Welcome to the SunTrust Third Quarter Earnings Conference Call. Parties will be on a listen-only mode until the question-and-answer session of today’s conference. (Operator Instructions) This call is being recorded. If you have any objections you may disconnect. I’d like to introduce your speaker, Mr. Steve Shriner and he is the Director of Investor Relations.

Good morning. Welcome to SunTrust’s third quarter earnings conference call. Thanks for joining us. In addition to the press release, we’ve also provided a presentation that covers the topics we plan to address during our call today. Slide two outlines the content, which includes an overview of the quarter, financial results and a review of credit quality. The press release presentation and detailed financial schedules are available on our website, www.suntrust.com. This information can be accessed by going to the Investor Relations section of the website. With me today are members of our management team Jim Wells, Chief Executive Officer; Mark Chancy, our Chief Financial Officer; and Tom Freeman, our Chief Risk Officer. Jim will start the call with an overview of the quarter. Mark will then discuss financial performance and Tom will conclude with review of asset quality. At the conclusion of the formal remarks, we’ll open the session for questions. Before we get started, I need to 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 list the factors that might cause actual results to differ materially in our press release and SEC filings which are available on the website. Further, we do not intend to update any further forward-looking statements to reflect circumstances or events that occur after the date the statements are made and we disclaim any responsibility to do so. During the call we’ll discuss non-GAAP financial measures in talking about the company’s performance. You can find the reconciliation of these measures to GAAP financial measures in our press release 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 -- websites are located on our website. With that, I’ll turn the call over to Jim.

Thank you, Steve. Good morning, everybody. Glad you’re with us this morning. Financial results improved significantly this quarter as we earned $84 million or $0.17 per share. Strong revenue coupled with lower credit costs grew significantly increased profitability. As you’re all aware throughout this economic cycle we have been positioning our businesses for growth. Those efforts are gaining traction and resulting in improved performance. Until macroeconomic indicators are mixed and there remains uncertainty in regard to regulation we are increasingly encouraged by the improvement in our operating results. Revenue growth in the quarter was particularly strong in mortgage related revenues as we benefited from the lower interest rate. SunTrust Robinson Humphrey also had a terrific quarter posting report investment banking revenues. Partially offsetting the performance of these core businesses, excuse me, was a decrease in service charges, largely related to Reg E and $81 million of mark-to-market losses on debt and indexed linked CDs. Net interest income and net interest margin increased compared to last quarter, up 5% and 8 basis points, respectively. Net interest margin increased largely due to the improved funding mix and lower rate paid on deposits. Additionally, the securities and loan portfolios increased, while earning asset yields remained stable. Total expenses were flat compared to last quarter while core expenses increased mostly driven by revenue related compensation and legal related expenses. Mark will provide more detail on this momentarily, however, I will reiterate that we continue to manage expenses tightly across the organization while making what we believe are appropriate investments in our business to facilitate growth. Asset quality trends continue to improve with non-performing asset, non-accrual loans, net charge-offs and provision for loan losses all declining this quarter. As anticipated, early stage delinquencies were stable overall. We made a significant stride toward our goal to…

Thanks, Jim and good morning everybody. I’ll begin my comments today on slide seven of the earnings presentation with a review of the summary income statement. For the quarter, we posted net income to common shareholders of $84 million or $0.17 per share. This is $140 million improvement from the loss to common shareholders of $56 million that we posted in the second quarter. The improvement was largely attributable to strong core revenue performance, which increased $153 million sequentially. Net interest income increased 5%, non-interest income increased 10%, with a combined result of 7% increase in revenues. Now the key revenue drivers included increased earning assets, expanded net interest margin, significant increases in mortgage production and servicing revenue and a very strong quarter for investment banking. Further, a $47 million decline in provision for credit losses and flat non-interest expenses supported the sequential improvement in earnings. Provision for taxes increased $63 million to a small tax liability of $14 million with no material discrete items impacting tax provision in the quarter. The net effect of securities gains, debt extinguishment costs and mark-to-market gains and losses contributed $47 million to pre-tax income and we’ve adjusted for these items when presenting SunTrust’s core non-interest income for the quarter. In addition, third quarter results included $59 million in mark-to-market losses and an increase in legal related cost that we’ve not adjusted for. I’ll talk more about these puts and takes in just a minute. However, the overall takeaway was that this was a solid quarter of earnings for SunTrust. Now, with that said, I’ll also acknowledge that the sustainable earnings of the company are still not where we want them to be. While we are very pleased with the revenue performance of our investment in mortgage banking businesses, we recognize that these revenue…

Thanks Mark. This morning, I’m going to review our asset quality beginning on slide 15. As Mark and Jim noted earlier in the call, asset quality continued to improve this quarter. Charge-offs, provision expense, non-performing loans and non-performing assets all decreased. Loan balances increased and overall delinquencies were basically stable. Net charge-offs during the second quarter were $690 million, down $32 million from last quarter. Charge-offs continued to be heavily concentrated in the residential real estate related portfolios, including residential mortgages, construction and home equity. The net charge-off ratio declined from 2.57% to 2.42% with most portfolios showing improvement. Stable mortgage and higher commercial real estate charge-offs were the exceptions to this declining trend and I’ll talk about these more in a moment. Provision expense declined as a result of lower charge-offs. In addition, with improved asset quality metrics in the current quarter and an outlook for continued gradual improvement, the allowance for loan losses was reduced by a modest $70 million. The allowance to loan ratio declined to 2.69% of loans or 12 basis points. With roughly half the decline related to lower reserves, the other half of the decline is related to higher loan balances. As Mark mentioned earlier, the portfolio mix continued to improve, with higher risk portfolio balances like construction continuing to decline and growth occurring in both higher quality and federally guaranteed portfolios. Nonperforming loans declined during the quarter by over $325 million or 7%. This is a fifth consecutive quarter of declining nonperforming loans. Owned real estate also declined resulting in nonperforming assets declining by nearly $400 million. Aggressive problem asset resolution coupled with continuing trending of lower inflows into nonperforming drove the decline in the current quarter. Early stage delinquencies remained basically stable during the quarter. Delinquencies are currently below 1% after excluding…

Operator, I think we’re ready to take our first question.

(Operator Instruction) The first question is from Matthew O’Connor from Deutsche Bank. Matthew O’Connor – Deutsche Bank: Hi, guys.

Good morning.

Good morning. Matthew O’Connor – Deutsche Bank: Regarding the private label mortgages that you sold or securitized, do you have any more color on the LTVs or the FICO scores or how the loans are actually performing?

Matt, it’s Mark Chancy. How are you? Matthew O’Connor – Deutsche Bank: Good.

You know, the data that we are providing, let me just run back through it. So we’ve got the information that we’re putting out publicly today. We have about $30 billion of non-agency related product that was sold during the ‘05 to ‘07 period with $17 billion that’s currently unpaid principal balance. What we noted in the call was that 56% of that $30 billion is prime-related product including prime jumbo loans with the remaining 44% high quality, low doc loans. The non-agency product is included in our reserve process but we’ve had few requests to date and few losses and the bulk of the reserves that we’ve been talking about and that we show in our presentation materials relate to the agency products. You’ll recall that total reserve is around $270 million, which was up $14 million. But as far as the individual statistics of the various loans by vintage, we just have not put that out in the public domain at this point. Matthew O’Connor – Deutsche Bank: Okay. And then just separately, I know as companies start to become profitable, the tax rate can get all funky. If you could just remind us of what the recurring tax credits are and how long we should assume they stick around?

Hey, Matt. This is Steve. You know, you’ll notice that with a pretax, I think it was around $170 million or so this quarter, we posted a small tax provision. If you compare that to our historical kind of at run rate earnings of call it 30 to 32%, what you’ll see is excluding discrete items, you should get a fairly linear function for tax rate going forward between that near breakeven level we’re at today and that long-term rate of 30 to 32% as we return to a run rate of earnings in the future. Does that help? Matthew O’Connor – Deutsche Bank: I guess it’s just going to be -- it will probably take a couple years to get back to that normal tax rate, right? So as we’re modeling it out, is there a kind of tax credit that we should assume each quarter plus a rate on top of that?

Well, with $170 million in pretax and tax liability of 14, you can assume that we have a permanent GAAP tax differences that shelter somewhere around $150 million of taxable income every quarter. Matthew O’Connor – Deutsche Bank: Okay. And then just lastly, if I may, the page on capital where you show 8% Tier 1 common, just to be clear, is that under the Basel III calculation?

Yeah. Matthew O’Connor – Deutsche Bank: Okay. And so I guess there’s not any meaningful change in RWAs or anything like that?

We have not made, let me clarify. We do not have any current significant adjustment to the capital calculation associated with things like DTA and SSR. So as we sit here today, that’s an immaterial effect on our overall calculation, so we basically just provided to you a straight calculation of our Tier 1 common but you should assume that those two things as of today are basically equivalent at 8%. Matthew O’Connor – Deutsche Bank: I guess if they adopt the OCI or if the U.S. adopts the OCI rule, there’s some Coke stock that is not included in regulatory capital that we would add back.

I’ll get back to you on that, Matt. Just to be clear. Matthew O’Connor – Deutsche Bank: Okay. Thank you.

The next question is from Nancy Bush from NAB Research. Nancy Bush – NAB Research: Good morning, gentlemen.

Good morning. Nancy Bush – NAB Research: Jim, could you just speak to the whole foreclosure moratorium issue and where SunTrust kind of sits in the spectrum of what’s going on right now? That’s my first question.

Well, as you heard from Tom, Nancy, we have, 70% of our activity is in Florida and the number there of loans in the next period of time for hearing is less than $300 million. At the same time -- excuse me, 300 loans. Sorry. Nancy Bush – NAB Research: Big difference.

I will correct it. 300 loans. And I guess what I would say to you is that I think the results of all this furor will be variable based on institutions and how many loans they’ve been working on and how they’ve done it. We’re just trying to be very clear and very cautious, making sure we comply with everything we need to comply with, but the effects so far have been limited. Now, what happens to others, honestly I don’t know and I find reading the press not particularly helpful about that. Nancy Bush – NAB Research: Okay. Secondly, the big increase you had in nonperform -- pardon me, in non-interest bearing deposits from sequentially, could you just speak to the sort of new account acquisition trends that may be embedded in that and how that big number came about?

I’m going to let Bill Rogers answer that one, Nancy.

Hey, Nancy. Nancy Bush – NAB Research: Hi.

We have been -- the whole transition in the deposit mix from learning CDs, single service CDs, okay, and really high focus on money market and demand. You can see the impact of that, but really underlying all that is the focus on household growth. I mean, that’s really what we’re trying to accomplish and on an annualized basis we’re somewhere in the 3% to 4% in total household growth which is where the focus is. And checking accounts box asking sort of have a lot of variability around them but that’s the focus. Nancy Bush – NAB Research: Are you seeing any impact, Bill, as – I mean, Wells Fargo, I guess has now changed the name on the building and they are sort of beginning to make its presence better known there and I think JPM is being pretty aggressive in the market, although they may be more aggressive on the loan side. Are you seeing any kind of shift as the competitive situation changes there?

I think the answer would be -- it’s always been really competitive in our markets and we’ve never been better positioned from a competitive standpoint. Nancy Bush – NAB Research: Are you guys beginning to sort of tout hometown bank advantage that sort of thing a bit more?

Well, we’ve been pretty aggressive on the marketing side in Atlanta. This is -- particularly here, this is our home turf here and we’ve been -- we have been and will be highly protective of our franchise.

Thank you, Nancy. Nancy Bush – NAB Research: Thank you.

The next question is from Mike Mayo from CLSA. Tom Sherlock – CLSA: Yeah. Hi. Good morning. This is [Tom Sherlock] filling in for Mike. I just had a follow-up on your loan utilization. You mentioned that it is flat to slightly down in some categories. I just want to see if you can give more color on what the actual percentages are in the different areas and where you expect that to go?

Yeah. I’ll handle that. It’s Bill again. On the large corporate side it’s sort of generally in the 17% kind of range and that’s pretty much all-time lows. Generally that could be somewhere in the mid to high 20s, sort of on an average kind of basis and on the commercial -- sort of commercial, middle market basis it’s in the low 30s and has historically averaged somewhere in the low to mid-40s. And it has for the last three quarters sort of -- the rate of decline has abated. But we’re sort of bobbling around those kind of numbers. Tom Sherlock – CLSA: Okay. So you would expect that to maybe go a little bit farther down?

No, no, I’m not saying that. I’m just saying it sort of has hovered consistently in the last three quarters. Tom Sherlock – CLSA: Okay. That’s would be consistent. Okay.

I would hope that we would start to see some kind of increase, depending on some type of economic recovery and then certain parts of our business, middle market would be the example, I mean, the commitments are going up. So we’re increasing our at bats and increasing our relationships, but the utilization rate’s still low. Tom Sherlock – CLSA: Got it. Great. Thank you.

Okay. We’ve got time for one more, I think.

The next question is from David Hilder from Susquehanna. David Hilder – Susquehanna: Good morning. Actually, two quick questions. First, Tom I think mentioned that you have been putting some agency mortgages on the balance sheet and I wondered what your appetite for that is going forward and what your interest rate management strategy would be, assuming they’re 30 year fixed paper.

If you don’t mind, let’s get Mark to answer that.

Yeah. This is Mark Chancy. We have added as we mentioned a little over $1 billion worth of that product during the quarter. We have other aspects of the mortgage portfolio that have been driving and as a result, this is somewhat of an offset, if you will, to that attrition. We’re not looking to grow the overall on balance sheet mortgage portfolio significantly. We’re trying to continue to de-risk our overall loan portfolio and add back quality assets, particularly in this case with a government guarantee. One of the things that you’ll note in our earnings release is that during the -- we have over the course of the past couple of quarters both added mortgage loans with the guarantee as well as certain student loans as well as other product that is government guaranteed, such that the total is now about 7% of our total loan book or about $8 billion. So it’s certainly something to take into consideration as you’re looking on a forward basis at both our improving credit trends as well as the de-risking that’s taken place in the higher risk portfolio and where the growth has come is on the margin in some of these government guaranteed areas as well as the consumer book that we outlined during the presentation. So you shouldn’t expect to see that mortgage portfolio grow significantly over the course of the next couple quarters. David Hilder – Susquehanna: Okay. Thanks. That’s helpful, very helpful. And then back to page six on the Basel III calculation, you said that you wouldn’t have much of an impact because of MSR or DTA on the numerator, but I think what Matt may have been asking about was the impact of the Basel III rules on the denominator, the RWA amount.

At this point based on the calculation that’s we have made, we don’t expect any significant effect on the calculation under the new rules. David Hilder – Susquehanna: Okay. Thanks. Thanks very much.

Thank you.

It’s 5, although, it looks like we have time for one more.

The next question is from Bob Patten from Morgan Keegan. Bob Patten – Morgan Keegan: Hey, good morning, everybody.

Good morning.

What’s your thoughts about the mortgage production, if you talked about this I apologize but just in terms of the look forward, do you continue to see several more quarters of strong, this type of mortgage production.

This is Bill. I can’t say for several quarters. Our application’s been up in the 27 or so percent in the last quarter. Rates certainly have continued at an attractive pace and we’re on that pace again through where we are in October. How long that will continue, given the fact that the bulk of this activity is refinance, I mean, eventually we’re going to have to have some purchase volume for that to continue at this kind of pace.

Okay. Thanks, Bill, appreciate it.

There are no more questions. We will end the call. Thanks, Bob.

That concludes today’s conference. You may disconnect at this time.