United States Securities And Exchange Commission

                              Washington, DC 20549

                                   Form 10-Q



                                   (Mark One)

(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

                      For the Quarter Ended June 30, 1998

( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

Commission File Number        1-7083
                        -----------------

                         Crestar Financial Corporation
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Virginia                                 54-0722175
-------------------------------------------------------------------------------
  (State or other jurisdiction                    (I.R.S. Employer
of incorporation or organization)                Identification No.)

 919 E. Main Street, P.O. Box 26665, Richmond, Virginia            23261-6665
------------------------------------------------------------------------------
        (Address of principal executive offices)                   (Zip Code)

                                 (804)782-5000
-------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

Yes     X       No
     -------       --------
Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

           Class                           Outstanding at July 31, 1998
---------------------------------     ----------------------------------------
Common Stock, $5 par value                          112,279,966

<PAGE>

                 Crestar Financial Corporation And Subsidiaries

                                   Form 10-Q

                      For The Quarter Ended June 30, 1998



Part I.   Financial Information

<TABLE>
<S>   <C>
          Item 1.   Financial Statements:
                                                                                                      Page

                    Consolidated Balance Sheets                                                          3

                    Consolidated Statements Of Income                                                    4

                    Consolidated Statements Of Changes In Shareholders' Equity                         5-6

                    Consolidated Statements Of Cash Flows                                                7

                    Notes To Consolidated Financial Statements                                        8-13

          Item 2.   Management's Discussion And Analysis Of Financial Condition And
                    Results Of Operations:

                    Financial Commentary                                                             14-35

Part II.  Other Information

          Item 4.   Submission Of Matters To A Vote Of Security Holders                                 36

          Item 6.   Exhibits And Reports On Form 8-K:
</TABLE>

There were no reports on Form 8-K filed during the three months ended June 30,
1998.

                                       2
<PAGE>


Consolidated Balance Sheets
Crestar Financial Corporation And Subsidiaries

<TABLE>
<CAPTION>

Dollars in thousands, except share data                                     June 30,
                                                                     ----------------------    December 31,
                                                                       1998           1997            1997
<S>   <C>
Assets
Cash and due from banks                                           $ 939,382      $ 974,362     $ 1,175,314
Securities held to maturity (note 2)                                578,813        715,516         626,716
Securities available for sale (note 3)                            4,210,810      3,518,420       3,839,006
Money market investments (note 4)                                   887,979      1,364,741       1,431,790
Loans held for sale                                               2,176,670        643,080         964,697
Loans (note 5):
 Business Loans:
  Commercial                                                      5,136,230      4,028,852       4,666,505
  Real estate - income property                                   1,176,314      1,289,423       1,254,079
  Real estate - construction                                        402,670        328,459         381,413
 Consumer Loans:
  Instalment                                                      5,385,873      4,093,346       4,846,857
  Bank card                                                         507,245      1,210,242       1,153,937
  Real estate - mortgage                                          3,342,579      3,308,393       3,374,199
-----------------------------------------------------------------------------------------------------------
   Total Loans                                                   15,950,911     14,258,715      15,676,990
  Less: Allowance for loan losses (note 6)                         (246,017)      (279,190)       (281,394)
-----------------------------------------------------------------------------------------------------------
   Loans - net                                                   15,704,894     13,979,525      15,395,596
-----------------------------------------------------------------------------------------------------------
Premises and equipment - net                                        479,759        459,275         486,111
Intangible assets - net                                             199,447        172,280         197,420
Foreclosed properties - net (notes 5 and 7)                          16,652         34,243          25,731
Other assets                                                        966,767        948,361         786,135
-----------------------------------------------------------------------------------------------------------
 Total Assets                                                   $26,161,173    $22,809,803     $24,928,516
===========================================================================================================

Liabilities
Demand deposits                                                 $ 3,766,030    $ 3,383,317     $ 3,540,340
Interest-bearing demand deposits                                  6,918,653      5,748,638       6,257,114
Regular savings deposits                                          1,397,567      1,552,860       1,448,589
Domestic time deposits                                            3,919,809      4,317,373       4,191,151
Certificates of deposit $100,000 and over                         1,868,122        844,271         932,058
-----------------------------------------------------------------------------------------------------------
 Total deposits                                                  17,870,181     15,846,459      16,369,252
Short-term borrowings (note 8)                                    4,639,407      3,841,043       4,789,045
Other liabilities                                                   498,281        403,161         879,073
Long-term debt (note 9)                                             947,704        819,071         831,383
-----------------------------------------------------------------------------------------------------------
 Total Liabilities                                               23,955,573     20,909,734      22,868,753
-----------------------------------------------------------------------------------------------------------
Shareholders' Equity
Preferred stock. Authorized 2,000,000 shares; none issued                 -              -               -
Common stock, $5 par value. Authorized 200,000,000 shares;
 outstanding 112,219,738 and 110,638,161 at June 30, 1998
 and 1997, respectively; 111,420,187 at December 31, 1997           561,099        553,191         557,101
Capital surplus                                                     382,180        261,789         340,623
Retained earnings                                                 1,255,891      1,114,028       1,162,767
Accumulated other comprehensive income (note 3)                       6,430        (28,939)           (728)
-----------------------------------------------------------------------------------------------------------
 Total Shareholders' Equity                                       2,205,600      1,900,069       2,059,763
Commitments and contingencies (note 11)
-----------------------------------------------------------------------------------------------------------
 Total Liabilities And Shareholders' Equity                     $26,161,173    $22,809,803     $24,928,516
===========================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                       3
<PAGE>

Consolidated Statements Of Income
Crestar Financial Corporation And Subsidiaries

<TABLE>
<CAPTION>
In thousands, except per share data               Three Months Ended June 30,    Six Months Ended June 30,
                                                  ---------------------------    -------------------------
                                                           1998          1997           1998          1997
<S>   <C>
Income From Earning Assets
Interest and fees on loans                             $337,053      $301,991       $661,392      $597,537
Interest on securities held to maturity                   8,400        10,882         17,355        23,974
Interest and dividends on securities available for sale  68,791        59,875        131,202       123,724
Income on money market investments                        3,180         2,248         12,212         6,912
Interest on mortgage loans held for sale                 28,542        10,618         49,113        22,258
-----------------------------------------------------------------------------------------------------------
 Total income from earning assets                       445,966       385,614        871,274       774,405
-----------------------------------------------------------------------------------------------------------
Interest Expense
Interest-bearing demand deposits                         55,182        42,939        105,478        84,753
Regular savings deposits                                  8,168         9,768         16,294        19,732
Domestic time deposits                                   49,482        53,450         99,983       108,513
Certificates of deposit $100,000 and over                20,062        11,608         37,036        18,486
-----------------------------------------------------------------------------------------------------------
 Total interest on deposits                             132,894       117,765        258,791       231,484
Short-term borrowings                                    63,038        33,949        118,366        73,746
Long-term debt                                           16,600        15,591         33,723        31,206
-----------------------------------------------------------------------------------------------------------
 Total interest expense                                 212,532       167,305        410,880       336,436
-----------------------------------------------------------------------------------------------------------
Net Interest Income                                     233,434       218,309        460,394       437,969
Provision for loan losses (note 6)                       21,811        36,000         44,907        65,698
-----------------------------------------------------------------------------------------------------------
Net Credit Income                                       211,623       182,309        415,487       372,271
-----------------------------------------------------------------------------------------------------------
Noninterest Income
Service charges on deposit accounts                      34,860        31,731         67,927        61,894
Trust and investment advisory income                     20,950        17,887         41,069        35,340
Bank card-related income                                  9,360         9,771         18,170        22,419
Other income                                             48,798        51,718         92,852        90,857
Gains (losses) from sale of securities                    2,542           (91)         5,155         3,973
-----------------------------------------------------------------------------------------------------------
 Total noninterest income                               116,510       111,016        225,173       214,483
-----------------------------------------------------------------------------------------------------------
Net Credit And Noninterest Income                       328,133       293,325        640,660       586,754
-----------------------------------------------------------------------------------------------------------
Noninterest Expense
Personnel expense                                       102,123        96,547        202,978       195,889
Occupancy expense - net                                  13,893        13,685         27,047        29,843
Equipment expense                                        10,962        11,462         21,764        21,281
Other expense                                            64,702        57,316        120,877       112,002
-----------------------------------------------------------------------------------------------------------
 Total noninterest expense                              191,680       179,010        372,666       359,015
-----------------------------------------------------------------------------------------------------------
Income Before Income Taxes                              136,453       114,315        267,994       227,739
Income tax expense (note 10)                             49,025        38,525         95,693        80,169
-----------------------------------------------------------------------------------------------------------
Net Income                                             $ 87,428      $ 75,790       $172,301      $147,570
===========================================================================================================
Earnings Per Share
Basic                                                  $    .78      $    .69       $   1.54      $   1.34
Diluted                                                     .77           .68           1.52          1.32
===========================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>

Consolidated Statements Of Changes In Shareholders' Equity
Crestar Financial Corporation And Subsidiaries

For the three months ended June 30, 1998 and 1997
In thousands
<TABLE>
<CAPTION>
                                                                    Capital     Accumulated
                                       Shares of                Surplus and           Other
                                          Common      Common       Retained   Comprehensive
                                           Stock       Stock       Earnings          Income          Total
<S>   <C>
Balance, April 1, 1998                   111,938    $559,690     $1,573,286         $(2,793)    $2,130,183
Comprehensive Income:
 Net Income                                    -           -         87,428               -         87,428
 Net unrealized gain on securities
  available for sale, net of
  reclassification adjustment (note 3)         -           -              -           9,223          9,223
---------------------------------------------------------------------------------------------------------------------------
Comprehensive Income                           -           -         87,428           9,223         96,651
Cash dividends declared on
 common stock                                  -           -        (36,977)              -        (36,977)
Common stock purchased and retired           (95)       (475)        (4,976)              -         (5,451)
Common stock issued:
 For acquisition of financial institution    124         621          8,322               -          8,943
 For dividend reinvestment plan              146         727          7,468               -          8,195
 For thrift and profit sharing plan           28         141          1,493               -          1,634
 Upon exercise of stock options
  (including tax benefit of $811)             79         395          2,027               -          2,422
---------------------------------------------------------------------------------------------------------------------------
Balance, June 30, 1998                   112,220    $561,099     $1,638,071          $6,430     $2,205,600
===========================================================================================================================
Balance, April 1, 1997                   110,300    $551,499     $1,323,415        $(57,567)    $1,817,347
Comprehensive Income:
 Net Income                                    -           -         75,790               -         75,790
 Net unrealized gain on securities
  available for sale, net of
  reclassification adjustment (note 3)         -           -              -          28,628         28,628
---------------------------------------------------------------------------------------------------------------------------
Comprehensive Income                           -           -         75,790          28,628        104,418
Cash dividends declared on
 common stock                                  -           -        (32,309)              -        (32,309)
Common stock issued:
 For dividend reinvestment plan              212       1,062          6,526               -          7,588
 For thrift and profit sharing plan            3          14             91               -            105
 For other stock compensation plans           19          96            325               -            421
 Upon exercise of stock options
  (including tax benefit of $780)            104         520          1,979               -          2,499
---------------------------------------------------------------------------------------------------------------------------
Balance, June 30, 1997                   110,638    $553,191     $1,375,817        $(28,939)    $1,900,069
===========================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                       5
<PAGE>

Consolidated Statements Of Changes In Shareholders' Equity
Crestar Financial Corporation And Subsidiaries

For the six months ended June 30, 1998 and 1997

<TABLE>
<CAPTION>
In thousands                                                        Capital     Accumulated
                                       Shares of                Surplus and           Other
                                          Common      Common       Retained   Comprehensive
                                           Stock       Stock       Earnings          Income          Total
<S>   <C>
Balance, January 1, 1998                 111,420    $557,101     $1,503,390          $ (728)    $2,059,763
Comprehensive Income:
 Net Income                                    -           -        172,301               -        172,301
 Net unrealized gain on securities
  available for sale, net of
  reclassification adjustment (note 3)         -           -              -           7,158          7,158
-----------------------------------------------------------------------------------------------------------
Comprehensive Income                           -           -        172,301           7,158        179,459
Cash dividends declared on
 common stock                                  -           -        (69,289)              -        (69,289)
Common stock purchased and retired          (195)       (975)        (9,888)              -        (10,863)
Common stock issued:
 For acquisition of financial institution    124         621          8,322               -          8,943
 For dividend reinvestment plan              299       1,493         14,764               -         16,257
 For thrift and profit sharing plan          236       1,181         11,776               -         12,957
 For other stock compensation plans            3          13             88               -            101
 Upon exercise of stock options
  (including tax benefit of $2,810)          333       1,665          6,607               -          8,272
-----------------------------------------------------------------------------------------------------------
Balance, June 30, 1998                   112,220    $561,099     $1,638,071         $ 6,430     $2,205,600
===========================================================================================================
Balance, January 1, 1997                 109,870    $549,350     $1,251,444        $(21,284)    $1,779,510
Comprehensive Income:
 Net Income                                    -           -        147,570               -        147,570
 Net unrealized loss on securities
  available for sale, net of
  reclassification adjustment (note 3)         -           -              -          (7,655)        (7,655)
-----------------------------------------------------------------------------------------------------------
Comprehensive Income                           -           -        147,570          (7,655)       139,915
Cash dividends declared on
 common stock                                  -           -        (32,309)              -        (32,309)
Common stock purchased and retired          (824)     (4,118)       (25,621)              -        (29,739)
Cash paid in lieu of fractional shares        (5)        (24)          (140)              -           (164)
Common stock issued:
 For dividend reinvestment plan              382       1,911         11,636               -         13,547
 For thrift and profit sharing plan          185         924          5,738               -          6,662
 For other stock compensation plans           73         364          1,903               -          2,267
 Upon exercise of stock options
  (including tax benefit of $7,347)          957       4,784         15,596               -         20,380
-----------------------------------------------------------------------------------------------------------

Balance, June 30, 1997                   110,638    $553,191     $1,375,817        $(28,939)    $1,900,069
===========================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                       6
<PAGE>

Consolidated Statements Of Cash Flows
Crestar Financial Corporation And Subsidiaries

<TABLE>
<CAPTION>
In thousands                                                                     Six Months Ended June 30,
                                                                               ----------------------------
                                                                                      1998            1997
<S>   <C>
Operating       Net Income                                                       $ 172,301       $ 147,570
Activities      Adjustments to reconcile net income to net cash provided
                 (used) by operating activities:
                  Provisions for loan losses, foreclosed properties and
                   other losses                                                     43,806          65,698
                  Depreciation and amortization of premises and equipment           25,319          23,361
                  Amortization of intangible assets                                  9,769           8,433
                  Deferred income tax expense (benefit)                             22,490          (6,727)
                  Net gain on sales of securities, loans and other assets          (10,824)        (20,230)
                  Gain on sale of merchant card processing                               -         (17,325)
                  Origination and purchase of loans held for sale               (4,765,519)     (1,218,769)
                  Proceeds from sales of loans held for sale                     4,121,546       1,234,527
                  Net decrease (increase) in accrued interest receivable,
                   prepaid expenses and other assets                               (57,805)         15,350
                  Net increase in accrued interest payable, accrued
                   expenses and other liabilities                                   42,472          18,442
                  Other, net                                                        19,519             759
                -------------------------------------------------------------------------------------------
                  Net cash provided (used) by operating activities                (376,926)        251,089
-----------------------------------------------------------------------------------------------------------
Investing       Proceeds from maturities and calls of securities held to maturity   63,786         265,758
Activities      Proceeds from maturities and calls of securities
                  available for sale                                               399,360         213,309
                Proceeds from sales of securities available for sale             2,254,547       1,939,142
                Purchases of securities held to maturity                           (16,343)        (11,957)
                Purchases of securities available for sale                      (3,451,693)     (1,557,756)
                Net decrease (increase) in money market investments                550,323        (614,926)
                Principal collected on non-bank subsidiary loans                    57,037          58,504
                Loans originated by non-bank subsidiaries                          (96,227)        (60,282)
                Proceeds from sales of loans                                       149,018          27,269
                Net increase in other loans                                       (572,838)         (7,124)
                Purchases of premises and equipment                                (28,681)        (60,937)
                Proceeds from the sales of foreclosed properties, mortgage
                 servicing rights and merchant card processing                      32,355          49,026
                Purchases of net assets of financial institutions                    1,437               -
                Purchases of loans and loan portfolios                            (560,021)       (420,063)
                Proceeds from sales of premises                                          -           7,945
                Other, net                                                         (63,083)        (10,963)
                -------------------------------------------------------------------------------------------
                Net cash used by investing activities                           (1,281,023)       (183,055)
-----------------------------------------------------------------------------------------------------------
Financing       Net increase (decrease) in demand, interest-bearing demand
Activities       and regular savings deposits                                      836,207        (202,404)
                Net increase in certificates of deposit                            664,722         377,653
                Net decrease in short-term borrowings                             (149,638)       (275,008)
                Proceeds from issuance of long-term debt                           202,695               -
                Principal payments on long-term debt                               (86,344)        (40,314)
                Cash dividends paid                                                (69,289)        (61,974)
                Common stock purchased and retired                                 (10,863)        (29,739)
                Proceeds from the issuance of common stock                          34,676          33,242
                Other, net                                                            (149)           (164)
                -------------------------------------------------------------------------------------------
                Net cash provided (used) by financing activities                 1,422,017        (198,708)
-----------------------------------------------------------------------------------------------------------
Cash And        Decrease in cash and cash equivalents                             (235,932)       (130,674)
Cash            Cash and cash equivalents at beginning of year                   1,175,314       1,105,036
Equivalents     -------------------------------------------------------------------------------------------
                Cash and cash equivalents at end of quarter                      $ 939,382       $ 974,362
===========================================================================================================
</TABLE>

Cash and cash  equivalents  consist of cash and due from banks; see accompanying
notes to consolidated financial statements.


                                       7
<PAGE>

Notes To Consolidated Financial Statements
Crestar Financial Corporation And Subsidiaries

(1) General

The consolidated  financial  statements conform to generally accepted accounting
principles  and  to  general   practices  within  the  banking   industry.   The
accompanying  interim  statements  are  unaudited;  however,  in the  opinion of
management,   all  adjustments   necessary  for  a  fair   presentation  of  the
consolidated  financial  statements,  including adjustments related to completed
business  combinations,  have been  included.  All  adjustments  are of a normal
nature.   Certain   reclassifications   have  been  made  to  the  prior  years'
consolidated financial statements to conform to the 1998 presentation. The notes
included herein should be read in conjunction with the notes to the consolidated
financial  statements  included in the Corporation's 1997 Annual Report and Form
10-K and first quarter 1998 Form 10-Q.

   On April 15, 1998, Crestar acquired Executive Auto Leasing, Inc. (Executive),
a  privately-held  auto leasing  company  based in Maryland with total assets of
approximately  $21 million at date of acquisition.  The acquisition of Executive
has been accounted for under the purchase  method of accounting,  whereby the
purchase price has been  allocated to the  underlying  assets  acquired  and
liabilities assumed based on their respective fair values at date of
acquisition.  Crestar's second  quarter 1998 financial  statements  include the
results of operations of the assets  purchased and  liabilities  assumed from
Executive from the date of purchase.  Results of operations of Executive did not
have a material  impact on Crestar's consolidated operating results for the
second quarter of 1998.

   Intangible assets consisted of goodwill and deposit based intangibles, having
a combined  balance of $199.1  million  and $171.9  million at June 30, 1998 and
1997,  respectively,  and  favorable  lease  rights of  $344,000  and  $400,000,
respectively.

   Capitalized mortgage servicing rights of $105.2 million and $45.9 at June 30,
1998 and 1997,  respectively,  were included in other assets in the consolidated
financial statements. Mortgage servicing rights of approximately $73 million and
$11  million  were  capitalized  during  the first six  months of 1998 and 1997,
respectively.  The fair  value of  capitalized  mortgage  servicing  rights  was
approximately  $126  million  at June  30,  1998.  Amortization  of  capitalized
mortgage  servicing rights was  approximately  $12 million and $6 million in the
first six months of 1998 and 1997, respectively.

   During the first six months of 1998 and 1997, Crestar capitalized interest of
$1.6 million and $1.2 million,  respectively,  associated  with  construction in
progress.

(2) Securities Held To Maturity

The amortized cost (carrying  values) and estimated  market values of securities
held to maturity at June 30 follow:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
In thousands                                                    1998                        1997
                                                      -----------------------      -----------------------
                                                      Amortized        Market      Amortized        Market
                                                           Cost         Value           Cost         Value
<S>   <C>
U.S. Treasury and Federal agencies                     $190,708      $191,560       $197,788      $196,323
Mortgage-backed obligations of Federal agencies         339,638       343,668        464,173       464,524
Other taxable securities                                  2,792         2,791          3,034         3,025
States and political subdivisions                        45,675        46,641         50,521        51,444
----------------------------------------------------------------------------------------------------------

 Total securities held to maturity                     $578,813      $584,660       $715,516      $715,316
==========================================================================================================
</TABLE>
                                       8
<PAGE>

(3) Securities Available For Sale

The amortized cost and estimated market values  (carrying  values) of securities
available for sale at June 30 follow:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
In thousands                                                   1998                        1997
                                                      -----------------------      -----------------------
                                                      Amortized        Market      Amortized        Market
                                                           Cost         Value           Cost         Value
<S>   <C>
U.S. Treasury and Federal agencies                    $ 239,872     $ 239,820      $ 604,863     $ 599,569
Mortgage-backed obligations of Federal agencies       2,882,361     2,885,909      2,164,126     2,125,494
Other taxable securities                                878,137       883,351        546,437       544,686
Common and preferred stocks                             201,018       201,730        247,983       248,671
----------------------------------------------------------------------------------------------------------
 Total securities available for sale                 $4,201,388    $4,210,810     $3,563,409    $3,518,420
==========================================================================================================
</TABLE>

The period-end net unrealized gain or loss on securities available for sale, net
of tax, is  reflected in the  Consolidated  Balance  Sheet and the  Consolidated
Statement of Changes in Shareholders' Equity as "Accumulated other comprehensive
income." For the three  months and six months ended June 30, 1998 and 1997,  the
net  unrealized  gain or loss on securities  available for sale reflected in the
Statement  of  Changes  in  Shareholders'  Equity  is  net  of  reclassification
adjustments  for gains from sale of  securities,  net of tax, as included in net
income. Gains from the sale of securities during the three months and six months
ended June 30, 1998 totaled $2.5 million and $5.2 million,  respectively. Net of
income tax expense of approximately $0.9 million, and $1.8 million for the three
months and six months ended June 30, 1998,  the gains  resulted in
reclassification  adjustments of $1.6 million and $3.4 million,  respectively.
Gains (losses) from sale of securities  during the three months and six months
ended June 30, 1997 totaled  $(0.1) million and $4.0 million,  respectively. Net
of income tax expense  (benefit)  of  approximately $(40) thousand and $1.4
million for the three months and six months ended,  June 30, 1997, the gains
(losses) resulted in  reclassification  adjustments of $(60) thousand and $2.6
million, respectively.

   At June 30, 1998,  the  amortized  cost and market  value of  Mortgage-backed
obligations  of Federal  agencies  includes the amortized cost and market value,
respectively, of interest rate caps purchased to hedge the probable market value
decline in a rising  interest rate  environment.  The interest rate caps,  which
have a notional balance of $1.75 billion,  have a cost basis of $9.7 million and
a market value of $297,000 at June 30, 1998. The cost basis of the interest rate
caps is  being  amortized  as a  reduction  of  interest  income  on  securities
available  for sale.  Amortization  of the cost basis of the interest  rate caps
totaled $1.3 million and $2.7 million for the three month and six month  periods
ended March 31, 1998, respectively.


(4) Money Market Investments

Money market investments at June 30 included:


------------------------------------------------------------------------------
------------------------------------------------------------------------------
In thousands                                                1998          1997
Federal funds sold                                      $752,700     $ 163,506
Securities purchased under agreements to resell                -     1,095,300
Time deposits                                            100,042        75,042
U.S. Treasury                                              8,624         8,263
Trading account securities                                13,351        11,706
Other                                                     13,262        10,924
------------------------------------------------------------------------------
 Total money market investments                         $887,979    $1,364,741
==============================================================================

                                       9

<PAGE>


(5) Nonperforming Assets And Impaired Loans

Nonperforming assets at June 30 are shown below. Loans that are past due 90
days or more and continue to accrue interest, due to an assessment of
collectibility, are excluded from the definition of nonperforming assets.
Such loans totaled $51.8 million and $58.7 million at June 30, 1998 and 1997,
respectively.

--------------------------------------------------------------
--------------------------------------------------------------
In thousands                                1998          1997
Nonaccrual loans                         $59,329       $57,813
Foreclosed properties - net               16,652        34,243
--------------------------------------------------------------
 Total nonperforming assets              $75,981       $92,056
==============================================================


Transfers from nonperforming loans to foreclosed properties (non-cash additions)
were $2.3  million  and $7.5  million  in the first six months of 1998 and 1997,
respectively.  Included  in  Crestar's  non-performing  loans  above are certain
impaired loans.  Impaired loans and their allocated valuation allowances at June
30, 1998 and 1997 were $15.8 million with an allowance of $2.8 million and $12.1
million with an allowance of $2.2 million,  respectively. All impaired loans had
an allocated valuation allowance at June 30, 1998 and 1997. Collateral dependent
loans, which were measured at the fair value of the collateral, constituted 100%
of impaired loans at June 30, 1998. The average recorded  investment in impaired
loans for the six months  ended  June 30,  1998 and 1997 was $14.3  million  and
$22.8 million, respectively. There was no material interest income recognized on
impaired loans in the three months and six months ended June 30, 1998 and 1997.

(6) Allowance For Loan Losses

Transactions  in the  allowance  for loan  losses  for the three  months and six
months ended June 30 were:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
In thousands                                                Three Months                 Six Months
                                                       ----------------------       ----------------------
                                                           1998          1997           1998          1997
<S>   <C>
Beginning balance                                      $280,969      $268,870       $281,394      $268,868
-----------------------------------------------------------------------------------------------------------
Charge-offs                                             (27,518)      (33,341)       (58,766)      (70,416)
Recoveries                                                5,729         7,661         11,925        15,040
-----------------------------------------------------------------------------------------------------------
 Net charge-offs                                        (21,789)      (25,680)       (46,841)      (55,376)
Provision for loan losses                                21,811        36,000         44,907        65,698
Allowance of loans transferred to loans held for sale   (35,000)            -        (35,000)            -
Allowance from acquisitions and other activity - net         26             -          1,557             -
-----------------------------------------------------------------------------------------------------------
 Net increase (decrease)                                (34,952)       10,320        (35,377)       10,322
-----------------------------------------------------------------------------------------------------------
Ending balance                                         $246,017      $279,190       $246,017      $279,190
===========================================================================================================
</TABLE>


(7) Allowance For Foreclosed Properties

Transactions in the allowance for losses on foreclosed  properties for the three
months and six months ended June 30 were:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
In thousands                                                 Three Months                 Six Months
                                                         --------------------        ---------------------
                                                           1998          1997           1998          1997
<S>   <C>
Beginning balance                                        $4,349       $18,076        $13,191       $18,449
Provision for foreclosed properties                           -             -         (1,100)            -
Write-downs                                              (1,946)          (91)        (9,688)         (464)
-----------------------------------------------------------------------------------------------------------
Ending balance                                           $2,403       $17,985        $ 2,403       $17,985
===========================================================================================================
</TABLE>

                                       10

<PAGE>

(8) Short-Term Borrowings
Short-term borrowings,  exclusive of deposits,  with maturities of less than one
year at June 30 were:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
In thousands                                                                         1998             1997
<S>   <C>
Federal funds and term Federal funds purchased                                 $2,278,547       $1,463,056
Securities sold under repurchase agreements                                       979,052        1,053,541
Federal Home Loan Bank borrowings                                                 366,500          575,000
U.S. Treasury demand notes                                                        749,538          499,401
Notes payable                                                                     263,643          247,911
Other                                                                               2,127            2,134
---------------------------------------------------------------------------------------------------------------------------
 Total short-term borrowings                                                   $4,639,407       $3,841,043
===========================================================================================================================
</TABLE>

The  Corporation  paid $366.3 million and $286.1 million in interest on deposits
and   short-term   borrowings  in  the  first  six  months  of  1998  and  1997,
respectively.

(9) Long-Term Debt

Long-term debt at June 30 included:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
In thousands                                                                         1998             1997
<S>    <C>
4-8% Federal Home Loan Bank obligations payable through 2017                     $299,960         $271,601
6 1/2% Subordinated notes due 2018                                                152,626                -
8 3/4% Subordinated notes due 2004                                                149,751          149,712
8 1/4% Subordinated notes due 2002                                                125,000          125,000
8 5/8% Subordinated notes due 1998                                                      -           49,992
7 7/8-11 1/4% Collateralized mortgage obligation bonds maturing through 2019       11,088           13,661
8 1/4% Mortgage indebtedness maturing through 2009                                  7,672            8,162
8 1/8-14 3/8% Capital lease obligations maturing through 2006                       1,607              943

Crestar Capital Trust I preferred stock                                           200,000          200,000
----------------------------------------------------------------------------------------------------------
 Total long-term debt                                                            $947,704         $819,071
==========================================================================================================
</TABLE>

The  Corporation  paid $30.1  million and $31.2 million in interest on long-term
debt in the first six months of 1998 and 1997, respectively.


                                       11
<PAGE>


(10) Income Taxes

The current and deferred components of income tax expense allocated to
continuing operations for the three months and six months ended June 30 in the
accompanying consolidated statements of income were:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
In thousands                                                Three Months                  Six Months
                                                        ---------------------        ----------------------
                                                           1998          1997           1998          1997
<S>   <C>
Current:
 Federal                                                $38,852       $41,917        $72,359       $81,499
 State and local                                            312         1,927            844         5,397
-----------------------------------------------------------------------------------------------------------
 Total current tax expense                               39,164        43,844         73,203        86,896
===========================================================================================================

Deferred:
 Federal                                                  8,578        (5,287)        20,410        (6,419)
 State and local                                          1,283           (32)         2,080          (308)
-----------------------------------------------------------------------------------------------------------
 Total deferred tax expense (benefit)                     9,861        (5,319)        22,490        (6,727)
-----------------------------------------------------------------------------------------------------------
Total income tax expense                                $49,025       $38,525        $95,693       $80,169
===========================================================================================================
</TABLE>

The differences between the amounts computed by applying the statutory federal
income tax rate to income  before income taxes and the actual income tax expense
allocated to operations for the three months and six months ended June 30 were:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
In thousands                                   Three Months                        Six Months
                                      ---------------------------------   ---------------------------------
                                           1998              1997              1998             1997
                                      --------------    ---------------   --------------    --------------
                                        Amount     %      Amount     %      Amount     %      Amount     %
<S>   <C>
Income before income taxes            $136,453          $114,315          $267,994          $227,739
-----------------------------------------------------------------------------------------------------------
Tax expense at statutory rate          47,759   35.0      40,011  35.0     93,798   35.0      79,709  35.0
-----------------------------------------------------------------------------------------------------------
Increase (decrease) in taxes
 resulting from:
  Tax-exempt interest and dividends    (2,201)  (1.7)     (2,198) (1.9)    (4,346)  (1.6)     (3,900) (1.8)
  Nondeductible interest expense          766     .6         447    .4      1,402     .5         876    .4
  Amortization of goodwill              1,262     .9       1,035    .9      2,496     .9       2,080    .9
  State income taxes                    1,037     .8       1,232   1.1      1,901     .7       3,308   1.5
  Other - net                             402     .3      (2,002) (1.8)       442     .2      (1,904)  (.8)
-----------------------------------------------------------------------------------------------------------
   Total increase (decrease) in taxes   1,266     .9      (1,486) (1.3)     1,895     .7         460    .2
-----------------------------------------------------------------------------------------------------------
Total income tax expense             $ 49,025   35.9    $ 38,525  33.7   $ 95,693   35.7    $ 80,169  35.2
===========================================================================================================
</TABLE>

The  Corporation  made income tax  payments of $71.2  million and $77.2  million
during the first six months of 1998 and 1997,  respectively.  At June 30,  1998,
the Corporation  had a net  deferred  income  tax  asset of $95.2  million.
There was no valuation  allowance relating to the net deferred income tax asset.
Crestar has sufficient  taxable income in the available  carryback  period to
realize all of its deferred income tax assets.


                                       12

<PAGE>

(11) Commitments And Contingencies

Legally  binding,  unfunded  commitments to extend credit were $12.1 billion and
$9.7 billion at June 30, 1998 and 1997, respectively. Standby letters of credit,
which are conditional commitments that guarantee the performance of customers to
a third party, were $431 million at June 30, 1998.

   Recourse  obligations  on mortgage loans serviced of $1.8 billion at June 30,
1998  included  $1.1  billion  which was  insured  by  agencies  of the  Federal
government or private insurance  companies.  Recourse  obligations also included
$94 million of contractual  recourse  liability  accepted by Crestar on mortgage
loan sales to Federal  agencies and $141 million on certain  mortgage loan sales
to private investors.

   For interest  rate risk  management  purposes at June 30,  1998,  Crestar was
using  interest  rate (fixed  receive)  swaps with  notional  balances of $1.575
billion to convert floating rate commercial and instalment loans to fixed rates.
Crestar was using purchased  interest rate caps with notional  balances of $1.95
billion to hedge the market value of fixed rate  securities  available  for sale
and real estate income property loans,  and $1.055 billion to minimize  interest
rate risk associated  with rising rates on floating rate money market  deposits.
Crestar was using purchased  interest rate floors with notional balances of $100
million  and $150  million to hedge the fair value of fixed rate  domestic  time
deposits and the prepayment risk associated with fixed rate real estate mortgage
loans, respectively.  The carrying value and net unrealized gain on these swaps,
caps and floors were $22.2 million and $5.4 million,  respectively,  at June 30,
1998. As a financial  intermediary for customers,  Crestar had $236.6 million in
offsetting  swap,  $23.7 million in offsetting  cap and $8 million in offsetting
collar agreements at June 30, 1998.

   The notional  amount of these  over-the-counter  traded  interest rate swaps,
caps and collars does not fully represent  Crestar's credit and market exposure,
which the Corporation  believes is a combination of current  replacement cost of
approximately  $29.5  million,  less  collateral  held  of  approximately  $17.1
million, plus an amount for prospective market movement.  Two counterparties
constituted 17% and 10% of the estimated credit and market exposure of $61.4
million at June 30, 1998.

   Crestar also had forward  agreements  outstanding at June 30, 1998, which are
primarily  used to reduce the interest  rate risk arising from changes in market
rates from the time  residential  mortgage  lending  commitments  are made until
those commitments are funded. The net unrealized loss on such forward agreements
was $3.5 million at June 30, 1998.

   Certain litigation is pending or threatened against Crestar.  Management,  in
consultation  with legal counsel,  is of the opinion that there is no pending or
threatened  litigation  that could,  individually  or in the  aggregate,  have a
material impact on the Corporation's financial condition or financial statements
beyond liabilities established for this purpose.

(12) Subsequent Events

On July 20, 1998 Crestar and  Suntrust  Banks,  Inc.  (SunTrust)  announced  the
signing of a definitive  agreement to merge.  The terms of the merger call for a
tax-free  exchange of 0.96 shares of SunTrust common stock for each  outstanding
share of Crestar common stock. The pooling-of-interests  combination is expected
to be  completed  during  the  fourth  quarter  of 1998,  and is  subject to the
approval  of  regulatory  authorities,  in  addition  to  shareholders  of  both
companies.  Upon  completion of the merger,  Crestar will become a  wholly-owned
subsidiary of SunTrust,  and will operate under its current name and  management
as one of  SunTrust's  four  locally-focused  bank holding  companies.  SunTrust
expects to incur pre-tax  merger  charges of  approximately  $250 million in the
fourth quarter of 1998.

   In July 1998,  Crestar  announced  that Fleet  Financial  Group had agreed to
purchase  approximately  $576 million of Crestar's  outstanding bank card loans.
The  accounts  and balances  represent  performing  bank card loans to borrowers
located  outside of Crestar's  primary market.  Under terms of the  transaction,
Crestar  anticipates  recognizing  a pre-tax  gain,  during the third quarter of
1998, of  approximately  $54 million.  Crestar's  noninterest  expenses are also
expected  to be higher in the third  quarter  of 1998,  in  comparison  to prior
quarters,  in  recognition of certain  incremental  expenses.  The  consolidated
balance  sheet as of June 30, 1998 reflects the transfer of $603 million in bank
card loans from the loan  portfolio  to loans held for sale.  In addition to the
principal  balance of the bank card  loans,  $35 million in  allowance  for loan
losses  specifically   related  to  the  bank  card  loans  held  for  sale  was
transferred.

                                       13
<PAGE>

Financial Commentary
Crestar Financial Corporation And Subsidiaries


Information  contained  in the  "Financial  Commentary,"  other than  historical
information,  may contain  forward-looking  statements  that  involve  risks and
uncertainties,  including,  but not limited to, the Corporation's  interest rate
risk position, credit and economic trends on both a regional and national basis,
technological  change,  the number and size of competitors in the  Corporation's
market,  compliance with year 2000 data processing standards, the Corporation's
proposed merger with SunTrust Banks, Inc., and the impact of future legal and
regulatory  actions,  including the  establishment  of federal deposit insurance
rates.  Such statements are provided to assist the reader in understanding
anticipated future financial operations,  and are made pursuant to the safe
harbor  provisions of the Private  Litigation  Reform Act of 1995.  The
Corporation's  actual  results may differ  materially  from those  projected  in
forward-looking  statements.

Overview
(Tables 1, 2 and 11)

Crestar  Financial Corporation (Crestar) reported net income of $87.4 million
for the quarter ended June 30, 1998, an increase of $11.6 million or 15% over
net income earned in the second quarter of 1997.  For the first six months,
earnings were $172.3 million in 1998,  an  increase  of 17% from the  $147.6
million  earned in 1997.  These increases reflect continued growth in
noninterest income and  net  interest  income,  lower credit-related   costs,
and  management  of controllable  expenses.  Diluted earnings  per  common share
were $.77 for the second quarter of 1998,  compared to $.68 in 1997,
representing  an increase of 13%.  For the first six months of 1998,  diluted
earnings per common share were $1.52,  an  increase  of 15% from the $1.32 per
share  recorded in the first six months of 1997. The predominant items affecting
the change in earnings per share are given in Table 2. Each item is net of
applicable federal income taxes.

   Crestar's subsidiaries provide banking and non-banking services throughout
Virginia, Maryland and Washington,  D.C., which comprise Crestar's  primary
market area. This market is  characterized  as economically  diverse.  Crestar's
market area is also  characterized  by active competition in all principal areas
where the Corporation  provides services.  In addition to banks,  other firms
competing  in the market area  include  savings associations,  consumer  finance
companies,  national  credit  card  companies, securities brokerage firms,
credit unions and mortgage banking companies.

   On April 15, 1998, Crestar acquired Executive Auto Leasing, Inc. (Executive),
a privately-held auto leasing company based in Beltsville,  Maryland. Executive,
with total  assets of  approximately  $21 million at date of  acquisition,  will
expand  Crestar's  ability to offer  commercial  and  consumer  auto  leasing to
customers.  The  acquisition  of  Executive  has been  accounted  for  under the
purchase method of accounting,  whereby the purchase price has been allocated to
the underlying assets acquired and liabilities assumed based on their respective
fair values at date of  acquisition.  Crestar's  second  quarter 1998  financial
statements  include  the  results  of  operations  of the assets  purchased  and
liabilities  assumed  from  Executive  from the  date of  purchase.  Results  of
operations of Executive did not have a material impact on Crestar's consolidated
operating results for the second quarter of 1998.

Merger With SunTrust Announced

On July 20, 1998 Crestar and  Suntrust  Banks,  Inc.  (SunTrust)  announced  the
signing of a definitive  agreement to merge.  The terms of the merger call for a
tax-free  exchange of 0.96 shares of SunTrust common stock for each  outstanding
share of Crestar common stock. The pooling-of-interests  combination is expected
to be  completed  during  the  fourth  quarter  of 1998,  and is  subject to the
approval  of  regulatory  authorities, and shareholders  of  both companies.
Upon completion  of the  merger,  Crestar  will  become  a  wholly-owned
subsidiary  of SunTrust,  and will  operate  under its current  name and
management  as one of SunTrust's four locally-focused  bank holding companies.
The merger will create the tenth  largest bank  holding  company in the United
States,  based on total assets of  approximately  $88 billion,  and will provide
a full line of consumer and commercial  banking  services to customers in
Florida,  Georgia,  Tennessee, Alabama,  Virginia,  Maryland and the District of
Columbia.  SunTrust expects to incur pre-tax merger charges of approximately
$250 million in the fourth quarter of 1998.

Sale Of Selected Bank Card Loans

In July  1998,  Crestar  announced  that  Fleet  Financial  Group had  agreed to
purchase  approximately  $576 million of Crestar's  outstanding bank card loans.
The  accounts  and balances  represent  performing  bank card loans to borrowers
located outside of Crestar's primary market.  The sale of the bank card loans is
consistent with Crestar's strategy of focusing on providing a range of financial
services to customers in the Virginia,  Maryland and  Washington,  D.C.  market.

                                       14
<PAGE>

Under terms of the transaction,  Crestar anticipates recognizing a pre-tax gain,
during the third  quarter  of 1998,  of  approximately  $54  million.  Crestar's
noninterest  expenses  are also  expected  to be higher in the third  quarter of
1998, in comparison to prior  quarters,  in recognition  of certain  incremental
expenses.

   The  consolidated  balance sheet as of June 30, 1998 reflects the transfer of
$603 million in bank card loans from the loan  portfolio to loans held for sale.
In addition  to the  principal  balance of the bank card  loans,  $35 million in
allowance for loan losses  specifically  related to the bank card loans held for
sale was transferred. Loans held for sale as of June 30, 1998 therefore included
bank card loans with a cost basis of $568 million,  with the  remaining  balance
representing  real  estate  -  mortgage  loans  originated  and held for sale by
Crestar's mortgage banking subsidiary.

Profitability Measures And Capital Resources
(Table 1)

Key profitability measures reflect Crestar's strong operating performance during
the first six months of 1998.  Return on average  assets was 1.39% in the second
quarter,  and  1.40% for the first  six  months of 1998,  compared  to 1.42% and
1.37%,  respectively,  for both the second quarter and first six months of 1997.
Return on average equity was 16.46% for the second quarter of 1998,  compared to
16.48% for the second quarter of 1997. For the first six months of 1998,  return
on average equity was 16.43%, compared to 16.27% for the first six months of the
previous year.

   Average equity to assets of 8.42% for the second quarter of 1998, compared to
8.64% in the second quarter of 1997.  Average equity to assets for the first six
months of 1998 was 8.51%,  compared  to 8.45% for the same  period of 1997.  The
period-end equity to assets ratio was 8.43% at June 30, 1998, compared to a June
30, 1997 ratio of 8.33%.

   Risk-based  capital ratios are another measure of capital  adequacy.  At June
30, 1998,  Crestar's  consolidated  risk-adjusted  capital ratios were 10.1% for
Tier 1 and 13.1% for total capital, well above the required minimums of 4.0% and
8.0%, respectively.  The Tier 1 leverage ratio of 8.8% at June 30, 1998 also was
significantly  above Crestar's  regulatory  minimum of 3.0%.  Crestar's tangible
leverage ratio,  defined as total equity less intangible assets divided by total
assets less intangible assets, was 7.73% at June 30, 1998. Under Federal Deposit
Insurance  Corporation  (FDIC) rules,  Crestar's sole  subsidiary  bank (Crestar
Bank)  was  considered  "well-capitalized"  as of June  30,  1998,  the  highest
category of capitalization defined by regulatory  authorities,  allowing for the
lowest level of FDIC insurance premium payments.

   Crestar has filed  shelf  registration  statements  with the  Securities  and
Exchange  Commission  pertaining to the possible  future issuance of securities.
Under  currently  effective  registration  statements,  Crestar may issue in the
future  approximately  $175 million in subordinated  debt securities,  preferred
stock or common stock, or any combination thereof.

Net Interest Margin And Net Interest Income
(Tables 3 and 12)

Crestar's  net  interest  margin  for the second  quarter  of 1998 was 4.06%,  a
decrease of 52 basis  points from the margin  recorded in the second  quarter of
1997.  The  decrease  was  primarily  due to  unfavorable  changes  in both  the
composition of earning assets and funding  sources,  and in the interest  yields
impacting the Corporation's  earning assets.  These factors served to offset the
impact of favorable changes in the rates paid on funding sources,  in comparison
to market  movements in short-term  funding  sources,  and favorable  changes in
off-balance sheet hedges on the Corporation's net interest margin.

   Crestar's  yield on average  loans  decreased 30 basis points from the second
quarter of 1997,  to 8.35% for the second  quarter of 1998.  Reflecting  a lower
long-term  interest rate  environment,  all  categories  of loans  experienced a
decline in average rates earned,  in comparison to second  quarter 1997 results.
Average rates on bank card loans  decreased from 14.39% in the second quarter of
1997 to 13.79% in the second quarter of 1998. Lower long-term interest rates and
a  competitive  marketing  environment  for most  consumer  loans in the  second
quarter of 1998,  compared to the second quarter of 1997, also resulted in lower
yields on instalment and real estate-mortgage  loan balances.  Average yields on
business loans also  demonstrated  declines in the second quarter of 1998,  with
yields  on  real  estate-income  property  and  real  estate-construction  loans
decreasing  12 basis  points  and 15 basis  points,  respectively,  from  second

                                       15
<PAGE>

quarter 1997 results. Yields on commercial loans declined 19 basis points during
the same time period,  and yielded 7.87% for the second quarter of 1998.  Yields
on money market  investments  were 5.37% for the second  quarter of 1998 versus
5.65% for the second quarter of 1997, in part reflecting lower average federal
funds rates on overnight deposits. Average rates on securities available for
sale were 6.23% in second quarter 1998, versus 6.32% in the same period of 1997.
Average yields increased on the smaller securities held to maturity portfolio,
which earned an average rate of 6.20% in the second quarter of 1998,  reflecting
the maturity of lower-yielding  securities.  In total,  interest rate spreads
for earning assets had a negative  impact of 42 basis points on Crestar's second
quarter 1998 net interest margin, when compared to the second quarter of 1997.

   Reflecting a competitive environment for consumer deposits, and growth in new
consumer deposit  products with rates tied to national money market yields,  the
average rate paid on total  interest-bearing  liabilities  increased by 24 basis
points from the second quarter of 1997 to the second quarter of 1998. Rates paid
on  interest-bearing  deposits averaged 3.93% during the second quarter of 1998,
an increase of 16 basis points from the second  quarter of 1997.  This  increase
was primarily  driven by an increase of 27 basis points on average rates paid on
interest-bearing  demand  deposits,  which  increased  from  2.97% in the second
quarter of 1997 to 3.24% in the  second  quarter  of 1998.  While  rates paid on
regular savings  deposits  decreased from the second quarter of 1997 by 18 basis
points,  the average rates paid on domestic time deposits and on certificates of
deposits  $100,000 and over  increased  by 10 basis  points and 9 basis  points,
respectively, when compared to the second quarter of 1997. Rates paid on average
short-term  borrowings rose from 5.26% in the second quarter of 1997 to 5.44% in
the second quarter of 1998. Rates paid on long-term debt, in part reflecting the
impact of a new issuance of $150 million in subordinated  notes during January
1998,  decreased from 7.47% in the second quarter of 1997 to 7.19% for the
second quarter of 1998. The average rate paid on  Crestar's  total  sources  of
funds in the  second  quarter of 1998 was 3.69%, reflecting an increase of 22
basis points from the same period of 1997.

   Excluding the impact of derivative instruments utilized as hedges, the change
in the  Corporation's  interest  rate spreads had a negative  impact of 29 basis
points on Crestar's  second  quarter 1998 net interest  margin,  compared to the
second  quarter of 1997.  Average rates paid on funding  sources  increased at a
lower level than short-term  interest rates,  contributing to a favorable impact
of 13 basis  points  for the  Corporation's  second  quarter  1998 net  interest
margin.

   Changes  in the  earning  asset mix  decreased  the second  quarter  1998 net
interest  margin by  approximately  9 basis  points when  compared to the second
quarter of 1997. Loans as a percentage of total earning assets decreased from an
average of 73% during the second  quarter of 1997 to 70% for the same  period of
1998.  Average total loans were $16.2 billion during the second quarter of 1998,
compared to $14.1 billion during the second quarter of 1997. However, changes in
the composition of average loan balances also  negatively  impacted net interest
margins.   Average  bank  card  loans,   the  highest  yielding  loan  category,
experienced a decline of $134 million, or 11%, during the second quarter of 1998
when  compared to the same  period of 1997.  Marketing  efforts  directed to new
accounts  have  been  curtailed  from  previous  levels,   in  light  of  higher
industry-wide  delinquency statistics.  Account balances have also declined as a
result of the  expiration of  introductory  low interest rates on some bank card
products;  Crestar's  transfer  of $603  million in bank card loans to the loans
held for sale  classification,  as of June 30, 1998, did not impact average bank
card loans  balances  for the second  quarter of 1998.  Lower  yielding  secured
consumer loans (instalment and real estate mortgage loans) experienced growth
during the second quarter of 1998. Average instalment  loan  balances  increased
by $1.2 billion or 29% during this period, with average real  estate-mortgage
loans  increasing  $65 million,  or 2%, from second  quarter  of  1997. Average
business  loans  for  the  second  quarter experienced a 19% increase. The
average balance of commercial loans increased by $1.1 billion,  from $3.8
billion for the second  quarter of 1997 to $4.9 billion for the second quarter
of 1998. Average money market investments increased, from $161 million in the
second  quarter of 1997 to $238 million for the same quarter of 1998.
Significant  increases  in  average  balances  of loans  held for sale reflect
record  levels of  origination  volume by  Crestar's  mortgage  banking
subsidiary.  Average  balances in the second  quarter of 1998 were $1.7 billion,
representing  7% of average  total earning  assets  during this period.  Average
balances for loans held for sale during the second  quarter of 1997 totaled $551
million, or 3% of average total earning assets.

                                       16
<PAGE>

   Changes  in the  composition  of  Crestar's  funding  sources  resulted  in a
negative  impact to the  second  quarter  1998 net  interest  margin of 17 basis
points,  in comparison to second quarter 1997 results.  Total sources of funding
needed to support earning assets levels  increased by $3.8 billion,  or 20% from
second  quarter  of 1997 to the  second  quarter  of  1998,  in part  reflecting
Crestar's  growth in average loan  balances  during this period.  Average  total
deposits for the second quarter of 1998 grew by $1.4 billion, a 9% increase over
second quarter 1997 average balances.  Interest-bearing demand deposits averaged
$6.8 billion  during the second  quarter of 1998, an increase of $1.0 billion or
18% over the second quarter of 1997. Average balances of domestic time deposits,
which include  consumer  certificates  of deposits,  declined $395 million or 9%
from the  levels of the  second  quarter of 1997.  Balances  of regular  savings
deposits were also lower in comparison to second  quarter 1997  balances,  while
certificates of deposits of $100,000 and over were higher by approximately  $586
million.  The Corporation  experienced  growth in average balances of
non-interest  bearing demand  deposits and in  shareholders  equity during the
second quarter of 1998.  Net  non-interest  bearing  sources of funds
represented 17% of total funding  sources in the second quarter of 1998,  versus
18% during the second quarter of 1997. Interest-bearing deposits represented 59%
of total  funding  sources in the  second  quarter of 1998 and 65% in the second
quarter of 1997.

   Average  balances of short-term  borrowings  increased by $2.1 billion during
the second  quarter of 1998, in comparison  to the second  quarter of 1997,  and
totaled $4.6 billion for the most recent quarter.  Average balances of long-term
debt totaled $923 million for the second quarter of 1998.  Short-term borrowings
and  long-term  debt  represented  20% and 4%,  respectively,  of total  funding
sources for the second quarter of 1998.

   Off-balance sheet hedge  transactions  resulted in a negligible impact to net
interest income during the second quarter of 1998. In the second quarter of 1997
the  comparable  impact of hedging  activity  was a decrease  to  Crestar's  net
interest income of $1.3 million,  which consisted of a $0.8 million  decrease in
interest income and a $0.5 million increase in interest  expense.  In comparison
to second quarter 1997,  off-balance  sheet hedging  transactions had a positive
impact of 3 basis  points on the net interest  margin for the second  quarter of
1998.

   The extent to which Crestar will be able to maintain its current net interest
margin is  significantly  influenced by the economic  environment in our markets
and the economic policy of the Federal Reserve Board, in addition to competitive
market  conditions  for both loans and  deposits.  Competition  among  financial
institutions,  in  addition  to  acquisition  strategies,  may  lead to  further
pressures on the Corporation's net interest margin in future periods.

   Despite the decline in net interest margin, Crestar's net interest income for
the second quarter of 1998 increased 7% over the second  quarter of 1997.
Tax-equivalent  net interest  income  similarly increased  by 7% during this
period.  The  increase  reflects the 20% growth in average earning assets for
the second quarter of 1998, versus the same period of 1997,  which offset the
lower net  interest  margin  realized  during the second quarter of 1998.

   For the  first  six  months  of 1998,  tax  equivalent  net  interest  income
increased  5% over 1997 as a result of a $3.0 billion or 15% increase in average
earning  assets,  which  more than  offset a 41 basis  point  decline in the net
interest  margin.  The net interest  margin for the first six months of 1998 was
4.13%,  versus 4.54% for the same period of 1997.  Most factors  contributing to
the  decrease in the  year-to-date  margin  mirror those  previously  discussed.
Changes to the earning assets mix for the year-to-date period had an unfavorable
impact of 6 basis  points,  while  changes to the funding  mix  resulted in a 15
basis point negative impact to the year-to-date  margin.  Unfavorable changes in
interest  rate spreads for the  comparable  six month period  decreased  the net
interest margin by 23 basis points,  in part reflecting a 25 basis point decline
in average yields on the Corporation's  loan portfolio.  Off-balance sheet hedge
transactions had a positive impact on the margin,  in comparison to year-to-date
1997  results,  of  approximately  3  basis  points.   Off-balance  sheet  hedge
transactions  resulted in an increase to net  interest  income of  approximately
$0.5  million  during the first six  months of 1998,  which was  composed  of an
approximately  $1.2  million  increase  in  interest  income and a $0.7  million
increase in interest  expense,  based on the underlying asset or liability being
hedged.  In the  first  six  months of 1997 the  comparable  impact  of  hedging
activity was a decrease to Crestar's total interest income of approximately $2.3
million,  which  consisted of a $1.4 million  decrease in interest  income and a
$0.9 million increase in interest expense.

                                       17

<PAGE>


Risk Exposures And Credit Quality
(Tables 4 and 5)

Crestar's  allowance  for  loan  losses  was  $246  million  at June  30,  1998,
representing 1.54% of period-end loans, 324% of period-end nonperforming assets,
and a 415%  coverage  of  nonperforming  loans.  Based on  current  expectations
relative to portfolio  characteristics  and performance  measures including loss
projections, management considers the level of the allowance adequate. Under the
Corporation's criteria for classification of nonperforming loans, loans that are
both  (a)  past  due 90 days or more  and (b) not  deemed  nonaccrual  due to an
assessment of  collectibility  are specifically  excluded from the definition of
nonperforming assets. Accruing loans past due 90 days or more, and excluded from
classification as nonperforming assets,  totaled $51.8 million at June 30, 1998.
Of this balance,  $31.7 million  represented student loan balances under Federal
government loan programs,  which can carry a substantial guarantee (in excess of
98%) as to principal loan balance.

   At June 30,  1998,  nonperforming  assets of $76.0  million  were down  $16.1
million or 17% from June 30, 1997,  and down $10.3  million or 12% from December
31, 1997. The ratio of nonperforming  assets to loans and foreclosed  properties
at June 30, 1998 was 0.48%,  compared to 0.55% at December 31, 1997 and 0.64% at
June 30,  1997.  Future  operating  results  could show  increases  in the total
balance of  nonperforming  assets due to loan  growth,  future  acquisitions  of
financial institutions, or adverse changes in credit quality.

   The  provision  for loan losses was $21.8  million for the second  quarter of
1998,  a decrease of $14.2  million  from the $36.0  million  provision  expense
recorded in the second quarter of 1997.  Provision  expense in the first quarter
of 1998 was $23.1 million.  Net charge-offs  totaled $21.8 million in the second
quarter of 1998, compared to $25.7 million in the comparable period of 1997. Net
charge-offs  as a percentage of average loans were 0.54% for the second  quarter
of 1998,  compared to 0.73% in the same period of 1997,  and 0.64% for the first
quarter of 1998. Business loans experienced net recoveries of $0.4 million in
the second quarter of 1998,  compared to net recoveries of $1.0 million in the
comparable  quarter of 1997.  Consumer loan net  charge-offs totaled $22.2
million in the second  quarter of 1998,  compared to consumer loan net
charge-offs of $25.3 million in the first quarter of 1998 and $26.7 million in
the second quarter of 1997.

   The largest  proportion of net loan charge-offs  during the second quarter of
1998,  and for the first  six  months  of 1998,  occurred  in the bank card loan
portfolio.  Net charge-offs for bank card loans were $18.6 million in the second
quarter of 1998,  compared  to $20.5  million  in the first  quarter of 1998 and
$22.9  million in 1997's second  quarter.  Net bank card loan  charge-offs  as a
percentage of bank card loans (on an annualized  basis) were 6.78% in the second
quarter of 1998,  7.26% for the first  quarter of 1998,  and 7.45% in the second
quarter of 1997.  During 1997 and the first six months of 1998,  Crestar's  bank
card loss rates were higher than in previous  periods,  due to an  unanticipated
decline in consumer payment performance,  influenced by substantive increases in
consumer  bankruptcy filings.  Crestar's  experience during this time period has
been similar to many other financial  institutions  with credit card operations.
The historically  high charge-off ratio for the bank card portfolio was a factor
in the loan  provision  expense  of $36.0  million  incurred  during  the second
quarter of 1997.

   As previously noted,  Crestar  transferred $603 million in bank card loans to
the loans held for sale  classification as of June 30, 1998;  approximately $576
million of such  loans were  subsequently  sold in July  1998.  The  transferred
loans,  which were composed of bank card loans to borrowers outside of Crestar's
primary  market  of  Virginia,   Maryland  and  Washington,   D.C.,  represented
approximately  54% of  Crestar's  total bank card loans  outstanding  at time of
transfer.  It is anticipated  that total bank card loan charge-offs will decline
in future periods,  from the levels experienced in the first six months of 1998,
in part reflecting the sale of a substantial part of the bank card portfolio and
the  resulting  decline  in bank  card  loans  outstanding.  Excluding  balances
classified  as loans held for sale,  Crestar had $507 million of bank card loans
at June 30, 1998,  representing  3% of Crestar's  total loan  portfolio of $16.0
billion.

   Net charge-offs of instalment  loans totaled $3.3 million versus $4.5 million
in the first quarter of 1998 and $3.0 million in the second quarter of 1997. Net
charge-offs  for real  estate-mortgage  loans were $0.4  million  for the second
quarter of 1998, compared to $0.8 million in the second quarter of 1997.

   In addition to other loan  categories,  Crestar closely manages its portfolio
of loans to real estate developers and investors (REDI). The REDI designation is
based on  borrower  type and  encompasses  non-owner  occupied  real  estate and
construction  loans as well as other  forms of credit  extended  to real  estate
developers and investors.  REDI outstanding balances have remained fairly stable
during 1998, and totaled $1.8 billion at June 30, 1998. This balance represented

                                       18

<PAGE>

11% of the total loan  portfolio at that date.  At both December 31, 1997 and at
March 31, 1998,  REDI loan balances also  constituted  approximately  11% of the
total loan portfolio.  REDI nonperforming  assets were $35.3 million at June 30,
1998,  compared to $40.3  million at December 31, 1997 and $46.0 million at June
30, 1997.

   Potential  problem loans  consist of loans that are  currently  performing in
accordance with contractual terms but for which potential operating or financial
concerns of the obligors have caused management to have serious doubts regarding
the ability of such obligors to continue to comply with present repayment terms.
Potential  problem  loans at June 30,  1998,  not  included in Table 5,  totaled
approximately  $81 million.  Over 90% of this balance  represents  commercial or
real estate-income  property related loans.  Depending on changes in the economy
and other future events, these loans  and  others  not  presently  identified
as  problem  loans  could  be classified as nonperforming  assets in the future.
Potential problem loans were approximately  $123  million at June 30, 1997 and
$77  million at  December  31, 1997.  Fluctuations in potential  problem loans
balances from quarter to quarter are normal and should be viewed in the  context
of the size of  Crestar's  total loan portfolio, which totaled $16.0 billion at
June 30, 1998.

Noninterest Income And Expense
(Table 6)

Noninterest  income totaled $116.5 million in the second quarter of 1997, a $5.5
million  or 5%  increase  over the  second  quarter  period  of 1997.  Excluding
securities  gains and losses,  noninterest  income  increased $2.9 million or 3%
over second quarter 1997 results.  Significantly  impacting a quarter-to-quarter
comparison of results is a gain of $17.3 million  (pre-tax)  recorded by Crestar
during the second  quarter of 1997,  arising from the sale of merchant bank card
processing  operations.  Excluding  the  impact  of the 1997 gain on sale of the
merchant bank card processing  operations,  and excluding  securities  gains and
losses from both periods, noninterest income increased by $20.2 million, or 22%,
from $93.8 million in the second quarter of 1997 to $114.0 million in the second
quarter of 1998.

   Significant growth was experienced in several  noninterest income categories.
Deposit  account fee income for the three months ended June 30, 1998 was up $3.1
million,  or 10%,  from the  results  of the second  quarter of 1997.  Trust and
investment  advisory income  increased 17% from second quarter 1997 levels,  and
totaled  $21.0  million  for the second  quarter of 1998,  reflecting  growth in
assets under trust. Other service charges and fees totaled $11.6 million for the
second quarter of 1998, representing an increase of 33% over second quarter 1997
results, in part due to growth in automated teller machine (ATM) fee income.

   Reflecting a significant increase in overall levels of mortgage  originations
within the mortgage  banking  industry,  driven by declines in residential  home
mortgage  interest rates,  Crestar's  mortgage income (mortgage  origination and
mortgage  servicing  income,  net of  expenses)  for the second  quarter of 1998
totaled $18.9 million, or $13.0 million greater than the results reported in the
second  quarter  of 1997.  The  increase  reflects  record  levels  of  mortgage
originations  during the second  quarter of 1998 by Crestar's  mortgage  banking
subsidiary,  Crestar Mortgage  Corporation.  Gains on sale of mortgage servicing
rights  totaled $4.0 million in the second  quarter of 1997;  there were no such
sales in the quarter ended June 30, 1998.

   Bank card-related  noninterest  income declined to $9.4 million in the second
quarter of 1998,  down  slightly  from the $9.8 million  recognized  in the same
period of 1997. The decline is primarily  attributable  to the sale of Crestar's
bank card processing operations, effective May 1, 1997. Miscellaneous income for
the second  quarter of 1998  includes a gain of $3.3 million  recognized  on the
sale of selected real  estate-mortgage  loans; a comparable gain of $4.6 million
was recorded in the second quarter of 1997.

   Noninterest  expense increased $12.7 million, or 7%, in the second quarter of
1998 when compared to the same period of 1997. Total personnel costs,  Crestar's
largest  expense  category,  were $102.1 million in the three month period ended
June 30,  1998,  an  increase  of 6% in  comparison  to the same period of 1997.
Commission expenses,  related to strong growth in fee-based business lines, were
significantly  higher during the second quarter of 1998, in part  reflecting the
high levels of  mortgage  loan  originations  at Crestar  Mortgage  Corporation.
Strong growth in other fee-based business lines, such as stock brokerage, mutual
fund and insurance

                                       19

<PAGE>

annuity sales, also resulted in higher commission-related personnel costs.

   Noninterest expense in the quarter included $2.7 million of costs incurred in
the ongoing project to prepare Crestar's data processing systems for "Year 2000"
compatibility;  comparable  expenses in the second  quarter of 1997 totaled $4.3
million. Crestar is implementing changes to its information systems so that they
will be fully operable for date  recognition  and data  processing when the year
2000 begins. The total cost for this conversion and testing process is estimated
to be between $22 and $27  million,  with the  majority of costs  expected to be
incurred  during  fiscal 1998.  This estimate  includes some costs,  such as the
purchase of  computer  hardware,  that will  qualify as  depreciable  assets for
accounting  purposes,  with the related depreciation expense recognized over the
estimated  lives of the related assets.  However,  the majority of costs will be
expensed as incurred.  Through June 30, 1998, Crestar had incurred approximately
$11.0 million in noninterest  expense  associated  with the Year 2000 conversion
process, of which $5.7 million was incurred during the first six months of 1998.

   The  effective  tax rate for the second  quarter and first six months of 1998
was  35.9%  and  35.7%,  respectively,  compared  to  33.7%  and  35.2%  for the
comparable periods of 1997.  Crestar's effective tax rate for the second quarter
of 1997 was  favorably  impacted by the  recognition  of tax  benefits  upon the
resolution  of  certain  federal  tax  filing  positions  taken in prior  years.
Financial  statement note 10 contains additional  information  concerning income
taxes.

Financial Condition
(Table 7)

Crestar's  assets  totaled  $26.2  billion at June 30,  1998,  compared to $24.9
billion in assets at December  31,  1997,  and $22.8  billion at June 30,  1997.
Loans totaled $16.0  billion at June 30, 1998,  compared to $15.7 billion at
year-end 1997 and $14.3  billion at June 30, 1997.  Total  deposits were $17.9
billion at June 30, 1998,  compared to $16.4  billion at December 31, 1997 and
$15.8 billion at June 30,  1997.  Excluding  certificates  of deposit of
$100,000  or more,  deposits totaled  $16.0  billion at June 30, 1998,  versus
$15.4  billion at December 31, 1997 and $15.0 billion at June 30, 1997.

   With  respect to the  securities  held to maturity  portfolio,  market  value
exceeded  the carrying  value at June 30, 1998 by $5.8  million,  consisting  of
approximately  $6.4 million in  unrealized  gains and $0.6 million in unrealized
losses.  At June 30,  1998,  the fair  value of  securities  available  for sale
exceeded the amortized  cost of such  securities by $9.4 million,  consisting of
$20.2  million  in  unrealized  gains and $10.8  million in  unrealized  losses.
Shareholders'  equity at June 30, 1998 reflects a $6.4 million  increase for the
excess, net of tax, of the fair value of securities  available for sale over the
amortized cost at quarter-end.  At June 30, 1997, Crestar's shareholders' equity
reflected a $28.9  million  reduction  for the excess,  net of tax, of amortized
cost of securities  available  for sale over the fair value of such  securities.
The net unrealized gain or loss on securities  available for sale is recorded as
a component of  shareholders'  equity,  and is classified as "accumulated  other
comprehensive  income" on the consolidated balance sheet. Net unrealized gain or
loss on  securities  available for sale will continue to be subject to change in
future periods due to fluctuations in market value, acquisition activities,  and
sales, purchases, maturities and calls of securities classified as available for
sale.  Net  unrealized  gains or losses  in the  securities  available  for sale
portfolio primarily reflect ongoing interest rate volatility,  which is inherent
in  the  securities  marketplace.   Based  on  current  market  conditions,  net
unrealized  gains on  securities  available  for sale are not expected to have a
significant impact on the future operating results or liquidity of Crestar.

   All  mortgage-backed  securities  in the  securities  available  for sale and
securities held to maturity portfolios are subject to prepayment risk, since the
mortgage  loans  underlying  these  securities  can  prepay at any time  without
penalty.  This risk becomes apparent during periods of declining interest rates,
when  refinancing  of  existing  mortgage  loans can  accelerate.  During  these
periods,  the expected maturity of  mortgage-backed  securities  shortens due to
prepayments,  reducing the  expected  stream of future  interest  payments to be
received. Similarly, prepayment risks exist within the company's loan portfolio.
Home equity  instalment  loans and real estate  mortgage loans are  particularly
susceptible to increased  prepayments in a declining  interest rate environment.
The interest rate and prepayment risk associated with mortgage-backed securities
and  consumer  loans is  considered  by  management  in  assessing  the  overall
asset/liability structure of the Corporation.

                                       20

<PAGE>

   All investment securities, including mortgage backed pass-through securities,
collateralized mortgage obligation (CMO) securities, and securitized credit card
receivables,  are also managed  with  respect to their credit risk.  Credit risk
arises  because  payments of interest  and  principal  can be  dependent  on the
payment of the underlying  mortgage or receivable  payment where applicable,  in
addition to the  contractual  obligation of the issuer to collect and remit such
payments to the individual security owners. The Corporation monitors credit risk
by assessing,  and  monitoring on an ongoing basis,  the financial  strength and
performance of the issuers of such securities.  Approximately 69% (market value)
of Crestar's securities  available for sale portfolio,  and 59% (amortized cost)
of the  Corporation's  securities  held to maturity  portfolio,  was composed of
mortgage-backed  obligations  of  Federal  agencies  as of June 30,  1998.  This
category includes mortgage-backed securities of Federal agencies, as well as CMO
securities guaranteed by Federal agencies  such  as  the  Federal  Home  Loan
Mortgage  Corporation. Securities  classified as "Other taxable securities" can
include  non-government CMO securities, corporate debt securities, and corporate
obligations securitized by credit card or  instalment  loans.  Other  taxable
securities  classified as available  for sale at June 30, 1998  included  $852
million  (market  value) of non-government CMO obligations.

   During the second quarter of 1998, Crestar sold approximately $1.1 billion of
securities  classified as available for sale, generating net securities gains of
$2.5  million.  Such sales were  consummated  in  conjunction  with the  overall
management of interest rate risk for the  Corporation.  In the second quarter of
1997,  Crestar  incurred  securities  losses  from sales of  securities  of $0.1
million. For the first six months of 1998 and 1997, Crestar recognized net gains
on the sale of  securities  available for sale of $5.2 million and $4.0 million,
respectively.

   During the second quarter of 1998,  Crestar announced a common stock dividend
increase,  effective  with the dividend paid on May 21, 1998, to $.33 per share.
This represents a 14% increase from the previous quarterly dividend rate of $.29
per share. Also during the second quarter,  Crestar purchased and retired 95,000
shares of common  stock,  at an average  price of $57 per share.  The purpose of
these  transactions was to retire shares previously issued for the purchase of a
financial institution.

Liquidity, Market Risk And Interest Sensitivity
(Tables 8 - 10)

Bank  liquidity is a measure of the ability to generate and maintain  sufficient
cash flows to fund  operations and to meet  financial  obligations to depositors
and borrowers  promptly and in a  cost-effective  manner.  Liquidity is provided
through securities available for sale, money market investments,  maturing loans
and securities, and the ability to generate new deposits or borrowings as
needed.  Crestar's  liquidity position is actively managed on a daily basis, and
monitored  regularly by the  Asset/Liability  Management  Committee (ALCO).
ALCO's overall objective is to optimize net interest income after giving
consideration  to capital  adequacy,  liquidity  needs,  interest rate risk, the
economic outlook, market opportunities and customer needs. General strategies to
accomplish  these  objectives  include   maintaining  a  strong  balance  sheet,
maintaining adequate core deposit levels, taking an acceptable level of interest
rate  risk,  adhering  to  conservative   financial  management  principles  and
practicing prudent dividend policies.

   Core  deposits   provide  a  significant   source  of  liquidity.   Crestar's
interest-bearing  core deposits represented 51% of total funding sources at June
30, 1998,  compared to 53% of total funding sources at December 31, 1997 and 57%
at June 30, 1997. As an additional indication of adequate liquidity,  securities
available for sale represented  18%, and money market  investments an additional
4%, of Crestar's total earning assets at June 30, 1998.

   Market  risk is the risk of loss  arising  from  adverse  changes in the fair
value of financial  instruments due to changes in interest rates, exchange rates
or equity prices. Like many financial  institutions,  Crestar's principal market
risk is interest  rate risk.  Interest  rate risk can be measuried by looking at
the  volatility  of  projected  net  income as a result of  possible  changes in
interest rates over a given period of time.  Crestar's goal is to limit interest
rate  exposure  to  prudent  levels  as  determined  by the  Corporation's  ALCO
committee.  The  committee  establishes  limits  on the  earnings  at risk for a
current planning period,  usually defined as either the current calendar year or
the  remainder  of the current  year plus the next  calendar  year.  Established
limits are subject to change,  but have  typically been 10% or less of projected
net income for the planning period. Actions that can be taken to manage interest
rate risk include changing the mix of floating

                                       21

<PAGE>

rate versus fixed rate  earning  assets and funding  sources,  changes in
average  maturities  within the securities  available for sale portfolio through
sales  and  purchases,  the use of  derivative  instruments  for  interest  rate
conversions or to hedge  interest  risk,  and marketing and product  development
efforts to attract new loans and deposits. The level of interest rate risk taken
is based on  management's  assessment of the market  environment,  and will vary
from period to period.

   A significant tool used by Crestar in assessing interest rate exposure is net
interest income  simulations.  A net income forecast is prepared regularly based
on a current  interest  rate  forecast,  in addition  to  numerous  high and low
interest  rate  scenarios  involving  changes  in  interest  rates  of up to and
including 300 basis points from current  interest  rates.  The various  interest
rate scenarios  represent a reasonable  range of interest  rates. By its nature,
the simulation process includes numerous  assumptions,  including assumptions on
changes in average  balances  and yields,  changes in deposit and loan mix,  and
forecasts  of  interest  rate  movements  and  prepayment   levels.   Prepayment
assumptions  are based on the  expertise  of  management  along  with input from
external  financial market sources.  The expected dynamics of the balance sheet,
including shifts in loans and deposits,  are included in the  simulations.  Also
taken into  account  are the assumed  effects of interest  rate caps and floors.
While  the  simulation   process  is  a  powerful  tool  in  analyzing  interest
sensitivity,  many of the  assumptions  used in the simulation  process are both
highly qualitative and subjective,  and subject to the risk that past historical
activity may not generate accurate predictions of future results.

   The high rate and low rate estimates generated by this simulation process are
compared to the estimate  generated under the consensus  interest rate scenario.
Based on the most recent  simulations as of June 30, 1998,  Crestar's  projected
after-tax net income under the consensus interest rate scenario for the 12 month
period  ending June 30, 1999 would  decrease by  approximately  $16 million in a
high interest rate scenario, and would increase by approximately $3 million in a
low interest rate  scenario,  if nothing else changed and no management  actions
were  taken.  These  projections  were  based  on  interest  rate  increases  of
approximately 240 basis points under a 12 month high interest rate scenario, and
interest rate decreases of  approximately  120 basis points under a 12 month low
interest rate scenario,  from market  interest rates in effect at June 30, 1998.
Interest rates under these  simulations were projected to change 25 basis points
per month  until the  interest  rate  targets  were met.  The  results  of these
projections were within Crestar's tolerance for interest rate risk, and indicate
a sufficient liquidity position and acceptable  operating  environment under the
high, low and current interest rate scenarios.

   Another   management   tool  for   assessing   interest   rate  risk  is  the
quantification  of the economic  fair value of  shareholders'  equity.  Economic
value of equity  consists  of the  present  value of all future  cash flows from
assets,  liabilities  and  off-balance  sheet  items.  Potential  changes in the
economic  value of equity  are  calculated  by  projecting  cash  flows and then
computing  present values under a series of different  interest rate  scenarios.
The economic value calculations include the valuation of instruments with option
characteristics,  using numerous  interest rate path valuations and mathematical
rate simulation techniques.  Crestar has incorporated this tool as a significant
component of its management of interest rate risk.  Economic  value  measurement
results at June 30, 1998 were within Crestar's internal guidelines.

   Each of the tools  used to assess  interest  rate  risk  have  strengths  and
weaknesses.  While Crestar believes that its methodologies  provide a meaningful
representation of the Corporation's interest rate sensitivity, the methodologies
do not necessarily take into account all business developments which can have an
impact on net interest  income,  such as changes in credit quality or changes in
the amount and  composition of earning assets and sources of funds.  Assumptions
can be inherently  uncertain:  actual results will differ from projected results
due to changes in market  conditions,  management  strategies and the timing and
magnitude of interest rate changes.

   As noted,  Crestar  incurs a degree of  interest  rate risk as a provider  of
banking services to its customers.  This risk can be reduced through  derivative
interest rate contracts, such as interest rate swaps, caps and floors. Crestar's
outstanding  interest  rate swap  instruments  at June 30, 1998 are  utilized to
convert certain variable rate assets to fixed rates as part of the Corporation's

                                       22

<PAGE>


interest risk management  strategy.  Interest rate caps are utilized to minimize
interest  rate risk  associated  with rising rates on floating rate money market
deposits,  fixed rate  securities  and fixed rate real  estate  mortgage  loans.
Because  financial  derivatives  typically do not have actual principal  dollars
transferred between parties,  notional principal amounts are used to express the
volume  of  such  transactions.  However,  the  notional  amount  of  derivative
contracts  does not represent  direct  credit  exposure,  which the  Corporation
believes is a combination of current  replacement cost of those instruments with
a positive market value plus an amount for prospective market movement.  Crestar
has established policies governing derivative activities, and the counterparties
used by Crestar are considered high quality  credits.  In addition,  Crestar may
demand  collateral  from a counterparty to further  minimize credit risk.  There
were no past due amounts or reserves for possible  derivative losses at June 30,
1998, nor has Crestar ever  experienced  any  charge-offs  related to the credit
risk of derivative transactions. Interest rate simulation techniques are used by
Crestar  to assess  and  monitor  market  risk in the  Corporation's  derivative
portfolio.

   At June 30, 1998 Crestar had a deferred  gain of  approximately  $3.6 million
included in other  assets,  arising  from the  termination  prior to maturity of
interest rate floors during 1997. The deferred gain is being  amortized over the
remaining original  contractual life of the underlying  derivative  instruments,
which range from  approximately  two to six years.  Terminations  of  derivative
instruments   prior  to  maturity  may  occur  in  the  future  in  response  to
modifications of interest rate risk management strategies.

   The  notional  amount of  Crestar's  interest  rate  swaps,  caps and  floors
(excluding  customer  positions where Crestar acts as an intermediary)  was $4.9
billion at June 30,  1998.  Forward  contracts  with a  notional  amount of $2.8
billion,  utilized to hedge lending  commitments of Crestar's  mortgage  banking
subsidiary,  were also outstanding at June 30, 1998, bringing the total notional
value  of  derivative  financial  instruments  related  to  interest  rate  risk
management  activities  to $7.7  billion at June 30,  1998.  Tables 8, 9, and 10
present information regarding fair values, maturity, average rates, and activity
as of and for the six month  period  ending June 30, 1998 for these  off-balance
sheet derivative instruments.  Net unrealized gains on these instruments totaled
$1.9  million  as of  June  30,  1998.  Financial  statement  note  11  contains
additional information pertaining to these types of agreements.

Year 2000 Issue

As previously noted,  Crestar is implementing changes to its information systems
so that they will be fully  operable for date  recognition  and data  processing
before the year 2000 begins.  The  Corporation's  Year 2000 plans are subject to
guidelines promulgated by the Federal Financial Institutions Examination Council
(FFIEC). The Federal Reserve Bank of Richmond  periodically  measures the status
of  Crestar's  plans  and  progress,   as  outlined  in  the  FFIEC  guidelines.
Accordingly,   Crestar   completed  a  thorough   assessment   of  each  of  the
Corporation's  computer  systems  in  1997.  The  Corporation  expects  to  have
substantially  completed necessary changes to its computer systems by the end of
the  current  year,  and to further  test its  computer  systems  during 1999 to
confirm compliance with "Year 2000" data processing standards.

   The  Corporation  considers its current state of readiness in addressing  the
Year 2000 issue to be adequate,  and fully  expects to meet the above  timetable
regarding Year 2000  compliance.  The total cost for this conversion and testing
process is  estimated  to be between $22 and $27  million,  with the majority of
costs expected to be incurred  during 1998.  This estimate  includes some costs,
such as the  purchase of computer  hardware,  that will  qualify as  depreciable
assets for accounting purposes, with the related depreciation expense recognized
over the estimated lives of the related assets.  However,  the majority of costs
will be  expensed as  incurred.  Through  June 30,  1998,  Crestar had  incurred
approximately $11.0 million in noninterest expense associated with the Year 2000
conversion process.

   As part  of its  planning  process,  the  Corporation  continues  to  develop
contingency  plans  based  on  possible  scenarios,   and  their  likelihood  of
occurrence,  which may impact Crestar's operations.  Crestar's contingency plans
address operational issues,  including  communication links with other entities,
utility  and  transportation  services,  and  the  availability  of  alternative
services  among key  vendor  relationships.  Crestar  expects  to  complete  its
contingency plans in various stages, during 1998 and 1999. At this time, Crestar
believes the most likely worst case Year 2000 scenario would not have a material
effect on the  Corporation's  results of  operations,  liquidity,  and financial
condition  for the year ending  December  31,  2000.  The  Corporation  does not

                                       23

<PAGE>

foresee a material loss of revenue due to the Year 2000 issue. As noted however,
Crestar's  contingency  plans  are based on  assessments  of the  likelihood  of
occurrence of possible  scenarios;  the Corporation  believes that no entity can
address the virtually  unlimited  possible  circumstances  relating to Year 2000
issues,  including  risks  outside  Crestar's  current  primary  marketplace  of
Virginia,  Maryland,  and  the  District  of  Columbia.  While  unlikely,  it is
acknowledged that failure by the Corporation to successfully  implement its Year
2000 plan,  its  modifications  and  conversions,  or to  adequately  assess the
likelihood  of various  events  relating  to the Year 2000  issue,  could have a
material  impact on  Crestar's  operations.  Therefore,  this could  potentially
result in a material adverse effect on the  Corporation's  results of operations
and financial condition.

   The  projections  of total  costs of  Crestar's  Year  2000  project  and the
expected  completion  dates are based on  Crestar's  best  estimates,  which are
necessarily  based  in  part on  assumptions  of  future  events  including  the
continued  availability  of adequate  resources  and  completion  of third party
modification  plans.  There can be no  guarantee  that these  estimates  will be
achieved;  actual results could differ from the Corporation's current estimates.
Specific risk factors that might cause material differences include, but are not
limited to, the  availability  and cost of personnel  with adequate  programming
skills and the ability to locate and correct all relevant  computer  codes.  The
inability to control the actions and plans of vendors and suppliers,  customers,
government entities and other third parties with respect to Year 2000 issues are
associated risks.

New Accounting Standard

In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments and Hedging Activities" (SFAS 133), which establishes accounting and
reporting standards for derivative  instruments and for hedging  activities.  It
requires that a company recognize all derivative instruments as either assets or
liabilities in the consolidated  balance sheet, and measure those instruments at
fair value.  The accounting for a derivative  depends on the intended use of the
derivative  and the  resulting  designation.  For  companies  with a fiscal year
ending on December  31,  SFAS 133 is  effective  as of January 1, 2000.  Earlier
adoption,  as of the beginning of a fiscal  quarter,  is  encouraged  but is not
mandatory.  The  statement  can not be applied  retroactively  to the  financial
statements of periods prior to adoption.  Crestar is evaluating  the  statement;
the impact of adopting  SFAS 133 will be dependent  on the  specific  derivative
instruments  in  place  at date of  adoption.  At this  time,  Crestar  does not
anticipate adopting SFAS 133 before January 1, 2000.


                                       24
<PAGE>


Table 1  Financial Highlights

<TABLE>
<CAPTION>
Dollars in millions, except per share data            Three Months                    Six Months
                                                --------------------------     ---------------------------
                                                                         %                               %
For the Period Ended June 30                     1998       1997    Change       1998       1997    Change
<S>   <C>
Net Income                                      $87.4      $75.8        15     $172.3     $147.6        17
Basic Earnings Per Share:
 Net Income                                      $.78       $.69        13      $1.54      $1.34        15
 Average Shares Outstanding (000s)            112,150    110,496         1    111,928    110,394         1
Diluted Earnings Per Share:
 Net Income                                      $.77       $.68        13      $1.52      $1.32        15
 Average Shares Outstanding (000s)            113,547    111,602         2    113,354    111,573         2
Dividends Paid Per Common Share                  $.33       $.29        14       $.62      $ .56        11
==========================================================================================================
Key Ratios
Return on Average Assets                         1.39%      1.42%                1.40%      1.37%
Return on Average Equity                        16.46      16.48                16.43      16.27
Average Equity to Average Assets                 8.42       8.64                 8.51       8.45
Net Interest Margin                              4.06       4.58                 4.13       4.54
At June 30
Book Value Per Share                                                           $19.65     $17.17        14
Equity to Assets                                                                 8.43%      8.33%
Risk Adjusted Capital Ratios:
 Tier I                                                                          10.1       10.7
 Total                                                                           13.1       13.4
Common Shares Outstanding (000s)                                              112,220    110,638
==========================================================================================================
</TABLE>

Table 2  Changes In Diluted Earnings Per Share

<TABLE>
<CAPTION>
                                                                        2nd Qtr. 1998        2nd Qtr. 1998
                                                                                  vs.                  vs.
                                                                        2nd Qtr. 1997        1st Qtr. 1998

<S>   <C>
Diluted Earnings Per Share - prior period                                       $ .68                $ .75
------------------------------------------------------------------------------------------------------------
Interest income                                                                   .35                  .12
Interest expense                                                                 (.27)                (.08)
Provision for loan losses                                                         .08                  .01
Securities gains or losses                                                        .02                    -
Other noninterest income                                                          .02                  .05
Foreclosed properties expense                                                       -                 (.01)
Other noninterest expense                                                        (.07)                (.05)
Change in effective income tax rate                                              (.03)                (.02)
Increase in shares outstanding                                                   (.01)                   -
------------------------------------------------------------------------------------------------------------
Net increase                                                                      .09                  .02
------------------------------------------------------------------------------------------------------------
Diluted Earnings Per Share - current period                                     $ .77                $ .77
============================================================================================================
</TABLE>

                                       25

<PAGE>

Table 3  Average Balances, Net Interest Income And Rate/Volume Analysis(1)
Dollars in thousands

<TABLE>
<CAPTION>

                  2nd Qtr.
---------------------------                        1st Qtr.
       Average Balance                             Average
---------------------------      Increase          Balance
       1998            1997     (Decrease)            1998
       ----            ----     ----------         -------
          $               $              %               $
<S>   <C>
  4,917,937       3,833,655             28       4,540,123          Commercial
  1,171,884       1,270,639             (8)      1,222,918          Real estate - income property
    386,861         334,572             16         381,702          Real estate - construction
  5,273,448       4,099,809             29       4,809,541          Instalment
  1,094,608       1,228,168            (11)      1,130,487          Bank card
  3,398,345       3,333,024              2       3,515,622          Real estate - mortgage
------------------------------------------------------------------------------------------------------------
 16,243,083      14,099,867             15      15,600,393           Total loans - net of unearned income(2)
------------------------------------------------------------------------------------------------------------
    594,342         771,671            (23)        616,117          Securities held to maturity
  4,415,174       3,778,013             17       3,978,423          Securities available for sale
    238,260         160,914             48         647,881          Money market investments
  1,676,327         551,352            204       1,150,140          Loans held for sale
----------------------------------------------------------------------------------------------------------
 23,167,186      19,361,817             20      21,992,954           Total earning assets
==========================================================================================================
  6,829,500       5,805,429             18       6,429,487          Interest-bearing demand deposits
  1,418,043       1,573,048            (10)      1,432,363          Regular savings deposits
  3,942,134       4,336,813             (9)      4,091,130          Domestic time deposits
----------------------------------------------------------------------------------------------------------
 12,189,677      11,715,290              4      11,952,980           Total interest-bearing core deposits
----------------------------------------------------------------------------------------------------------
  6,071,099       3,419,958             78       5,376,486          Purchased liabilities
    922,961         834,761             11         927,180          Long-term debt
----------------------------------------------------------------------------------------------------------
 19,183,737      15,970,009             20      18,256,646           Total interest-bearing liabilities
  3,983,449       3,391,808             17       3,736,308          Other sources - net
----------------------------------------------------------------------------------------------------------
 23,167,186      19,361,817             20      21,992,954           Total sources of funds
----------------------------------------------------------------------------------------------------------
                                                                    Net Interest Income
==========================================================================================================
</TABLE>

                                       26

<PAGE>

<TABLE>
<CAPTION>
                      2nd Qtr.
   -----------------------------------------------------
                                  1998 vs. 1997                          2nd Qtr. 1998 vs. 1st Qtr. 1998
                      ----------------------------------                 -------------------------------
                                                             1st Qtr.
   Income/Expense(3)                   Change due to(4)      Income/                    Change due to(4)
   -----------------   Increase        -----------------    Expense(3)  Increase      -------------------
    1998        1997  (Decrease)       Rate(5)    Volume        1998   (Decrease)       Rate(5)    Volume
    ----        ----  ----------       -------    ------     --------   --------        -------    ------
       $           $           $           $           $           $           $           $           $
<S>   <C>
  96,593      77,406      19,187      (2,562)     21,749      90,862       5,731      (1,799)      7,530
  26,091      27,847      (1,756)     (2,941)      1,185      26,393        (302)        788      (1,090)
   8,840       7,586       1,254       3,413      (2,159)      8,431         409         295         114
 106,078      84,012      22,066      (2,004)     24,070      95,308      10,770       1,561       9,209
  36,786      43,145      (6,359)     (1,515)     (4,844)     38,117      (1,331)        (72)     (1,259)
  65,110      64,068       1,042        (212)      1,254      67,597      (2,487)       (235)     (2,252)
---------------------------------------------------------------------------------------------------------
 339,498     304,064      35,434     (10,908)     46,342     326,708      12,790        (711)     13,501
---------------------------------------------------------------------------------------------------------
   9,202      11,642      (2,440)        235      (2,675)      9,533        (331)          6        (337)
  68,791      59,875       8,916      (1,182)     10,098      62,411       6,380        (471)      6,851
   3,192       2,266         926        (163)      1,089       9,049      (5,857)       (136)     (5,721)
  28,542      10,618      17,924      (4,454)     22,378      20,571       7,971      (1,553)      9,524
---------------------------------------------------------------------------------------------------------
 449,225     388,465      60,760     (15,818)     76,578     428,272      20,953      (1,980)     22,933
=========================================================================================================
  55,182      42,939      12,243       2,992       9,251      50,296       4,886       1,151       3,735
   8,168       9,768      (1,600)       (637)       (963)      8,126          42         123         (81)
  49,482      53,450      (3,968)        919      (4,887)     50,501      (1,019)        833      (1,852)
---------------------------------------------------------------------------------------------------------
 112,832     106,157       6,675       2,358       4,317     108,923       3,909       1,743       2,166
---------------------------------------------------------------------------------------------------------
  83,100      45,557      37,543       2,317      35,226      72,302      10,798       1,465       9,333
  16,600      15,591       1,009        (638)      1,647      17,123        (523)       (445)        (78)
---------------------------------------------------------------------------------------------------------
 212,532     167,305      45,227      11,490      33,737     198,348      14,184       4,090      10,094

---------------------------------------------------------------------------------------------------------
 212,532     167,305      45,227      12,277      32,950     198,348      14,184       3,572      10,612
---------------------------------------------------------------------------------------------------------
 236,693     221,160      15,533     (28,095)     43,628     229,924       6,769      (5,552)     12,321
=========================================================================================================
</TABLE>

(1) Tax-equivalent basis.

(2) Nonaccrual  loans are included in the average loan  balances and income on
    such loans is recognized on a cash basis.

(3) Includes  tax-equivalent  net loan fees (costs) of $(172,000) and $(68,000)
    for the second quarter of 1998 and 1997,  respectively,  and $310,000 for
    the first quarter of 1998.

(4) Variances are computed on a line-by-line basis and are non-additive.

(5) Variances caused by the change in rate times the change in balances are
    allocated to rate.

                                       27

<PAGE>

Table 4  Allowance For Loan Losses

<TABLE>
<CAPTION>
Dollars in thousands                                      Second Quarter         Six Months Ended June 30,
                                                        ---------------------    -------------------------
                                                           1998          1997            1998         1997
<S>   <C>
Beginning balance                                      $280,969      $268,870        $281,394     $268,868
-----------------------------------------------------------------------------------------------------------
Allowance from acquisitions and other activities, net        27             -           1,558            -
Allowance of loans transferred to loans held for sale   (35,000)            -         (35,000)           -
Provision for loan losses                                21,810        36,000          44,906       65,698
-----------------------------------------------------------------------------------------------------------

Net charge-offs (recoveries):
 Commercial                                                (613)          (58)           (815)         468
 Real estate - income property                              209          (433)           (187)        (895)
 Real estate - construction                                   -          (515)            361         (611)
 Instalment                                               3,276         3,038           7,797        8,583
 Bank card                                               18,565        22,865          39,073       46,235
 Real estate - mortgage                                     352           783             612        1,596
-----------------------------------------------------------------------------------------------------------
  Total net charge-offs                                  21,789        25,680          46,841       55,376
-----------------------------------------------------------------------------------------------------------
Balance, June 30                                       $246,017      $279,190        $246,017     $279,190
===========================================================================================================
Allowance for loan losses to period-end loans              1.54%         1.96%           1.54%        1.96%
Annualized net charge-offs to average loans                 .54           .73             .59          .79
===========================================================================================================
</TABLE>


Table 5  Nonperforming Assets(1) And Past Due Loans

<TABLE>
<CAPTION>
Dollars in thousands                                                      June 30,
                                                                 -------------------------    December 31,
                                                                    1998              1997            1997
<S>   <C>
Nonaccrual loans:
 Commercial                                                      $ 9,850           $11,990         $11,247
 Real estate - income property                                     9,887             7,303           6,412
 Real estate - construction                                       13,165            10,243          14,239
 Instalment                                                        5,613             3,115           3,292
 Real estate - mortgage                                           20,814            25,162          25,310
-----------------------------------------------------------------------------------------------------------
  Total nonperforming loans(1)                                    59,329            57,813          60,500
Foreclosed properties - net                                       16,652            34,243          25,731
-----------------------------------------------------------------------------------------------------------
  Total nonperforming assets(1)                                  $75,981           $92,056         $86,231
===========================================================================================================
Nonperforming assets(1) to:
 Loans and foreclosed properties - net                               .48%              .64%            .55%
 Total assets                                                        .29               .40             .35
Allowance for loan losses to:
 Nonperforming assets(1)                                             324               303             326
 Nonperforming loans(1)                                              415               483             465
Allowance for loan losses plus shareholders'
 equity to nonperforming assets(1)                                 32.27x            23.67x          27.15x
===========================================================================================================
Accruing loans past due 90 days:
 Commercial                                                      $ 4,081           $ 2,014         $ 3,524
 Real estate - income property                                       461             1,800           1,750
 Real estate - construction                                            2               500             216
 Instalment
  Student                                                         31,700            25,168          25,742
  Other                                                            5,771             4,953           6,886
 Bank card                                                         4,884            19,484          24,126
 Real estate - mortgage                                            4,912             4,794           6,023
-----------------------------------------------------------------------------------------------------------
  Total accruing loans past due 90 days                          $51,811           $58,713         $68,267
===========================================================================================================
</TABLE>

(1) Loans which are both past due 90 days or more and not deemed  nonaccrual due
    to an assessment of collectibility  are specifically  excluded from the
    definition of nonperforming.


                                       28
<PAGE>

Table 6  Noninterest Income And Expense

<TABLE>
<CAPTION>
In thousands                                                                           Six Months Ended
                                                     Second Quarter          First          June 30,
                                                   --------------------    Quarter     -------------------
                                                       1998        1997       1998        1998        1997
<S>   <C>
Noninterest Income
Service charges on deposit accounts                $ 34,860    $ 31,731   $ 33,067    $ 67,927    $ 61,894
Trust and investment advisory                        20,950      17,887     20,119      41,069      35,340
Bank card-related                                     9,360       9,771      8,810      18,170      22,419
Other service charges and fees                       11,592       8,730      9,653      21,245      17,173
Mortgage origination - net                           18,488       2,359     15,102      33,590       3,261
Mortgage servicing - net                                458       3,582      2,352       2,810       8,713
Trading account activities                            1,570       1,162      1,345       2,915       2,109
Commissions on letters of credit                      1,161       1,299      1,356       2,517       2,413
Gain on sale of mortgage servicing rights                 -       4,000          -           -      10,450
Gain on sale of premises                                  -           -          -           -       5,807
Gain on sale of merchant card processing                  -      17,325          -           -      17,325
Miscellaneous                                        15,529      13,261     14,246      29,775      23,606
Securities gains (losses)                             2,542         (91)     2,613       5,155       3,973
-----------------------------------------------------------------------------------------------------------
 Total noninterest income                          $116,510    $111,016   $108,663    $225,173    $214,483
===========================================================================================================

Noninterest Expense
Salaries                                           $ 81,932    $ 75,914   $ 81,096    $163,028    $154,302
Benefits                                             20,191      20,633     19,759      39,950      41,587
-----------------------------------------------------------------------------------------------------------
 Total personnel                                    102,123      96,547    100,855     202,978     195,889
Occupancy - net                                      13,893      13,685     13,154      27,047      29,843
Equipment                                            10,962      11,462     10,802      21,764      21,281
Communications                                       10,433       9,278      9,970      20,403      18,123
Outside data services                                 7,693       6,837      6,962      14,655      13,059
Professional fees and services                        6,840       8,333      6,327      13,167      15,368
Advertising and marketing                             5,773       5,345      5,709      11,482       9,875
Amortization of purchased intangibles                 4,976       4,206      4,793       9,769       8,433
Stationery, printing and supplies                     3,220       2,615      3,608       6,828       5,328
Loan expense                                          4,826       2,783      2,883       7,709       5,598
Transportation                                        1,894       1,774      1,855       3,749       3,499
FDIC premiums - net                                     747         682        430       1,177       1,789
Foreclosed properties (net recoveries)                  914         645       (517)        397       1,360
Miscellaneous                                        17,386      14,818     14,155      31,541      29,570
-----------------------------------------------------------------------------------------------------------
 Total noninterest expense                         $191,680    $179,010   $180,986    $372,666    $359,015
===========================================================================================================
</TABLE>


Table 7  Debt And Other Security Ratings
(as of July 31, 1998)

<TABLE>
<CAPTION>
                                                         Standard       Thomson
Security                                   Moody's      & Poor's      BankWatch
<S>   <C>
6 1/2% Subordinated Notes due 2018            Baa1          BBB+             A-
8 3/4% Subordinated Notes due 2004            Baa1          BBB+             A-
8 1/4% Subordinated Notes due 2002            Baa1          BBB+             A-
Commercial Paper                               P-2     Not rated          TBW-1
Crestar Bank Deposits:
 Long-Term                                      A2             A      Not rated
 Short-Term                                    P-1           A-1          TBW-1
Crestar Capital Trust 1
 Preferred Stock                              Baa1           BBB      Not rated
===============================================================================
</TABLE>
                                       29

<PAGE>

Table 8  Off-Balance Sheet Derivative Financial Instruments(1)

<TABLE>
<CAPTION>
June 30, 1998                                             Average
                                               Weighted     Fixed   Estimated
Dollars in thousands                Notional    Average   Receive        Fair
                                     Balance   Maturity      Rate       Value   Comments
<S>   <C>
Interest Rate Conversions
 Generic interest rate swaps      $1,675,000   3.3 yrs.     6.19%               Notional amounts of $1.33
  Carrying amount(2)                                                  $ 1,468   billion and $350 million
   Commercial loan program                                                      convert floating rate commercial
    Unrealized gains                                                   17,307   and instalment loans, respectively,
    Unrealized losses                                                    (554)  to fixed rate. Floating rates paid
   Instalment loan program                                                      tied to LIBOR.
   Unrealized gains                                                     2,067
                                                                     --------
  Estimated fair value                                                 20,288
                                                                     --------
 Interest rate caps                1,055,000   2.9 yrs.    6.55%(3)             Notional amount of $1.06 million
  Carrying amount(2)                                                    8,855   hedges the interest rate risk
   Money market deposit program                                                 associated with rising interest
    Unrealized losses                                                  (4,216)  rates on floating rate money
                                                                                market deposits (strike rate tied
                                                                     --------   to LIBOR).
  Estimated fair value                                                  4,639
                                                                     --------
Market Value Hedges
 Interest rate caps                1,950,000   1.7 yrs.    7.56%3               Notional amount of $1.75 billion
  Carrying amount(2)                                                   10,229   hedges the market value of fixed
   Securities available for sale program(5)                                     rate securities available for sale
    Unrealized losses                                                  (9,379)  in a rising rate environment (strike
   Real estate income property loan program                                     rate for $800 million tied to 5 year
   Unrealized losses                                                     (545)  CMT; strike rate for $950 million
                                                                                tied to LIBOR). Notional amount
                                                                                of $200 million hedges the
                                                                                market value of fixed rate real
                                                                                estate income property loans
                                                                     --------   (strike rate tied to LIBOR).
  Estimated fair value                                                    305
                                                                     --------

 Interest rate floors                250,000   3.7 yrs.    5.26%4               Notional amount of $150 million
  Carrying amount(2)                                                    1,620   hedges the prepayment risk
   Real estate mortgage loan program                                            associated with fixed rate
    Unrealized gains                                                      509   mortgage loans in a declining rate
   Domestic time deposit program                                                environment (strike rate tied to
    Unrealized gains                                                      202   5 year CMT). Notional amount of
                                                                                $100 million hedges the fair value
                                                                                of fixed rate domestic time deposits
                                                                     --------  (strike rate tied to 3 year CMT).
  Estimated fair value                                                  2,331
                                                                     --------

Hedges of Lending Commitments
 Forward contracts                 2,813,321    .2 yrs.       n/a               Hedges of residential mortgage
  Unrealized gains                                                      3,065   lending commitments.
  Unrealized losses                                                    (6,590)
                                                                    ---------
 Estimated fair value                                                  (3,525)
                                  ----------                        ---------
   Total derivatives              $7,743,321                          $24,038
======================================================================================================================
</TABLE>

(1) Includes only off-balance  sheet derivative  financial  instruments  related
    to interest  rate  risk  management  activities.

(2) Includes  any  accrued  interest receivable and or payable balances,  and
    unamortized  premiums paid for interest rate caps and floors.

(3) Represents average strike rate. For interest rate caps purchased,  Crestar
    will receive  interest if a specified  market  index rate rises above a
    fixed strike rate during the term of the  contract.  Any  interest  received
    is based on the difference  between a higher index interest rate and the
    contractual cap rate, applied to the underlying notional balance. No
    interest payments are received if the index rate remains below the cap rate.

(4) Represents  average  strike rate. For interest rate floors  purchased,
    Crestar will  receive  interest  if a specified  market  index rate falls
    below a fixed strike rate during the term of the contract.  Any interest
    received is based on the difference  between a lower index interest rate and
    the  contractual  floor rate,  applied to the underlying  notional  balance.
    No interest  payments are received if the index rate remains above the floor
    rate.

(5) The fair value of derivative  interest rate caps hedging securities
    classified as available  for sale is included  in the total fair value of
    the  securities available for sale portfolio.  The unamortized  premiums
    paid for such interest rate caps are included in the amortized cost basis of
    securities  available for sale,  with  any  unrealized  gain or loss  (net
    of tax)  pertaining  to  these interest rate caps included in  shareholders'
    equity as "Net  unrealized  gain (loss) on securities available for sale."

n/a - Not applicable
LIBOR - London Interbank Offered Rates
3 year CMT - Yield on 3 year constant maturity U.S.  Treasury  securities
5 year CMT - Yield on 5 year constant maturity U.S. Treasury securities


                                       30
<PAGE>

Table 9  Off-Balance Sheet Derivatives--Expected Maturities(1)

<TABLE>
<CAPTION>
June 30, 1998
Dollars in thousands                   Within         One to         Three to         Over
                                     One Year    Three Years       Five Years   Five Years           Total
<S>  <C>
Interest Rate Conversions
 Generic interest rate swaps:
  Notional amount                         $ -      $ 665,000        $ 760,000     $250,000      $1,675,000
  Average fixed receive rate                -           5.95%            6.21%        6.74%           6.19%
  Carrying amount                         $ -          $ 137            $ 898        $ 433         $ 1,468
  Net unrealized gain                       -          1,527            7,612        9,681          18,820

 Interest rate caps
  Notional amount                     $ 5,000      $ 550,000        $ 500,000          $ -      $1,055,000
  Average strike rate                    6.00%          6.68%            6.40%           -            6.55%
  Carrying amount                         $ -        $ 2,745          $ 6,110          $ -         $ 8,855
  Unrealized loss                           -           (944)          (3,272)           -          (4,216)

Market Value Hedges
 Interest rate caps
  Notional amount                         $ -     $1,950,000              $ -          $ -      $1,950,000
  Average strike rate                       -           7.56%               -            -            7.56%
  Carrying amount                         $ -       $ 10,229              $ -          $ -        $ 10,229
  Unrealized loss                           -         (9,924)               -            -          (9,924)

 Interest rate floors
  Notional amount                         $ -            $ -        $ 250,000          $ -       $ 250,000
  Average strike rate                       -              -             5.26%           -            5.26%
  Carrying amount                         $ -            $ -          $ 1,620          $ -         $ 1,620
  Unrealized gain                           -              -              711            -             711

Hedges of Lending Commitments
 Forward contracts:(2)
  Notional amount                  $2,813,321            $ -              $ -          $ -      $2,813,321
  Net unrealized loss                  (3,525)             -                -            -          (3,525)
   Total derivatives:
    Notional amount                $2,818,321     $3,165,000       $1,510,000     $250,000      $7,743,321
    Carrying amount                       $ -       $ 13,111          $ 8,628        $ 433        $ 22,172
    Net unrealized gain (loss)         (3,525)        (9,341)           5,051        9,681           1,866
                                   ----------     ----------       ----------     --------      ----------
     Estimated fair value            $ (3,525)       $ 3,770         $ 13,679     $ 10,114        $ 24,038
==========================================================================================================
</TABLE>

(1) Includes only off-balance  sheet derivative  financial  instruments  related
    to interest  rate risk  management  activities.

(2) Hedges  of  residential  mortgage lending commitments.

                                       31
<PAGE>

Table 10  Off-Balance Sheet Derivatives Activity-Notional Balances(1)
In thousands

<TABLE>
<CAPTION>
                           Interest Rate Conversions      Market Value Hedges
                           -------------------------    ---------------------    Hedges of
                               Interest     Interest      Interest   Interest      Lending
                                   Rate         Rate          Rate       Rate      Commit-
                                  Swaps         Caps          Caps     Floors       ments(2)         Total
<S>   <C>
Balance, April 1, 1998       $1,575,000    $ 560,000    $1,950,000        $ -   $2,278,339      $6,363,339
Additions                       100,000      500,000             -    250,000    3,399,044       4,249,044
Maturities                            -       (5,000)            -          -   (2,864,062)     (2,869,062)
-----------------------------------------------------------------------------------------------------------
Balance, June 30, 1998       $1,675,000   $1,055,000    $1,950,000   $250,000   $2,813,321      $7,743,321
===========================================================================================================
Balance, January 1, 1998     $1,675,000    $ 460,000    $1,950,000        $ -   $1,459,888      $5,544,888
Additions                       300,000      600,000             -    250,000    5,967,864       7,117,864
Terminations                   (300,000)           -             -          -            -        (300,000)
Maturities                            -       (5,000)            -          -   (4,614,431)     (4,619,431)
-----------------------------------------------------------------------------------------------------------
Balance, June 30, 1998       $1,675,000   $1,055,000    $1,950,000   $250,000   $2,813,321      $7,743,321
===========================================================================================================
</TABLE>

(1) Includes only off-balance  sheet derivative  financial  instruments  related
    to interest rate risk management activities.

(2) Forward contracts hedging residential mortgage lending commitments;
    maturities represent contracts delivered.


                                       32
<PAGE>


Table 11  Selected Quarterly Financial Information
Dollars in thousands, except per share data

<TABLE>
<CAPTION>
                                             2nd Qtr.     1st Qtr.     4th Qtr.(3)   3rd Qtr.(2)  2nd Qtr.
Results of operations:                           1998         1998          1997         1997         1997
<S>   <C>
Net interest income(1)                       $236,693     $229,924      $224,051     $220,041     $221,160
Provision for loan losses                      21,811       23,096        23,300       19,099       36,000
-----------------------------------------------------------------------------------------------------------
Net credit income                             214,882      206,828       200,751      200,942      185,160
Securities gains (losses)                       2,542        2,613         1,231          124          (91)
Other noninterest income                      113,968      106,050       109,616       95,985      111,107
-----------------------------------------------------------------------------------------------------------
Net credit and noninterest income             331,392      315,491       311,598      297,051      296,176
Noninterest expense                           191,680      180,986       182,011      173,231      179,010
-----------------------------------------------------------------------------------------------------------
Income before taxes                           139,712      134,505       129,587      123,820      117,166
-----------------------------------------------------------------------------------------------------------
Tax-equivalent adjustment                       3,259        2,964         2,860        2,903        2,851
Book tax expense                               49,025       46,668        44,032       41,374       38,525
-----------------------------------------------------------------------------------------------------------
 Income tax expense                            52,284       49,632        46,892       44,277       41,376
-----------------------------------------------------------------------------------------------------------
Net Income                                   $ 87,428     $ 84,873      $ 82,695     $ 79,543     $ 75,790
===========================================================================================================
Basic
 Earnings per share                          $ .78        $ .76         $ .75        $ .71        $ .69
 Average shares outstanding (000s)            112,150      111,704       110,916      110,760      110,496
Diluted
 Earnings per share                          $ .77        $ .75         $ .74        $ .71        $ .68
 Average shares outstanding (000s)            113,547      113,222       112,423      112,069      111,602
Dividends paid                                    .33          .29           .29          .29          .29
===========================================================================================================================
Selected ratios and other data:
Return on average assets                         1.39%        1.41%         1.46%        1.47%        1.42%
Return on average equity                        16.46        16.41         16.70        16.60        16.48
Net interest margin(1)                           4.06         4.18          4.35         4.47         4.58
Net charge-offs as % of average loans             .54          .64           .64          .55          .73
Allowance as % of period-end loans               1.54         1.74          1.79         1.90         1.96
Overhead ratio                                  54.27        53.45         54.35        54.79        53.89
Average equity to assets                         8.42         8.61          8.74         8.87         8.64
Average equity leverage                         11.88x       11.61x        11.45x       11.28x       11.57x
Full-time equivalent employees (period-end)     8,125        8,170         8,215        7,934        7,960
===========================================================================================================================
</TABLE>

(1) Tax-equivalent basis.


                                       33
<PAGE>

Table 12  Consolidated Average Balances/Net Interest Income/Rates(1)

<TABLE>
<CAPTION>
                                                             Three Months Ended June 30,
                                            --------------------------------------------------------------
                                                       1998                            1997
                                            -----------------------------      ---------------------------
Dollars in thousands                                    Income/    Yield/                  Income/  Yield/
                                              Balance   Expense      Rate        Balance   Expense    Rate
                                              -------   -------    ------        -------   -------  ------
Assets                                              $         $         %              $         $       %
<S>   <C>
Securities held to maturity(2)                594,342     9,202      6.20        771,671    11,642    6.04
Securities available for sale(2)            4,415,174    68,791      6.23      3,778,013    59,875    6.32
Money market investments(2)                   238,260     3,192      5.37        160,914     2,266    5.65
Loans held for sale(2)                      1,676,327    28,542      6.84        551,352    10,618    7.89
----------------------------------------------------------------------------------------------------------
Commercial                                  4,917,937    96,593      7.87      3,833,655    77,406    8.06
Real estate - income property               1,171,884    26,091      8.65      1,270,639    27,847    8.77
Real estate - construction                    386,861     8,840      8.94        334,572     7,586    9.09
Instalment                                  5,273,448   106,078      8.01      4,099,809    84,012    8.21
Bank card                                   1,094,608    36,786     13.79      1,228,168    43,145   14.39
Real estate - mortgage                      3,398,345    65,110      7.66      3,333,024    64,068    7.68
----------------------------------------------------------------------------------------------------------
 Total loans(2,3)                          16,243,083   339,498      8.35     14,099,867   304,064    8.65
Allowance for loan losses                    (283,650)                          (269,823)
----------------------------------------------------------------------------------------------------------
 Loans - net                               15,959,433                         13,830,044
Cash and due from banks                       847,408                            876,737
Premises and equipment - net                  494,425                            452,803
Intangible assets - net                       195,933                            174,283
Foreclosed properties - net                    19,447                             29,107
Other assets                                  792,090                            669,267
----------------------------------------------------------------------------------------------------------
 Total Assets                              25,232,839                         21,294,191
==========================================================================================================
Total Earning Assets                       23,167,186   449,225      7.75     19,361,817   388,465    8.05
==========================================================================================================
Liabilities And Shareholders' Equity
Interest-bearing demand deposits            6,829,500    55,182      3.24      5,805,429    42,939    2.97
Regular savings deposits                    1,418,043     8,168      2.31      1,573,048     9,768    2.49
Domestic time deposits                      3,942,134    49,482      5.08      4,336,813    53,450    4.98
Certificates of deposit $100,000 and over   1,422,465    20,062      5.66        836,682    11,608    5.57
----------------------------------------------------------------------------------------------------------
 Total savings and time deposits(2)        13,612,142   132,894      3.93     12,551,972   117,765    3.77
Demand deposits                             3,499,735                          3,124,043
----------------------------------------------------------------------------------------------------------
 Total deposits                            17,111,877                         15,676,015
Short-term borrowings(2)                    4,648,634    63,038      5.44      2,583,276    33,949    5.26
Long-term debt(2)                             922,961    16,600      7.19        834,761    15,591    7.47
Other liabilities                             425,086                            360,040
----------------------------------------------------------------------------------------------------------
 Total liabilities                         23,108,558                         19,454,092
----------------------------------------------------------------------------------------------------------
 Total shareholders' equity                 2,124,281                          1,840,099
----------------------------------------------------------------------------------------------------------
Total Liabilities And Shareholders' Equity 25,232,839                         21,294,191
==========================================================================================================
Total interest-bearing liabilities         19,183,737   212,532      4.45     15,970,009   167,305    4.21
Other sources - net                         3,983,449                          3,391,808
----------------------------------------------------------------------------------------------------------
Total Sources Of Funds                     23,167,186   212,532      3.69     19,361,817   167,305    3.47
==========================================================================================================
Net Interest Spread                                                  3.30                             3.84
Net Interest Income/Margin                              236,693      4.06                  221,160    4.58
==========================================================================================================
</TABLE>

                                       34

<PAGE>

<TABLE>
<CAPTION>
                                            Three Months Ended March 31,                        Six Months Ended June 30,
                                            ------------------------------       --------------------------------------------------
                                                        1998                             1998                           1997
                                            ------------------------------       ------------------------   -----------------------
Dollars in thousands                                   Income/   Yield/                Income/  Yield/               Income/ Yield/
                                              Balance  Expense     Rate       Balance  Expense    Rate      Balance  Expense   Rate
                                              -------  -------   ------       -------  -------  ------      -------  ------- ------
Assets                                              $        $        %             $        $       %            $        $      %
<S>   <C>
Securities held to maturity(2)                616,117    9,533     6.21       605,169   18,735    6.21      839,850   25,350   6.05
Securities available for sale(2)            3,978,423   62,411     6.28     4,198,005  131,202    6.25    3,923,791  123,724   6.31
Money market investments(2)                   647,881    9,049     5.66       441,939   12,241    5.59      258,645    6,953   5.42
Loans held for sale(2)                      1,150,140   20,571     7.22     1,414,687   49,113    6.97      565,877   22,258   7.98
-----------------------------------------------------------------------------------------------------------------------------------
Commercial                                  4,540,123   90,862     8.09     4,730,074  187,455    7.98    3,822,540  152,788   8.04
Real estate - income property               1,222,918   26,393     8.69     1,197,260   52,484    8.72    1,257,868   55,130   8.78
Real estate - construction                    381,702    8,431     8.95       384,296   17,271    8.98      323,027   14,658   9.07
Instalment                                  4,809,541   95,308     7.95     5,042,775  201,386    7.99    4,102,657  165,462   8.09
Bank card                                   1,130,487   38,117    13.90     1,112,448   74,903   13.84    1,283,150   90,084  14.31
Real estate - mortgage                      3,515,622   67,597     7.68     3,456,660  132,707    7.67    3,193,160  123,389   7.73
-----------------------------------------------------------------------------------------------------------------------------------
 Total loans(2,3)                          15,600,393  326,708     8.45    15,923,513  666,206    8.40   13,982,402  601,511   8.65
Allowance for loan losses                    (280,800)                       (282,233)                     (269,460)
-----------------------------------------------------------------------------------------------------------------------------------
 Loans - net                               15,319,593                      15,641,280                    13,712,942
Cash and due from banks                       882,916                         865,064                       870,186
Premises and equipment - net                  494,547                         494,485                       448,276
Intangible assets - net                       193,335                         194,641                       176,324
Foreclosed properties - net                    20,002                          19,723                        28,807
Other assets                                  723,180                         757,826                       645,754
-----------------------------------------------------------------------------------------------------------------------------------
 Total Assets                              24,026,134                      24,632,819                    21,470,452
===================================================================================================================================
Total Earning Assets                       21,992,954  428,272     7.84    22,583,313  877,497    7.80   19,570,565  779,796   8.01
===================================================================================================================================
Liabilities And Shareholders' Equity
Interest-bearing demand deposits            6,429,487   50,296     3.17     6,630,599  105,478    3.21    5,800,783   84,753   2.95
Regular savings deposits                    1,432,363    8,126     2.30     1,425,164   16,294    2.31    1,591,398   19,732   2.50
Domestic time deposits                      4,091,130   50,501     5.04     4,016,221   99,983    5.05    4,418,860  108,513   4.98
Certificates of deposit
  $100,000 and over                         1,203,860   16,974     5.72     1,313,767   37,036    5.69      677,175   18,486   5.51
-----------------------------------------------------------------------------------------------------------------------------------
 Total savings and time deposits(2)        13,156,840  125,897     3.89    13,385,751  258,791    3.91   12,488,216  231,484   3.75
Demand deposits                             3,289,652                       3,395,274                     3,123,526
-----------------------------------------------------------------------------------------------------------------------------------
 Total deposits                            16,446,492                      16,781,025                    15,611,742
Short-term borrowings(2)                    4,172,626   55,328     5.37     4,411,945  118,366    5.41    2,846,104   73,746   5.22
Long-term debt(2)                             927,180   17,123     7.39       925,059   33,723    7.29      843,932   31,206   7.40
Other liabilities                             410,387                         417,773                       354,395
-----------------------------------------------------------------------------------------------------------------------------------
 Total liabilities                         21,956,685                      22,535,802                    19,656,173
-----------------------------------------------------------------------------------------------------------------------------------
 Total shareholders' equity                 2,069,449                       2,097,017                     1,814,279
-----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities And
  Shareholders' Equity                     24,026,134                      24,632,819                    21,470,452
===================================================================================================================================
Total interest-bearing liabilities          8,256,646  198,348     4.41    18,722,755  410,880    4.43   16,178,252  336,436   4.19
Other sources - net                         3,736,308                       3,860,558                     3,392,313
-----------------------------------------------------------------------------------------------------------------------------------
Total Sources Of Funds                     21,992,954  198,348     3.66    22,583,313  410,880    3.67   19,570,565  336,436   3.47
===================================================================================================================================
Net Interest Spread                                                3.43                           3.37                         3.82
Net Interest Income/Margin                             229,924     4.18                466,617    4.13               443,360   4.54
===================================================================================================================================
</TABLE>

(1) Income and yields are computed on a  tax-equivalent  basis using the
    statutory federal  income  tax  rate  exclusive  of  the alternative minimum
    tax and nondeductible interest expense.

(2) Indicates   earning  asset  or interest-bearing liability.

(3) Nonaccrual  loans are included in the average loan balances and income on
    such loans is recognized on a cash basis.

                                       35
<PAGE>

Item 4.  Submission Of Matters To A Vote Of Security Holders

The Annual Meeting of Shareholders of Crestar Financial  Corporation was held on
April 24, 1998 for the purpose of electing five Class II directors for a term of
three years. Proxies for the meeting were solicited pursuant to Section 14(a) of
the  Securities  Exchange  Act of  1934  and  there  were  no  solicitations  in
opposition to the  recommendation  of the Board of Directors on the matter voted
on.

Five Class II directors were elected for three-year terms, each having a minimum
of  92,216,087  shares voted "for"  election,  with no more than 814,541  shares
voted "withheld." The five Class II directors elected were:

Class II - three-year term:

Frank E. McCarthy          Eugene P. Trani
G. Gilmer Minor III        James M. Wells III
Jeffrey R. Springer

<TABLE>
<S>   <C>
The following Class III directors' terms expire in 1999:      The following Class I directors' terms expire in 2000:

Charles R. Longsworth      Richard G. Tilghman          J. Carter Fox             Alfred H. Smith, Jr.
Paul D. Miller             L. Dudley Walker             Patrick J. Maher          Robert C. Wilburn
Frank S. Royal             Karen Hastie Williams        Gordon F. Rainey, Jr.
</TABLE>

"Broker  non-votes" were not included in determining the number of votes cast in
the election of directors.  The matter voted on was considered  "routine"  under
New York Stock Exchange rules.

                                       36

<PAGE>

Signatures

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                              Crestar Financial Corporation
                                      ------------------------------------------
                                                       Registrant




Date   August 12, 1998                    /s/ James D. Barr
      -----------------               ------------------------------------------
                                         James D. Barr
                                         Executive Vice President,
                                         Controller and Treasurer