Inc. and President, Patricia C. Frist and Thomas F. Frist, Jr. Foundation Nashville, Tennessee

David H. Hughes Director since 1984 Chairman of the Board and Chief Executive Officer, Hughes Supply, Inc. Orlando, Florida

M. Douglas Ivester Director since 1998 (Retired) Chairman of the Board and Chief Executive Officer, The Coca-Cola Company Atlanta, Georgia

Summerfield K. Johnston, Jr. Director since 1997 Chairman of the Board,

Coca-Cola Enterprises Inc. Atlanta, Georgia

Joseph L. Lanier, Jr. Director since 1984 Chairman of the Board and Chief Executive Officer, Dan River, Inc. Danville, Virginia

G. Gilmer Minor, III Director since 1998 Chairman of the Board and Chief Executive Officer, Owens & Minor, Inc. Richmond, Virginia

Larry L. Prince Director since 1996 Chairman of the Board and Chief Executive Officer, Genuine Parts Company Atlanta, Georgia

R. Randall Rollins Director since 1995 Chairman of the Board and Chief Executive Officer, Rollins, Inc. and Chairman of the Board and Chief Executive Officer, RPC, Inc. Atlanta, Georgia

Frank S. Royal, M.D. Director since 1998 President, Frank S. Royal, M.D., P.C. Richmond, Virginia

James B. Williams Director since 1984 Chairman of the Executive Committee, SunTrust Banks, Inc. Atlanta, Georgia

SunTrust 2001 Annual Report 77

Management Committee

L. Phillip Humann, 56 Chairman, President and Chief Executive Officer SunTrust Banks, Inc. 33 years of service.

John W. Clay, Jr., 60 Vice Chairman Geographic Banking (Florida, Georgia, Mid-Atlantic, Tennessee/Alabama); Corporate and Investment Banking Line of Business 35 years of service.

Theodore J. Hoepner, 60 Vice Chairman Technology & Operations, Human Resources, Asset Quality, Legal and Regulatory Affairs and Efficiency and Quality Initiatives 34 years of service.

John W. Spiegel, 60 Vice Chairman and Chief Financial Officer Accounting, Funds Management, Risk Management, Strategic Finance & Taxes, Audit, Investor Relations and Treasury 37 years of service.

James M. Wells III, 55 Vice Chairman Commercial, Retail, Mortgage, Private Client Services Lines of Business; and Corporate Strategy, Marketing 34 years of service.

Robert H. Coords, 59 Executive Vice President Chief Efficiency and Quality Officer 29 years of service.

Donald S. Downing, 55 Executive Vice President Mortgage Banking Line of Business 34 years of service.

Samuel O. Franklin, III, 58 Chairman, President and Chief Executive Officer, SunTrust Bank, Tennessee 37 years of service.

C. T. Hill, 51 Chairman, President and Chief Executive Officer, SunTrust Bank, Mid-Atlantic 32 years of service.

Craig J. Kelly, 56 Executive Vice President Marketing 5 years of service.

George W. Koehn, 58 Chairman, President and Chief Executive Officer, SunTrust Bank, Florida 23 years of service.

Carl F. Mentzer, 56 Executive Vice President Commercial Banking Line of Business 24 years of service.

Joy Wilder Morgan, 39 Senior Vice President and Chief Strategy Officer STI Strategies Group 18 years of service.

Dennis M. Patterson, 52 Executive Vice President Retail Banking Line of Business 33 years of service.

William H. Rogers, 44 Executive Vice President Private Client Services Line of Business 21 years of service.

R. Charles Shufeldt, 51 Executive Vice President Corporate and Investment Banking Line of Business 18 years of service.

Robert C. Whitehead, 54 President and Chief Executive Officer Enterprise Information Services 34 years of service.

E. Jenner Wood, III, 50 Chairman, President and Chief Executive Officer, SunTrust Bank, Georgia 27 years of service.

78 SunTrust 2001 Annual Report

Banks

(1) Average deposits for December 2001.

(2) Deposits held within SunTrust's geographic banking organization; excludes primarily deposits from the Corporate and Investment Banking line of business.

(3) South Central Tennessee and Alabama were combined to form Tennessee Valley.

Name Headquarters CEO/P resident Deposits(1, 2) Branches --------------------------------------------------- -------------------------------------------------- Florida Orlando, FL Georg e W. Koehn $24.0 Billion 375 Central Florida Orlando Thoma s H. Yochum 5.4 Billion 55 East Central Florida Daytona Beach Willi am H. Davison 1.2 Billion 23 Gulf Coast Sarasota Ray L . Sandhagen 1.8 Billion 30 Miami Miami John P. Hashagen 3.1 Billion 25 Mid-Florida Lakeland Charl es W. McPherson 970 Million 24 Nature Coast Brooksville James H. Kimbrough 1.6 Billion 33 North Central Florida Ocala Willi am H. Evans 851 Million 17 North Florida Jacksonville John R. Schmitt 1.2 Billion 15 Northwest Florida Tallahassee David B. Ramsay 975 Million 26 South Florida Fort Lauderdale Thoma s G. Kuntz 3.7 Billion 67 Southwest Florida Fort Myers Charl es K. Idelson 1.1 Billion 21 Tampa Bay Tampa Danie l W. Mahurin 2.0 Billion 39 --------------------------------------------------- -------------------------------------------------- Georgia Atlanta, GA E. Je nner Wood, III $11.0 Billion 245 Atlanta Atlanta E. Je nner Wood, III 7.0 Billion 139 Augusta Augusta Willi am R. Thompson 458 Million 11 Middle Georgia Macon James B. Patton 548 Million 17 Northeast Georgia Athens Rober t D. Bishop 529 Million 18 Northwest Georgia Rome Willi am H. Pridgen 322 Million 11 Savannah Savannah Willi am B. Haile 563 Million 13 South Georgia Albany Willi s D. Sims 465 Million 14 Southeast Georgia Brunswick Jack E. Hartman 432 Million 11 West Georgia Columbus Frank S. Etheridge, III 429 Million 11 --------------------------------------------------- -------------------------------------------------- Mid-Atlantic Richmond, VA C. T. Hill $17.3 Billion 380 Central Virginia Richmond A. Da le Cannady 2.2 Billion 48 Greater Washington Washington, DC Peter F. Nostrand 9.2 Billion 167 Hampton Roads Norfolk Willi am K. Butler II 1.8 Billion 45 Maryland Baltimore, MD J. Sc ott Wilfong 1.9 Billion 59 Western Virginia Roanoke Rober t C. Lawson, Jr. 2.2 Billion 61 --------------------------------------------------- -------------------------------------------------- Tennessee Nashville, TN Samue l O. Franklin, III $6.7 Billion 128 Chattanooga Chattanooga Rober t J. Sudderth, Jr. 1.2 Billion 28 East Tennessee Knoxville R. Ki ng Purnell 1.7 Billion 43 Nashville Nashville Samue l O. Franklin, III 3.2 Billion 39 Tennessee Valley(3) Florence, AL W. Da vid Jones 643 Million 18

SunTrust 2001 Annual Report 79

Key Subsidiaries

Chief Executiv e --------------------------------------------------- --------------------------------------------------- ------- AMA Holdings, Inc. Henry A. Perry Provides comprehensive financial, investment advi sory and family wealth management services. Premium Assignment Corporation Peter Kugelman n Provides insurance premium financing primarily to small businesses. SunTrust BankCard, N.A. Ronald W. East burn Offers credit card services to commercial and cor porate clients. SunTrust Capital Markets, Inc. R. Charles Shu feldt Provides securities underwriting and broker/deale r as well as investment advisory activities. Includes SunTrust Robinson-H umphrey and Alexander Key. SunTrust Community Development Corporation Peter P. Walcz uk Manages the Company's investments in affordable h ousing. SunTrust Delaware Trust Company Barbara B. O'D onnell A limited purpose trust company providing special ized investment-related services for high-net-worth clients. SunTrust Insurance Company Michael A. Kin sey Re-insures credit life as well as accident and he alth insurance policies. SunTrust Leasing Corporation Daniel E. McKe w Provides equipment-related lease financing to bus inesses. SunTrust Mortgage, Inc. Donald S. Down ing One of the nation's largest bank-owned mortgage c ompanies. Originates, purchases, sells and services mortgag e loans. SunTrust Securities, Inc. Peter Bielan Provides brokerage and investment advisory servic es primarily to retail investors. Trusco Capital Management, Inc. Douglas S. Phi llips An SEC registered investment advisor that manages assets for institutional clients. Includes the STI Classic Funds, SunTrust 's mutual fund family.

80 SunTrust 2001 Annual Report

General Information

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 16, 2002 at 9:30 a.m. in Suite 225 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 2001 and 2000 and the dividends paid per share are shown below.

Market Price

SunTrust Banks, Inc. debt ratings are as follows:

Senior Long-Term Debt Moody's Investors Service, Inc. A1 Standard & Poor's Corp. A+ Fitch/IBCA AA-

Commercial Paper Moody's Investors Service, Inc. P-1 Standard & Poor's Corp. A-1 Fitch/IBCA F1+

Shareholders Of Record SunTrust has 38,439 shareholders of record as of December 31, 2001.

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

Quarter --------------------- Divide nds Ended High Low Close Pai d 2001 December 31 67.93 58.10 62.70 $0.4 0 September 30 72.35 60.10 66.60 0.4 0 June 30 66.38 59.25 64.78 0.4 0 March 31 68.07 57.29 64.80 0.4 0 --------------------------------------------------- - 2000 December 31 64.38 41.63 63.00 $0.3 7 September 30 54.19 45.63 49.88 0.3 7 June 30 66.00 45.06 45.69 0.3 7 March 31 68.06 46.81 57.75 0.3 7 --------------------------------------------------- - Debt Ratings

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:

o 2001 annual report (including select information translated in Spanish) o Quarterly earnings releases o Press releases o 2001 annual report for kids

Exhibit 21.1

Page 1 of 4

SunTrust Banks, Inc. ORGANIZATION CHART

December 31, 2001

=================================================== =================================================== =============== SunTrust Banks, Inc. At lanta, GA =================================================== =================================================== =============== --------------------------------------------------- --------------------------------------------------- --------------- Lower Tier Bank Holding Company --------------------------------------------------- --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- 100% SunTrust Bank Holding Company Orlando, FL -------------- ------------------------------------ --------------------------------------------------- --------------- 100% (see pages 3 - 4 for subsidiaries) --------------------------------------------------- --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- Direct Bank Subsidiaries --------------------------------------------------- --------------------------------------------------- --------------- -------------- ------------------------------------ --------------------------------------------------- --------------- 100% SunTrust BankCard, National Associat ion Orlando, FL -------------- ------------------------------------ --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- Direct Non Bank Subsidiaries --------------------------------------------------- --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- 100% AMA Holdings, Inc. Jupiter, FL ------------------------------------ --------------------------------------------------- --------------- 100% Teton Trust Company Teton, WY ---------- ------------------------- --------------------------------------------------- --------------- 88.666% Asset Management Advisors Atlanta, L.L.C. Atlanta, GA ---------- ------------------------- --------------------------------------------------- --------------- 80% Lighthouse Partners, L.L. C. Jupiter, FL ---------- ------------------------- --------------------------------------------------- --------------- 76.37% Asset Management Advisors , L.L.C. Jupiter, FL ---------- ------------------------- --------------------------------------------------- --------------- 50% Abundance, L.L.C. Jupiter, FL ---------- ------------------------- --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- 100% SBF Agency, Inc. (Inactive) Altamonte Springs, FL -------------- ------------------------------------ --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- 100% STI Investment Management (Collatera l), 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 Community Development Corpo ration Atlanta, GA ------------------------------------ --------------------------------------------------- --------------- 100% Regency Development Assoc iates, Inc. Raleigh, NC ---------- ------------------------- --------------------------------------------------- --------------- 100% Regency Constructors, Inc . Raleigh, NC -------------- ------------------------------------ --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- 100% SunTrust Delaware Trust Company Wi lmington, DE -------------- ------------------------------------ --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- 100% SunTrust Capital Markets, Inc. N ashville, TN ------------------------------------ --------------------------------------------------- --------------- 100% SunTrust Equitable Securi ties Corporation of Delaware, Inc. Wi lmington, DE -------------- ---------- ------------------------- --------------------------------------------------- ---------------

Exhibit 21.1

Page 2 of 4

SunTrust Banks, Inc. ORGANIZATION CHART

December 31, 2001

=================================================== =================================================== =============== SunTrust Banks, Inc. At lanta, GA =================================================== =================================================== =============== --------------------------------------------------- --------------------------------------------------- --------------- Direct Non Bank Subsidiaries cont'd --------------------------------------------------- --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- 100% SunTrust Insurance Company Chatta nooga, TN -------------- ------------------------------------ --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- 99.99% SunTrust Plaza Associates, L.L.C. At lanta, GA -------------- ------------------------------------ --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- 100% SunTrust Properties, Inc. At lanta, GA -------------- ------------------------------------ --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- 100% SunTrust Real Estate Corporation Ric hmond, VA -------------- ------------------------------------ --------------------------------------------------- --------------- --------------------------------------------------- --------------------------------------------------- --------------- 100% Trusco Capital Management, Inc. At lanta, GA --------------------------------------------------- --------------------------------------------------- --------------- =================================================== =================================================== ===============

Exhibit 21.1

Page 3 of 4

SunTrust Banks, Inc. ORGANIZATION CHART

December 31, 2001

========= ========================================= =================================================== =========================== 100% SunTrust Bank Holding Company ========= ========================================= =================================================== =========================== ----------------------------------------- --------------------------------------------------- --------------------------- 100% SunTrust Bank (see pages 3 - 4 for subsidiaries) Atlanta, GA ------------------------------ --------------------------------------------------- --------------------------- 100% Acquisition and Equ ity Corporation Knoxville, TN ------------------- --------------------------------------------------- --------------------------- 100% Atlanta Community I nvestment Corporation Atlanta, GA ------------------- --------------------------------------------------- --------------------------- 100% Florida Aviation, I nc. Miami, FL ------------------- --------------------------------------------------- --------------------------- 100% Kasalta Miramar, In c. Miami, FL ------------------- --------------------------------------------------- --------------------------- 100% Service of Volusia County, Inc. Daytona Beach, FL ------------------- --------------------------------------------------- --------------------------- 100% STB Receivables (Ce ntral Florida), Inc. Newark, DE ------------------- --------------------------------------------------- --------------------------- 100% STB Management Corp oration Newark, DE ------------------- --------------------------------------------------- --------------------------- 100% STB FNC C orporation Newark, DE --------- --------------------------------------------------- --------------------------- 100% S TB STR Newark, DE ------- - --------------------------------------------------- --------------------------- ---------- ------------------- --------------------------------------------------- --------------------------- 100% STB Real Estate (Ge orgia), Inc. Newark, DE --------- --------- --------------------------------------------------- --------------------------- 100% STB Real Estate Parent (Georgia), Inc. Newark, DE --------- --------------------------------------------------- --------------------------- 100% S TB Real Estate Holdings (Georgia), Inc. Newark, DE - --------------------------------------------------- --------------------------- 1 00% STB Real Estate Holdings (Atlanta), Inc. Newark, DE - ------- ------------------------------------------- --------------------------- 1 00% STB Real Estate Holdings (Conforming - GA), Inc. Newark, DE - ------- ------------------------------------------- --------------------------- 1 00% STB Real Estate Holdings (Non-Conforming - GA), Inc. Newark, DE ---------- ------------------- --------------------------------------------------- --------------------------- 100% STB Real Estate (Fl orida), Inc. Newark, DE ------------------- --------------------------------------------------- --------------------------- --------- --------- --------------------------------------------------- --------------------------- 100% STB Real Estate Parent (Florida), Inc. Newark, DE --------- --------------------------------------------------- --------------------------- 100% S TB Real Estate Holdings (Florida), Inc. Newark, DE - --------------------------------------------------- --------------------------- 1 00% STB Real Estate Holdings (Commercial - FL), Inc. Newark, DE - ------- ------------------------------------------- --------------------------- 1 00% STB Real Estate Holdings (Conforming - FL), Inc. Newark, DE - ------- ------------------------------------------- --------------------------- 1 00% STB Real Estate Holdings (Non-Conforming - FL), Inc. Newark, DE ---------- ------------------- --------------------------------------------------- --------------------------- 100% SunTrust Annuities (Alabama), Inc. Florence, AL ---------- ------------------- --------------------------------------------------- --------------------------- 100% SunTrust Insurance Services, Inc. Madison, GA ---------- ------------------- --------------------------------------------------- --------------------------- 100% SunTrust Internatio nal Banking Company Atlanta, GA ------------------- --------------------------------------------------- --------------------------- 100% SunTrust Asia, Limited Atlanta, GA ---------- ------------------- --------------------------------------------------- --------------------------- 100% TCB Holdings, Inc. Atlanta, GA ---------- ------------------- --------------------------------------------------- --------------------------- 100% DC Properties, Inc. Washington, DC ---------- ------------------- --------------------------------------------------- --------------------------- 100% MD Properties, Inc. Baltimore, MD ---------- ------------------- --------------------------------------------------- --------------------------- 100% VA Properties, Inc. Richmond, VA ---------- ------------------- --------------------------------------------------- --------------------------- 85% SunTrust Benefits M anagement, Inc. Baltimore, MD ---------- ------------------- --------------------------------------------------- --------------------------- 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 Mid-Atlantic Newark, DE -------- --------------------------------------------------- --------------------------- 100% SunTrust Real Estate Investment Corporation Newark, DE ---------- -------- --------------------------------------------------- --------------------------- 99.99% CM Finan ce, L.L.C. Newark, DE -------- --------------------------------------------------- --------------------------- 99.99% CBP Finance, L.L.C. Newark, DE

---------- ------------------- --------------------------------------------------- --------------------------- 100% Jefferson Funding C orporation I Richmond, VA ---------- ------------------- --------------------------------------------------- ---------------------------

Exhibit 21.1

Page 4 of 4

SunTrust Banks, Inc. ORGANIZATION CHART

December 31, 2001

========== ======================================== =================================================== ============================ 100% SunTrust Bank Holding Company (continued ) ========== ======================================== =================================================== ============================ ---------------------------------------- --------------------------------------------------- ---------------------------- 100% SunTrust Bank (continued) ----------------------------- --------------------------------------------------- ---------------------------- 100% SunTrust Leasing C orporation Richmond, VA ---------- ------------------ --------------------------------------------------- ---------------------------- 100% Southern Service C orporation Richmond, VA ---------- ------------------ --------------------------------------------------- ---------------------------- 100% SunTrust Mortgage, Inc. Richmond, VA ------------------ --------------------------------------------------- ---------------------------- 100% Cheroke e Insurance Company Burlington, VT ---------- ------- --------------------------------------------------- ---------------------------- 100% ValuTre e Real Estate Services, L.L.C. Richmond, VA ------- --------------------------------------------------- ---------------------------- 100% ValuTree Lender Management, L.L.C. Richmond, VA ---------- ------- --------------------------------------------------- ---------------------------- 100% CMC Ore o Inc. Richmond, VA ---------- ------- --------------------------------------------------- ---------------------------- 51% America n Safety Mortgage Company, L.L.C. Ponce Inlet, FL ---------- ------- --------------------------------------------------- ---------------------------- 51% Bosshar dt Financial Services, L.L.C. Gainesville, FL ---------- ------- --------------------------------------------------- ---------------------------- 51% Chesape ake Mortgage, L.L.C Forest Hill, MD ---------- ------- --------------------------------------------------- ---------------------------- 51% Custom Builders Mortgage, L.L.C. Maitland, FL ---------- ------- --------------------------------------------------- ---------------------------- 51% Palladi an Mortgage, L.L.C. Valrico, FL ---------- ------- --------------------------------------------------- ---------------------------- 51% Partner ship Mortgage, L.L.C. Oldsmar, FL ---------- ------- --------------------------------------------------- ---------------------------- 51% Perfect Gulf Mortgage, L.L.C. Palm Harbor, FL ---------- ------- --------------------------------------------------- ---------------------------- 51% Univers al Capital Mortgage, L.L.C. Maitland, FL ---------- ------- --------------------------------------------------- ---------------------------- 51% Windwar d Mortgage of Georgia, L.L.C. Alpharetta, GA ---------- ------- --------------------------------------------------- ---------------------------- 51% Windwar d Mortgage, L.L.C. (Tampa) Tampa, FL ---------- ------------------ --------------------------------------------------- ---------------------------- 100% SunTrust Procureme nt Services, L.L.C. Baltimore, MD ---------- ------------------ --------------------------------------------------- ---------------------------- 100% SunTrust Education Financial Services Corporation Richmond, VA ------------------ --------------------------------------------------- ---------------------------- 51% SunTrus t Student Loan, L.L.C. Richmond, VA ---------- ------------------ --------------------------------------------------- ---------------------------- 100% SunTrust Community Development Corporation, MidAtlantic Richmond, VA ---------- ------------------ --------------------------------------------------- ---------------------------- 100% CBRE II, Inc. St. Thomas, Virgin Islands ---------- ------------------ --------------------------------------------------- ---------------------------- 99% Crestar Securitiza tion, L.L.C. Richmond, VA ---------- ------------------ --------------------------------------------------- ---------------------------- 100% Crestar SP Corpora tion Richmond, VA ---------- ---------- ------------------ --------------------------------------------------- ---------------------------- ---------------------------------------- --------------------------------------------------- ---------------------------- 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 C ayman, Cayman Island, B.W.I. ---------- ----------------------------- --------------------------------------------------- ---------------------------- ---------------------------------------- --------------------------------------------------- ---------------------------- 100% SunTrust Personal Loans, Inc. Atlanta, GA ---------- ----------------------------- --------------------------------------------------- ---------------------------- ---------------------------------------- --------------------------------------------------- ---------------------------- 100% Premium Assignment Corporatio n Tallahassee, FL ---------- ----------------------------- --------------------------------------------------- ---------------------------- ---------------------------------------- --------------------------------------------------- ---------------------------- 100% Madison Insurance Company Madison, GA

---------- ----------------------------- --------------------------------------------------- ----------------------------

[LOGO] ANDERSEN

Exhibit 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of our report included in this Annual Report and Form 10-K into the Registrant's previously filed Registration Statement Nos. 33-28250, 33-58723, 333-69331, 333-91519, 333-91521 and 333-43348 on Form S-8 and Registration Statement No. 333-61583 on Form S-3.

End of Filing

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/s/ Arthur Andersen LLP Atlanta, GA March 15, 2002