Steve Shriner - Director of IR Jim Wells - President and CEO Mark Chancy - CFO & EVP

Gary Townsend - Friedman, Billings Matthew O'Connor - UBS Christopher Marinac - Fig Partners Kevin St. Pierre- Sanford Bernstein Mike Holton - Merrill Lynch Strategic Investment Group John McDonald - Banc of America Securities

Welcome to the SunTrust Third Quarter Earnings Conference Call.All participants have been placed on a listen-only mode until theQuestion-and-Answer Session. (Operator Instructions) Today's conference isbeing recorded. If you have any objections, please disconnect at this time. I would now like to turn the call over to Mr. Steve Shriner,Director of Investor Relations. Sir, you may begin.

Good morning, and welcome to SunTrust third quarter 2007 earningsconference call. Thanks for joining us. In addition to the press release, wehave also provided a presentation that covers the focus of our call today. Youwill hear an overview of the financial results, including market impacts, an updateon our shareholder value initiatives, including our efficiency and productivityprogram, and a detailed view of our credit picture. The press release, presentation, and detailed financialschedules, are available on our website www.suntrust.com. Information can beaccessed directly today by using the quick link on the suntrust.com homepageentitled Third Quarter Earnings Release or by going to the Investor Relationssection of the website. With me today, among members of our executive Managementteam, are Jim Wells, our Chief Executive Officer and Mark Chancy, our ChiefFinancial Officer. Jim will start the call with an overview of the quarter and discussionregarding our progress on the shareholder value initiatives. Mark will becovering financial topics and will provide an in-depth overview of credit, and thenwe will open the session for questions. First, I will remind you that our comments today may includeforward-looking statements. These statements are subject to risks anduncertainties and actual results could differ materially. We list the factorsthat might cause actual results to differ materially in our press release andSEC filings, which are available on our website. Further, we do not intend to update any forward-lookingstatements to reflect circumstances or events that occur after the dateforward-looking statements are made, and we disclaim any responsibility to doso. We’ve detailed the forward-looking statements made inconjunction with today’s earnings release in the Appendix of our 3Q earningspresentation. During the call we will discuss some non-GAAP financialmeasures in talking about the Company's performance. You can find thereconciliation of these measures to your GAAP financial measures in our pressrelease and on our website. Finally, SunTrust is not responsible for, and does not edit,or guarantee the accuracy of our earnings teleconference transcripts providedby third parties. The only authorized live and archived webcasts are located onour website. With that let me turn it over to Jim.

Thanks. Good morning, everyone. Glad you are with us. As yousaw on our press release this morning we reported earnings per share for thethird quarter of a $1.18. Our results included a $0.28 per share negativeimpact on net valuation losses attributable to the recent disruptions of creditand capital markets, and a $45 million or $0.08 per share negative impact of severanceexpenses related to our ongoing E-Square Efficiency and Productivity Program. Clearly we were not immune to the deterioration in thehousing market and the related turmoil in the capital markets, as well as thechange on the credit side. However, based on what we have seen so far, we wereimpacted to a lesser extent than many other institutions. It is disappointing,however, that the positive impact of the continuing progress we have made onour initiatives driving net shareholder value was overshadowed by the difficultmarket conditions. In a few moments Mark will detail the impacts of thisenvironment and what it has done to our results this quarter. On a positive note regarding our financials, the netinterest income was up 4% over the same quarter last year, but was flat overthe prior quarter. The net interest margin increased 8 basis points from thesecond quarter making this the third consecutive quarter an 8 basis pointmargin expansion. This continued improvement is a direct result of theshareholder value initiatives, in particular, the balance sheet managementstrategies we have recently implemented. Notwithstanding our strong creditculture, we did experience higher net charge-offs of 34 basis points, principallyas a result of the change in the credit cycle, and particularly in the consumerportfolio, and we have increased our provision and reserves. We will expand onthis discussion later on the call this morning. Non-interest income was down 5% from the same quarter lastyear. As I mentioned, we had a negative impact of a $161 million from the netvaluation losses this quarter. Despite a difficult operating environment, wegrew revenue across a number of areas. Once you peel back the net mark-to-marketadjustment there was underlying growth in trading account profits andcommissions, which were due to stronger customer related trading activities,principally in derivatives and structured leasing. Also, trust and investmentmanagement revenues were up slightly as a result of impacts of enhanced revenueinitiatives. However, the comparative growth rate of trust income wasnegatively impacted by the merger of Lighthouse in the first quarter of 2007,as well as the Bond Trustee sale in the third quarter of 2006. Additionally there was good growth in service charge income,up 10% and strong annuity sales that drove retail investment services incomegrowth up 28%. Mortgage servicing income increased 56% primarily from growth inthe servicing portfolio. Non-interest expense increased 7% from the third quarter oflast year due to a number of significant non-recurring items. Excluding theone-time items, expenses actually grew in the 2.6% range in the quarter andthese results would have been even better that warrant for the increasingexpenses associated with the current credit environment, including increasedoperating losses driven by mortgage related fraud. The low growth rate ofexpenses is a continued reflection of the significant progress we've made on thefundamental initiatives in place to grab shareholder value. We have continued with a high degree of success in our E2program. As you can see on page three of the presentation text, cost savings inthe first three quarters totaled $140.1 million with $59.5 million was thatachieved in the third quarter. So, note that we are slightly ahead of our 2007projections. At this point, we anticipate that we will exceed ourupwardly revised target of $181 million and estimated cost savings for theyear, but while we are confident that we will achieve our 2008 goal of $350million, it is premature to comment on what an upward revision is appropriate,as there are number of initiatives whose precise timing and benefits are stillbeing developed. Needless to say, we are quiet pleased with the results ofall of these efforts and what they are producing. So, I'll take a moment tooutline some of the recent highlights associated with the program. Do recallthat we launched a rigorous internal study of various organizational structuresand processes that included evaluating certain back office functions,consolidating various support functions and reviewing management spans andlayers. We announced in August that we would eliminate approximately 2,400,primarily non-customer contact employee positions by year-end 2008. And aspreviously disclosed, these actions necessitated a third quarter pre-taxone-time charge of $45 million or $0.08 per share. Discharge of these positions have been eliminated includingover a 1,000 individuals being notified of position elimination in August. Wewill begin to realize the associated cost savings in the fourth quarter withthe full impact on these position eliminations coming in the first quarter of2008. A great deal of the savings associated with ourorganizational review effort stem from streamlining internal processes withmore efficient activities, thereby making it easier to do business with us bothinternally and externally. We do this valueelimination of non-client related activity often. It is important to point outthat these changes did not eliminate direct revenue for losing positions. Inactuality, the percentage of SunTrust employees and revenue and client facingjob has been steadily increasing. Moving to corporate real estate, the implementation of ourcorporate real estate space utilization strategy, including sale leaseback, isprogressing according to plan. Completed transactions today represent nearlyone quarter of the 2009 run rate improvement bill of a $100 million. We've been actively marketing 469 properties over the pastseveral months. Majority of these properties are currently under contract andwe expect to have the remaining properties that are for sale under contract bythe end of the year. Based on current data, it actually looks like all of themwill be under contract within the next several weeks with closings on theremaining sales expected to occur during the fourth quarter of '07 and thefirst quarter of 2008. As I previously articulated, it is a crucial part of ourongoing effort to grab shareholder value and we strategically invest to ensurethat we are able to capture market opportunities and to grow the businessovertime. So, on page 4 of the presentation deck we've outlined somerecent examples of where we are investing for growth. Our mobile bankingapplication, which we will launch next month is designed to target Gen X andGen Y segments of the population. It will allow users to access account balanceand transaction history via mobile devices and it'll also enable users toconnect to the increasingly popular Bill Pay platform. We are also implementing an online payroll application forour highly valued small business clients. It will be integrated with the onlinecash manager product and provide end-to-end payroll functionalities. This willalso launch in November. In the mortgage line of business, we continue to capitalizeon the current environments to obtain highly seasoned, top-producing mortgageoriginative to augment our efforts to grow that business and to increase theirmarket share. We added 178 net new real estate mortgage loan officers in 2007,and the net overall sales team increased by over 300. Also during 2007, we'll open 47 new branches, improve,renovate or refresh over 50% of our existing branches. Last investments Imentioned today are those related to our GenSpring family offices formerlyknown as AMA. In addition to the recent rebranding, we've also opened a New York office, hiredseveral more client advisors and completed a small acquisition. These examplesare only a subset of the various investments we are making for the futuregrowth of the institution. Moving to the capital management side of our shareholdervalue efforts, we've repurchased 10.2 million shares to date in 2007 throughthe combination of an accelerated share repurchase program and open-markettransactions. We remain committed to our goal of maintaining a 7.5% Tier 1capital ratio and have an estimated Tier 1 ratio of 7.45% in the third quarter. We are also continuing our evaluation of how to optimize ourcapital structure in light of our holdings of Coca-Cola of common stock. I willpoint out the obvious in saying that this evaluation is not about the Coca-ColaCompany. We believe their management team and board are leading the company inthe right direction for the benefit of all shareholders. This is only about theSunTrust Capital structure and uncovering ways to optimize are inherentefficiencies for SunTrust in holding a significant portion of our equity basein a publicly traded stock. As a result, as we've noted, we are going for amethodical approach of evaluating our alternatives, and we expect evaluation tobe complete and to communicate our plans by the end of this year. In summary, despite the difficult operating environment thisquarter, we are pleased with the results of our efforts to drive shareholdervalue, and the tangible benefit they are producing. Our focus remains on keycomponents of our plan, while revenues reduce the growth rate of expenses,increase the efficiency of the balance sheet and optimize our capitalstructure, while returning a high rate of our earnings to shareholders. I'll look forward to continuing our share -- to share oursuccess on these fronts, as we finish at the current year and move into 2008. Now, I'd like to turn it over to Mark Chancy. Mark?

Thanks Jim, and good morning. Given the difficultenvironment that we are operating in, I am going to be providing near-termguidance regarding certain key metrics in my comments, and for your reference,we've included in the appendix a summary of the forward-looking statements thatI plan to make. I'll begin the discussion outlining the key drivers of ourthird quarter results, before spending time discussing the credit environmentin some level of detail. As Jim noted and as outlined on page 5 of our earningspresentation, we reported net interest margin of 3.18, our third consecutive 8basis point margin increase. Margin improvement was a direct result of thebalance sheet management strategies that we've implemented in connection withour shareholder value initiatives in 2007. We would also expect this positive trend in margin tocontinue in the fourth quarter. I'll remind you that we were slightly liabilitysensitive, and as such lower short-term rates and a more steeply sloped yieldcurve creating an environment conducive to maintaining or growing our netinterest margin. As we remain focused on maximizing the value of our balancesheet, we will continue to be selective in the businesses and the assets thatwe are likely to grow. Average loans for the third quarter of 2007 wereapproximately $120 billion, down 1% from the third quarter of last year. Thedecline was due to the balance sheet management strategies implemented sincethe second quarter of 2006, and which accelerated in the first half of 2007. Strategies resulted in the sale of nearly $10 billion inloans over the past year primarily comprise of mortgage, student and corporateloans. Taking into account these loan sales the company actually had underlyingloan growth across most categories, and compared to the second quarter of 2007,average loans were up $1.4 billion or 5% on a sequential annualized basis,primarily driven by commercial loan growth. And with regard to loan growth, onething that you should not expect to see is any meaningful increase in largecorporate loans related to "hung" leveraged buyout transactions, asSunTrust does not have any significant exposure in this area. Now shifting to deposits. We continue our focus ongenerating low-cost deposit growth despite our client’s increasing preferencefor higher rate products and the highly competitive market for deposits at thistime. Despite a 1% decline in average customer deposits year-over-year, we weresuccessful in reducing total brokered and foreign deposits by over 20% relativeto the third quarter of 2006, thereby reducing our reliance on these highercost earning sources and improving margin. We have also recently experienced significant lift in newchecking account acquisitions as a result of our successful My Cause campaign.This promotion will continue in the fourth quarter and we are focused onexpanding our relationships with these new customers through cost sale ofadditional products and services. Now moving to the $42 million increase in provision thisquarter relative to last quarter. As you saw this morning, third quarter netcharge-offs were 34 basis points. The year-to-date charge-off ratio is 28 basispoints, which is within the 25 to 30 basis point guidance range that weprovided in July. However, we expect net charge-offs to increase somewhat inthe fourth quarter, though at a slower rate of increase than we haveexperienced in recent quarters. To be more specific, looking out over the nextthree quarters, we anticipate charge-offs to fall in the 35 to 45 basis pointrange, assuming there is no material further deterioration in the economy. I will be providing an in-depth look at our credit picturemomentarily, though I want to point out here that given the fact that we are ina period of increased uncertainty regarding the direction of the economy,interest rates and residential real estate, we are limiting our guidance oncharge-offs out until mid-2008. Ultimately, the level will be highly dependent on thedirection of the currently isolated and industry-wide consumer credit qualityissues, the health of the residential construction market, as well as homeprices. However, I am going to spend a good deal of time dissecting ourportfolios in providing statistics on various components to demonstrate theiroverall health. I will also get very specific on a few areas where we arehaving some problems, and what we are doing to mitigate the associated potentiallosses. And one final note before I move on to non-interest income.You will note that our allowance total loans increased this quarter by $43million to 91 basis points. Debt allowance to non-performing loans decreased. Iwant to reiterate that we believe the reserve coverage is adequate given ourcurrent view of losses embedded in our existing loan portfolio, I will providea little more color on this when I discuss the components of the portfolio andour current non-performing loans in a minute. Now with regard to non-interest income, as Jim mentionedearlier, we were not immune to the financial impacts of the difficult capitalmarket conditions this quarter. The net mark-to-market impacts to our EPS came in at $0.28per share, or a little over $160 million pre-tax during the quarter. Thisnumber is up from our prior disclosure in early September, which as you recall,was based on our actual results through August. And it was up due to additionaldeclines primarily in mortgage related fixed income valuations in September. We provided a breakout of the impacts on page six of theearnings presentation for your review. As you can see, the most significantvaluations declines, as noted in the capital markets section of this slide,were related to collateralized debt obligations and residential mortgage-backedsecurities. And although these losses are currently largely unrealized,we don't expect material recovery in the short run. The mortgage impact wasrelated to credit-spread widening during July and August where spreads widenedat an unprecedented speed and magnitude. For SunTrust, the spread wideningimpacted mortgages originated for sales through non-agency investors, as agencyproduct is forward sold as part of our normal practice. Beginning back in the fourth quarter of 2006, andaccelerating in the third quarter of 2007, we dramatically reduced our exposureto non-agency products. Currently, less than 5% of our originated for salevolume is non-agency, and it is primarily high-quality jumbo product for thatsmall component. While we are disappointed with the mark-to-market loss in thisarea, had we not taken actions to reduce non-agency production beginning lastyear, our mortgage related losses would have been significantly higher. The impact that is noted in treasury is primarily related toa net positive mark on the $3.3 billion of publicly issued debt that was movedto fair value earlier in the year. As credit spreads widened for the industryand for SunTrust specifically, this debt position gained value. And as with themajority of the negative marks that were incurred in the quarter, this gain islargely unrealized at this point. Capital markets disruption that we and the industryexperienced was unprecedented in terms of speed and size. However, observingthe comparative impact on other firm's capital markets and mortgage businesses,it provides us some comfort in our business mix and risk management business. Now moving to expenses, and I am going to focus on theyear-to-date numbers that you can see on the chart. Year-to-date expensesincreased 3.6% over the same period last year. However, there are numerousnon-recurring items that affected the expense base and current year expenses assummarized on page six. Largest of these items is the net non-recurring E2items of $58 million in 2007, of which severance represents $45 million. Additionally, the $44.5 million impact noted in '07 isrelated to our election to record certain newly originated mortgage loans heldfor sale at fair value. Under this election, costs associated with theorigination of mortgage loans held for sale are recognized as a component ofcompensation expense when the loan is originated. Prior to the fair valueelection and specifically in the year-to-date period for 2006, these costs weredeferred and recognized as part of the gain or loss on sale of the loan. The approximately $11 million reversal of the LILO reserveprimarily relates to truing up some of the reserves that we held against ourleasing program in 2006. The next item relates to an accrual reversal associated witha private placement of legacy trust preferred securities. As a result of theearly termination of these securities we recorded a life-to-date adjustment toour accrued liability resulting in a one-time expense reduction of $33.6million in the quarter. In connection with our capital optimization initiative, weintend to replace this Tier 1 capital in the fourth quarter with hybrid capitalsecurities that have higher equity content. And lastly, in the same vein the$9.8 million increase in expense is due to the loss on early retirement ofcertain legacy trust preferred securities, which we also intend to re-financein connection with our capital strategy, with higher equity content securitiesin the fourth quarter. So the reason we go through this reconciliation process, andafter considering all these various one-time expenses, the bottom line is togive you a view of year-over-year expense growth, which was approximately 1.5%. And the growth on a year-over-year basis after making theseadjustments is really focused in one primary area, which relates to themortgage fraud related operating losses and other costs associated with thechanging credit environment. And if you take into account those expenses thatgrew year-over-year, our overall company expense growth was basically flat. So needless to say, we are extremely encouraged by theprogress we've been making in our ongoing efforts to enhance productivity andefficiency across the Company and the results of those efforts are producing. Let me also note that our effective tax-rate for the quarterwas 27%, which is below our year-to-date rate of 30%. Reduction in rate wasprimarily attributable to the lower level of earnings that we generated in thequarter, due to the mark-to-market losses in the severance related expenses, aswell as, the true-up of expense associated with the early termination of thereferred security, and it was not related to any specific tax event thatoccurred during the quarter. The expected tax rate in the fourth quarter wouldapproximate 30%, resulting in about that level for the full year of 2007. I am going to shift gears and talk about SunTrust creditposture. I will begin this discussion with some general comments about our loanportfolio, and then spend time delving into some of the specific products andloan categories within the portfolio. As you can see on the page seven of the presentation, ourloan portfolio is a $120.7 billion. It’s well diversified from both a productand a client perspective. From a geographic viewpoint, the loans aredistributed throughout the SunTrust footprint, and we have no material exposureto credit card and/or other consumer unsecured lending. The commercial and commercial real estate portfolios, whichcomprise about 40% of the overall portfolio are performing well overall.However, there is an increasing trend of charge-offs in residential mortgageand home equity lines, which collectively represent 38% of the portfolio. So, Iwill spend a few minutes reviewing these in more detail. Page eight of the earnings presentation depicts theresidential mortgage product breakout. The largest portion is our core mortgageportfolio, which represents 63% of the overall portfolio. It’s roughly halfprime jumbo and half ARMs originated for the portfolio. And we have said thisbefore, but I want to reiterate, that we do not have a portfolio option ARMs,sub-prime loans or negative amortizing loans. We do have interest-only ARMs,but the interest only period is 10 years unlike many sub-prime loans. As youcan see in the bullets, this is a highly-quality portfolio with a weightedaverage loan-to-value at origination of 73% and current average FICO scores of729. As you can see Lot loans,which are made for individuals for developed plots, represent only 5% of theportfolio. FICO score is also very strong at 735. Our Prime 2nd Mortgages,which represent 11% of the residential portfolio are comprised of insuredpurchase money second liens. These are often called combos or piggybacksbecause they are closed at the same time as the first mortgage, and theproceeds are used to purchase the home. Now, we also have Alt-A loans of $1.7 billion on a combinedbasis, which comprise 5% of the overall portfolio. $1.1 billion of these arefirst liens and are well secured with a weighted average LTV of 76%. Theremaining $600 million are second lien loans and this portion of the portfoliohas insurance, and we've established a reserve for potential claim denials basedon our experience to date. It is important to note that this is basically a decliningportfolio as we began making a series of changes in the underwriting standardsin the fourth quarter of 2006 that ultimately resulted in rationing down ourproduction of Alt-A loans to virtually zero by the end of the third quarter of2007. Our next loan category Home Equity loans, comprises 12% ofthe residential portfolio, and it too has healthy statistics with a weightedaverage FICO score of 725, loan-to-value at origination of 71%, and 40% ofthese loans are actually in a first lien position. And finally, the 4% of portfolio labeled Wealth andInvestment Management are loans made to high net worth clients in this line ofbusiness. That gives you a detailed overview of our residential mortgageportfolio. And now, I am going to move on to page 9, which depicts the end ofquarter home equity line portfolio approximately $14.6 billion, and you can seethat the weighted average FICO on this portfolio is 734 and 24% of theportfolio is also in a first lien position. 87% of these loans are originated through what would beconsidered low-risk channels. The most common of which is VAR branches, and toa lesser degree, through our wealth and investment management relationships andfor cross sales to our mortgage customers. The remaining 13% has originatedthrough somewhat higher risk wholesale channel. Weighted average seasoning of this portfolio is 27 months.Further, 72% of the portfolio has FICO scores of above 700 and 72% of theportfolio has LTVs of 90% or less. Now the bottom line is that we areexperiencing the most pronounced deterioration in a portion of this portfoliothat has LTVs greater than 90% and current FICO scores that are less than 660. You have the data in front of you now, so you can draw yourown conclusions, but ours is that the percentage of this portfolio that posesthe greatest risk of loss to SunTrust is in the single digits. Now moving to the construction portfolio on page 10.Construction and acquisition and development for commercial business purposesaccounts for 27% of our total construction portfolio. On the residential side,the quarter represents 38% of total residential related development loans, andthis percentage is inclusive of residential acquisition and development,residential construction, construction perm and raw land. 95% of ourconstruction nonaccruals are from residential related construction, and theyare geographically dispersed throughout the SunTrust footprint. We are well diversifiedby client in residential construction, which we believe is a real positive. And as you can see, the loan size, on average, is arelatively small $560,000. So to summarize the point at this slide, a largepiece of the portfolio is currently well performing commercial purposefinancing. On residential, we are well diversified by geography and the numberof borrowers, and finally, we have minimal exposure to raw land. I will finish today by talking about our nonaccrual loans onpage 11, which as I am sure, you have noted increased $238 million since June30th. First, let me be clear about this slide. We are focusing on a subset ofNPAs, the non-performing loans in this discussion, because by and large when aloan moves from nonaccrual to OREO, it has been written down to the expectedrealizable value. The second point is that nonaccrual balances represent theloan amount and the expected loss can be far less, which we intend to pointout. Two of the most important points on page 11 of the presentationare that the Alt-A portfolio is 50% of nonaccrual loans and that 65% of theseloans are in the first lien position with a weighted average LTV of 76%.Second, we have insurance and reserves established to the Alt-A seconds. Sowhile a 76% loan-to-value insurance and reserves don't eliminate potentialadditional losses, these facts should help you reach a conclusion that therewill be relatively low-loss severity on the Alt-A portion of nonaccrual loans. Most of the remaining portion of the residential nonaccrualsare from our core portfolio, which we noted previously has a weighted averageLTV of 73%. So, once again, while there is likely some loss content in thisnon-performance, the lower LTVs will help significantly mitigate the lossseverity. 95% of construction nonaccruals are from residential relatedconstruction and development, and this is an area that we are watching veryclosely. We have not realized any material losses in the construction portfolioyet, but the weakening in the housing market warrants our attention. Now I'll leave the credit discussion by repeating the pointwe believe the severity of losses in residential mortgage NPLs is mitigated bythe loan-to-values and insurance, and noting that our allowance for loan andlease losses covers annualized third quarter 2007 charge-offs by over 260%. Our intent with this detailed discussion today was to helpprovide a better understanding of the overall health of our loan portfolio, andwhere we see the isolated issues. We have been, and will continue toaggressively monitor and adjust underwriting guidelines, product mix andpricing as warranted. With that, I’ll turn the call back over to the operatorto begin the Q-&-A session of the call. Operator?

Thank you. (Operator Instructions) Our first question todayis from Gary Townsend. You may ask your question and please state your companyname. Gary Townsend -Friedman, Billings: Hi, this is Gary Townsend with Friedman, Billings. Good morning Mark and Jim. Markcould you discuss in the home equity portfolio the issues of severity versusfrequency? And, if you could also focus it on, has there been, as we have seenin other companies, a concentration, as I would presume, in correspondentdelivered or wholesale purchase loans?

We have Tom Freeman, our Chief Credit Risk Officer with usthis morning, so I am going to ask him to address that question.

I think severity versus frequency was the first part of thequestion, if you look at the charts that were provided, and we are reallytrying to go over a thought process in terms of the home equity loans, is thatwe are actually seeing most of our charge-offs and problems in that portfoliocoming through a relatively small portion of the portfolio, which is the highloan-to-value and the low FICO score portfolio. Now the portfolios weregenerated with our general profile of strong FICO scores, but we did, in fact,have some that we generated loan-to-values in excess of 90%. It is a relativelysmall number of the portfolio, and it is generating a significant amount ofwhere the losses are coming from. In terms of channels, most of our channel, if you take alook at this, comes out of primarily bank originated loan activity, but I thinkwe would be disingenuous if we didn't say that those loans generated out of ourwholesale channels where we are buying loans from the marketplace, perform inan inferior manner to our core originated portfolios. Gary Townsend -Friedman, Billings: I am sorry, did I understand you, probably to say that thewholesale originated is performing equally to what you --?

No. It's performing poor than our core originated portfoliosout of our branches itself. Gary Townsend -Friedman, Billings: Okay. Thank you for comment.

This is Eugene Kirby, and we have made a number of changesin our origination. It's around the wholesale segment, significantly increasingour pricing and tightening up on our credit standards. And have basically movedto a pass that, by the end of this quarter heading into the fourth quarter wewill have no loans over 90% LTV coming through the wholesale channel and have asignificant reduction in the overall production in that channel, because it hasperformed at a level that we are not happy with compared to the core bank. Gary Townsend -Friedman, Billings: Thank you for your comment.

Thank you, Gary.

Thank you. Our next question comes from Matthew O'Connor.You may ask your question, and please state your company name. Matthew O'Connor -UBS: Yes, UBS. Jim, earlier this year, you had said there were nosacred cows, as you look to evaluate the businesses and the balance sheet mixthat you have. Given the macro environments, it’s probably going to be lot moredifficult than we would have thought both for capital markets and credit. Areyou going to take a kind of a double look at some of the businesses andconsider downsizing or exiting some of them?

Yeah, Matt, as you know, I remain in my no-sacred cowsposition, and we are re-looking at the sub-lines of business actively to seewhat is going on there, what the future potential is, and if we see things outof that work that leads us to conclude the risk is not worth the reward we'llcertainly deal with. Matthew O'Connor - UBS: Okay. And can you give us a sense of what areas you might belooking at and the timing of when a decision might be made?

I would actually care not to until the work is done, Matt,if you don't mind. You could imagine what they would be based on what's goingon in the market, I think. Matthew O'Connor -UBS: Okay. How about on the timing side?

We are looking at it, we constantly look at the sub-lines ofbusiness and I would expect that some of that are getting a re-look, you willsee some activity in over the next month or two or three. Matthew O'Connor -UBS: Okay. And then, just a question for Mark, obviously, a lotof moving pieces here, care to take an estimate of what run rate earnings mightbe, as we go into 4Q and beyond?

You know, Matt, I am going to leave that to you and yourcolleagues. We have tried to be very clear about the items that have, you know,affected our earnings. We’ve talked about severance specifically, we’ve talkedabout the mark-to-market adjustments, the early extinguishment of our legacytrust preferred securities as part of our capital optimization strategy of acouple of cents. We also were very explicit about the benefits that we receivedin connection with the termination of the REIT related transaction. So, I'llleave that to you’ll discretion in terms of determining the run rate. Matthew O'Connor -UBS: Okay. And then, just lastly, I am sorry, I missed it, but interms of provisions versus charge-offs going forward, would you expect, can youbuild to the extent that we saw this quarter?

No. Like we, in terms of the valuation of the allowance, wefeel comfortable based on the data that we have, and our current loan portfoliothat the allowance adequately stated. It will depend on a variety of factors;it will depend on loan growth, the type of growth that we get in the loan book,whether or not we have improvement or deterioration in the existing portfolios,what the level of charge-offs are. So, there are a lot of factors that go intothe determination of what the provision will be in a given period, as you know,and I won't speculate on how all those different variables are going to reflectin the next quarter's results. Matthew O'Connor -UBS: Okay. But just in general assuming your charge-offs fallingin that 35 to 45 basis point range for the next few quarters?

You know Matt, if you assume all of being equal that loanscontinue to grow, then by default, you will expect some level of increase inthe provision relative to charge-offs. How about that? Matthew O'Connor -UBS: Okay.

Thank you for your questions. Matthew O'Connor -UBS: Okay, thanks.

Thank you. Our next question comes from Christopher Marinac.You may ask your question, and please state your company name. Christopher Marinac -Fig Partners: Hi, Fig Partners in Atlanta.This question is for, if I guess, for Mark, but also for Jim as well. You areall aware that there is some practice in the industry of building interestreserves for construction loans and also making loan modification as thingschange. To what extent is SunTrust doing that or what is your policy ascustomers go through changes?

Perhaps, it’s Tom Freeman again, and maybe I will wait inhere and I have Walt Mercer with me who runs our commercial real estatebusiness here at the bank. Our policy is, of course, as you know that interestreserves are in fact an inherent part of what we are doing, doing constructionactivity, because one can't be in construction activity without making surethere are adequate interest reserves. We re-evaluate our construction loans ona rolling ongoing basis. We evaluate monthly, whether or not the interestreserves are appropriate, and are more than willing to press for incrementalreserves, if in fact we think that they are required. We have a very rigorous review process, and we also have thesupport of, I think, some very good systems in knowing the construction progress,the progress of sales activity under the individual loans, and therefore, kindof, what do we need, and in terms of interest reserves to the sell-out periods.I will also speak to the fundamental underwriting, which is pretty downrigorous in terms of with whom we do business, making sure that they havesubstantial liquidity, and are they sorts of borrowers, who during difficultperiods can afford to extend and ride through difficult periods within themarkets. So, yes, we do have interest reserves, yes they are rigorouslyapplied, and yes we look at them constantly. Christopher Marinac -Fig Partners: Okay. Great. That’s helpful, Tom, and just a follow-up. Arethere any markets on the construction side where you are not taking newconstruction customers on the commercial construction?

Maybe Walt will answer that for us.

Hi. Well, we look across the whole footprint sort ofcustomers, there are a number of areas especially in residential real estate.We were looking carefully at the portfolios, especially in South Florida right now, and given the housing market there, we are notpicking on a lot of new construction. Christopher Marinac -Fig Partners: Okay. But will South Floridabe the only example or are there others?

I think that's a primary example right now, we are lookingat the whole portfolio very rigorously, monthly, given the current economicenvironment. Christopher Marinac -Fig Partners: Okay. Great. Thank you very much.

Thank you. Our next question comes from Kevin St. Pierre.You may ask your question and please state your company name. Kevin St. Pierre - Sanford Bernstein: SanfordBernstein. Good morning. The loan-to-value ratios, average loan-to-value ratioswhich you have given us on a few of the portfolios are at origination. Ipresume, you have done some analysis to estimate what current loan-to-valuesmight be, I was wondering if you could perhaps share some of that with us?

We have an ongoing evaluation process upon renewal or in anyof the lending activity, where we believe that there is any sort of restrictionin value, and as anyone who can read the literature knows that we have hadshrinkage in value. We have seen shrinkage in value most aggressive in South Florida. We have seen minor shrinkage in value interms of single-family housing prices, pretty much across the portfolio. Butyou got to remember that in some of these instances we get amortization on theportfolios. We have extensions and repayments on the commercial side and we dokeep a very clear set of rebalancing initiatives during the renewal periods orre-negotiation periods in any of the lot. Kevin St. Pierre - Sanford Bernstein: Yeah, but can you share with us any stats on whatloan-to-value might be on the core mortgage portfolio based on what you expecttheir current values?

The answer is no. I mean, we are keeping at it. We have seensome increase in the loan-to-value since the origination, which you got toremember that parts of the portfolio are in the average life of the portfolioapproaches 3 years, which means that large parts of the portfolio are 5 yearsor 6 years old and older and wherefrom the initial origination actively towhere it is now. We still see shrinking loan-to-values in terms of some of thatstuff given the progress of loans through the loan lifecycle. Kevin St. Pierre - Sanford Bernstein: Okay. Thank you very much.

We’ve offsetting characteristics here. Kevin St. Pierre - Sanford Bernstein: Thank you.

Thank you. Mike Holton, you may ask your question and pleasestate your company name. Mike Holton - MerrillLynch Strategic Investment Group: Merrill Lynch Strategic Investment Group. I appreciate theadditional disclosure on the construction portfolio, and my question there is,given the NPAs, I guess, about doubled from June to September, Mark, you eludedto them probably going higher in the future, can you guys kind of provide arange on how much of an increase we might see there, maybe over the next two tothree quarters?

We are really not going to get into forecasting the rangesrelated to NPAs and NPLs, I guess, our point in the detailed discussion was toknow where the NPLs are coming from, what the characteristics of thoseportfolios are, so that you can get a better understanding of potential lossseverity, and, of course, find out both to the charge-off levels, as well as,the adequacy of the reserve. Now that's probably as far as we want to go interms of providing you with forward-looking information. We have said beforethat we would expect some keeping of the NPAs, particularly related to ourAlt-A portfolio is probably going to be a little bit later than we had hoped,which was in the third and fourth quarter, it will probably be in early 2008.Now that's our current expectation, but that's probably the only incrementaldata point that I am going to provide you. Mike Holton - MerrillLynch Strategic Investment Group: Okay. Let me ask one, I guess, backward looking question,and of the $158 million in construction NPAs, how much of that is raw land?

I am sorry, could you repeat your question? Mike Holton - MerrillLynch Strategic Investment Group: Right. You had a $158 million in construction NPAs in thequarter and within the construction portfolio you pointed out that there isabout $1 billion of raw land?

Correct. Mike Holton - MerrillLynch Strategic Investment Group: How much is on NPA status?

It's a de minimus amount. Mike Holton - MerrillLynch Strategic Investment Group: Okay, thanks.

Thanks. Time for one more question?

Thank you. Our final question is from John McDonald. You mayask your question and please state your company name. John McDonald - Bancof AmericaSecurities: Hi, it's Banc of America Securities. You gave some helpfulstab at what the charge-offs might do in the first half of '08. You mentionedmargins in the fourth quarter and early '08 today? Sorry, if I missed it, didyou give any quantification mark of how much the margin could benefit in thefourth quarter and into the first half of '08?

Yes John, this is Steve. We expect the margin trend that yousee on page 5 of the presentation to continue into the fourth quarter, and havenot provided any additional guidance beyond that for a quarter period. John McDonald - Bancof AmericaSecurities: Okay, meaning that you are kind of up 8 basis point, andquarter-to-quarter you could have a similar jump in the fourth quarter?

Yeah, we're just commenting that the trend that you haveseen, you can see here over the last three quarters… John McDonald - Bancof AmericaSecurities: Okay.

It is likely to continue on a positive note. John McDonald - Bancof AmericaSecurities: Okay.

But we are not going to get into the specifics of what thattarget should be for the quarter. John McDonald - Bancof AmericaSecurities: Okay. And is this some continued pull through of the balancesheet positioning, and as a function of the fact that -- has the curve rate andyield curves done a little better?

Yeah, that's exactly right. John McDonald - Bancof AmericaSecurities: Okay. And in '08, you are saying, we should get some benefitthere, you are saying also in '08 this trend should continue?

Well, that would depend on interest rates and the slow bookto curve and a variety of other factors. In the short run, we see continuedimprovement. Beyond that, it’s kind of hard to tell, and also it would bedependent upon loan growth, deposit growth and other factors. John McDonald - Bancof AmericaSecurities: Sure. Okay, that's fair. And then just a quick question ifyou could, could you just kind of give us a little flavor for theconsiderations that are applied as you think through the Coke decision?Obviously, you get something through it, but what are the factors there that,you know, will drive your decision, and if you do end up selling some of theCoke stock, would you likely have to replace it with some other form ofcapital. Well, early in the year when you sold your Coke stock, you couldbuyback SunTrust shares, does the equation become a little different goingforward?

Sure, John, that evaluation does continue. We obviously havea capital that is in our tangible equity-to-assets. It's in our total capital,but it’s not in our Tier 1 capital, based on the regulatory framework. So,considerations include our long-term Tier 1 target, our relationships and thecapital level relative to the rest of our businesses as it's evaluated by therating agencies. Opening up a decision process around structure of our holdingswill be predicated on an evaluation of how that Coke in its current form oralternative form, fits into our long-term capital strategy and it’s evaluatedbetween regulatory, our safety and soundness review, as well as, the ratingagencies. And, we plan to be completed with that review by the end ofthe year. We obviously have a significant embedded gain in the Coke Holdings,that’s a consideration. So, it’s around the optimization of our capitalstructure as we have set our target. One of the things we are clearly doing isevaluating the Tier 1 target in the context of how we might manage the Coke stockgoing forward. So, it’s a variety of factors that are at play here, and it'sobviously a complicated set of issues, and we are going to come back andexplain to you where we are at some point later in the quarter. John McDonald - Bancof AmericaSecurities: Okay. One quick follow-up there, Mark did you mentionanything outside of that about if you are in a position, you kind of be doingbuybacks in the fourth quarter?

Yeah, John we are right at our Tier 1 capital target at 745versus the 750, obviously the decision process around the Coke holdings, aswell as, the growth in Tier 1 capital during the quarter will dictate whetheror not we have incremental flexibility. And so we will be evaluating thatthroughout the quarter. I wouldn’t expect a significant share repurchase in thefourth quarter, again aside from any Coke related decisions, although theremaybe some modest repurchases based on the growth of the balance sheet and ourearnings. John McDonald - Bancof AmericaSecurities: Okay.

Given the level of repurchase that we’ve had, through theyear-to-date period, we anticipate that we’ll meet the guidance that weprovided earlier in the year in terms of return of capital to shareholders,both through a combination of dividends and share repurchase. John McDonald - Bancof AmericaSecurities: Okay. Thanks.

Thank you. And that concludes the third quarter earningscall. Thank you very much.

Thank you. This concludes today's conference. Thank you for yourparticipating. You may disconnect at this time.