Georgett B. Dickinson, Esq.
Senior Attorney
Legal and Regulatory
SunTrust Banks, Inc.
Post Office Box 4418
Atlanta, GA 30302-4418

Dear Ms. Dickinson:

This will respond to your November 14, 1997, letter regarding whether the prior approval of the Board would be required for certain transactions proposed by four state member bank subsidiaries of SunTrust Banks, Inc., Atlanta, Georgia ("SunTrust"). The four banks, SunTrust Bank, Atlanta, Atlanta, Georgia; SunTrust Bank, Gulf Coast, Sarasota, Florida; SunTrust Bank, Nature Coast, Brooksville, Florida; and SunTrust Bank, Southwest Florida, Fort Myers, Florida (collectively, the "Parent Banks"), will each establish two new operating subsidiaries. One subsidiary ("Subsidiary") will be wholly owned by its respective Parent Bank. Each Subsidiary will, in turn, own all of the common stock and 80 percent of the nonvoting preferred stock of a real estate investment trust ("R.E. Holdings").

We understand that each R.E. Holdings subsidiary would be formed for the sole purpose of holding a portion of its Parent Bank's residential adjustable rate mortgage portfolio. The activity of holding loans, including mortgage loans, is an activity that is permissible for bank holding companies and their nonbank subsidiaries. See 12 C.F.R. 225.28(b)(1). SunTrust has previously received approval to engage in making, acquiring, or servicing loans and other extensions of credit pursuant to section 225.28(b)(1) of Regulation Y.

In view of these facts, it is our opinion that the proposal by SunTrust is within the authority already granted to SunTrust under section 4 of the BHC Act and Regulation Y and that no additional formal notice to or approval of the Board is required in order for Parent Banks to establish and operate the various subsidiaries. We also note that the proposal is consistent with prior staff letters stating that staff would not recommend that the Board find that the proposed subsidiaries are barred by section 16 of the Glass-Steagall Act (12 U.S.C. § 24). See Letter dated July 11, 1996, from J. Virgil Mattingly to Shane B. Hansen, Esq. of Warner Norcross & Judd LLP.

The conclusions in this letter are based on facts provided by you. A change in these facts may result in a different conclusion. Should you have an questions about this letter, please call Walter McEwen of my staff at (202/452-3321).

Sincerely yours,

(Signed) Scott G. Alvarez

Scott G. Alvarez

cc: S. Dwight Blackwood
     Senior Counsel
     Federal Reserve Bank of Atlanta