Welcome to today’s SunTrust First Quarter Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Mr. Steve Shriner, Director of Investor Relations.

Good morning, welcome to SunTrust’s First Quarter 2008 Earnings Conference call. Thanks for joining us. In addition to the press release, we’ve also provided a presentation that covers the focus of our call today, an update of capital our efficiency and productivity program, a broad risk and credit overview and a review of financial results. Press release, presentation, and detailed financial schedules are available on our website www.SunTrust.com. Information can be accessed directly today by using the quick link on the SunTrust.com homepage entitled First Quarter Earnings Release, or by going to the Investor Relations section of the website. With me today, among members of our executive management team are Jim Wells, our Chief Executive Officer, Mark Chancy, our Chief Financial Officer and Tom Freeman, our Chief Risk and Credit Officer. Jim will start the call with an overview of the quarter, including an update on capital and our efficiency and productivity initiatives. Tom will them provide a detailed review of our risk and credit picture and Mark will conclude the call with an overview of financial topics, including impacts to earnings this quarter. We will then open the session for questions. First, I’ll remind you our comments today may include forward looking statements. These statements are subject to risks and uncertainty and actual results could differ materially. We’ll list the factors that might cause actual results to differ materially in our press release and SEC filings, which are available on our website. Further, we do not intend to update any forward looking statements to reflect circumstances or events that occur after the date forward looking statements are made and we disclaim any responsibility to do so. We’ve detailed the forward looking statements made in conjunction with today’s earnings release in the appendix of our first quarter earnings presentation. During the call, we will discuss non-GAAP financial measures in talking about the company’s performance. You can find a reconciliation of these measures to GAAP financial measures in our press release and on our website. Finally, SunTrust is not responsible for and does not edit nor guarantee the accuracy of our earnings teleconference transcripts provided by third parties. The only authorized live and archived webcasts are located on our website. With that, let me turn it over to Jim.

Good morning everyone I’m glad you’re with us this morning. As anticipated, SunTrust and the industry continue to face a very challenging earnings environment in the first quarter. Growth and provision expense associated with residential real estate correction took a toll on results. However, SunTrust remains a financially strong institution with significant growth opportunities. With that point we are encouraged by underlying progress in key business lines this quarter, good deposit and even saw modest loan growth, and the positive impact of improved discipline. Indeed non-interest income was up double digits this quarter and expenses remain flat compared to last year. However, overall earnings for the first quarter of $284 million or $0.81 per common share were largely impacted by the growth and provision expense associated with the housing correction. Provision expense was $560 million for the quarter which covered $297 million in charge offs and provided $263 million to increase the allowance for loan losses to 125 basis points. We obviously are not pleased with our credit performance and the impact on near term earnings. However, as you will hear we are and have been working on the right things to minimize risks in new production and to mitigate losses in the existing portfolio. Tom Freeman is going to cover credit in great detail but I do want to point out that the elevated credit metrics are primarily confined to the consumer portfolio particularly the residential real estate secured categories. Within these categories the majority of the risk that is coming from relatively small segments that are largely run off portfolios and I expect this risk will run its course. However, the commercial real estate, commercial, and commercial purpose construction categories continue to perform relatively well overall during this quarter. Home values and consumer credit have obviously deteriorated over…

This morning I’m going to provide a brief review of our securities portfolio and then spend time going over the credit data. I’ll be referring to our presentation slides beginning on slide six. As you know, the credit securities market showed high volatility around a downward trend during the first quarter. Mortgage securities continued their downward trend which started last year. As you can see on the graphs the pressure on mortgage valuation spreads to other asset classes during the quarter. Corporate credit spread has widened significantly through mid March and then rebounded somewhat in response to the Federal Reserve’s continued efforts to add liquidity to the system. Overall for the quarter the decline in prices resulted in the net trading losses we reported this morning. You should also note that we have no un-syndicated exposure to the large syndicated leverage loan market which caused write downs across the industry during the first quarter. Slide seven shows the progress we have made in reducing the carrying value of the securities we acquired from our asset management subsidiary and three pillars, our commercial paper conduit for client transactions. Carrying value of these acquired securities has been reduced by almost 60%. In addition to these portfolios below the subtotal we’ve included the AAA portion of the securities we retained from the securitization of almost all our purchased commercial loan securities. Exposure on all the securities has been reduced by almost $1.9 billion, $750 million in write downs including roughly $240 million in the current quarter. In addition, we sold over $500 million of these securities at or near carrying values. Over $600 million in repayments were also received. We continue to evaluate performance of the assets underlying each security as well as market liquidity and pricing. We are actively selling when market…

I’ll start with a few highlights in what was generally a good quarter for both loan and deposit growth. Overall loan growth picked up in the first quarter, the sequential annualized growth rate was 5% we are effectively back to even with last years loan balance. The reason this is significant is that as you may recall we transferred $4 billion in mortgages to held for sale in the first quarter of ’07. We subsequently sold them as part of our balance sheet restructuring initiative. Commercial loan growth which began to pick up during the fourth quarter continued that trend this quarter. The largest contributor to the $1.5 billion or 4% sequential quarter growth was the energy sector in our wholesale segment. Leasing and the technology sector also experienced good growth this quarter. Equally notable is the $800 million decline in construction as a result of existing projects being completed coupled with dwindling demand and a low appetite on our part for new projects. While less material to the balance sheet overall our de-emphasis of the indirect auto lending product is apparent in the annual and sequential quarter decline as well. The deterioration in the economy and pressure on the consumer this deliberate reduction is appropriate in our view. Deposits are also showing improved growth and mix strengths. The majority of the growth is occurring in interest bearing now and money market accounts. The significant decline in high cost broker and foreign deposits as compared to last year was also the result of our balance sheet restructuring initiatives which significantly enhanced the company’s liquidity position. It’s probably not obvious from the average balance data are the very recent trends in deposit mix. You look at the period end balance for the deposit included in the press release table you will…

[Operator Instructions] Our first question today is from Brian Foran you may ask your question and please state your company name. Brian Foran – Goldman Sachs: Can you talk a little bit about the dividend payout ratio that you are comfortable with in the short term and longer term just given where earnings are right now? Would you be comfortable with a near 100% payout ratio or at some point does that become a risk even with the potential capital gains from Coke?

We went through some significant evaluation as you would expect at the end of the year related to our dividend in making the decision to increase it approximately 5% year over year. We did sensitivity analysis on our earnings both in the short term as well as on longer term basis and felt comfortable with that increase. The payout ratio will ultimately be a function of the actual earnings level for the full year for the company but as I mentioned earlier and we’ve stated a couple of times we feel very good about the overall capital position of the company with a 7.25% tier one capital ratio, the prospects of completing our Coke related transaction during the second quarter that would add 65 basis points or more of capital. The fact that our current liquidity position and our ability to grow capital on a net basis over the next several quarters so an approximate 8% or so pro forma capital at the end of the second quarter is something that we are comfortable with and feel like as we look out over the next several quarters that both dividend payout ratio and dividend yield will be at acceptable levels. Brian Foran – Goldman Sachs: If I could follow up on a separate topic. You mentioned early delinquencies are stabilizing but a number of your competitors have noted that the problem is really roll rates and the later stage delinquency buckets as well as rising severities. Could you just put your comment about potentially being at or near the peak in loss rates in the context of roll rates and severity and what you are seeing there?

Good question, what we are seeing is that the early stage delinquencies are coming down which are really going to impact a quarter to two quarters out what we think the later stage delinquencies and roll rates are going to provide for. Current late stage delinquencies have in fact picked up somewhat and we expect them to given the previous quarters increase in early stage delinquencies. In terms of severity we saw an increase in severity particularly in the third party originated home equity lines over the last quarter. Those severities have gotten very large and don’t think they’ve got much room upward in terms of the severity levels. We think within those individual business segments the severities have gotten about as high as they can get and then in addition we believe that the early stage roll rates will begin to mitigate flows into non performers in charge offs in the later quarters of this year.

I forgot to mention one thing. I think the tangible equity to asset ratio of 6.5% that we currently have is also a distinguishing feature as you compare us to other peers during the course of the quarter and as you look out over the next several quarters. In addition to the regulatory capital position that we are in we feel good about our overall tangible equity base. Brian Foran – Goldman Sachs: That’s actually a pretty good point. The last thing if I could is just the debt write ups you’ve had over the past two quarters of $325 million if your spreads tightened does that come back through the P&L or how should we think about that going forward?

We have benefited and had an offset as a result of the widening of credit spread that has offset a portion of the net negative effect on the trading asset that we own. We will be working through a partial hedging related strategy to mitigate the net loss that will be ensued over the course of the next eight to nine years as those spreads come back and tighten and the debt matures. The answer to your question is yes, over the course of time those gains will normalize as the bonds mature.

Our next question is from Matt O’Connor you may ask your question and please state your company name. Matt O’Connor – UBS: Could you quantify the decline in interest margin you expect in 2Q and then also the upside opportunity in the back half of the year assuming we are mostly done with the Fed cuts?

We anticipated some marginal decline in the margin during the first quarter which we realized six basis points quarter over quarter. We are continuing to see in the marketplace active deposit pricing as people want to maintain liquidity both on a customer and a wholesale basis. I will say that we’ve seen some normalization if you will of the rate betas on the various interest bearing deposit products in recent weeks over the past month timeframe. While the historical relationship that mean rates paid and changes in libor have not held in the last quarter and that had put some pressure on our net interest margin. We are seeing some normalization of pricing in the marketplace to reflect the lower short term interest rate that the Federal Reserve is obviously been moving the market towards. I think that is a key element for us an also our ability to grow low cost deposits as we mentioned in the presentation our period end balances and the balance mix improved. We have gotten growth on a year over year basis 3.5% we have a tremendous number of initiatives focused on growing our net new checking household. We have spent a significant amount as you can see in the numbers on our marketing and advertising and the growth in core customers through our My Cause campaign which has been very successful. We are focused on growing those household and those lower cost deposits and that will be a key determinant along with this rates paid scenario as to whether or not margins stabilizes in the short run and then improves. Obviously the steeper yield curve in general is a benefit to us but we also have to get the relationship between the earning asset yield change and the liability costs to normalize somewhat before we can feel good about projecting growth in the margin. Matt O’Connor – UBS: Its sounds like you would hope just a modest decline in Q2 if I understood correctly?

Our next question is from Mike Mayo you may ask your question and please state your company name. Mike Mayo – Deutsche Bank: The E² initiative you have $113 million this quarter and you look for $500 million for the year. Should we expect only a little bit more incremental phase quarter to quarter?

Yes. I think that’s accurate. We are working on the longer term value aspects of our program at this point. Many of the shorter term ones have born fruit and will be what they are. We are increasing the 2009 number as well. Mike Mayo – Deutsche Bank: Back to credit quality. You said the problems are mostly confined to residential mortgage, home equity, and construction as you mentioned but the other 87% of the portfolio, how do you feel about that? We are hearing from some other banks that increased concerns with small business and maybe even certain areas in the commercial portfolio.

In the other 87% of the portfolio the portfolio looks stable. Of the areas where we are watching it very carefully and really are intervening aggressively is we are concerned about our residential construction specifically within Southern Florida and are spending a lot of time and attention trying to get those situations stabilized. As you look at deterioration in the core portfolios they continue to perform pretty well. The CNI looks very good some softening in our lower end small business product but nothing dramatic. I think as you really take a look at it, we don’t have what a lot of the other guys have got which is lots of unsecured consumer debt out there which is where I think a lot of the deterioration is beginning to take place. The commercial portfolios are holding up very well. Mike Mayo – Deutsche Bank: Last question, this is a hard question. What impact does what’s going on with libor have on you guys or how you even think about some parties that you deal with?

As you can see with the relationship change that libor has had it was above Fed funds for a period of time it them moved down below Fed funds as the Federal Reserve was moving short term interest rates down and then in recent weeks its moved back up sharply. Our overall sensitivity position we are liability sensitive and so as rates decline and the curves steepens in general that benefits us and so as I mentioned they key to that relationship is not only the effect that higher libor has on earning asset yields but also the relationship of the various interest bearing deposits to whichever metric you want to reference. If you want to think about it relative to libor, the swap curve or Fed funds. The key to our margin stability and increase over the course of the year will be affected by that libor Fed funds relationship will be more affected by the lower cost deposit growth that we realized and the manner in which deposits are priced relative to those various metrics.

Betsy Graseck you may ask your question and please state your company name. Betsy Graseck – Morgan Stanley: On the reserve bank could you give us some indication as to how you are factoring in home price changes? I’m wondering if your reserving analysis takes into consideration home price values at present time or some future expectation for home prices.

We do a segment by segment review. The segments reviews factor in a view basically based on a Case-Shiller indexes for housing prices. We review what’s moving in housing prices and adjust our severity expectations around charge offs for the individual product segments which really captures the movement in housing prices. We make, in addition to the quantitative adjustments, which would have a tendency to lag we make qualitative adjustments in expectation of movement of the housing prices. Betsy Graseck – Morgan Stanley: Are you factoring in the forward expectation in case Shiller forwards or are you mostly using just point in time data?

We analyze the point in time data in order to determine what we think the current loss expectations are within the portfolio and then we make qualitative adjustments based upon the future movement expectations in the Case-Shiller indexes. Betsy Graseck – Morgan Stanley: Could you just give us a sense of what your forward look at this stage for the portfolio?

I believe that especially the Florida markets are showing some continued downward movement in the markets specifically in Southern Florida. The rest of the markets are showing slight downward trends. The Atlanta marketplace and the Georgia marketplace is stable to slightly down. Mid-Atlantic markets are stable to a little more down in the marketplace. Basically our Carolina markets are relatively stable at the moment. Betsy Graseck – Morgan Stanley: On the Coke question, I know that you’ve been thinking about different alternatives including an outright sale and the regulators are planning on some of the proposals that you have. I’m wondering when do you decide not to wait for the regulators any more and do what you can do which is execute a sale and recognize that gain to bring that into your tier one number?

As Jim mentioned you can surmise from the evaluation that we’ve been going through now for several quarters that our targeted transactions do not include just a simple sale of the stock to generate the tier one capital out of the holdings that we have. We are not in a posture where we need to immediately convert the stock to capital. We have a strong base capital position, we have a strong liquidity position, our tangible equity asset ratio is in very good shape so we are going to finish out the process that we entered into back several quarters ago and we expect that that will be complete during the second quarter. I just say stay tuned we’ve given you a fair amount of information as to what we expect the result to be if we are able to bring the proposed transactions to fruition to your point we always have that alternative options but we are focused on finishing up here in the second quarter and we’ll give you a full overview of the transactions at that time.

Just to add to that I think it’s important to understand that we are trying to find the best reasonable transaction for our shareholders, that’s who really matters in all of this. Given our capital position we have been searching and we hope we have found transactions that will accrete better to shareholders than a simple sale might.

As you know, Coke continues to perform very well given their earnings release last week or so their dividend increased and so we are not going to accelerate the process just to meet an arbitrary timeline. We’re going to try to complete a transaction as Jim mentioned are in the best interest of our shareholders and we anticipate doing that here in the second quarter. Betsy Graseck – Morgan Stanley: That makes sense, I’m just thinking that since you initiated the transaction, announced it to the investing public, credit quality has been deteriorating not only at SunTrust but in the industry. The bar has been raised with regard to what tier one needs to be in this environment or asset durations or extending and credit deteriorating. I’m just wondering what degree of urgency do you feel with regard to not only the Coke holding but capital structure in general.

Fortunately we are in a position where we can be careful and caring about this to the benefit of everybody. That’s the way we are approaching it.

You next question is from Jefferson Harralson and it will be our final question you may ask your question and please state your company name. Jefferson Harralson - Keefe, Bruyette & Woods: I have a couple questions for Tom. If you guys break out the Florida exposures that a lot of the banks we’ve seen this quarter have had or even Georgia NPAs especially on their residential construction portfolios can you talk about how Georgia is holding up maybe even versus Florida in your residential construction and maybe your HELOC portfolios?

I think the Florida portfolio is where we saw the early incurrence of our problem portfolios. We really started about a year and a half ago to take a look at our residential construction portfolios and have managed those down aggressively over the past year and a half. That exposure is down about $1.7 billion and outstandings are down $500 to $550 million over that period of time. We watch our inventory levels with all of the builders very carefully. What we’ve seen is some softening specifically in lower home prices in the Georgia region but where we lend most of our money is in the custom home marketplace, that’s holding up relatively well. In Florida, however we’ve seen a deterioration in housing prices less and less inventory going into the marketplace and we’ve been working through that stuff fairly aggressively so we’ve seen some deterioration in the lower end of the Georgia market I guess is the best way I can answer that for you. Jefferson Harralson - Keefe, Bruyette & Woods: In the delinquency the improving delinquencies in the home equity book in the first quarter what part does seasonality play in it? Isn’t first quarter a better seasonal quarter there and we should expect that to maybe increase since we have had home prices decline expected to continue to decline. Why do you think that improvement is going to last throughout the year if you think that?

The home equity book is one of the three problems we talked about earlier. It is the one we think is going to continue to have problems through the remainder of the year. Early state delinquencies while they flatten didn’t radically improve in the home equity book during the first quarter; they improved a lot in the other two problem portfolios. Typically the first quarter sees some seasonality adjustment but it’s not a big seasonality improvement quarter for us and in fact the second quarter would show seasonality improvement more aggressively than would the first quarter. We are not enthusiastically optimistic about what’s going to go on in the home equity market. We think its going to be a pretty long haul over the next year to really if we move through the HELOC specifically. Our home equity loan portfolio is older and more mature and performing really well. It really is the brokered loans where we are really having the majority of our problems. That a little over $1.8 billion, as you look at that portfolio its going to continue to cause problems over the next two or three quarters.

With that, thank you very much for joining the call today.

This concludes today’s conference thank you for participating you may disconnect at this time.