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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

For the Quarterly Period Ended June 30, 2002
Commission File Number 0-3613

SOUTHTRUST CORPORATION

(Exact name of registrant as specified in its charter)


|                                  |  |                    
|--------------------------------- |  | -------------------
|Delaware                          |  | 63-0574085         
|                                  |  |                    
|(State or other jurisdiction      |  | (I.R.S. Employer   
|of incorporation or organization) |  | Identification No.)

|                                           |  |           
|------------------------------------------ |  | ----------
|420 North 20th Street, Birmingham, Alabama |  | 35203     
|(Address of principal executive officers)  |  | (Zip Code)

(205) 254-5530

(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 proceeding 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   [   ]

At June 30, 2002, 346,766,256 shares of the Registrants Common Stock, $2.50 par
value were outstanding.



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TABLE OF CONTENTS



|                               |                                                                                               |                                                                  |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                               | Consolidated Condensed Balance Sheets                           
|                               |                                                                                               | Consolidated Condensed Statements of Income                     
|                               |                                                                                               | Consolidated Condensed Statements of Stockholders Equity       
|                               |                                                                                               | Consolidated Condensed Statements of Cash Flows                 
|                               |                                                                                               | Notes to Consolidated Condensed Financial Statements (Unaudited)
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|SIGNATURES                    



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PART I  FINANCIAL INFORMATION




Item 1. Financial Statements

|                                                                                                                        |  |         |      | 
|----------------------------------------------------------------------------------------------------------------------- |  | ------- | ---- | 
|Statement Description                                                                                                   |  | Page(s)
|                                                                                                                        |  |        
|Consolidated Condensed Balance Sheets (Unaudited)
June 30, 2002, December 31, 2001 and
June 30, 2001                    |  |         | 3    | 
|Consolidated Condensed Statements of Income (Unaudited)
Three and six months ended June 30, 2002 and 2001               |  |         | 4    | 
|Consolidated Condensed Statements of Stockholders Equity (Unaudited)
Three and six months ended June 30, 2002 and 2001 |  |         | 5    | 
|Consolidated Condensed Statements of Cash Flows (Unaudited)
Six months ended June 30, 2002 and 2001                     |  |         | 6    | 
|Notes to Consolidated Condensed Financial Statements (Unaudited)                                                        |  |         | 7-15 | 

The Consolidated Condensed Financial Statements were prepared by the
Company without an audit, but in the opinion of Management, reflect all
adjustments necessary for the fair presentation of the Companys financial
position and results of operations for the three and six month periods ended
June 30, 2002 and 2001. Results of operations for the interim 2002 period are
not necessarily indicative of results expected for the full year. While
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission, the Company believes that the disclosures
herein are adequate to make the information presented not misleading. These
condensed financial statements should be read in conjunction with the
Consolidated Financial Statements and the notes thereto included in the
Companys annual report on Form 10-K for the year ended December 31, 2001. The
accounting policies employed are the same as those shown in Note A to the
Consolidated Financial Statements on Form 10-K.

Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations

The Managements Discussion and Analysis of the registrant is included on Pages
16-32.

2



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SOUTHTRUST CORPORATION
Consolidated Condensed Balance Sheets
(Unaudited)

|                                           |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |             |            |            | 
|------------------------------------------ | -------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------------------------------------- | ------------------------------------------ | ----------- | ---------- | ----------- | ---------- | ----------- | ---------- | ----------- | ---------- | ----------- | ---------- | ---------- | 
|(Dollars in thousands)                     |                                                                            | June 30                                      |                                                                     | December 31                                |             | June 30   
|                                           |                                                                            |                                              |                                                                     |                                            |             | 2002       |             | 2001       |             | 2001      
|                                           |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |           
|Assets                                     |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |           
|                                           | Cash and due from banks                                                    |                                              | $                                                                   | 869,635                                    |             |            | $           | 1,159,236  |             |            | $           | 921,992    |            
|                                           | Short-term investments:                                                    |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |            
|                                           |                                                                            |                                              | Federal funds sold and securities purchased
under resale agreements |                                            |             | 256,959    |             |            |             | 28,219     |             |            |             | 4,593      |           
|                                           |                                                                            |                                              | Interest-bearing deposits in other banks                            |                                            |             | 4,307      |             |            |             | 5,728      |             |            |             | 1,214      |           
|                                           |                                                                            |                                              | Trading securities                                                  |                                            |             | 107,132    |             |            |             | 107,321    |             |            |             | 128,116    |           
|                                           |                                                                            |                                              | Loans held for sale                                                 |                                            |             | 477,976    |             |            |             | 787,710    |             |            |             | 447,117    |           
|                                           |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |            
|                                           |                                                                            |                                              |                                                                     | Total short-term investments               |             |            | 846,374     |            |             |            | 928,978     |            |             |            | 581,040    | 
|                                           | Available-for-sale securities                                              |                                              |                                                                     | 10,216,236                                 |             |            |             | 9,954,837  |             |            |             | 8,898,148  |            
|                                           | Held-to-maturity securities (1)                                            |                                              |                                                                     | 436,775                                    |             |            |             | 544,695    |             |            |             | 1,454,418  |            
|                                           | Loans                                                                      |                                              |                                                                     | 33,423,017                                 |             |            |             | 33,695,495 |             |            |             | 32,527,278 |            
|                                           | Less:                                                                      |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |            
|                                           |                                                                            |                                              | Unearned income                                                     |                                            |             | 242,279    |             |            |             | 272,896    |             |            |             | 284,647    |           
|                                           |                                                                            |                                              | Allowance for loan losses                                           |                                            |             | 488,340    |             |            |             | 483,124    |             |            |             | 462,905    |           
|                                           |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |            
|                                           |                                                                            |                                              |                                                                     | Net loans                                  |             |            | 32,692,398  |            |             |            | 32,939,475  |            |             |            | 31,779,726 | 
|                                           | Premises and equipment, net                                                |                                              |                                                                     | 899,522                                    |             |            |             | 838,552    |             |            |             | 775,276    |            
|                                           | Due from customers on acceptances                                          |                                              |                                                                     | 12,500                                     |             |            |             | 25,361     |             |            |             | 18,625     |            
|                                           | Goodwill and other intangible assets                                       |                                              |                                                                     | 789,644                                    |             |            |             | 777,160    |             |            |             | 601,282    |            
|                                           | Bank owned life insurance                                                  |                                              |                                                                     | 959,647                                    |             |            |             | 934,806    |             |            |             | 909,213    |            
|                                           | Other assets                                                               |                                              |                                                                     | 696,836                                    |             |            |             | 651,448    |             |            |             | 595,272    |            
|                                           |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |            
|                                           |                                                                            |                                              |                                                                     | Total assets                               |             | $          | 48,419,567  |            |             | $          | 48,754,548  |            |             | $          | 46,534,992 | 
|                                           |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |            
|Liabilities                                |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |           
|                                           | Deposits:                                                                  |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |            
|                                           |                                                                            |                                              | Interest-bearing                                                    |                                            | $           | 27,244,732 |             |            | $           | 28,241,840 |             |            | $           | 25,954,906 |           
|                                           |                                                                            |                                              | Other                                                               |                                            |             | 4,342,125  |             |            |             | 4,392,271  |             |            |             | 3,869,529  |           
|                                           |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |            
|                                           |                                                                            |                                              |                                                                     | Total deposits                             |             |            | 31,586,857  |            |             |            | 32,634,111  |            |             |            | 29,824,435 | 
|                                           | Federal funds purchased and securities sold
under agreements to repurchase |                                              |                                                                     | 4,934,226                                  |             |            |             | 5,811,872  |             |            |             | 6,964,313  |            
|                                           | Other short-term borrowings                                                |                                              |                                                                     | 256,375                                    |             |            |             | 113,455    |             |            |             | 148,868    |            
|                                           | Bank acceptances outstanding                                               |                                              |                                                                     | 12,500                                     |             |            |             | 25,361     |             |            |             | 18,625     |            
|                                           | Federal Home Loan Bank advances                                            |                                              |                                                                     | 4,271,005                                  |             |            |             | 4,221,066  |             |            |             | 4,251,210  |            
|                                           | Long-term debt                                                             |                                              |                                                                     | 2,144,305                                  |             |            |             | 1,263,419  |             |            |             | 1,047,147  |            
|                                           | Other liabilities                                                          |                                              |                                                                     | 898,033                                    |             |            |             | 722,889    |             |            |             | 680,755    |            
|                                           |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |            
|                                           |                                                                            |                                              |                                                                     | Total liabilities                          |             |            | 44,103,301  |            |             |            | 44,792,173  |            |             |            | 42,935,353 | 
|Stockholders equity                       |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |           
|                                           |                                                                            | Preferred stock, par value $1.00 a share (2) |                                                                     |                                            | 0           |            |             |            | 0           |            |             |            | 0           |           
|                                           |                                                                            | Common stock, par value $2.50 a share (3)    |                                                                     |                                            | 889,017     |            |             |            | 887,745     |            |             |            | 856,934     |           
|                                           |                                                                            | Capital surplus                              |                                                                     |                                            | 602,689     |            |             |            | 597,187     |            |             |            | 340,644     |           
|                                           |                                                                            | Retained earnings                            |                                                                     |                                            | 2,760,277   |            |             |            | 2,566,308   |            |             |            | 2,376,275   |           
|                                           |                                                                            | Accumulated other comprehensive income       |                                                                     |                                            | 244,543     |            |             |            | 91,029      |            |             |            | 50,720      |           
|                                           |                                                                            | Treasury stock, at cost (4)                  |                                                                     |                                            | (180,260    | )          |             |            | (179,894    | )          |             |            | (24,934     | )         
|                                           |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |            
|                                           |                                                                            |                                              |                                                                     | Total stockholders equity                 |             |            | 4,316,266   |            |             |            | 3,962,375   |            |             |            | 3,599,639  | 
|                                           |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |            
|                                           |                                                                            |                                              |                                                                     | Total liabilities and stockholders equity |             | $          | 48,419,567  |            |             | $          | 48,754,548  |            |             | $          | 46,534,992 | 
|                                           |                                                                            |                                              |                                                                     |                                            |             |            |             |            |             |            |             |            |            
|(1) Held-to-maturity securities-fair value |                                                                            | $                                            | 462,897                                                             |                                            |             | $          | 562,296     |            |             | $          | 1,468,967   |           
|(2) Preferred shares authorized            |                                                                            |                                              | 5,000,000                                                           |                                            |             |            | 5,000,000   |            |             |            | 5,000,000   |           
|                                           |                                                                            | Preferred shares issued                      |                                                                     |                                            | 0           |            |             |            | 0           |            |             |            | 0           |           
|(3) Common shares authorized               |                                                                            |                                              | 1,000,000,000                                                       |                                            |             |            | 500,000,000 |            |             |            | 500,000,000 |           
|                                           |                                                                            | Common shares issued                         |                                                                     |                                            | 355,606,785 |            |             |            | 355,097,977 |            |             |            | 342,773,378 |           
|(4) Treasury shares of common stock        |                                                                            |                                              | 8,840,529                                                           |                                            |             |            | 8,825,370   |            |             |            | 2,762,384   |           

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SOUTHTRUST CORPORATION
Consolidated Condensed Statements of Income
(Unaudited)

|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |           |         |           |         | 
|--------------------------------------------------- | ----------------------------------- | --------------------------------------------------- | -------------------------- | ---------- | ------- | ------------------ | ------- | ---------------- | ------- | ------- | ------- | ------- | ------- | --------- | ------- | --------- | ------- | --------- | ------- | 
|                                                    |                                     |                                                     |                            |            |         | Three Months Ended |         | Six Months Ended
|(In thousands, except per share data)               |                                     | June 30                                             |                            | June 30   
|                                                    |                                     |                                                     |                            |           
|                                                    |                                     |                                                     |                            |            |         | 2002               |         | 2001             |         | 2002    |         | 2001   
|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |        
|Interest income                                     |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |          
|                                                    | Loans, including fees               |                                                     | $                          | 490,834    |         |                    | $       | 630,531          |         |         | $       | 995,538 |         |           | $       | 1,296,146 |        
|                                                    | Available-for-sale securities       |                                                     |                            | 164,281    |         |                    |         | 136,261          |         |         |         | 322,698 |         |           |         | 260,532   |        
|                                                    | Held-to-maturity securities         |                                                     |                            | 8,226      |         |                    |         | 34,621           |         |         |         | 17,363  |         |           |         | 80,135    |        
|                                                    | Short-term investments              |                                                     |                            | 8,446      |         |                    |         | 10,439           |         |         |         | 18,131  |         |           |         | 19,536    |        
|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |           |        
|                                                    |                                     |                                                     | Total interest income      |            |         | 671,787            |         |                  |         | 811,852 |         |         |         | 1,353,730 |         |           |         | 1,656,349 |        
|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |           |        
|Interest expense                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |          
|                                                    | Deposits                            |                                                     |                            | 153,824    |         |                    |         | 287,727          |         |         |         | 321,075 |         |           |         | 604,095   |        
|                                                    | Short-term borrowings               |                                                     |                            | 23,727     |         |                    |         | 76,036           |         |         |         | 52,019  |         |           |         | 179,736   |        
|                                                    | Federal Home Loan Bank advances     |                                                     |                            | 50,814     |         |                    |         | 58,014           |         |         |         | 103,182 |         |           |         | 112,934   |        
|                                                    | Long-term debt                      |                                                     |                            | 15,475     |         |                    |         | 16,058           |         |         |         | 28,999  |         |           |         | 34,645    |        
|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |           |        
|                                                    |                                     |                                                     | Total interest expense     |            |         | 243,840            |         |                  |         | 437,835 |         |         |         | 505,275   |         |           |         | 931,410   |        
|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |           |        
|                                                    |                                     |                                                     | Net interest income        |            |         | 427,947            |         |                  |         | 374,017 |         |         |         | 848,455   |         |           |         | 724,939   |        
|                                                    |                                     |                                                     | Provision for loan losses  |            |         | 28,728             |         |                  |         | 25,748  |         |         |         | 56,378    |         |           |         | 48,559    |        
|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |           |        
|                                                    |                                     | Net interest income after provision for
loan losses |                            |            | 399,219 |                    |         |                  | 348,269 |         |         |         | 792,077 |           |         |           | 676,380 |          
|Non-interest income                                 |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |          
|                                                    | Service charges on deposit accounts |                                                     |                            | 68,457     |         |                    |         | 58,544           |         |         |         | 130,823 |         |           |         | 112,238   |        
|                                                    | Mortgage banking operations         |                                                     |                            | 13,795     |         |                    |         | 13,656           |         |         |         | 26,386  |         |           |         | 26,603    |        
|                                                    | Bank card fees                      |                                                     |                            | 11,383     |         |                    |         | 10,659           |         |         |         | 22,020  |         |           |         | 19,939    |        
|                                                    | Debit card fees                     |                                                     |                            | 9,814      |         |                    |         | 7,776            |         |         |         | 18,284  |         |           |         | 14,809    |        
|                                                    | Trust fees                          |                                                     |                            | 8,950      |         |                    |         | 8,508            |         |         |         | 16,921  |         |           |         | 16,146    |        
|                                                    | Investment fees                     |                                                     |                            | 15,075     |         |                    |         | 11,170           |         |         |         | 28,548  |         |           |         | 22,371    |        
|                                                    | Bank owned life insurance           |                                                     |                            | 12,641     |         |                    |         | 12,655           |         |         |         | 24,841  |         |           |         | 28,869    |        
|                                                    | Gains on loans held for sale, net   |                                                     |                            | 6,931      |         |                    |         | 4,229            |         |         |         | 16,320  |         |           |         | 6,167     |        
|                                                    | Securities gains                    |                                                     |                            | 1,175      |         |                    |         | 1,867            |         |         |         | 3,356   |         |           |         | 1,879     |        
|                                                    | Other                               |                                                     |                            | 11,727     |         |                    |         | 11,397           |         |         |         | 26,218  |         |           |         | 21,800    |        
|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |           |        
|                                                    |                                     |                                                     | Total non-interest income  |            |         | 159,948            |         |                  |         | 140,461 |         |         |         | 313,717   |         |           |         | 270,821   |        
|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |           |        
|Non-interest expense                                |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |          
|                                                    | Salaries and employee benefits      |                                                     |                            | 183,430    |         |                    |         | 159,524          |         |         |         | 365,548 |         |           |         | 311,570   |        
|                                                    | Net occupancy                       |                                                     |                            | 28,058     |         |                    |         | 25,303           |         |         |         | 54,666  |         |           |         | 49,571    |        
|                                                    | Equipment                           |                                                     |                            | 16,746     |         |                    |         | 16,240           |         |         |         | 33,244  |         |           |         | 30,776    |        
|                                                    | Professional services               |                                                     |                            | 18,447     |         |                    |         | 12,907           |         |         |         | 32,642  |         |           |         | 22,769    |        
|                                                    | Data processing                     |                                                     |                            | 10,509     |         |                    |         | 8,897            |         |         |         | 20,664  |         |           |         | 16,930    |        
|                                                    | Communications                      |                                                     |                            | 15,692     |         |                    |         | 12,967           |         |         |         | 30,207  |         |           |         | 25,912    |        
|                                                    | Intangible amortization             |                                                     |                            | 8,023      |         |                    |         | 10,043           |         |         |         | 17,386  |         |           |         | 19,641    |        
|                                                    | Other                               |                                                     |                            | 44,428     |         |                    |         | 37,338           |         |         |         | 89,048  |         |           |         | 73,052    |        
|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |           |        
|                                                    |                                     |                                                     | Total non-interest expense |            |         | 325,333            |         |                  |         | 283,219 |         |         |         | 643,405   |         |           |         | 550,221   |        
|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |           |        
|Income before income taxes                          |                                     |                                                     | 233,834                    |            |         |                    | 205,511 |                  |         |         | 462,389 |         |         |           | 396,980 |          
|Income tax expense                                  |                                     |                                                     | 75,677                     |            |         |                    | 67,893  |                  |         |         | 150,027 |         |         |           | 129,506 |          
|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |           |        
|                                                    |                                     |                                                     |                            | Net income |         | $                  | 158,157 |                  |         | $       | 137,618 |         |         | $         | 312,362 |           |         | $         | 267,474 | 
|                                                    |                                     |                                                     |                            |            |         |                    |         |                  |         |         |         |         |         |           |         |           |        
|Average shares outstanding  basic (in thousands)   |                                     |                                                     | 346,741                    |            |         |                    | 339,974 |                  |         |         | 346,624 |         |         |           | 339,316 |          
|Average shares outstanding  diluted (in thousands) |                                     |                                                     | 351,464                    |            |         |                    | 344,048 |                  |         |         | 350,937 |         |         |           | 342,895 |          
|Net income per share  basic                        |                                     | $                                                   | 0.45                       |            |         | $                  | 0.41    |                  |         | $       | 0.90    |         |         | $         | 0.79    |          
|Net income per share  diluted                      |                                     |                                                     | 0.45                       |            |         |                    | 0.40    |                  |         |         | 0.89    |         |         |           | 0.78    |          
|Dividends declared per share                        |                                     |                                                     | 0.17                       |            |         |                    | 0.14    |                  |         |         | 0.34    |         |         |           | 0.28    |          

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##### Table of Contents






SOUTHTRUST CORPORATION
Consolidated Condensed Statements of Stockholders Equity
(Unaudited)

|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |   |       | 
|------------------------------------------------- |  | -------------------------------------------------- | ----------- | --------------------------------- | --------- | ------- | ------- | -------- | ----- | ------------- | ------- | ------------- | ----- | ----- | --------- | ----- | --- | - | ------- | ----------- | - | - | -------- | - | - | - | --------- | - | ----- | 
|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         | Accumulated |   |   |          |   |   |   |           |  
|                                                  |  |                                                    |             | Common Stock                      |           |         |         |          |       |               |         |               |       | Other |           |       |     |   |         |             |   |  
|                                                  |  |                                                    |             |                                   |           | Capital |         | Retained |       | Comprehensive |         | Treasury     
|                                                  |  |                                                    |             | Shares                            |           | Amount  |         | Surplus  |       | Earnings      |         | Income (Loss) |       | Stock |           | Total
|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |      
|                                                  |  |                                                    |             | (In Thousands, except share data)
|Balance at January 1, 2001                        |  |                                                    | 338,106,862 |                                   |           | $       | 851,962 |          |       | $             | 333,987 |               |       | $     | 2,202,901 |       |     | $ | (12,164 | )           |   | $ | (24,226  | ) |   | $ | 3,352,460 |  
|Net income                                        |  |                                                    | 0           |                                   |           |         | 0       |          |       |               | 0       |               |       |       | 267,474   |       |     |   | 0       |             |   |   | 0        |   |   |   | 267,474   |  
|Unrealized gain on available-for-sale
securities* |  |                                                    | 0           |                                   |           |         | 0       |          |       |               | 0       |               |       |       | 0         |       |     |   | 44,751  |             |   |   | 0        |   |   |   | 44,751    |  
|Unrealized gain on derivatives*                   |  |                                                    | 0           |                                   |           |         | 0       |          |       |               | 0       |               |       |       | 0         |       |     |   | 18,133  |             |   |   | 0        |   |   |   | 18,133    |  
|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |  
|Total other comprehensive income                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   | 62,884    |  
|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |  
|Comprehensive income                              |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   | 330,358   |  
|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |  
|Dividends declared ($.28 per share)               |  |                                                    | 0           |                                   |           |         | 0       |          |       |               | 0       |               |       |       | (94,926   | )     |     |   | 0       |             |   |   | 0        |   |   |   | (94,926   | )
|Common stock issued pursuant to:                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |  
|                                                  |  | Long-term incentive plan                           |             |                                   | 575,674   |         |         |          | 1,439 |               |         |               | 4,184 |       |           |       | 0   |   |         |             | 0 |   |          |   | 0 |   |           |   | 5,623 | 
|                                                  |  | Employee discounted stock purchase plan            |             |                                   | 115,384   |         |         |          | 289   |               |         |               | 1,385 |       |           |       | 0   |   |         |             | 0 |   |          |   | 0 |   |           |   | 1,674 | 
|                                                  |  | Acquisitions accounted for as poolings-of-interest |             |                                   | 1,297,344 |         |         |          | 3,244 |               |         |               | 1,088 |       |           |       | 826 |   |         |             | 0 |   |          |   | 0 |   |           |   | 5,158 | 
|Treasury stock acquired                           |  |                                                    | (84,270     | )                                 |           |         | 0       |          |       |               | 0       |               |       |       | 0         |       |     |   | 0       |             |   |   | (708     | ) |   |   | (708      | )
|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |  
|Balance at June 30, 2001                          |  |                                                    | 340,010,994 |                                   |           | $       | 856,934 |          |       | $             | 340,644 |               |       | $     | 2,376,275 |       |     | $ | 50,720  |             |   | $ | (24,934  | ) |   | $ | 3,599,639 |  
|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |  
|Balance at January 1, 2002                        |  |                                                    | 346,272,607 |                                   |           | $       | 887,745 |          |       | $             | 597,187 |               |       | $     | 2,566,308 |       |     | $ | 91,029  |             |   | $ | (179,894 | ) |   | $ | 3,962,375 |  
|Net income                                        |  |                                                    | 0           |                                   |           |         | 0       |          |       |               | 0       |               |       |       | 312,362   |       |     |   | 0       |             |   |   | 0        |   |   |   | 312,362   |  
|Unrealized gain on available-for-sale
securities* |  |                                                    | 0           |                                   |           |         | 0       |          |       |               | 0       |               |       |       | 0         |       |     |   | 146,935 |             |   |   | 0        |   |   |   | 146,935   |  
|Unrealized gain on derivatives*                   |  |                                                    | 0           |                                   |           |         | 0       |          |       |               | 0       |               |       |       | 0         |       |     |   | 6,579   |             |   |   | 0        |   |   |   | 6,579     |  
|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |  
|Total other comprehensive income                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   | 153,514   |  
|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |  
|Comprehensive income                              |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   | 465,876   |  
|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |  
|Dividends declared ($.34 per share)               |  |                                                    | 0           |                                   |           |         | 0       |          |       |               | 0       |               |       |       | (118,393  | )     |     |   | 0       |             |   |   | 0        |   |   |   | (118,393  | )
|Common stock issued pursuant to:                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |  
|                                                  |  | Long-term incentive plan                           |             |                                   | 381,393   |         |         |          | 953   |               |         |               | 3,651 |       |           |       | 0   |   |         |             | 0 |   |          |   | 0 |   |           |   | 4,604 | 
|                                                  |  | Employee discounted stock purchase plan            |             |                                   | 127,415   |         |         |          | 319   |               |         |               | 1,851 |       |           |       | 0   |   |         |             | 0 |   |          |   | 0 |   |           |   | 2,170 | 
|Treasury stock acquired                           |  |                                                    | (15,159     | )                                 |           |         | 0       |          |       |               | 0       |               |       |       | 0         |       |     |   | 0       |             |   |   | (366     | ) |   |   | (366      | )
|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |  
|Balance at June 30, 2002                          |  |                                                    | 346,766,256 |                                   |           | $       | 889,017 |          |       | $             | 602,689 |               |       | $     | 2,760,277 |       |     | $ | 244,543 |             |   | $ | (180,260 | ) |   | $ | 4,316,266 |  
|                                                  |  |                                                    |             |                                   |           |         |         |          |       |               |         |               |       |       |           |       |     |   |         |             |   |   |          |   |   |   |           |  



---

|* |  | See disclosure of reclassification amount and tax effect in Notes to Consolidated
Condensed Financial Statements
|- |  | ----------------------------------------------------------------------------------------------------------------

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SOUTHTRUST CORPORATION
Consolidated Condensed Statements of Cash Flows
(Unaudited)

|                     |                                                                                   |                                                 |                                                     |                                           |            |                  |         |         |            |            |         |  
|-------------------- | --------------------------------------------------------------------------------- | ----------------------------------------------- | --------------------------------------------------- | ----------------------------------------- | ---------- | ---------------- | ------- | ------- | ---------- | ---------- | ------- | -
|                     |                                                                                   |                                                 |                                                     |                                           |            | Six Months Ended
|(In Thousands)       |                                                                                   | June 30                                        
|                     |                                                                                   |                                                
|                     |                                                                                   |                                                 |                                                     |                                           |            | 2002             |         | 2001   
|                     |                                                                                   |                                                 |                                                     |                                           |            |                  |         |        
|Operating activities |                                                                                   |                                                 |                                                     |                                           |            |                  |         |        
|                     | Net income                                                                        |                                                 | $                                                   | 312,362                                   |            |                  | $       | 267,474 |           
|                     | Adjustments to reconcile net income to net cash
provided by operating activities: |                                                 |                                                     |                                           |            |                  |         |         |           
|                     |                                                                                   | Provision (credit) for:                         |                                                     |                                           |            |                  |         |         |            |           
|                     |                                                                                   |                                                 |                                                     | Loan losses                               |            |                  | 56,378  |         |            |            | 48,559  |  
|                     |                                                                                   |                                                 |                                                     | Depreciation of premises and equipment    |            |                  | 29,008  |         |            |            | 26,206  |  
|                     |                                                                                   |                                                 |                                                     | Amortization of intangibles               |            |                  | 17,637  |         |            |            | 21,956  |  
|                     |                                                                                   |                                                 |                                                     | Amortization of security premium          |            |                  | 1,607   |         |            |            | 1,435   |  
|                     |                                                                                   |                                                 |                                                     | Accretion of security discount            |            |                  | (9,522  | )       |            |            | (4,108  | )
|                     |                                                                                   |                                                 |                                                     | Deferred income taxes                     |            |                  | 13,674  |         |            |            | 70,476  |  
|                     |                                                                                   |                                                 |                                                     | Bank owned life insurance                 |            |                  | (24,841 | )       |            |            | (28,869 | )
|                     |                                                                                   | Net gain on sales of loans held for sale        |                                                     |                                           | (16,320    | )                |         |         | (6,167     | )         
|                     |                                                                                   | Net gain on sales of securities                 |                                                     |                                           | (3,356     | )                |         |         | (1,879     | )         
|                     |                                                                                   | Origination and purchase of loans held for sale |                                                     |                                           | (1,578,994 | )                |         |         | (1,768,992 | )         
|                     |                                                                                   | Proceeds from sales of loans held for sale      |                                                     |                                           | 1,905,048  |                  |         |         | 1,671,055  |           
|                     |                                                                                   | Net increase in trading securities              |                                                     |                                           | (45,852    | )                |         |         | (56,660    | )         
|                     |                                                                                   | Net increase in other assets                    |                                                     |                                           | (34,253    | )                |         |         | (24,294    | )         
|                     |                                                                                   | Net increase in other liabilities               |                                                     |                                           | 146,603    |                  |         |         | 72,710     |           
|                     |                                                                                   |                                                 |                                                     |                                           |            |                  |         |         |           
|                     |                                                                                   |                                                 |                                                     | Net cash provided by operating activities |            |                  | 769,179 |         |            |            | 288,902 |  
|Investing activities |                                                                                   |                                                 |                                                     |                                           |            |                  |         |        
|                     | Proceeds from maturities, calls or prepayments of:                                |                                                 |                                                     |                                           |            |                  |         |         |           
|                     |                                                                                   |                                                 | Available-for-sale securities                       |                                           |            | 1,311,842        |         |         |            | 2,056,182  |        
|                     |                                                                                   |                                                 | Held-to-maturity securities                         |                                           |            | 98,215           |         |         |            | 1,661,899  |        
|                     | Proceeds from sales of:                                                           |                                                 |                                                     |                                           |            |                  |         |         |           
|                     |                                                                                   |                                                 | Available-for-sale securities                       |                                           |            | 1,006,046        |         |         |            | 22,446     |        
|                     |                                                                                   |                                                 | Held-to-maturity securities                         |                                           |            | 8,568            |         |         |            | 0          |        
|                     | Purchases of:                                                                     |                                                 |                                                     |                                           |            |                  |         |         |           
|                     |                                                                                   |                                                 | Available-for-sale securities                       |                                           |            | (1,940,105       | )       |         |            | (3,944,221 | )      
|                     |                                                                                   |                                                 | Held-to-maturity securities                         |                                           |            | 0                |         |         |            | (14,500    | )      
|                     |                                                                                   |                                                 | Premises and equipment                              |                                           |            | (87,939          | )       |         |            | (53,604    | )      
|                     | Net (increase) decrease in:                                                       |                                                 |                                                     |                                           |            |                  |         |         |           
|                     |                                                                                   |                                                 | Short-term investments                              |                                           |            | (207,039         | )       |         |            | 57,921     |        
|                     |                                                                                   |                                                 | Loans                                               |                                           |            | (100,436         | )       |         |            | (599,019   | )      
|                     | Net cash paid in acquisitions                                                     |                                                 |                                                     | (31,300                                   | )          |                  |         | (30,207 | )         
|                     |                                                                                   |                                                 |                                                     |                                           |            |                  |         |         |           
|                     |                                                                                   |                                                 | Net cash provided by (used in) investing activities |                                           |            | 57,852           |         |         |            | (843,103   | )      
|Financing activities |                                                                                   |                                                 |                                                     |                                           |            |                  |         |        
|                     | Net increase (decrease) in:                                                       |                                                 |                                                     |                                           |            |                  |         |         |           
|                     |                                                                                   |                                                 | Deposits                                            |                                           |            | (1,193,094       | )       |         |            | (1,317,083 | )      
|                     |                                                                                   |                                                 | Short-term borrowings                               |                                           |            | (738,095         | )       |         |            | 823,080    |        
|                     | Proceeds from:                                                                    |                                                 |                                                     |                                           |            |                  |         |         |           
|                     |                                                                                   |                                                 | Common Stock issuances                              |                                           |            | 5,119            |         |         |            | 6,365      |        
|                     |                                                                                   |                                                 | Federal Home Loan Bank advances                     |                                           |            | 200,013          |         |         |            | 1,400,485  |        
|                     |                                                                                   |                                                 | Long-term debt                                      |                                           |            | 877,484          |         |         |            | 0          |        
|                     | Payments for:                                                                     |                                                 |                                                     |                                           |            |                  |         |         |           
|                     |                                                                                   |                                                 | Repurchase of common stock                          |                                           |            | (366             | )       |         |            | (708       | )      
|                     |                                                                                   |                                                 | Federal Home Loan Bank advances                     |                                           |            | (150,074         | )       |         |            | (202,056   | )      
|                     |                                                                                   |                                                 | Long-term debt                                      |                                           |            | (86              | )       |         |            | (98,873    | )      
|                     |                                                                                   |                                                 | Cash dividends                                      |                                           |            | (117,533         | )       |         |            | (94,767    | )      
|                     |                                                                                   |                                                 |                                                     |                                           |            |                  |         |         |           
|                     |                                                                                   |                                                 | Net cash provided by (used in) financing activities |                                           |            | (1,116,632       | )       |         |            | 516,443    |        
|                     |                                                                                   |                                                 |                                                     |                                           |            |                  |         |         |           
|                     |                                                                                   |                                                 | Decrease in cash and due from banks                 |                                           |            | (289,601         | )       |         |            | (37,758    | )      
|                     | Cash and due from banks at beginning of year                                      |                                                 |                                                     | 1,159,236                                 |            |                  |         | 959,750 |           
|                     |                                                                                   |                                                 |                                                     |                                           |            |                  |         |         |           
|                     | Cash and due from banks at end of period                                          |                                                 | $                                                   | 869,635                                   |            |                  | $       | 921,992 |           
|                     |                                                                                   |                                                 |                                                     |                                           |            |                  |         |         |           

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Notes to Consolidated Condensed Financial Statements (Unaudited)

Note A  Recent Accounting Pronouncements

Statement of Financial Accounting Standards (SFAS) 141  Business
Combinations

In June 2001, the Financial Accounting Standards Board (FASB) issued
SFAS 141, which addresses financial accounting and reporting for business
combinations and supersedes APB Opinion 16  Business Combinations (APB 16).
This Statement requires that all business combinations be accounted for under
the purchase method. Also, intangible assets that meet certain criteria must be
recognized as assets apart from goodwill. Finally, it requires disclosures in
addition to the disclosure requirements of APB 16. The provisions of this
Statement apply to all business combinations initiated after June 30, 2001.

SFAS 142  Goodwill and Other Intangible Assets

In June 2001, the FASB issued SFAS 142, which requires that an
identifiable intangible asset that is acquired either individually or with a
group of other assets (but not those acquired in a business combination) is to
be initially recognized and measured based on its fair value. An identifiable
intangible asset with a finite useful life is amortized over its estimated
useful life. An intangible asset with an indefinite useful life is not
amortized, but is tested for impairment under the provisions of SFAS 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of(which has been superceded by SFAS 144 as discussed below).

Goodwill recognized in business combinations is not amortized, but is
tested for impairment under the provisions of SFAS 142 at a level of reporting
referred to as a reporting unit. To the extent a reporting units carrying
amount exceeds its fair value, an indication exists that the reporting units
goodwill may be impaired and the Company must perform a second step of the
impairment test. In the second step, if the carrying amount of reporting unit
goodwill exceeds the implied fair value of that goodwill, an impairment loss is
recognized in an amount equal to that excess. Goodwill of a reporting unit is
tested for impairment on an annual basis and between annual tests in certain
circumstances. The first step of the initial goodwill impairment test was
completed by June 30, 2002 as required by SFAS 142. After performing this
initial step, no goodwill impairment was indicated.

For business combinations that are consummated after June 30, 2001,
goodwill and identifiable intangibles are recorded in accordance with SFAS 142,
which requires no amortization of goodwill and separately identifiable
intangible assets with indefinite lives. For intangible assets in existence
prior to June 30, 2001, the Company continued to amortize goodwill and all
separately identifiable intangibles through December 31, 2001. Upon adoption
of SFAS 142 on January 1, 2002, the Company ceased amortizing goodwill and
separately identifiable intangibles with indefinite lives and continued to
amortize other identifiable intangibles in accordance with the guidelines set
forth in this Statement.

In addition to goodwill accounted for under SFAS 142, the Company has
unidentifiable intangible assets generated through branch acquisitions. These
unidentifiable intangible assets are accounted for under SFAS 72, Accounting
for Certain Acquisitions of Banking or Thrift Institution, and are sometimes
referred to in practice as Statement 72 goodwill. In response to significant
industry concern and confusion, the FASB has reconsidered the accounting
relative to Statement 72 goodwill and issued an Exposure Draft, Acquisitions of
Certain Financial Institutions, an amendment of FASB Statements No. 72 and No.
144 and FASB Interpretation No. 9,in April 2002. Under the Exposure Draft, an
unidentifiable intangible asset generated in a business combination would be
treated as goodwill under the provisions of SFAS 142. The FASB is expected to
issue final guidance in the latter part of 2002.

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Changes in the accounting
could result in the discontinuation of amortization expense related to the
asset. However, until final guidance is issued regarding this topic,
SouthTrust will continue to amortize Statement 72 goodwill as required by SFAS
72.

The following tables detail the changes in the carrying amount of goodwill
and information related to other intangible assets as June 30, 2002:

|                    |  |            |       |          |  |          |       |  |  |   |       | 
|------------------- |  | ---------- | ----- | -------- |  | -------- | ----- |  |  | - | ----- | 
|                    |  | Commercial |       | Regional |  | Total   
|(In millions)       |  | Banking    |       | Banking  |  | Goodwill
|                    |  |            |       |          |  |         
|Balance at 12/31/01 |  | $          | 157.7 |          |  | $        | 322.7 |  |  | $ | 480.4 | 
|Goodwill acquired   |  |            | 9.4   |          |  |          | 17.8  |  |  |   | 27.2  | 
|Other               |  |            | 0.1   |          |  |          | 0.2   |  |  |   | 0.3   | 
|                    |  |            |       |          |  |          |       |  |  |   |       | 
|Balance at 6/30/02  |  | $          | 167.2 |          |  | $        | 340.7 |  |  | $ | 507.9 | 
|                    |  |            |       |          |  |          |       |  |  |   |       | 

|                         |  |               |       |              |  |             |        |   |  |   |        |  
|------------------------ |  | ------------- | ----- | ------------ |  | ----------- | ------ | - |  | - | ------ | -
|                         |  | Statement 72 |       | Core Deposit |  | Total Other
|(In millions)            |  | Goodwill     |       | Intangible   |  | Intangibles
|                         |  |               |       |              |  |            
|Original Cost            |  | $             | 296.3 |              |  | $           | 171.6  |   |  | $ | 467.9  |  
|Accumulated amortization |  |               | (54.7 | )            |  |             | (131.5 | ) |  |   | (186.2 | )
|                         |  |               |       |              |  |             |        |   |  |   |        |  
|Balance at 6/30/02       |  | $             | 241.6 |              |  | $           | 40.1   |   |  | $ | 281.7  |  
|                         |  |               |       |              |  |             |        |   |  |   |        |  

Estimated amortization expense related to other intangible assets for the
next five years is as follows: $38.6 million in 2002, $38.0 million in 2003,
$36.0 million in 2004, $31.4 million in 2005 and $29.9 million in 2006.

The following table is a reconciliation of net income, basic earnings per
share, and diluted earnings per share with and without goodwill amortization:

(Dollars in thousands, except per share data)

|                                |                       |   |                            |      |                          |   |         |      |      |   |         |      |  |   |         |      | 
|------------------------------- | --------------------- | - | -------------------------- | ---- | ------------------------ | - | ------- | ---- | ---- | - | ------- | ---- |  | - | ------- | ---- | 
|                                |                       |   | Three Months Ended June 30 |      | Six Months Ended June 30
|                                |                       |   |                            |      |                         
|                                |                       |   | 2002                       |      | 2001                     |   | 2002    |      | 2001
|                                |                       |   |                            |      |                          |   |         |      |     
|Reported net income             |                       | $ | 158,157                    |      |                          | $ | 137,618 |      |      | $ | 312,362 |      |  | $ | 267,474 |     
|Add back: Goodwill amortization |                       |   |                           |      |                          |   | 3,508   |      |      |   |        |      |  |   | 6,625   |     
|                                |                       |   |                            |      |                          |   |         |      |      |   |         |      |  |   |         |     
|Adjusted net income             |                       | $ | 158,157                    |      |                          | $ | 141,126 |      |      | $ | 312,362 |      |  | $ | 274,099 |     
|                                |                       |   |                            |      |                          |   |         |      |      |   |         |      |  |   |         |     
|Basic earnings per share:       |                       |   |                            |      |                          |   |         |      |      |   |         |      |  |   |         |     
|                                | Reported net income   |   | $                          | 0.45 |                          |   | $       | 0.41 |      |   | $       | 0.90 |  |   | $       | 0.79 | 
|                                | Goodwill amortization |   |                            |     |                          |   |         | 0.01 |      |   |         |     |  |   |         | 0.02 | 
|                                |                       |   |                            |      |                          |   |         |      |      |   |         |      |  |   |         |     
|                                | Adjusted net income   |   | $                          | 0.45 |                          |   | $       | 0.42 |      |   | $       | 0.90 |  |   | $       | 0.81 | 
|                                |                       |   |                            |      |                          |   |         |      |      |   |         |      |  |   |         |     
|Diluted earnings per share:     |                       |   |                            |      |                          |   |         |      |      |   |         |      |  |   |         |     
|                                | Reported net income   |   | $                          | 0.45 |                          |   | $       | 0.40 |      |   | $       | 0.89 |  |   | $       | 0.78 | 
|                                | Goodwill amortization |   |                            |     |                          |   |         | 0.01 |      |   |         |     |  |   |         | 0.02 | 
|                                |                       |   |                            |      |                          |   |         |      |      |   |         |      |  |   |         |     
|                                | Adjusted net income   |   | $                          | 0.45 |                          |   | $       | 0.41 |      |   | $       | 0.89 |  |   | $       | 0.80 | 
|                                |                       |   |                            |      |                          |   |         |      |      |   |         |      |  |   |         |     

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SFAS 143  Accounting for Asset Retirement Obligations

In June 2001, the FASB issued SFAS 143, which requires entities to record
the fair value of a liability for an asset retirement obligation in the period
in which it is incurred. When the liability is initially recorded, the entity
capitalizes a cost by increasing the carrying amount of the related long-lived
asset. Over time, the liability is accreted to its present value each period,
and the capitalized cost is depreciated over the useful life of the related
asset. Upon settlement of the liability, an entity either settles the
obligation for its recorded amount or incurs a gain or loss upon settlement.
This Statement is effective for fiscal years beginning after June 15, 2002.
Management does not expect this Statement to have a material impact to the
Consolidated Condensed Financial Statements.

SFAS 144  Accounting for the Impairment or Disposal of Long-Lived Assets

In August 2001, the FASB issued SFAS 144, which replaces SFAS 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of.The primary objectives of this Statement are to develop one
accounting model, based upon the framework established in SFAS 121, for
long-lived assets to be disposed of by sale and to address significant
implementation issues. This Statement requires that long-lived assets being
disposed of be measured at the lower of carrying amount or fair value less cost
to sell, whether reported in continuing operations or in discontinued
operations. Therefore, discontinued operations will no longer be measured at
net realizable value or include amounts for operating losses that have not yet
occurred. The provisions of this Statement are effective for financial
statements issued for fiscal years beginning after December 15, 2001 and,
generally, are to be applied prospectively. The effect of this Statement on
the Consolidated Condensed Financial Statements was not material.

SFAS 145  Rescission of FASB Statements No. 4, 44, 64, Amendment of FASB
Statement No. 13, and Technical Corrections

In April 2002, the FASB issued SFAS 145, which rescinds SFAS 4, Reporting
Gains and Losses from Extinguishment of Debt,SFAS 44, Accounting for
Intangible Assets of Motor Carriers,and SFAS 64, Extinguishments of Debt Made
to Satisfy Sinking-Fund Requirements.These rescissions eliminate the
requirement to report gains and losses from the extinguishment of debt as an
extraordinary item, net of related income tax effect, and are effective for
fiscal years beginning after May 15, 2002. This Statement also amends SFAS 13,
Accounting for Leases,and requires that capital leases that are modified so
that the resulting lease agreement is classified as an operating lease be
accounted for as a sale-leaseback. This amendment is effective for
transactions occurring after May 15, 2002. Finally, this Statement amends
several pronouncements to make technical corrections to existing authoritative
pronouncements. Management does not expect this Statement to have a material
impact to the Consolidated Condensed Financial Statements.

SFAS 146  Accounting for Costs Associated with Exit or Disposal Activities

In July 2002, the FASB issues SFAS 146, which requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
This Statement is effective prospectively for exit or disposal activities
initiated after December 31, 2002. Management does not expect this Statement
to have a material impact to the Consolidated Condensed Financial Statements.

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Note B  Earnings per Share Reconciliation

A reconciliation of the numerator and denominator of the basic EPS
computation to the diluted EPS computation is as follows:

|                                      |  |                            |         |                          |  |      |         |      |  |   |         |  |  |   |         | 
|------------------------------------- |  | -------------------------- | ------- | ------------------------ |  | ---- | ------- | ---- |  | - | ------- |  |  | - | ------- | 
|                                      |  | Three months ended June 30 |         | Six months ended June 30
|                                      |  |                            |         |                         
|(In thousands, except per share data) |  | 2002                       |         | 2001                     |  | 2002 |         | 2001
|                                      |  |                            |         |                          |  |      |         |     
|Basic:                                |  |                            |         |                          |  |      |         |      |  |   |         |  |  |   |         | 
|Net income                            |  | $                          | 158,157 |                          |  | $    | 137,618 |      |  | $ | 312,362 |  |  | $ | 267,474 | 
|Average common shares outstanding     |  |                            | 346,741 |                          |  |      | 339,974 |      |  |   | 346,624 |  |  |   | 339,316 | 
|                                      |  |                            |         |                          |  |      |         |      |  |   |         |  |  |   |         | 
|Earnings per share                    |  | $                          | 0.45    |                          |  | $    | 0.41    |      |  | $ | 0.90    |  |  | $ | 0.79    | 
|                                      |  |                            |         |                          |  |      |         |      |  |   |         |  |  |   |         | 
|Diluted:                              |  |                            |         |                          |  |      |         |      |  |   |         |  |  |   |         | 
|Net income                            |  | $                          | 158,157 |                          |  | $    | 137,618 |      |  | $ | 312,362 |  |  | $ | 267,474 | 
|Average common shares outstanding     |  |                            | 346,741 |                          |  |      | 339,974 |      |  |   | 346,624 |  |  |   | 339,316 | 
|Dilutive effect of stock options      |  |                            | 4,723   |                          |  |      | 4,074   |      |  |   | 4,313   |  |  |   | 3,579   | 
|                                      |  |                            |         |                          |  |      |         |      |  |   |         |  |  |   |         | 
|Average diluted shares outstanding    |  |                            | 351,464 |                          |  |      | 344,048 |      |  |   | 350,937 |  |  |   | 342,895 | 
|                                      |  |                            |         |                          |  |      |         |      |  |   |         |  |  |   |         | 
|Earnings per share                    |  | $                          | 0.45    |                          |  | $    | 0.40    |      |  | $ | 0.89    |  |  | $ | 0.78    | 
|                                      |  |                            |         |                          |  |      |         |      |  |   |         |  |  |   |         | 

For the three and six months ended June 30, 2001, the Company had zero
and 447,515 options issued that were not included in the calculation of diluted
EPS, as the exercise price of these options was in excess of the average market
price. There were no excluded options for the three and six months ended June
30, 2002.

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Note C  Comprehensive Income

Comprehensive income is the total of net income and all other non-owner
changes in equity. Items that are recognized under accounting standards as
components of comprehensive income are displayed in the Consolidated Condensed
Statements of Stockholders Equity.

In the calculation of comprehensive income, certain reclassification
adjustments are made to avoid double counting items that are displayed as part
of net income for a period that also had been displayed as part of other
comprehensive income in that period or earlier periods. The disclosure of the
reclassification amount is as follows:

|                                                            |  |                            |         |        |  |        |         |        |  |        |         |        |  |   |         |   |  |   |       |   |  |   |         |  
|----------------------------------------------------------- |  | -------------------------- | ------- | ------ |  | ------ | ------- | ------ |  | ------ | ------- | ------ |  | - | ------- | - |  | - | ----- | - |  | - | ------- | -
|                                                            |  | Three months ended June 30
|                                                            |  |                           
|                                                            |  | 2002                       |         | 2001  
|                                                            |  |                            |         |       
|                                                            |  | Before                     |         | Tax    |  | Net of |         | Before |  | Tax    |         | Net of
|                                                            |  | Tax                        |         | Effect |  | Tax    |         | Tax    |  | Effect |         | Tax   
|                                                            |  |                            |         |        |  |        |         |        |  |        |         |       
|Unrealized gain (loss) on securities:                       |  |                            |         |        |  |        |         |        |  |        |         |        |  |   |         |   |  |   |       |   |  |   |         |  
|Unrealized holding gains (losses) arising
during the period |  | $                          | 257,424 |        |  | $      | (89,265 | )      |  | $      | 168,159 |        |  | $ | (17,270 | ) |  | $ | 5,958 |   |  | $ | (11,312 | )
|Less: reclassification adjustment                           |  |                            | 2,607   |        |  |        | (991    | )      |  |        | 1,616   |        |  |   | 1,867   |   |  |   | (709  | ) |  |   | 1,158   |  
|                                                            |  |                            |         |        |  |        |         |        |  |        |         |        |  |   |         |   |  |   |       |   |  |   |         |  
|Net unrealized gain (loss) on securities                    |  |                            | 254,817 |        |  |        | (88,274 | )      |  |        | 166,543 |        |  |   | (19,137 | ) |  |   | 6,667 |   |  |   | (12,470 | )
|                                                            |  |                            |         |        |  |        |         |        |  |        |         |        |  |   |         |   |  |   |       |   |  |   |         |  
|Unrealized gain (loss) on derivatives:                      |  |                            |         |        |  |        |         |        |  |        |         |        |  |   |         |   |  |   |       |   |  |   |         |  
|Unrealized holding gains (losses) arising
during the period |  |                            | 17,017  |        |  |        | (1,659  | )      |  | $      | 15,358  |        |  |   | (6,845  | ) |  |   | (929  | ) |  |   | (7,774  | )
|Less: reclassification adjustment                           |  |                            | 4,367   |        |  |        | (1,659  | )      |  |        | 2,708   |        |  |   | 2,444   |   |  |   | (929  | ) |  |   | 1,515   |  
|                                                            |  |                            |         |        |  |        |         |        |  |        |         |        |  |   |         |   |  |   |       |   |  |   |         |  
|Net unrealized gain (loss) on derivatives                   |  |                            | 12,650  |        |  |        | 0       |        |  |        | 12,650  |        |  |   | (9,289  | ) |  |   | 0     |   |  |   | (9,289  | )
|                                                            |  |                            |         |        |  |        |         |        |  |        |         |        |  |   |         |   |  |   |       |   |  |   |         |  
|Total Other Comprehensive Income (Loss)                     |  | $                          | 267,467 |        |  | $      | (88,274 | )      |  | $      | 179,193 |        |  | $ | (28,426 | ) |  | $ | 6,667 |   |  | $ | (21,759 | )
|                                                            |  |                            |         |        |  |        |         |        |  |        |         |        |  |   |         |   |  |   |       |   |  |   |         |  

|                                                   |  |                          |         |        |  |        |         |        |  |        |         |        |  |   |        |  |  |   |         |   |  |   |        | 
|-------------------------------------------------- |  | ------------------------ | ------- | ------ |  | ------ | ------- | ------ |  | ------ | ------- | ------ |  | - | ------ |  |  | - | ------- | - |  | - | ------ | 
|                                                   |  | Six months ended June 30
|                                                   |  |                         
|                                                   |  | 2002                     |         | 2001  
|                                                   |  |                          |         |       
|                                                   |  | Before                   |         | Tax    |  | Net of |         | Before |  | Tax    |         | Net of
|                                                   |  | Tax                      |         | Effect |  | Tax    |         | Tax    |  | Effect |         | Tax   
|                                                   |  |                          |         |        |  |        |         |        |  |        |         |       
|Unrealized gain on securities:                     |  |                          |         |        |  |        |         |        |  |        |         |        |  |   |        |  |  |   |         |   |  |   |        | 
|Unrealized holding gains arising
during the period |  | $                        | 229,602 |        |  | $      | (79,699 | )      |  | $      | 149,903 |        |  | $ | 69,411 |  |  | $ | (23,495 | ) |  | $ | 45,916 | 
|Less: reclassification adjustment                  |  |                          | 4,788   |        |  |        | (1,820  | )      |  |        | 2,968   |        |  |   | 1,879  |  |  |   | (714    | ) |  |   | 1,165  | 
|                                                   |  |                          |         |        |  |        |         |        |  |        |         |        |  |   |        |  |  |   |         |   |  |   |        | 
|Net unrealized gain on securities                  |  |                          | 224,814 |        |  |        | (77,879 | )      |  |        | 146,935 |        |  |   | 67,532 |  |  |   | (22,781 | ) |  |   | 44,751 | 
|                                                   |  |                          |         |        |  |        |         |        |  |        |         |        |  |   |        |  |  |   |         |   |  |   |        | 
|Unrealized gain on derivatives:                    |  |                          |         |        |  |        |         |        |  |        |         |        |  |   |        |  |  |   |         |   |  |   |        | 
|Unrealized holding gains arising
during the period |  |                          | 15,129  |        |  |        | (3,249  | )      |  | $      | 11,880  |        |  |   | 21,691 |  |  |   | (1,352  | ) |  |   | 20,339 | 
|Less: reclassification adjustment                  |  |                          | 8,550   |        |  |        | (3,249  | )      |  |        | 5,301   |        |  |   | 3,558  |  |  |   | (1,352  | ) |  |   | 2,206  | 
|                                                   |  |                          |         |        |  |        |         |        |  |        |         |        |  |   |        |  |  |   |         |   |  |   |        | 
|Net unrealized gain on derivatives                 |  |                          | 6,579   |        |  |        | 0       |        |  |        | 6,579   |        |  |   | 18,133 |  |  |   | 0       |   |  |   | 18,133 | 
|                                                   |  |                          |         |        |  |        |         |        |  |        |         |        |  |   |        |  |  |   |         |   |  |   |        | 
|Total Other Comprehensive Income                   |  | $                        | 231,393 |        |  | $      | (77,879 | )      |  | $      | 153,514 |        |  | $ | 85,665 |  |  | $ | (22,781 | ) |  | $ | 62,884 | 
|                                                   |  |                          |         |        |  |        |         |        |  |        |         |        |  |   |        |  |  |   |         |   |  |   |        | 

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Note D  Supplemental Cash Flow Information

The following is supplemental disclosure to the Consolidated Condensed
Statements of Cash Flows for the six months ended June 30, 2002 and 2001.

|                             |                                                   |                          |      |         |      |  |   |           | 
|---------------------------- | ------------------------------------------------- | ------------------------ | ---- | ------- | ---- |  | - | --------- | 
|(In thousands)               |                                                   | Six Months Ended June 30
|                             |                                                   |                         
|                             |                                                   |                          | 2002 |         | 2001
|                             |                                                   |                          |      |         |     
|Cash paid during period for: |                                                   |                          |      |         |      |  |   |          
|                             | Interest                                          |                          | $    | 551,984 |      |  | $ | 1,010,528 | 
|                             | Income taxes                                      |                          |      | 22,323  |      |  |   | 43,922    | 
|Noncash transactions:        |                                                   |                          |      |         |      |  |   |          
|                             | Assets acquired in business combinations          |                          |      | 170,761 |      |  |   | 422,342   | 
|                             | Liabilities assumed in business combinations      |                          |      | 160,758 |      |  |   | 400,656   | 
|                             | Common Stock issued in business combinations      |                          |      | 0       |      |  |   | 5,158     | 
|                             | Loans transferred to other real estate            |                          |      | 43,376  |      |  |   | 26,892    | 
|                             | Financed sales of foreclosed property             |                          |      | 31,010  |      |  |   | 21,560    | 
|                             | Loans securitized into mortgage-backed securities |                          |      | 400,728 |      |  |   | 0         | 

Note E  Business Segments

The Company segregates financial information for use in assessing its
performance which is ultimately used for allocating resources to its business
segments. The Company has four reportable business segments which are
primarily aligned along lines of business. Each segment is managed by one or
more of the Companys executives who, in conjunction with the Chief Executive
Officer, make strategic business decisions regarding that segment. The four
reportable business segments are Commercial Banking, Regional Banking, Funds
Management, and Capital Management.

The Commercial Banking segment provides financing and other services for
large corporate customers throughout all geographic areas covered by
SouthTrust. Types of corporate lending include the following: commercial and
industrial, commercial real estate, leasing, asset-based and health care.
Also, this segment provides cash management and international services in
conjunction with the lending relationship established with corporate banking
customers.

The Regional Banking segment generates revenues through the Companys
branch banking network. Services and products include retail and small
business lending, depository services, business banking and private banking.
Also included in Regional Banking is regional lending activities, such as
middle-market and residential construction, and certain centralized consumer
lending areas. Branch administration costs are also included in Regional
Banking.

The Funds Management segment provides asset and liability management,
which includes management of interest rate and liquidity risk. Activities
include management of the Companys securities portfolio, wholesale and
long-term funding sources, and the use of derivatives such as interest rate
swap agreements.

The Capital Management segment provides trust, brokerage, investment, and
insurance services. All of these areas are managed as one area with the goal
of providing a variety of financial management products to customers.

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The remaining Company divisions included within the Reconciliation
grouping are divisions that have no operating revenue. They contain
unallocated costs from support areas not directly associated with the other
reportable segments. Other items in this grouping include provisions for loan
losses in excess of the amounts allocated to the operating segments, income
from bank owned life insurance, intangible amortization, and income tax
expense. Intercompany eliminations are also included in the Reconciliation
group.

The Companys management accounting policies generally follow those for
the Company described in Note A to the Consolidated Financial Statements on
Form 10-K for the year ended December 31, 2001, except for the following items.
The Company uses a transfer pricing process to aid in assessing operating
segment performance. This process involves matched rate transfer pricing of
assets and liabilities to determine a contribution to the net interest margin
on a segment basis. Also, net interest margin is reported on a fully taxable
equivalent basis. The provision for loan losses is charged to each business
segment primarily based on net charge-offs. Data processing and other support
function costs are charged in accordance with the relative operational cost of
each segment. Also, depreciation expense is not disclosed separately by
segment, since this is not considered a significant component of the
profitability of a financial institution.

The Companys management accounting policies are continuously evolving
based on both internal and external factors. Therefore, the Company has
restated the comparative 2001 segment information to conform to the 2002
presentation. The restatement for 2001 includes organizational structure
changes made during 2002 and changes to the allocation of interest rate risk.
As management accounting policies change, prior period restatement may also be
necessary in the future. In addition, results of operations for SouthTrusts
reportable segments may not be comparable to similar reportable segments for
other financial institutions.

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The following tables present the Companys business segment information
for the three and six month periods ended June 30, 2002 and 2001:

|                          |            |                |      |                                  |      |            |       |            |      |         |       |             |       |       |      |     |     |   |       |       |       |   |       |       |       | 
|------------------------- | ---------- | -------------- | ---- | -------------------------------- | ---- | ---------- | ----- | ---------- | ---- | ------- | ----- | ----------- | ----- | ----- | ---- | --- | --- | - | ----- | ----- | ----- | - | ----- | ----- | ----- | 
|                          |            |                |      | Three months ended June 30, 2002
|                          |            |                |      |                                 
|                          |            |                |      | Commercial                       |      | Regional   |       | Funds      |      | Capital |       | Reconciling |       | Total
|(In millions)             |            | Banking        |      | Banking                          |      | Management |       | Management |      | Items   |       | Company    
|                          |            |                |      |                                  |      |            |       |            |      |         |       |            
|Net interest margin (FTE) |            | $              | 76.3 |                                  |      | $          | 271.0 |            |      | $       | 120.6 |             |       | $     | 1.0  |     |     | $ | (37.6 | )     |       | $ | 431.3 |      
|Provision for loan losses |            |                | 4.3  |                                  |      |            | 21.3  |            |      |         | 2.5   |             |       |       | 0.0  |     |     |   | 0.6   |       |       |   | 28.7  |      
|Non-interest income       |            |                | 7.8  |                                  |      |            | 114.5 |            |      |         | (0.4  | )           |       |       | 24.9 |     |     |   | 13.1  |       |       |   | 159.9 |      
|Non-interest expense      |            |                | 18.6 |                                  |      |            | 292.6 |            |      |         | 1.2   |             |       |       | 19.0 |     |     |   | (6.1  | )     |       |   | 325.3 |      
|                          |            |                |      |                                  |      |            |       |            |      |         |       |             |       |       |      |     |     |   |       |       |       |   |       |      
|                          |            | Pre-tax income |      |                                  | 61.2 |            |       |            | 71.6 |         |       |             | 116.5 |       |      |     | 6.9 |   |       |       | (19.0 | ) |       |       | 237.2 | 
|Income tax expense (FTE)  |            |                | 0.0  |                                  |      |            | 0.0   |            |      |         | 0.0   |             |       |       | 0.0  |     |     |   | 79.0  |       |       |   | 79.0  |      
|                          |            |                |      |                                  |      |            |       |            |      |         |       |             |       |       |      |     |     |   |       |       |       |   |       |      
|                          | Net income |                | $    | 61.2                             |      |            | $     | 71.6       |      |         | $     | 116.5       |       |       | $    | 6.9 |     |   | $     | (98.0 | )     |   | $     | 158.2 |      
|                          |            |                |      |                                  |      |            |       |            |      |         |       |             |       |       |      |     |     |   |       |       |       |   |       |      

|                          |            |                |          |                                |       |            |          |            |       |         |          |             |       |       |       |      |      |   |         |        |       |   |          |       |       | 
|------------------------- | ---------- | -------------- | -------- | ------------------------------ | ----- | ---------- | -------- | ---------- | ----- | ------- | -------- | ----------- | ----- | ----- | ----- | ---- | ---- | - | ------- | ------ | ----- | - | -------- | ----- | ----- | 
|                          |            |                |          | Six months ended June 30, 2002
|                          |            |                |          |                               
|                          |            |                |          | Commercial                     |       | Regional   |          | Funds      |       | Capital |          | Reconciling |       | Total
|(In millions)             |            | Banking        |          | Banking                        |       | Management |          | Management |       | Items   |          | Company    
|                          |            |                |          |                                |       |            |          |            |       |         |          |            
|Net interest margin (FTE) |            | $              | 152.9    |                                |       | $          | 536.9    |            |       | $       | 241.1    |             |       | $     | 2.0   |      |      | $ | (77.8   | )      |       | $ | 855.1    |      
|Provision for loan losses |            |                | 10.8     |                                |       |            | 40.1     |            |       |         | 3.5      |             |       |       | 0.0   |      |      |   | 2.0     |        |       |   | 56.4     |      
|Non-interest income       |            |                | 15.7     |                                |       |            | 226.2    |            |       |         | 1.0      |             |       |       | 47.3  |      |      |   | 23.5    |        |       |   | 313.7    |      
|Non-interest expense      |            |                | 31.5     |                                |       |            | 557.2    |            |       |         | 2.4      |             |       |       | 35.9  |      |      |   | 16.4    |        |       |   | 643.4    |      
|                          |            |                |          |                                |       |            |          |            |       |         |          |             |       |       |       |      |      |   |         |        |       |   |          |      
|                          |            | Pre-tax income |          |                                | 126.3 |            |          |            | 165.8 |         |          |             | 236.2 |       |       |      | 13.4 |   |         |        | (72.7 | ) |          |       | 469.0 | 
|Income tax expense (FTE)  |            |                | 0.0      |                                |       |            | 0.0      |            |       |         | 0.0      |             |       |       | 0.0   |      |      |   | 156.6   |        |       |   | 156.6    |      
|                          |            |                |          |                                |       |            |          |            |       |         |          |             |       |       |       |      |      |   |         |        |       |   |          |      
|                          | Net income |                | $        | 126.3                          |       |            | $        | 165.8      |       |         | $        | 236.2       |       |       | $     | 13.4 |      |   | $       | (229.3 | )     |   | $        | 312.4 |      
|                          |            |                |          |                                |       |            |          |            |       |         |          |             |       |       |       |      |      |   |         |        |       |   |          |      
|Ending assets             |            | $              | 10,982.6 |                                |       | $          | 24,421.7 |            |       | $       | 11,153.4 |             |       | $     | 138.6 |      |      | $ | 1,723.3 |        |       | $ | 48,419.6 |      
|                          |            |                |          |                                |       |            |          |            |       |         |          |             |       |       |       |      |      |   |         |        |       |   |          |      

|                          |            |                |      |                                  |      |            |       |            |       |         |      |             |      |       |      |     |     |   |       |        |       |   |       |       |       | 
|------------------------- | ---------- | -------------- | ---- | -------------------------------- | ---- | ---------- | ----- | ---------- | ----- | ------- | ---- | ----------- | ---- | ----- | ---- | --- | --- | - | ----- | ------ | ----- | - | ----- | ----- | ----- | 
|                          |            |                |      | Three months ended June 30, 2001
|                          |            |                |      |                                 
|                          |            |                |      | Commercial                       |      | Regional   |       | Funds      |       | Capital |      | Reconciling |      | Total
|(In millions)             |            | Banking        |      | Banking                          |      | Management |       | Management |       | Items   |      | Company    
|                          |            |                |      |                                  |      |            |       |            |       |         |      |            
|Net interest margin (FTE) |            | $              | 81.4 |                                  |      | $          | 267.2 |            |       | $       | 64.9 |             |      | $     | 0.1  |     |     | $ | (36.1 | )      |       | $ | 377.5 |      
|Provision for loan losses |            |                | 6.9  |                                  |      |            | 20.6  |            |       |         | 1.8  |             |      |       | 0.0  |     |     |   | (3.6  | )      |       |   | 25.7  |      
|Non-interest income       |            |                | 6.4  |                                  |      |            | 100.3 |            |       |         | 0.0  |             |      |       | 20.6 |     |     |   | 13.1  |        |       |   | 140.4 |      
|Non-interest expense      |            |                | 12.4 |                                  |      |            | 235.7 |            |       |         | 0.9  |             |      |       | 16.3 |     |     |   | 17.9  |        |       |   | 283.2 |      
|                          |            |                |      |                                  |      |            |       |            |       |         |      |             |      |       |      |     |     |   |       |        |       |   |       |      
|                          |            | Pre-tax income |      |                                  | 68.5 |            |       |            | 111.2 |         |      |             | 62.2 |       |      |     | 4.4 |   |       |        | (37.3 | ) |       |       | 209.0 | 
|Income tax expense (FTE)  |            |                | 0.0  |                                  |      |            | 0.0   |            |       |         | 0.0  |             |      |       | 0.0  |     |     |   | 71.4  |        |       |   | 71.4  |      
|                          |            |                |      |                                  |      |            |       |            |       |         |      |             |      |       |      |     |     |   |       |        |       |   |       |      
|                          | Net income |                | $    | 68.5                             |      |            | $     | 111.2      |       |         | $    | 62.2        |      |       | $    | 4.4 |     |   | $     | (108.7 | )     |   | $     | 137.6 |      
|                          |            |                |      |                                  |      |            |       |            |       |         |      |             |      |       |      |     |     |   |       |        |       |   |       |      

|                          |            |                |          |                                |       |            |          |            |       |         |          |             |       |       |       |     |     |   |         |        |       |   |          |       |       | 
|------------------------- | ---------- | -------------- | -------- | ------------------------------ | ----- | ---------- | -------- | ---------- | ----- | ------- | -------- | ----------- | ----- | ----- | ----- | --- | --- | - | ------- | ------ | ----- | - | -------- | ----- | ----- | 
|                          |            |                |          | Six months ended June 30, 2001
|                          |            |                |          |                               
|                          |            |                |          | Commercial                     |       | Regional   |          | Funds      |       | Capital |          | Reconciling |       | Total
|(In millions)             |            | Banking        |          | Banking                        |       | Management |          | Management |       | Items   |          | Company    
|                          |            |                |          |                                |       |            |          |            |       |         |          |            
|Net interest margin (FTE) |            | $              | 159.7    |                                |       | $          | 528.6    |            |       | $       | 116.0    |             |       | $     | (0.4  | )   |     | $ | (72.1   | )      |       | $ | 731.8    |      
|Provision for loan losses |            |                | 8.8      |                                |       |            | 38.3     |            |       |         | 2.6      |             |       |       | 0.0   |     |     |   | (1.2    | )      |       |   | 48.5     |      
|Non-interest income       |            |                | 12.2     |                                |       |            | 194.6    |            |       |         | (0.8     | )           |       |       | 40.2  |     |     |   | 24.6    |        |       |   | 270.8    |      
|Non-interest expense      |            |                | 23.4     |                                |       |            | 463.6    |            |       |         | 1.7      |             |       |       | 32.0  |     |     |   | 29.5    |        |       |   | 550.2    |      
|                          |            |                |          |                                |       |            |          |            |       |         |          |             |       |       |       |     |     |   |         |        |       |   |          |      
|                          |            | Pre-tax income |          |                                | 139.7 |            |          |            | 221.3 |         |          |             | 110.9 |       |       |     | 7.8 |   |         |        | (75.8 | ) |          |       | 403.9 | 
|Income tax expense (FTE)  |            |                | 0.0      |                                |       |            | 0.0      |            |       |         | 0.0      |             |       |       | 0.0   |     |     |   | 136.4   |        |       |   | 136.4    |      
|                          |            |                |          |                                |       |            |          |            |       |         |          |             |       |       |       |     |     |   |         |        |       |   |          |      
|                          | Net income |                | $        | 139.7                          |       |            | $        | 221.3      |       |         | $        | 110.9       |       |       | $     | 7.8 |     |   | $       | (212.2 | )     |   | $        | 267.5 |      
|                          |            |                |          |                                |       |            |          |            |       |         |          |             |       |       |       |     |     |   |         |        |       |   |          |      
|Ending assets             |            | $              | 11,071.5 |                                |       | $          | 22,971.4 |            |       | $       | 10,124.0 |             |       | $     | 121.8 |     |     | $ | 2,246.3 |        |       | $ | 46,535.0 |      
|                          |            |                |          |                                |       |            |          |            |       |         |          |             |       |       |       |     |     |   |         |        |       |   |          |      

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##### Table of Contents



Note F  Business Combinations

During the first six months of 2002, the Company completed the following
acquisition:

|              |  |            |  |                          |  |        |       |       |  |          |       |      |  |        |       |  |  |   |      |  |  |               |   |  |  |        |  | 
|------------- |  | ---------- |  | ------------------------ |  | ------ | ----- | ----- |  | -------- | ----- | ---- |  | ------ | ----- |  |  | - | ---- |  |  | ------------- | - |  |  | ------ |  | 
|(In Millions) |  |            |  |                          |  |        |       |       |  |          |       |      |  |        |       |  |  |   |      |  |  | Consideration
|              |  |            |  |                          |  |        |       |       |  |          |       |      |  |        |       |  |  |   |      |  |  |              
|              |  |            |  |                          |  |        |       |       |  |          |       |      |  |        |       |  |  |   |      |  |  |               |   |  |  | Common
|Date          |  | Location   |  | Institution              |  | Assets |       | Loans |  | Deposits |       | Cash |  | Shares
|              |  |            |  |                          |  |        |       |       |  |          |       |      |  |       
|March 1, 2002 |  | Euless, TX |  | Landmark Bancshares, Inc |  | $      | 170.8 |       |  | $        | 108.4 |      |  | $      | 154.6 |  |  | $ | 38.9 |  |  |               |  | 

In addition, on May 10, 2002, the Company purchased the remaining 25%
ownership interest in Omniserve, LLC.

Under purchase accounting, the results of operations, subsequent to the
acquisition date, are included in the Consolidated Condensed Financial
Statements.

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##### Table of Contents






Item 2.     Managements Discussion and Analysis of Financial Condition and Results of Operations

Business

SouthTrust Corporation (SouthTrust or the Company) is a registered
financial holding company incorporated under the laws of Delaware in 1968. The
Company is headquartered in Birmingham, Alabama, and engages, through its
subsidiary bank, SouthTrust Bank and its non-banking subsidiaries, in a full
range of banking services from 714 banking locations in Alabama, Florida,
Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Texas and
Virginia. As of June 30, 2002, the Company had consolidated total assets of
$48.4 billion, which ranked it among the top twenty bank holding companies in
the United States.

SouthTrust Bank offers a broad range of banking services, either directly
or through other affiliated bank related subsidiaries. Services to business
customers include providing checking and time deposit accounts, cash management
services, various types of lending and credit services, and corporate and other
trust services. Services provided to individual customers directly or through
other affiliated corporations include checking accounts, money market
investment and money market checking accounts, personal money management
accounts, passbook savings accounts and various other time deposit savings
programs, loans (including business, personal, automobile, mortgage, home
improvement and educational loans), and a variety of trust services.
SouthTrust Bank also offers Visa and/or MasterCard multi-purpose nationally
recognized credit card services. The Company also offers brokerage and other
investment services through its subsidiary SouthTrust Securities, Inc.

Information relating to the Companys business segments can be found in
Note E to the unaudited Consolidated Condensed Financial Statements.

Forward-Looking Statements

This report and documents incorporated herein by reference may contain
certain statements relating to the future results of the Company based upon
information currently available. These forward-looking statements (as defined
in Section 21E of The Securities and Exchange Act of 1934) are typically
identified by words such as believes, expects, anticipates, intends,
estimates, projects, and similar expressions. These forward-looking
statements are based upon assumptions the Company believes are reasonable and
may relate to, among other things, the allowance for loan loss adequacy,
simulation of changes in interest rates and litigation results. Such
forward-looking statements are subject to risks and uncertainties, which could
cause the Companys actual results to differ materially from those included in
these statements. These risks and uncertainties include, but are not limited to
the following: (1) changes in political and economic conditions; (2) interest
rate fluctuations; (3) competitive product and pricing pressures within the
Companys markets; (4) equity and fixed income market fluctuations; (5)
personal and corporate customers bankruptcies; (6) inflation; (7) acquisitions
and integration of acquired businesses; (8) technological changes; (9) changes
in law; (10) changes in fiscal, monetary, regulatory and tax policies; (11)
monetary fluctuations; (12) success in gaining regulatory approvals when
required; and (13) other risks and uncertainties listed from time to time in
the Companys SEC reports and announcements.

16



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|                                                                             |  |        
|---------------------------------------------------------------------------- |  | -------
|Selected Quarterly Financial Data(Dollars in millions except per share data) |  | Table 1

|                  |                                                           |         |   |                |         |        |   |          |         |        |   |          |         |  |   |          |         |  |   |          |         | 
|----------------- | --------------------------------------------------------- | ------- | - | -------------- | ------- | ------ | - | -------- | ------- | ------ | - | -------- | ------- |  | - | -------- | ------- |  | - | -------- | ------- | 
|                  |                                                           |         |   | Quarters Ended
|                  |                                                           |         |   |               
|                  |                                                           |         |   | 2002           |         | 2001  
|                  |                                                           |         |   |                |         |       
|                  |                                                           |         |   | Jun 30         |         | Mar 31 |   | Dec 31   |         | Sep 30 |   | Jun 30  
|                  |                                                           |         |   |                |         |        |   |          |         |        |   |         
|Earnings Summary: |                                                           |         |   |                |         |        |   |          |         |        |   |          |         |  |   |          |         |  |   |         
|                  | Interest income                                           |         | $ | 671.8          |         |        | $ | 681.9    |         |        | $ | 732.0    |         |  | $ | 782.4    |         |  | $ | 811.8    |        
|                  | Interest expense                                          |         |   | 243.8          |         |        |   | 261.4    |         |        |   | 318.6    |         |  |   | 392.6    |         |  |   | 437.8    |        
|                  |                                                           |         |   |                |         |        |   |          |         |        |   |          |         |  |   |          |         |  |   |          |        
|                  | Net interest income                                       |         |   | 428.0          |         |        |   | 420.5    |         |        |   | 413.4    |         |  |   | 389.8    |         |  |   | 374.0    |        
|                  | Provision for loan losses                                 |         |   | 28.7           |         |        |   | 27.7     |         |        |   | 39.3     |         |  |   | 30.4     |         |  |   | 25.7     |        
|                  |                                                           |         |   |                |         |        |   |          |         |        |   |          |         |  |   |          |         |  |   |          |        
|                  | Net interest income after
provision for loan losses       |         |   | 399.3          |         |        |   | 392.8    |         |        |   | 374.1    |         |  |   | 359.4    |         |  |   | 348.3    |        
|                  | Non-interest income                                       |         |   | 158.7          |         |        |   | 151.6    |         |        |   | 156.8    |         |  |   | 138.8    |         |  |   | 138.5    |        
|                  | Securities gains                                          |         |   | 1.2            |         |        |   | 2.2      |         |        |   | 4.0      |         |  |   | 0.6      |         |  |   | 1.9      |        
|                  | Non-interest expense                                      |         |   | 325.3          |         |        |   | 318.1    |         |        |   | 317.6    |         |  |   | 285.6    |         |  |   | 283.2    |        
|                  |                                                           |         |   |                |         |        |   |          |         |        |   |          |         |  |   |          |         |  |   |          |        
|                  | Income before income taxes                                |         |   | 233.9          |         |        |   | 228.5    |         |        |   | 217.3    |         |  |   | 213.2    |         |  |   | 205.5    |        
|                  | Income taxes                                              |         |   | 75.7           |         |        |   | 74.3     |         |        |   | 72.4     |         |  |   | 71.1     |         |  |   | 67.9     |        
|                  |                                                           |         |   |                |         |        |   |          |         |        |   |          |         |  |   |          |         |  |   |          |        
|                  | Net income                                                |         | $ | 158.2          |         |        | $ | 154.2    |         |        | $ | 144.9    |         |  | $ | 142.1    |         |  | $ | 137.6    |        
|                  |                                                           |         |   |                |         |        |   |          |         |        |   |          |         |  |   |          |         |  |   |          |        
|Per common share: |                                                           |         |   |                |         |        |   |          |         |        |   |          |         |  |   |          |         |  |   |         
|                  | Net income  basic                                        |         | $ | 0.45           |         |        | $ | 0.45     |         |        | $ | 0.42     |         |  | $ | 0.41     |         |  | $ | 0.41     |        
|                  | Net income  diluted                                      |         |   | 0.45           |         |        |   | 0.44     |         |        |   | 0.42     |         |  |   | 0.41     |         |  |   | 0.40     |        
|                  | Cash dividends declared                                   |         |   | 0.17           |         |        |   | 0.17     |         |        |   | 0.14     |         |  |   | 0.14     |         |  |   | 0.14     |        
|                  | Book value                                                |         |   | 12.45          |         |        |   | 11.64    |         |        |   | 11.44    |         |  |   | 11.38    |         |  |   | 10.59    |        
|                  | Market value-high                                         |         |   | 27.20          |         |        |   | 27.32    |         |        |   | 25.93    |         |  |   | 27.18    |         |  |   | 26.44    |        
|                  | Market value-low                                          |         |   | 24.86          |         |        |   | 23.33    |         |        |   | 21.69    |         |  |   | 19.97    |         |  |   | 21.69    |        
|Ending balances:  |                                                           |         |   |                |         |        |   |          |         |        |   |          |         |  |   |          |         |  |   |         
|                  | Loans, net of unearned income                             |         | $ | 33,180.7       |         |        | $ | 32,870.4 |         |        | $ | 33,422.6 |         |  | $ | 32,813.2 |         |  | $ | 32,242.6 |        
|                  | Total assets                                              |         |   | 48,419.6       |         |        |   | 48,245.0 |         |        |   | 48,754.5 |         |  |   | 47,267.9 |         |  |   | 46,535.0 |        
|                  | Deposits                                                  |         |   | 31,586.9       |         |        |   | 30,749.8 |         |        |   | 32,634.1 |         |  |   | 30,038.3 |         |  |   | 29,824.4 |        
|                  | Federal Home Loan Bank advances                           |         |   | 4,271.0        |         |        |   | 4,221.0  |         |        |   | 4,221.1  |         |  |   | 4,221.2  |         |  |   | 4,251.2  |        
|                  | Long-term debt                                            |         |   | 2,144.3        |         |        |   | 1,511.4  |         |        |   | 1,263.4  |         |  |   | 1,071.1  |         |  |   | 1,047.1  |        
|                  | Stockholders equity                                      |         |   | 4,316.3        |         |        |   | 4,037.2  |         |        |   | 3,962.4  |         |  |   | 3,900.1  |         |  |   | 3,599.6  |        
|                  | Common shares (in thousands)                              |         |   | 346,766        |         |        |   | 346,706  |         |        |   | 346,273  |         |  |   | 342,685  |         |  |   | 340,011  |        
|Average balances: |                                                           |         |   |                |         |        |   |          |         |        |   |          |         |  |   |          |         |  |   |         
|                  | Loans, net of unearned income                             |         | $ | 32,967.1       |         |        | $ | 33,367.9 |         |        | $ | 32,960.3 |         |  | $ | 32,428.4 |         |  | $ | 32,032.1 |        
|                  | Earning assets                                            |         |   | 44,373.9       |         |        |   | 44,514.8 |         |        |   | 44,243.4 |         |  |   | 43,271.0 |         |  |   | 42,870.4 |        
|                  | Total assets                                              |         |   | 48,079.3       |         |        |   | 48,283.4 |         |        |   | 47,885.0 |         |  |   | 46,669.3 |         |  |   | 46,229.4 |        
|                  | Deposits                                                  |         |   | 31,690.4       |         |        |   | 31,505.7 |         |        |   | 30,612.5 |         |  |   | 30,138.1 |         |  |   | 29,600.9 |        
|                  | Stockholders equity                                      |         |   | 4,154.5        |         |        |   | 4,041.9  |         |        |   | 3,973.5  |         |  |   | 3,721.5  |         |  |   | 3,554.9  |        
|                  | Common shares (in thousands)                              |         |   |                |         |        |   |          |         |        |   |          |         |  |   |          |         |  |   |          |        
|                  |                                                           | Basic   |   |                | 346,741 |        |   |          | 346,506 |        |   |          | 344,815 |  |   |          | 342,184 |  |   |          | 339,974 | 
|                  |                                                           | Diluted |   |                | 351,464 |        |   |          | 350,403 |        |   |          | 348,769 |  |   |          | 346,541 |  |   |          | 344,048 | 
|Selected ratios:  |                                                           |         |   |                |         |        |   |          |         |        |   |          |         |  |   |          |         |  |   |         
|                  | Return on average total assets                            |         |   | 1.32           | %       |        |   | 1.30     | %       |        |   | 1.20     | %       |  |   | 1.21     | %       |  |   | 1.19     | %      
|                  | Return on average stockholders equity                    |         |   | 15.27          |         |        |   | 15.47    |         |        |   | 14.47    |         |  |   | 15.15    |         |  |   | 15.53    |        
|                  | Net interest margin (FTE)                                 |         |   | 3.92           |         |        |   | 3.87     |         |        |   | 3.74     |         |  |   | 3.61     |         |  |   | 3.54     |        
|                  | Average equity to average assets                          |         |   | 8.64           |         |        |   | 8.37     |         |        |   | 8.30     |         |  |   | 7.97     |         |  |   | 7.69     |        
|                  | Non-interest expense as a percent
of average total assets |         |   | 2.71           |         |        |   | 2.67     |         |        |   | 2.63     |         |  |   | 2.43     |         |  |   | 2.46     |        
|                  | Efficiency ratio                                          |         |   | 55.13          |         |        |   | 55.28    |         |        |   | 55.40    |         |  |   | 53.70    |         |  |   | 54.87    |        

17



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|                                                                                                                                                |  |        
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | -------
|Average Balances, Interest Income and Expense and
Average Yields Earned and Rates Paid(Dollars in millions; yields on taxable equivalent basis) |  | Table 2

|                                     |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |      |      |  
|------------------------------------ | ----------- | ------------------------------------------ | -------- | -------------- | -------- | -------------- | ----- | ----- | ----- | ------- | ---- | -------- | ---- | ---- | -------- | ------- | -------- | ------ | ----- | ----- | ----- | --- | ---- | ---- | ---- | -
|                                     |             |                                            |          | Quarters Ended
|                                     |             |                                            |          |               
|                                     |             |                                            |          | June 30, 2002  |          | March 31, 2002
|                                     |             |                                            |          |                |          |               
|                                     |             |                                            |          |                |          |                |       |       |       |         |      | (1)      |      |      |          |         |          |        |       |       |       | (1)
|                                     |             |                                            |          | Average        |          |                |       |       |       | Yield/  |      | Average  |      |      |          |         |          | Yield/
|                                     |             |                                            |          | Balance        |          | Interest       |       | Rate  |       | Balance |      | Interest |      | Rate
|                                     |             |                                            |          |                |          |                |       |       |       |         |      |          |      |     
|Assets                               |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     
|Loans, net of unearned
income (2)    |             | $                                          | 32,967.1 |                |          | $              | 491.3 |       |       |         | 5.98 | %        |      | $    | 33,367.9 |         |          | $      | 505.2 |       |       |     | 6.14 | %   
|Available-for-sale securities:       |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     
|                                     | Taxable     |                                            |          | 9,910.9        |          |                |       | 159.3 |       |         |      | 6.57     |      |      |          | 9,553.0 |          |        |       | 153.7 |       |     |      | 6.62 |     
|                                     | Non-taxable |                                            |          | 419.7          |          |                |       | 7.6   |       |         |      | 7.28     |      |      |          | 409.0   |          |        |       | 7.2   |       |     |      | 7.23 |     
|Held-to-maturity securities:         |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     
|                                     | Taxable     |                                            |          | 416.4          |          |                |       | 7.4   |       |         |      | 7.14     |      |      |          | 462.3   |          |        |       | 8.2   |       |     |      | 7.23 |     
|                                     | Non-taxable |                                            |          | 48.6           |          |                |       | 1.1   |       |         |      | 9.11     |      |      |          | 52.3    |          |        |       | 1.2   |       |     |      | 9.43 |     
|Short-term investments               |             |                                            | 611.2    |                |          |                | 8.4   |       |       |         | 5.54 |          |      |      | 670.3    |         |          |        | 9.7   |       |       |     | 5.86 |     
|                                     |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     
|                                     |             | Total interest-earning assets              |          |                | 44,373.9 |                |       | $     | 675.1 |         |      |          | 6.13 | %    |          |         | 44,514.8 |        |       | $     | 685.2 |     |      |      | 6.26 | %
|Allowance for loan losses            |             |                                            | (487.4   | )              |          |                |       |       |       |         |      |          |      |      | (487.5   | )       |          |        |       |       |       |     |      |     
|Other assets                         |             |                                            | 4,192.8  |                |          |                |       |       |       |         |      |          |      |      | 4,256.1  |         |          |        |       |       |       |     |      |     
|                                     |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     
|                                     |             | Total assets                               |          | $              | 48,079.3 |                |       |       |       |         |      |          |      |      |          | $       | 48,283.4 |        |       |       |       |     |      |      |      |  
|                                     |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     
|Liabilities                          |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     
|Savings deposits                     |             | $                                          | 2,356.1  |                |          | $              | 7.5   |       |       |         | 1.29 | %        |      | $    | 2,308.5  |         |          | $      | 7.6   |       |       |     | 1.34 | %   
|Interest-bearing demand deposits     |             |                                            | 4,014.4  |                |          |                | 9.3   |       |       |         | 0.93 |          |      |      | 3,891.8  |         |          |        | 9.5   |       |       |     | 0.99 |     
|Time deposits                        |             |                                            | 21,139.1 |                |          |                | 137.0 |       |       |         | 2.60 |          |      |      | 21,208.2 |         |          |        | 150.1 |       |       |     | 2.87 |     
|Short-term borrowings                |             |                                            | 5,420.1  |                |          |                | 23.7  |       |       |         | 1.76 |          |      |      | 6,427.1  |         |          |        | 28.3  |       |       |     | 1.79 |     
|Federal Home Loan Bank advances      |             |                                            | 4,261.1  |                |          |                | 50.8  |       |       |         | 4.78 |          |      |      | 4,221.1  |         |          |        | 52.4  |       |       |     | 5.03 |     
|Long-term debt                       |             |                                            | 1,724.3  |                |          |                | 15.5  |       |       |         | 3.60 |          |      |      | 1,300.6  |         |          |        | 13.5  |       |       |     | 4.22 |     
|                                     |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     
|                                     |             | Total interest-bearing liabilities         |          |                | 38,915.1 |                |       | $     | 243.8 |         |      |          | 2.51 | %    |          |         | 39,357.3 |        |       | $     | 261.4 |     |      |      | 2.69 | %
|Non-interest bearing demand deposits |             |                                            | 4,180.8  |                |          |                |       |       |       |         |      |          |      |      | 4,097.3  |         |          |        |       |       |       |     |      |     
|Other liabilities                    |             |                                            | 828.9    |                |          |                |       |       |       |         |      |          |      |      | 786.9    |         |          |        |       |       |       |     |      |     
|Total liabilities                    |             |                                            | 43,924.8 |                |          |                |       |       |       |         |      |          |      |      | 44,241.5 |         |          |        |       |       |       |     |      |     
|Stockholders Equity                 |             |                                            | 4,154.5  |                |          |                |       |       |       |         |      |          |      |      | 4,041.9  |         |          |        |       |       |       |     |      |     
|                                     |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     
|                                     |             | Total liabilities and stockholders equity |          | $              | 48,079.3 |                |       |       |       |         |      |          |      |      |          | $       | 48,283.4 |        |       |       |       |     |      |      |      |  
|                                     |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     
|Net interest income                  |             |                                            |          |                |          | $              | 431.3 |       |       |         |      |          |      |      |          |         |          | $      | 423.8 |       |       |     |      |     
|                                     |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     
|Net interest margin                  |             |                                            |          |                |          |                |       |       |       |         | 3.92 | %        |      |      |          |         |          |        |       |       |       |     | 3.87 | %   
|                                     |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     
|Net interest spread                  |             |                                            |          |                |          |                |       |       |       |         | 3.62 | %        |      |      |          |         |          |        |       |       |       |     | 3.57 | %   
|                                     |             |                                            |          |                |          |                |       |       |       |         |      |          |      |      |          |         |          |        |       |       |       |     |      |     



---

|(1) |  | Yields were calculated using the average amortized cost of the underlying assets. All yields and rates are presented on an
annualized basis.                                                                                                                                                                                  
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Included in interest are net loan fees of $11.3 million, $12.6 million, $13.1 million, $14.8 million, and $15.5 million
for the five quarters ended June 30, 2002, respectively. The averages include loans on which the accrual of interest
has been discontinued. Income on non-accrual loans is recognized on a cash-basis.

18



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##### Table of Contents



Table 2

|                  |  |                    |          |               |  |      |       |         |  |          |      |      |  |         |          |          |  |         |       |     |  |  |      |        |  |   |          |   |  |     |       |  |  |  |      |  
|----------------- |  | ------------------ | -------- | ------------- |  | ---- | ----- | ------- |  | -------- | ---- | ---- |  | ------- | -------- | -------- |  | ------- | ----- | --- |  |  | ---- | ------ |  | - | -------- | - |  | --- | ----- |  |  |  | ---- | -
|Quarters Ended   
|                 
|December 31, 2001 |  | September 30, 2001 |          | June 30, 2001
|                  |  |                    |          |              
|                  |  |                    |          |               |  |      |       |         |  | (1)      |      |      |  |         |          |          |  |         |       | (1) |  |  |      |        |  |   |          |   |  | (1)
|                  |  | Average            |          |               |  |      |       | Yield/  |  | Average  |      |      |  |         |          | Yield/   |  | Average |       |     |  |  |      | Yield/
|                  |  | Balance            |          | Interest      |  | Rate |       | Balance |  | Interest |      | Rate |  | Balance |          | Interest |  | Rate   
|                  |  |                    |          |               |  |      |       |         |  |          |      |      |  |         |          |          |  |        
|                  |  | $                  | 32,960.3 |               |  | $    | 550.9 |         |  |          | 6.63 | %    |  | $       | 32,428.4 |          |  | $       | 603.9 |     |  |  | 7.39 | %      |  | $ | 32,032.1 |   |  | $   | 631.1 |  |  |  | 7.90 | %
|                  |  |                    | 9,587.9  |               |  |      | 155.8 |         |  |          | 6.48 |      |  |         | 8,727.2  |          |  |         | 143.3 |     |  |  | 6.56 |        |  |   | 7,886.2  |   |  |     | 131.9 |  |  |  | 6.76 |  
|                  |  |                    | 392.5    |               |  |      | 6.9   |         |  |          | 7.04 |      |  |         | 377.3    |          |  |         | 6.5   |     |  |  | 6.90 |        |  |   | 364.5    |   |  |     | 6.8   |  |  |  | 7.59 |  
|                  |  |                    | 512.7    |               |  |      | 9.2   |         |  |          | 7.12 |      |  |         | 1,122.8  |          |  |         | 20.5  |     |  |  | 7.26 |        |  |   | 1,931.4  |   |  |     | 33.5  |  |  |  | 6.95 |  
|                  |  |                    | 56.2     |               |  |      | 1.3   |         |  |          | 8.97 |      |  |         | 61.7     |          |  |         | 1.5   |     |  |  | 9.44 |        |  |   | 70.4     |   |  |     | 1.6   |  |  |  | 9.16 |  
|                  |  |                    | 733.8    |               |  |      | 10.9  |         |  |          | 5.93 |      |  |         | 553.6    |          |  |         | 10.0  |     |  |  | 7.18 |        |  |   | 585.7    |   |  |     | 10.4  |  |  |  | 7.15 |  
|                  |  |                    |          |               |  |      |       |         |  |          |      |      |  |         |          |          |  |         |       |     |  |  |      |        |  |   |          |   |  |     |       |  |  |  |      |  
|                  |  |                    | 44,243.4 |               |  | $    | 735.0 |         |  |          | 6.60 | %    |  |         | 43,271.0 |          |  | $       | 785.7 |     |  |  | 7.21 | %      |  |   | 42,870.3 |   |  | $   | 815.3 |  |  |  | 7.64 | %
|                  |  |                    | (476.2   | )             |  |      |       |         |  |          |      |      |  |         | (470.9   | )        |  |         |       |     |  |  |      |        |  |   | (461.6   | ) |  |     |       |  |  |  |      |  
|                  |  |                    | 4,117.8  |               |  |      |       |         |  |          |      |      |  |         | 3,869.2  |          |  |         |       |     |  |  |      |        |  |   | 3,820.7  |   |  |     |       |  |  |  |      |  
|                  |  |                    |          |               |  |      |       |         |  |          |      |      |  |         |          |          |  |         |       |     |  |  |      |        |  |   |          |   |  |     |       |  |  |  |      |  
|                  |  | $                  | 47,885.0 |               |  |      |       |         |  |          |      |      |  | $       | 46,669.3 |          |  |         |       |     |  |  |      |        |  | $ | 46,229.4 |   |  |     |       |  |  |  |      |  
|                  |  |                    |          |               |  |      |       |         |  |          |      |      |  |         |          |          |  |         |       |     |  |  |      |        |  |   |          |   |  |     |       |  |  |  |      |  
|                  |  | $                  | 2,186.4  |               |  | $    | 8.8   |         |  |          | 1.61 | %    |  | $       | 2,104.6  |          |  | $       | 12.4  |     |  |  | 2.34 | %      |  | $ | 2,069.2  |   |  | $   | 13.9  |  |  |  | 2.69 | %
|                  |  |                    | 3,628.3  |               |  |      | 12.3  |         |  |          | 1.35 |      |  |         | 3,336.4  |          |  |         | 15.8  |     |  |  | 1.88 |        |  |   | 3,369.8  |   |  |     | 16.9  |  |  |  | 2.02 |  
|                  |  |                    | 20,845.7 |               |  |      | 188.9 |         |  |          | 3.60 |      |  |         | 20,919.0 |          |  |         | 234.8 |     |  |  | 4.45 |        |  |   | 20,471.5 |   |  |     | 256.9 |  |  |  | 5.03 |  
|                  |  |                    | 6,979.5  |               |  |      | 39.3  |         |  |          | 2.23 |      |  |         | 6,745.4  |          |  |         | 58.3  |     |  |  | 3.43 |        |  |   | 7,045.4  |   |  |     | 76.0  |  |  |  | 4.33 |  
|                  |  |                    | 4,221.1  |               |  |      | 55.1  |         |  |          | 5.18 |      |  |         | 4,235.2  |          |  |         | 56.9  |     |  |  | 5.33 |        |  |   | 4,242.4  |   |  |     | 58.0  |  |  |  | 5.48 |  
|                  |  |                    | 1,262.3  |               |  |      | 14.2  |         |  |          | 4.45 |      |  |         | 1,047.4  |          |  |         | 14.4  |     |  |  | 5.46 |        |  |   | 1,053.3  |   |  |     | 16.1  |  |  |  | 6.11 |  
|                  |  |                    |          |               |  |      |       |         |  |          |      |      |  |         |          |          |  |         |       |     |  |  |      |        |  |   |          |   |  |     |       |  |  |  |      |  
|                  |  |                    | 39,123.3 |               |  | $    | 318.6 |         |  |          | 3.23 | %    |  |         | 38,388.0 |          |  | $       | 392.6 |     |  |  | 4.06 | %      |  |   | 38,251.6 |   |  | $   | 437.8 |  |  |  | 4.59 | %
|                  |  |                    | 3,952.1  |               |  |      |       |         |  |          |      |      |  |         | 3,778.2  |          |  |         |       |     |  |  |      |        |  |   | 3,690.4  |   |  |     |       |  |  |  |      |  
|                  |  |                    | 836.1    |               |  |      |       |         |  |          |      |      |  |         | 781.6    |          |  |         |       |     |  |  |      |        |  |   | 732.5    |   |  |     |       |  |  |  |      |  
|                  |  |                    | 43,911.5 |               |  |      |       |         |  |          |      |      |  |         | 42,947.8 |          |  |         |       |     |  |  |      |        |  |   | 42,674.5 |   |  |     |       |  |  |  |      |  
|                  |  |                    | 3,973.5  |               |  |      |       |         |  |          |      |      |  |         | 3,721.5  |          |  |         |       |     |  |  |      |        |  |   | 3,554.9  |   |  |     |       |  |  |  |      |  
|                  |  |                    |          |               |  |      |       |         |  |          |      |      |  |         |          |          |  |         |       |     |  |  |      |        |  |   |          |   |  |     |       |  |  |  |      |  
|                  |  | $                  | 47,885.0 |               |  |      |       |         |  |          |      |      |  | $       | 46,669.3 |          |  |         |       |     |  |  |      |        |  | $ | 46,229.4 |   |  |     |       |  |  |  |      |  
|                  |  |                    |          |               |  |      |       |         |  |          |      |      |  |         |          |          |  |         |       |     |  |  |      |        |  |   |          |   |  |     |       |  |  |  |      |  
|                  |  |                    |          |               |  | $    | 416.4 |         |  |          |      |      |  |         |          |          |  | $       | 393.1 |     |  |  |      |        |  |   |          |   |  | $   | 377.5 |  |  |  |      |  
|                  |  |                    |          |               |  |      |       |         |  |          |      |      |  |         |          |          |  |         |       |     |  |  |      |        |  |   |          |   |  |     |       |  |  |  |      |  
|                  |  |                    |          |               |  |      |       |         |  |          | 3.74 | %    |  |         |          |          |  |         |       |     |  |  | 3.61 | %      |  |   |          |   |  |     |       |  |  |  | 3.54 | %
|                  |  |                    |          |               |  |      |       |         |  |          |      |      |  |         |          |          |  |         |       |     |  |  |      |        |  |   |          |   |  |     |       |  |  |  |      |  
|                  |  |                    |          |               |  |      |       |         |  |          | 3.37 | %    |  |         |          |          |  |         |       |     |  |  | 3.15 | %      |  |   |          |   |  |     |       |  |  |  | 3.05 | %
|                  |  |                    |          |               |  |      |       |         |  |          |      |      |  |         |          |          |  |         |       |     |  |  |      |        |  |   |          |   |  |     |       |  |  |  |      |  

19



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##### Table of Contents



Net Interest Income/Margin

Net interest income is the principal component of SouthTrusts earnings
and represents the difference between revenue generated by interest-earning
assets and the interest cost related to funding those assets. The net interest
margin and net interest spread are affected by the composition of
interest-earning assets and interest-bearing liabilities, competitive
pressures, and Federal Reserve Bank (the Fed) monetary policies. For
purposes of discussion, income that is either exempt from federal income taxes
or taxed at a preferential rate has been adjusted to fully taxable equivalent
(FTE) amounts, using a statutory federal tax rate of 35%.

The Companys net interest margin increased 38 basis points from the
second quarter of 2001 to 3.92% for the 2002-second quarter period. The net
interest spread between interest-earning assets and interest-bearing
liabilities increased 57 basis points from the second quarter of 2001 to 3.62%.
The improvement in the net interest margin resulted from the interest rate cuts
made by the Fed during 2001. The Company has benefited from lower funding
costs, which have typically repriced downward more quickly than its variable
rate assets.

For the remainder of 2002, some economic indicators show that the economy
is attempting to recover from last years recession. However, the economy is
being hindered by a declining stock market, low consumer confidence and
international tensions. Therefore, it is unclear exactly when the economy will
fully rebound. Many predict that it will be sometime during the latter part of
2002; however accurate economic predictions are often difficult to determine.
The Companys most likely scenario calls for interest rates to remain neutral
throughout the remainder of 2002, while rising moderately sometime during 2003.
Under this scenario, the Company expects the net interest margin to remain
stable for the remainder of 2002. Given Managements belief that interest
rates will eventually go up, SouthTrust has worked diligently on improving its
interest rate sensitivity position. During 2001, more than 85% of all new and
renewed commercial loans were made at variable rates. The Company fully
expects to continue this loan policy in 2002 and 2003, and financial models
indicate that a significant change in interest rates over the next two years
should have a minor impact on net interest margin in the latter part of 2002
and 2003.

See Table 2 for detailed information concerning quarterly average volumes,
interest, yields earned and rates paid.

Provision for Loan Losses

During the second quarter of 2002, the Company recorded a $28.7 million
provision for loan losses. This compares to a provision of $25.7 million for
the quarter ended June 30, 2001. For the six months ended June 30, 2002 and
2001, the provision for loan losses was $56.4 million and $48.6 million,
respectively. Provisions for loan losses are charged to income to bring the
allowance to a level deemed appropriate by Management based on the factors as
described in Allowance for Loan Losses later in Managements Discussion and
Analysis of Financial Condition and Results of Operations Earnings Summary.

20



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##### Table of Contents



Non-Interest Income

Total non-interest income for the quarter ended June 30, 2002 was $159.9
million, an increase of $19.4 million or 14% over the same period in 2001. For
the six-month period ended June 30, 2002, non-interest income was $313.7
million, up $42.9 million or 16% from the comparable period in 2001.

Service charges on deposit accounts, which represent the largest portion
of non-interest income, increased in both the second quarter and first six
months of 2002 by 17% from the comparable year-ago periods. These increases
are attributable to increases in the number of deposit accounts, both through
internal growth and acquisitions, and increases in certain service charge
rates. Mortgage banking operations income increased 1% for the quarter ended
June 30, 2002 compared to the quarter ended June 30, 2001. On a year-to-date
basis, mortgage-banking operations decreased 1%. Mortgage loan production in
the first six months of 2002 was lower when compared to the same period in
2001. Mortgage loans closed during the first six months of 2002 and 2001 were
$1,767.9 million and $1,930.6 million, respectively.

Fee income related to Bank cards also increased in the second quarter and
first six months of 2002 by 7% and 10%, respectively, from the comparable
year-ago periods. Debit card fees increased 26% in the second quarter of 2002
compared to the same period in 2001, and for the comparable six-month period,
the increase was 23%. Trust fees also increased in both the second quarter and
first six months of 2002 by 5% from the comparable year-ago periods. The
increases in these categories are the result of increased volume.

Investment fee income increased 35% for the quarter ended June 30, 2002
compared to the quarter ended June 30, 2001. For the six-month period ended
June 30, 2002, investment fee income was up 28% from the comparable period in
2001. The increases in investment fee income were driven by market conditions
and annuity sales. Income from bank owned life insurance (BOLI) for the
second quarter of 2002 was flat compared to the same year-ago period. For the
six-month period ended June 30, 2002, income from bank owned life insurance was
down 14% from the comparable period in 2001.

Sales of loans during the second quarter and six-month period ended June
30, 2002 resulted in gains of approximately $6.9 million and $16.3 million,
respectively. Securities gains were $1.2 million in the second quarter of 2002
and $3.4 million in the first six months of 2002.

There were no other significant non-recurring non-interest income items
recorded in the first six months of 2002 or 2001.

21



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##### Table of Contents



|                                 |  |        
|-------------------------------- |  | -------
|Non-Interest Income(In millions) |  | Table 3

|                                    |       |   |                |       |        |   |        |       |         |   |        |       |  |   |      |       |  |   |      |       | 
|----------------------------------- | ----- | - | -------------- | ----- | ------ | - | ------ | ----- | ------- | - | ------ | ----- |  | - | ---- | ----- |  | - | ---- | ----- | 
|                                    |       |   | Quarters Ended
|                                    |       |   |               
|                                    |       |   | 2002           |       | 2001  
|                                    |       |   |                |       |       
|                                    |       |   | Jun 30         |       | Mar 31 |   | Dec 31 |       | Sept 30 |   | Jun 30
|                                    |       |   |                |       |        |   |        |       |         |   |       
|Service charges on deposit accounts |       | $ | 68.5           |       |        | $ | 62.3   |       |         | $ | 63.8   |       |  | $ | 60.2 |       |  | $ | 58.5 |      
|Mortgage banking operations         |       |   | 13.8           |       |        |   | 12.6   |       |         |   | 15.4   |       |  |   | 11.8 |       |  |   | 13.6 |      
|Bank card fees                      |       |   | 11.4           |       |        |   | 10.6   |       |         |   | 10.9   |       |  |   | 10.7 |       |  |   | 10.7 |      
|Debit card fees                     |       |   | 9.8            |       |        |   | 8.5    |       |         |   | 8.5    |       |  |   | 8.3  |       |  |   | 7.8  |      
|Trust fees                          |       |   | 8.9            |       |        |   | 8.0    |       |         |   | 8.5    |       |  |   | 7.9  |       |  |   | 8.5  |      
|Investment fees                     |       |   | 15.1           |       |        |   | 13.5   |       |         |   | 16.1   |       |  |   | 13.6 |       |  |   | 11.2 |      
|Bank owned life insurance           |       |   | 12.6           |       |        |   | 12.2   |       |         |   | 12.9   |       |  |   | 12.7 |       |  |   | 12.7 |      
|Gains on loans held-for-sale, net   |       |   | 6.9            |       |        |   | 9.4    |       |         |   | 6.7    |       |  |   | 5.9  |       |  |   | 4.2  |      
|Securities gains                    |       |   | 1.2            |       |        |   | 2.2    |       |         |   | 4.0    |       |  |   | 0.6  |       |  |   | 1.9  |      
|Other                               |       |   | 11.7           |       |        |   | 14.5   |       |         |   | 14.0   |       |  |   | 7.7  |       |  |   | 11.4 |      
|                                    |       |   |                |       |        |   |        |       |         |   |        |       |  |   |      |       |  |   |      |      
|                                    | Total |   | $              | 159.9 |        |   | $      | 153.8 |         |   | $      | 160.8 |  |   | $    | 139.4 |  |   | $    | 140.5 | 
|                                    |       |   |                |       |        |   |        |       |         |   |        |       |  |   |      |       |  |   |      |      

Non-Interest Expense

Total non-interest expense increased 15% to $325.3 million in the second
quarter of 2002 as compared to the same period in 2001. On a year-to-date
basis, total non-interest expense increased 17 % from 2001 to $643.4 million.
The efficiency ratio, a measure of non-interest expense to net interest income
plus non-interest income, was 55.13% and 55.20 % for the three and six-month
periods ended June 30, 2002, respectively. The efficiency ratio for the three
and six-month periods ended June 30, 2001 was 54.87% and 54.98%, respectively.

Salaries and employee benefits expense is the largest component of
non-interest expense, accounting for 56% of total non-interest expense for the
quarter ended June 30, 2002 and 57 % of total non-interest expense for the
first six months of 2002. Salary and employee benefits expense increased
during the second quarter and first six months of 2002 by 15% and 17 %,
respectively, over the same year-ago periods. These increases related mainly
to annual merit and incentive increases, a 5% increase in the number of
full-time equivalent employees primarily due to acquisitions, and increases in
certain employee benefit costs.

Occupancy expense was up in the second quarter of 2002 versus the second
quarter of 2001 by 11%. On a year-to-date basis, the increase was 10% in 2002
as compared to the same period in 2001. Equipment expense was also up in the
second quarter and first six months of 2002 by 3% and 8%, respectively, as
compared to the same period in 2001. These increases are attributable to a
higher number of banking offices, primarily from acquisitions, as of June 30,
2002 compared to June 30, 2001. Also, certain rental rates and depreciation on
new equipment have increased during these same periods.

Data Processing expense increased 18% during the second quarter of 2002
versus the second quarter of 2001. On a year-to-date basis, the increase was
22% for 2002 as compared to the same period in 2001. These increases primarily
related to an increase in system licenses for various projects and expenses
related to upgrades for computer desktops and various systems. Communications
expense increased during the second quarter and first six months of 2002 by 21%
and 17%, respectively, over the

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same year-ago periods. These increases relate
primarily to the implementation of a new phone system during the first six
months of 2002. Once the previous phone system is phased out, overall
communication expense is expected to settle at levels lower than that
experienced in the current quarter. Expense for professional services
increased both in the second quarter and first six months of 2002 by 43%. These
increases were due primarily to an increase in advertising co-op fees, higher
consulting fees related to various projects, and increases from acquisitions.

Intangible amortization decreased during the second quarter and first six
months of 2002 by 20% and 11% respectively, over the same period in 2001.
Beginning January 1, 2002, the Company ceased amortization of goodwill as
provided in SFAS 142, Goodwill and Other Intangible Assets, which was adopted
as of that date. In lieu of amortization, goodwill will be periodically tested
for impairment, also as required by this new Statement. See Note A to the
Consolidated Condensed Financial Statements (Unaudited) for more information
regarding SFAS 142.

There were no other significant non-recurring non-interest expense items
recorded in the first six months of 2002 or 2001.

|                     |  |        
|-------------------- |  | -------
|Non-Interest Expense |  | Table 4
|(In millions)        |  |        

|                               |       |   |                |       |        |   |        |       |         |   |        |       |  |   |       |       |  |   |       |       | 
|------------------------------ | ----- | - | -------------- | ----- | ------ | - | ------ | ----- | ------- | - | ------ | ----- |  | - | ----- | ----- |  | - | ----- | ----- | 
|                               |       |   | Quarters Ended
|                               |       |   |               
|                               |       |   | 2002           |       | 2001  
|                               |       |   |                |       |       
|                               |       |   | Jun 30         |       | Mar 31 |   | Dec 31 |       | Sept 30 |   | Jun 30
|                               |       |   |                |       |        |   |        |       |         |   |       
|Salaries and employee benefits |       | $ | 183.4          |       |        | $ | 182.1  |       |         | $ | 176.5  |       |  | $ | 168.1 |       |  | $ | 159.5 |      
|Net occupancy                  |       |   | 28.1           |       |        |   | 26.6   |       |         |   | 27.4   |       |  |   | 25.2  |       |  |   | 25.3  |      
|Equipment                      |       |   | 16.7           |       |        |   | 16.5   |       |         |   | 17.2   |       |  |   | 15.6  |       |  |   | 16.2  |      
|Data processing                |       |   | 10.5           |       |        |   | 10.2   |       |         |   | 10.5   |       |  |   | 9.3   |       |  |   | 8.9   |      
|Professional services          |       |   | 18.5           |       |        |   | 14.2   |       |         |   | 16.5   |       |  |   | 10.2  |       |  |   | 12.9  |      
|Communications                 |       |   | 15.7           |       |        |   | 14.5   |       |         |   | 14.0   |       |  |   | 13.7  |       |  |   | 13.0  |      
|Intangible amortization        |       |   | 8.0            |       |        |   | 9.4    |       |         |   | 10.3   |       |  |   | 10.0  |       |  |   | 10.0  |      
|Other                          |       |   | 44.4           |       |        |   | 44.6   |       |         |   | 45.2   |       |  |   | 33.5  |       |  |   | 37.4  |      
|                               |       |   |                |       |        |   |        |       |         |   |        |       |  |   |       |       |  |   |       |      
|                               | Total |   | $              | 325.3 |        |   | $      | 318.1 |         |   | $      | 317.6 |  |   | $     | 285.6 |  |   | $     | 283.2 | 
|                               |       |   |                |       |        |   |        |       |         |   |        |       |  |   |       |       |  |   |       |      

Income Tax Expense

Income tax expense for the first quarter of 2002 was $75.7 million for an
effective tax rate of 32.4% compared to $67.9 million or an effective rate of
33.0% in the second quarter of 2001. For the six months ended June 30, 2002,
income tax expense was $150.0 million for an effective tax rate of 32.4%
compared to tax expense of $129.5 million and an effective tax rate of 32.6%
during the first six months of 2001. The statutory federal income tax rate was
35% in 2002 and 2001.

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Loans

Loans, net of unearned income at June 30, 2002 were $33,180.7 million, a
net decrease of $241.9 million over the December 31, 2001 level. During the
first quarter of 2002, $108.4 million of loans were obtained in an acquisition.
During the first quarter of 2002, $401.0 million of 1-4 family loans were
securitized and moved to the available-for-sale securities portfolio. Demand
for loans has slowed down in recent quarters, partially as a result of the
general slowdown in the economy. In addition, the Company is emphasizing more
variable-rate commercial lending than in the past as part of its
asset/liability management strategy. Also, the Company is experiencing loan
run-off in certain consumer lending areas in which the Company is no longer
originating new loans such as indirect auto lending and manufactured housing.
This trend of slower growth may continue in the near future, given the
uncertainty in the economy at this time.

The Company regularly participates in loan sales in the secondary market,
which facilitate the management of its loan portfolio. Specifically, these
sales allow the Company to manage credit concentrations, while continuing to
extend credit to customers. Loans sold, consisting mainly of 1-4 family
mortgages, amounted to approximately $1,888.7 million during the six-month
period ended June 30, 2002.

|               |  |        
|-------------- |  | -------
|Loan Portfolio |  | Table 5
|(In millions)  |  |        

|                                       |  |                |          |        |  |        |          |         |  |        |          |   |  |   |          |   |  |   |          |  
|-------------------------------------- |  | -------------- | -------- | ------ |  | ------ | -------- | ------- |  | ------ | -------- | - |  | - | -------- | - |  | - | -------- | -
|                                       |  | Quarters Ended
|                                       |  |               
|                                       |  | 2002           |          | 2001  
|                                       |  |                |          |       
|                                       |  | Jun 30         |          | Mar 31 |  | Dec 31 |          | Sept 30 |  | Jun 30
|                                       |  |                |          |        |  |        |          |         |  |       
|Commercial, financial and agricultural |  | $              | 12,738.8 |        |  | $      | 12,791.2 |         |  | $      | 12,984.5 |   |  | $ | 12,674.9 |   |  | $ | 12,571.8 |  
|Real estate construction               |  |                | 4,870.0  |        |  |        | 4,627.9  |         |  |        | 4,388.0  |   |  |   | 4,269.9  |   |  |   | 4,058.9  |  
|Commercial real estate mortgage        |  |                | 7,113.6  |        |  |        | 7,036.2  |         |  |        | 7,136.4  |   |  |   | 7,004.0  |   |  |   | 6,981.9  |  
|Residential real estate mortgage       |  |                | 5,918.8  |        |  |        | 5,772.4  |         |  |        | 6,114.2  |   |  |   | 6,030.3  |   |  |   | 5,732.7  |  
|Loans to individuals                   |  |                | 2,781.8  |        |  |        | 2,894.3  |         |  |        | 3,072.4  |   |  |   | 3,087.2  |   |  |   | 3,182.0  |  
|                                       |  |                |          |        |  |        |          |         |  |        |          |   |  |   |          |   |  |   |          |  
|                                       |  |                | 33,423.0 |        |  |        | 33,122.0 |         |  |        | 33,695.5 |   |  |   | 33,066.3 |   |  |   | 32,527.3 |  
|Unearned income                        |  |                | (242.3   | )      |  |        | (251.6   | )       |  |        | (272.9   | ) |  |   | (253.1   | ) |  |   | (284.7   | )
|                                       |  |                |          |        |  |        |          |         |  |        |          |   |  |   |          |   |  |   |          |  
|Loans, net of unearned income          |  |                | 33,180.7 |        |  |        | 32,870.4 |         |  |        | 33,422.6 |   |  |   | 32,813.2 |   |  |   | 32,242.6 |  
|Allowance for loan losses              |  |                | (488.3   | )      |  |        | (485.4   | )       |  |        | (483.1   | ) |  |   | (471.1   | ) |  |   | (462.9   | )
|                                       |  |                |          |        |  |        |          |         |  |        |          |   |  |   |          |   |  |   |          |  
|Net loans                              |  | $              | 32,692.4 |        |  | $      | 32,385.0 |         |  | $      | 32,939.5 |   |  | $ | 32,342.1 |   |  | $ | 31,779.7 |  
|                                       |  |                |          |        |  |        |          |         |  |        |          |   |  |   |          |   |  |   |          |  

Allowance for Loan Losses

The Company maintains an allowance for loan losses to absorb probable
losses inherent in the loan portfolio and is based upon Managements estimated
range of those losses. Actual losses for these loans can vary significantly
from this estimate. The Companys subsidiary bank is regulated by the State
Banking Department of the State of Alabama. SouthTrust Bank is a member bank
of the Federal Reserve System, and as such, is also subject to the regulations
of the Federal Reserve Board applicable to state member banks. Management may
also consider recommendations from these regulators in concluding on the
adequacy of the allowance for loan losses. The methodology and assumptions
used to calculate the allowance are continually reviewed as to their
appropriateness given the most recent losses realized and other factors that
influence the estimation process. The model assumptions and resulting
allowance level are adjusted accordingly as these factors change. The
historical and migration loss rates described below which are used in
determining the allowance also provide a self-correcting feature to the
methodology.

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Loans are separated by internal risk ratings into two categories for
assessment of their estimated allowance level needs; Non-problem and
Watch-list. The allowance for loan losses is calculated by applying historical
loss factors to outstanding Non-problem loans within each loan type. The loss
factors represent either the average of the last four years losses or, in some
cases, the most recent years loss experience if in Managements judgement that
loss rate is more representative of current trends in a particular loan type.
The allocation of the allowance on Non-problem loans is based on estimates of
losses inherent in this portfolio, which have not yet been specifically
identified in the Companys problem loan rating process. Watch-list loans
include any loans that have an internal credit review or regulatory rating of
less than pass, plus pass rated loans that are sound and collectible, but
contain certain characteristics that require review by Management. The
allowance associated with Watch-list loans is calculated by applying loss
factors determined through a combination of a migration analysis or an average
of the last four years loss experience, both of which are specific to
Watch-list loans. The migration analysis is performed periodically and
measures losses in relation to the internal risk ratings assigned to loans.
Additionally, certain Watch-list loans (generally large commercial credits that
the Company considers to be impaired) are specifically reviewed. The specific
review considers estimates of future cash flows, fair values of collateral and
other indicators of the borrowers ability to repay the loan.

In addition to the above, the Company considers other risk elements in
establishing the allowance for both Non-problem and Watch-list loans. These
risk elements are based on Managements evaluation of various conditions that
affect inherent losses, which are not directly measured by applying the
historical or migration loss rates. Also, in most cases, the impact of these
risk elements has not yet been reflected in the level of non-performing loans
or in the internal risk grading process. Evaluation of these elements involves
a higher degree of uncertainty since they are not directly associated with
specific problem credits. These elements are discussed below.

The Companys loan portfolio has historically experienced growth rates in
excess of our peers. While the Company strives to use prudent underwriting and
credit management standards, such growth and related underwriting risks lead to
increased losses that are not realized until after period end. Additionally,
loans acquired through the various business combinations carry additional
credit risk due to uncertainties associated with the underwriting process and
deviations from the Companys credit underwriting standards at the acquired
institutions. The Company is also subject to risk associated with certain
industry concentrations. Commercial real estate mortgage loans represent the
Companys largest concentration and although this segment of the portfolio has
performed well in recent years, Management considers the associated risk within
the commercial real estate portfolio as part of the other risk elements. The
Company has established a sound credit policy, which guides the manner in which
loans are underwritten. Exceptions from this policy may be necessary to
facilitate the lending process. The associated exception risk has also been
considered in computing the allowance.

The allowance allocated to Watch-list loans at June 30, 2002 totaled
$105.7 million, and the allowance allocated to Non-problem loans totaled $382.6
million. Based on the methodology outlined above, the total allowance for loan
losses was $488.3 million at June 30, 2002 and $483.1 million at December 31,
2001. As a percentage of outstanding loans, the total allowance for loan losses
was 1.47 %, compared to the December 31, 2001 level of 1.45%. Net charge-offs
during the three months ended June 30, 2002 totaled $25.8 million or .31% of
average net loans on an annualized basis, an increase of $2.5 million over the
2001-second quarter period. For the six months ended June 30, 2002, net
charge-offs were $53.3 million or .32% of average net loans on an annualized
basis, an increase of $7.2 million compared to the first six months of 2001.

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|                          |  |        
|------------------------- |  | -------
|Allowance for Loan Losses |  | Table 6
|(In thousands)            |  |        

|                                                         |                                                |                   |          |                |        |        |          |        |        |         |          |        |        |   |          |        |        |   |          |        |        | 
|-------------------------------------------------------- | ---------------------------------------------- | ----------------- | -------- | -------------- | ------ | ------ | -------- | ------ | ------ | ------- | -------- | ------ | ------ | - | -------- | ------ | ------ | - | -------- | ------ | ------ | 
|                                                         |                                                |                   |          | Quarters Ended
|                                                         |                                                |                   |          |               
|                                                         |                                                |                   |          | 2002           |        | 2001  
|                                                         |                                                |                   |          |                |        |       
|                                                         |                                                |                   |          | Jun 30         |        | Mar 31 |          | Dec 31 |        | Sept 30 |          | Jun 30
|                                                         |                                                |                   |          |                |        |        |          |        |        |         |          |       
|Balance beginning of quarter                             |                                                | $                 | 485,389  |                |        | $      | 483,124  |        |        | $       | 471,133  |        |        | $ | 462,905  |        |        | $ | 460,451  |       
|Loans charged-off:                                       |                                                |                   |          |                |        |        |          |        |        |         |          |        |        |   |          |        |        |   |          |       
|                                                         | Commercial, financial and agricultural         |                   |          | 14,538         |        |        |          | 17,858 |        |         |          | 24,672 |        |   |          | 18,374 |        |   |          | 12,311 |       
|                                                         | Real estate construction                       |                   |          | 0              |        |        |          | 0      |        |         |          | 0      |        |   |          | 15     |        |   |          | 0      |       
|                                                         | Commercial real estate mortgage                |                   |          | 912            |        |        |          | 197    |        |         |          | 541    |        |   |          | 37     |        |   |          | 439    |       
|                                                         | Residential real estate mortgage               |                   |          | 2,471          |        |        |          | 1,455  |        |         |          | 2,356  |        |   |          | 2,577  |        |   |          | 1,995  |       
|                                                         | Loans to individuals                           |                   |          | 11,760         |        |        |          | 11,071 |        |         |          | 12,375 |        |   |          | 11,774 |        |   |          | 12,236 |       
|                                                         |                                                |                   |          |                |        |        |          |        |        |         |          |        |        |   |          |        |        |   |          |       
|                                                         |                                                | Total charge-offs |          |                | 29,681 |        |          |        | 30,581 |         |          |        | 39,944 |   |          |        | 32,777 |   |          |        | 26,981 | 
|                                                         |                                                |                   |          |                |        |        |          |        |        |         |          |        |        |   |          |        |        |   |          |       
|Recoveries of loans previously charged-off:              |                                                |                   |          |                |        |        |          |        |        |         |          |        |        |   |          |        |        |   |          |       
|                                                         | Commercial, financial and agricultural         |                   |          | 1,295          |        |        |          | 982    |        |         |          | 2,244  |        |   |          | 956    |        |   |          | 1,207  |       
|                                                         | Real estate construction                       |                   |          | 0              |        |        |          | 1      |        |         |          | 1      |        |   |          | 1      |        |   |          | 19     |       
|                                                         | Commercial real estate mortgage                |                   |          | 175            |        |        |          | 26     |        |         |          | 4      |        |   |          | 13     |        |   |          | 1      |       
|                                                         | Residential real estate mortgage               |                   |          | 529            |        |        |          | 162    |        |         |          | 219    |        |   |          | 326    |        |   |          | 495    |       
|                                                         | Loans to individuals                           |                   |          | 1,884          |        |        |          | 1,883  |        |         |          | 1,671  |        |   |          | 1,787  |        |   |          | 1,965  |       
|                                                         |                                                |                   |          |                |        |        |          |        |        |         |          |        |        |   |          |        |        |   |          |       
|                                                         |                                                | Total recoveries  |          |                | 3,883  |        |          |        | 3,054  |         |          |        | 4,139  |   |          |        | 3,083  |   |          |        | 3,687  | 
|                                                         |                                                |                   |          |                |        |        |          |        |        |         |          |        |        |   |          |        |        |   |          |       
|Net loans charged-off                                    |                                                |                   | 25,798   |                |        |        | 27,527   |        |        |         | 35,805   |        |        |   | 29,694   |        |        |   | 23,294   |       
|Additions to allowance charged to expense                |                                                |                   | 28,728   |                |        |        | 27,650   |        |        |         | 39,334   |        |        |   | 30,400   |        |        |   | 25,748   |       
|Subsidiaries allowance at date of purchase              |                                                |                   | 21       |                |        |        | 2,142    |        |        |         | 8,462    |        |        |   | 7,522    |        |        |   | 0        |       
|                                                         |                                                |                   |          |                |        |        |          |        |        |         |          |        |        |   |          |        |        |   |          |       
|Balance at end of quarter                                |                                                | $                 | 488,340  |                |        | $      | 485,389  |        |        | $       | 483,124  |        |        | $ | 471,133  |        |        | $ | 462,905  |       
|                                                         |                                                |                   |          |                |        |        |          |        |        |         |          |        |        |   |          |        |        |   |          |       
|(In millions)                                            |                                                |                   |          |                |        |        |          |        |        |         |          |        |        |   |          |        |        |   |          |       
|Loans outstanding at quarter end,
net of unearned income |                                                | $                 | 33,180.7 |                |        | $      | 32,870.4 |        |        | $       | 33,422.6 |        |        | $ | 32,813.2 |        |        | $ | 32,242.6 |       
|Average loans outstanding,
net of unearned income        |                                                | $                 | 32,967.1 |                |        | $      | 33,367.9 |        |        | $       | 32,960.3 |        |        | $ | 32,428.4 |        |        | $ | 32,032.1 |       
|Ratios:                                                  |                                                |                   |          |                |        |        |          |        |        |         |          |        |        |   |          |        |        |   |          |       
|                                                         | Allowance to net loans outstanding             |                   |          | 1.47           | %      |        |          | 1.48   | %      |         |          | 1.45   | %      |   |          | 1.44   | %      |   |          | 1.44   | %     
|                                                         | Net loans charged-off to average net loans     |                   |          | 0.31           |        |        |          | 0.33   |        |         |          | 0.43   |        |   |          | 0.36   |        |   |          | 0.29   |       
|                                                         | Provision for loan losses to net charge-offs   |                   |          | 111.36         |        |        |          | 100.45 |        |         |          | 109.86 |        |   |          | 102.38 |        |   |          | 110.53 |       
|                                                         | Provision for loan losses to average net loans |                   |          | 0.35           |        |        |          | 0.34   |        |         |          | 0.47   |        |   |          | 0.37   |        |   |          | 0.32   |       

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Non-Performing Assets

Non-performing assets, which include non-accrual and restructured loans,
other real estate owned and other repossessed assets were $268.3 million at
June 30, 2002, a decrease of $24.1 million from December 31, 2001. The ratio
of non-performing assets to total loans plus other non-performing assets
was .81% at June 30, 2002, while the allowance to non-performing loans ratio was
251.41% for the same period. The Company has historically maintained high
credit underwriting standards, and expects the trend in non-performing assets
to be stable or slightly improving for the remainder of 2002.

|                      |  |        
|--------------------- |  | -------
|Non-performing Assets |  | Table 7
|(Dollars in millions) |  |        

|                                        |                                                                                                                   |                             |      |                |       |        |      |        |       |         |      |        |       |   |      |        |       |   |      |        |       | 
|--------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | --------------------------- | ---- | -------------- | ----- | ------ | ---- | ------ | ----- | ------- | ---- | ------ | ----- | - | ---- | ------ | ----- | - | ---- | ------ | ----- | 
|                                        |                                                                                                                   |                             |      | Quarters Ended
|                                        |                                                                                                                   |                             |      |               
|                                        |                                                                                                                   |                             |      | 2002           |       | 2001  
|                                        |                                                                                                                   |                             |      |                |       |       
|                                        |                                                                                                                   |                             |      | Jun 30         |       | Mar 31 |      | Dec 31 |       | Sept 30 |      | Jun 30
|                                        |                                                                                                                   |                             |      |                |       |        |      |        |       |         |      |       
|Non-performing loans                    |                                                                                                                   |                             |      |                |       |        |      |        |       |         |      |        |       |   |      |        |       |   |      |       
|                                        | Commercial, financial, and agricultural                                                                           |                             | $    | 131.5          |       |        | $    | 145.2  |       |         | $    | 153.2  |       |   | $    | 152.8  |       |   | $    | 160.7  |      
|                                        | Real estate construction                                                                                          |                             |      | 22.1           |       |        |      | 21.0   |       |         |      | 28.6   |       |   |      | 31.0   |       |   |      | 22.1   |      
|                                        | Commercial real estate mortgage                                                                                   |                             |      | 9.3            |       |        |      | 10.4   |       |         |      | 7.9    |       |   |      | 5.9    |       |   |      | 2.5    |      
|                                        | Residential real estate mortgage                                                                                  |                             |      | 20.1           |       |        |      | 23.8   |       |         |      | 16.5   |       |   |      | 21.5   |       |   |      | 17.5   |      
|                                        | Loans to individuals                                                                                              |                             |      | 11.2           |       |        |      | 10.1   |       |         |      | 11.3   |       |   |      | 12.0   |       |   |      | 9.8    |      
|                                        |                                                                                                                   |                             |      |                |       |        |      |        |       |         |      |        |       |   |      |        |       |   |      |       
|                                        |                                                                                                                   | Total non-performing loans  |      |                | 194.2 |        |      |        | 210.5 |         |      |        | 217.5 |   |      |        | 223.2 |   |      |        | 212.6 | 
|                                        |                                                                                                                   |                             |      |                |       |        |      |        |       |         |      |        |       |   |      |        |       |   |      |       
|Other real estate owned                 |                                                                                                                   |                             | 59.5 |                |       |        | 56.2 |        |       |         | 53.5 |        |       |   | 42.4 |        |       |   | 37.5 |       
|Other repossessed assets                |                                                                                                                   |                             | 14.6 |                |       |        | 16.6 |        |       |         | 21.4 |        |       |   | 8.7  |        |       |   | 8.8  |       
|                                        |                                                                                                                   |                             |      |                |       |        |      |        |       |         |      |        |       |   |      |        |       |   |      |       
|                                        |                                                                                                                   | Total non-performing assets |      | $              | 268.3 |        |      | $      | 283.3 |         |      | $      | 292.4 |   |      | $      | 274.3 |   |      | $      | 258.9 | 
|                                        |                                                                                                                   |                             |      |                |       |        |      |        |       |         |      |        |       |   |      |        |       |   |      |       
|Accruing loans past due 90 days or more |                                                                                                                   | $                           | 73.0 |                |       | $      | 82.8 |        |       | $       | 74.2 |        |       | $ | 66.6 |        |       | $ | 65.9 |       
|Ratios:                                 |                                                                                                                   |                             |      |                |       |        |      |        |       |         |      |        |       |   |      |        |       |   |      |       
|                                        | Non-performing loans to total loans                                                                               |                             |      | 0.59           | %     |        |      | 0.64   | %     |         |      | 0.65   | %     |   |      | 0.68   | %     |   |      | 0.66   | %    
|                                        | Non-performing assets to total loans
plus other non-performing assets                                             |                             |      | 0.81           |       |        |      | 0.86   |       |         |      | 0.87   |       |   |      | 0.83   |       |   |      | 0.80   |      
|                                        | Non-performing assets and accruing loans
90 days or more past due to total loans
plus other non-performing assets |                             |      | 1.03           |       |        |      | 1.11   |       |         |      | 1.09   |       |   |      | 1.04   |       |   |      | 1.01   |      
|                                        | Allowance to non-performing loans                                                                                 |                             |      | 251.41         |       |        |      | 230.62 |       |         |      | 222.18 |       |   |      | 211.07 |       |   |      | 217.79 |      

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Available-for-Sale and Held-to-Maturity Securities

The investment portfolio is managed to maximize yield over an entire
interest rate cycle while providing liquidity and minimizing risk. Securities
classified as held-to-maturity are carried at amortized cost, as the Company
has the ability and Management has the positive intent to hold these securities
to maturity. All securities not considered held-to-maturity or part of the
trading portfolio have been designated as available-for-sale and are carried at
fair value. Unrealized gains and losses on available-for-sale securities are
excluded from earnings and are reported net of deferred taxes as other
comprehensive income, a component of stockholders equity. This caption
includes securities that Management intends to use as part of its asset /
liability management strategy or that may be sold in response to changes in
interest rates, changes in prepayment risk, liquidity needs, or for other
purposes.

Total securities, including those designated as available-for-sale and
held-to-maturity, have increased $153.5 million since December 31, 2001.
Securities obtained through the acquisition of another financial institution
were $33.1 million during the first six months of 2002.

During the second quarter of 2002, held-to-maturity securities with a net
carrying amount of $10.0 million were sold due to credit deterioration, and a
loss of $1.4 million was recognized.

|                                                   |  |        
|-------------------------------------------------- |  | -------
|Available-for-Sale and Held-to-Maturity Securities |  | Table 8

|                                                                   |       |      |                               |         |                   |      |           |          |      |   |         |         |  |   |         |         | 
|------------------------------------------------------------------ | ----- | ---- | ----------------------------- | ------- | ----------------- | ---- | --------- | -------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                                                                   |       |      | Available-for-Sale Securities
|                                                                   |       |      |                              
|                                                                   |       |      | June 30, 2002                 |         | December 31, 2001
|                                                                   |       |      |                               |         |                  
|                                                                   |       |      | Amortized                     |         | Fair              |      | Amortized |          | Fair
|(Dollars in millions)                                              |       | Cost |                               | Value   |                   | Cost |           | Value   
|                                                                   |       |      |                               |         |                   |      |           |         
|U.S. Treasury securities                                           |       | $    | 30.0                          |         |                   | $    | 30.8      |          |      | $ | 38.2    |         |  | $ | 38.5    |        
|U.S. Government agency securities                                  |       |      | 1,342.2                       |         |                   |      | 1,372.3   |          |      |   | 336.5   |         |  |   | 333.1   |        
|Collateralized mortgage obligations
and mortgage-backed securities |       |      | 7,730.9                       |         |                   |      | 7,964.9   |          |      |   | 8,719.1 |         |  |   | 8,799.7 |        
|Obligations of states and political
subdivisions                   |       |      | 331.4                         |         |                   |      | 343.6     |          |      |   | 319.5   |         |  |   | 324.2   |        
|Other debt securities                                              |       |      | 53.3                          |         |                   |      | 52.8      |          |      |   | 98.4    |         |  |   | 95.0    |        
|Equity securities                                                  |       |      | 424.8                         |         |                   |      | 451.8     |          |      |   | 364.3   |         |  |   | 364.3   |        
|                                                                   |       |      |                               |         |                   |      |           |          |      |   |         |         |  |   |         |        
|                                                                   | Total |      | $                             | 9,912.6 |                   |      | $         | 10,216.2 |      |   | $       | 9,876.0 |  |   | $       | 9,954.8 | 
|                                                                   |       |      |                               |         |                   |      |           |          |      |   |         |         |  |   |         |        

|                                                                   |       |   |                             |       |                   |   |           |       |       |   |       |       |  |   |       |       | 
|------------------------------------------------------------------ | ----- | - | --------------------------- | ----- | ----------------- | - | --------- | ----- | ----- | - | ----- | ----- |  | - | ----- | ----- | 
|                                                                   |       |   | Held-to-Maturity Securities
|                                                                   |       |   |                            
|                                                                   |       |   | June 30, 2002               |       | December 31, 2001
|                                                                   |       |   |                             |       |                  
|                                                                   |       |   | Amortized                   |       | Fair              |   | Amortized |       | Fair 
|                                                                   |       |   | Cost                        |       | Value             |   | Cost      |       | Value
|                                                                   |       |   |                             |       |                   |   |           |       |      
|U.S. Treasury securities                                           |       | $ | 2.0                         |       |                   | $ | 2.1       |       |       | $ | 2.5   |       |  | $ | 2.6   |      
|U.S. Government agency securities                                  |       |   | 24.5                        |       |                   |   | 25.4      |       |       |   | 25.6  |       |  |   | 26.7  |      
|Collateralized mortgage obligations
and mortgage-backed securities |       |   | 217.2                       |       |                   |   | 226.9     |       |       |   | 306.1 |       |  |   | 314.6 |      
|Obligations of states and political
subdivisions                   |       |   | 47.7                        |       |                   |   | 51.7      |       |       |   | 55.1  |       |  |   | 58.7  |      
|Other debt securities                                              |       |   | 145.4                       |       |                   |   | 156.8     |       |       |   | 155.4 |       |  |   | 159.7 |      
|                                                                   |       |   |                             |       |                   |   |           |       |       |   |       |       |  |   |       |      
|                                                                   | Total |   | $                           | 436.8 |                   |   | $         | 462.9 |       |   | $     | 544.7 |  |   | $     | 562.3 | 
|                                                                   |       |   |                             |       |                   |   |           |       |       |   |       |       |  |   |       |      

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Short-Term Investments

Short-term investments at June 30, 2002 totaled $846.4 million, reflecting
a decrease of $82.6 million from the December 31, 2001 level of $929.0 million.
At June 30, 2002, short-term investments consisted of $257.0 million in
federal funds sold and securities purchased under resale agreements, $4.3
million in time deposits with other banks, $107.1 million in trading securities
and $478.0 million in loans held for sale. Securities held for trading
purposes primarily include inventory at the Companys brokerage subsidiary and
are carried at fair value. Loans held for sale, primarily 1-4 mortgage loans
in the process of being securitized and sold to third party investors, are
carried at the lower of cost or fair value.

The Companys Asset/Liability Management Committee monitors current and
future expected economic conditions, as well as the Companys liquidity
position, in determining desired balances of short-term investments and
alternative uses of such funds.

Funding

The Companys overall funding level is governed by current and expected
asset demand and capital needs. The Companys funding sources can be divided
into four broad categories: deposits, short-term borrowings, Federal Home Loan
Bank (FHLB) advances, and long-term debt. The mixture of these funding types
depends upon the Companys maturity and liquidity needs, the current rate
environment, and the availability of such funds.

The Company monitors certain ratios and liability concentrations to ensure
funding levels are maintained within established policies. These policies
include a maximum short-term liability to total asset ratio of 40% and a limit
on funding concentrations from any one source as a percent of total assets of
20%. Various maturity limits have also been established.

Deposits are the Companys primary source of funding. Total deposits at
June 30, 2002 were $31,586.9 million, down $1,047.2 million or 3% from the
December 31, 2001 level of $32,634.1 million. Of this net decrease, $1,538.0
million was from a reduction in wholesale funding sources, while core deposits
increased deposits by $490.8 million. In the first six months of 2002, $154.6
million of deposits were obtained in acquisitions. In addition, the fair value
of deposits hedged increased deposits by $8.7 million during the first six
months of 2002. At June 30, 2002 total deposits included interest-bearing
deposits of $ 27,244.8 million and other deposits of $4,342.1 million.

Short-term borrowings at June 30, 2002 were $5,190.6 million and included
federal funds purchased of $2,827.0 million, securities sold under agreements
to repurchase of $2,107.2 million and other borrowed funds of $256.4 million.
At June 30, 2002 total short-term borrowings were 11% of total liabilities and
stockholders equity. This compares to total short-term borrowings of $5,925.3
million or 12% of total liabilities and stockholders equity at December 31,
2001.

FHLB advances totaled $4,271.0 million at June 30, 2002. The current
quarter end balance is up $49.9 million from the level outstanding at December
31, 2001. The Company uses FHLB advances as an alternative to other funding
sources with similar maturities. They are also flexible, allowing the Company
to quickly obtain the necessary maturities and rates that best suit its overall
asset/liability management strategy.

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At June 30, 2002 and December 31, 2001, total long-term debt was $ 2,144.3
million and $1,263.4 million, respectively. During the first six months of
2002, $876.5 million of Bank Notes were issued by the Companys subsidiary
bank, other issuances totaled $1.0 million, other redemptions totaled $0.1
million, and the fair value adjustment related to long-term debt hedged
decreased $3.5 million. There are no scheduled maturities of long-term debt
through 2002.

Capital

The Company continually monitors current and projected capital adequacy
positions of both the Company and its subsidiary bank. Maintaining adequate
capital levels is integral to providing stability to the Company, resources to
achieve the Companys growth objectives, and returns to stockholders in the
form of dividends.

The Company is subject to various regulatory capital requirements that
prescribe quantitative measures of the Companys assets, liabilities, and
certain off-balance sheet items. The Companys regulators have also imposed
qualitative guidelines for capital amounts and classifications such as risk
weighting, capital components, and other details. The quantitative measures to
ensure capital adequacy require that the Company maintain Tier 1 and Total
capital to risk-weighted assets of 4% and 8%, respectively, and Tier 1 capital
to adjusted quarter average total assets of 4%. Failure to meet minimum
capital requirements can initiate certain actions by regulators that, if
undertaken, could have a direct material effect on the Companys financial
statements. As of the periods ended below, the Company meets all capital
adequacy requirements imposed by its regulators.

The June 30, 2002 Tier 1 and Total capital to risk weighted assets were
8.10% and 11.19%, respectively, compared to the December 31, 2001 ratios of
7.71% and 10.97%.

|                                    |  |        
|----------------------------------- |  | -------
|Capital Ratios(Dollars in millions) |  | Table 9

|                     |                                               |                          |          |         |         |        |          |         |         |         |          |         |         |   |          |         |         |   |          |         |         | 
|-------------------- | --------------------------------------------- | ------------------------ | -------- | ------- | ------- | ------ | -------- | ------- | ------- | ------- | -------- | ------- | ------- | - | -------- | ------- | ------- | - | -------- | ------- | ------- | 
|                     |                                               |                          |          | 2002    |         | 2001  
|                     |                                               |                          |          |         |         |       
|                     |                                               |                          |          | Jun 30  |         | Mar 31 |          | Dec 31  |         | Sept 30 |          | Jun 30 
|                     |                                               |                          |          |         |         |        |          |         |         |         |          |        
|Tier 1 capital:      |                                               |                          |          |         |         |        |          |         |         |         |          |         |         |   |          |         |         |   |          |        
|                     | Stockholders equity                          |                          | $        | 4,316.3 |         |        | $        | 4,037.2 |         |         | $        | 3,962.4 |         |   | $        | 3,900.1 |         |   | $        | 3,599.6 |        
|                     | Intangible assets other than
servicing rights |                          |          | (789.6  | )       |        |          | (796.9  | )       |         |          | (777.2  | )       |   |          | (666.1  | )       |   |          | (601.3  | )      
|                     | Accumulated other
comprehensive income        |                          |          | (244.6  | )       |        |          | (65.4   | )       |         |          | (91.0   | )       |   |          | (204.0  | )       |   |          | (50.7   | )      
|                     |                                               |                          |          |         |         |        |          |         |         |         |          |         |         |   |          |         |         |   |          |        
|                     |                                               | Total Tier 1 capital     |          |         | 3,282.1 |        |          |         | 3,174.9 |         |          |         | 3,094.2 |   |          |         | 3,030.0 |   |          |         | 2,947.6 | 
|                     |                                               |                          |          |         |         |        |          |         |         |         |          |         |         |   |          |         |         |   |          |        
|Tier 2 capital:      |                                               |                          |          |         |         |        |          |         |         |         |          |         |         |   |          |         |         |   |          |        
|                     | Allowable allowance for loan losses           |                          |          | 488.3   |         |        |          | 485.4   |         |         |          | 483.1   |         |   |          | 471.1   |         |   |          | 462.9   |        
|                     | Allowable long-term debt                      |                          |          | 765.0   |         |        |          | 825.0   |         |         |          | 825.0   |         |   |          | 825.0   |         |   |          | 825.0   |        
|                     |                                               |                          |          |         |         |        |          |         |         |         |          |         |         |   |          |         |         |   |          |        
|                     |                                               | Total Tier 2 capital     |          |         | 1,253.3 |        |          |         | 1,310.4 |         |          |         | 1,308.1 |   |          |         | 1,296.1 |   |          |         | 1,287.9 | 
|                     |                                               |                          |          |         |         |        |          |         |         |         |          |         |         |   |          |         |         |   |          |        
|                     |                                               | Total risk-based capital |          | $       | 4,535.4 |        |          | $       | 4,485.3 |         |          | $       | 4,402.3 |   |          | $       | 4,326.1 |   |          | $       | 4,235.5 | 
|                     |                                               |                          |          |         |         |        |          |         |         |         |          |         |         |   |          |         |         |   |          |        
|Risk-weighted assets |                                               | $                        | 40,526.2 |         |         | $      | 39,986.0 |         |         | $       | 40,124.6 |         |         | $ | 39,120.8 |         |         | $ | 38,748.2 |        
|Risk-based ratios:   |                                               |                          |          |         |         |        |          |         |         |         |          |         |         |   |          |         |         |   |          |        
|                     | Tier 1 capital                                |                          |          | 8.10    | %       |        |          | 7.94    | %       |         |          | 7.71    | %       |   |          | 7.75    | %       |   |          | 7.61    | %      
|                     | Total capital                                 |                          |          | 11.19   |         |        |          | 11.22   |         |         |          | 10.97   |         |   |          | 11.06   |         |   |          | 10.93   |        
|Leverage ratio       |                                               |                          | 6.94     |         |         |        | 6.69     |         |         |         | 6.57     |         |         |   | 6.59     |         |         |   | 6.46     |        

The Company may, from
time to time, engage in repurchases of its common stock in connection
with acquisitions or other such purposes as management deems
advisable. No such repurchases were made in the six-month period
ending June 30, 2002.

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Commitments

The Companys subsidiary bank had standby letters of credit outstanding of
approximately $1,286.2 million at June 30, 2002 and $1,127.1 million at
December 31, 2001.

The Companys subsidiary bank had outstanding commitments to extend credit
of approximately $12,512.3 million at June 30, 2002 and $12,183.3 million at
December 31, 2001. Since many of the commitments are expected to expire
without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements.

The Companys policies as to collateral and assumption of credit risk for
off-balance sheet commitments are essentially the same as those for extension
of credit to its customers.

Interest Rate Risk Management

The Companys primary market risk is its exposure to interest rate
changes. This risk has not changed materially since December 31, 2001.
Interest rate risk management strategies are designed to optimize net interest
income while minimizing fluctuations caused by changes in the interest rate
environment. It is through these strategies that the Company seeks to manage
the maturity and repricing characteristics of its balance sheet.

The modeling techniques used by SouthTrust simulate changes in net
interest income under various rate scenarios. Important elements of the
techniques include the mix of floating versus fixed rate assets and
liabilities, the scheduled repricing and maturing volumes and rates of the
existing balance sheet, the slope of the yield curve, and prepayment
assumptions. Changes in the preceding assumptions will cause these results to
change.

As of June 30, 2002, a parallel increase in interest rates of 100 basis
points would have increased net interest income by approximately $25.3 million
on an annualized basis. For the same period, a parallel decrease in interest
rates of 100 basis points would have decreased net interest income by
approximately $26.0 million on an annualized basis.

Derivative Financial Instruments

Derivative financial instruments that are used as a part of the Companys
interest rate risk management strategy include interest rate swap agreements
(swaps). These swaps qualify for hedge accounting treatment and are
designated as follows: (1) Some swaps provide for the Company to pay interest
based on the Floating London Interbank Offered Rate (LIBOR) while receiving
payments on a fixed rate. These swaps are designated as fair value hedges of
pools of fixed-rate deposit liabilities and certain fixed-rate long-term debt.
(2) Some swaps also provide for the Company to pay interest based on LIBOR
while receiving payments on a fixed rate. These swaps are designated as cash
flow hedges of the interest received on pools of floating-rate LIBOR loans.
(3) Other swaps provide for the Company to pay a fixed rate of interest while
receiving payments on a floating rate. These swaps are designated as cash flow
hedges of the interest paid on federal funds purchased and long-term bank
notes.

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##### Table of Contents



|                                |  |         
|------------------------------- |  | --------
|End User Derivative Instruments |  | Table 10

|                             |                                                   |                                |         |                       |       |           |  |          |   |          |  |       |   |        |  |      |   |                |   |      |     |  |  |      |      |   |       |      |      |  
|---------------------------- | ------------------------------------------------- | ------------------------------ | ------- | --------------------- | ----- | --------- |  | -------- | - | -------- |  | ----- | - | ------ |  | ---- | - | -------------- | - | ---- | --- |  |  | ---- | ---- | - | ----- | ---- | ---- | -
|                             |                                                   |                                |         | As of June 30, 2002  
|                             |                                                   |                                |         |                      
|                             |                                                   |                                |         | (Dollars in Millions)
|                             |                                                   |                                |         |                       |       |           |  | Weighted |   |          |  |       |   |        |  |      |   | Carrying Value
|                             |                                                   |                                |         |                       |       |           |  | Average  |   | Average  |  |       |   |        |  |     
|                             |                                                   |                                |         | Notional              |       | Maturity  |  | Received |   | Average  |  | Gross |   | Gross  |  |      |   |               
|                             |                                                   |                                |         | Balance               |       | In Months |  | Rate     |   | Pay Rate |  | Gains |   | Losses |  | Net 
|                             |                                                   |                                |         |                       |       |           |  |          |   |          |  |       |   |        |  |     
|Fair Value Hedges:           |                                                   |                                |         |                       |       |           |  |          |   |          |  |       |   |        |  |      |   |                |   |      |     |  |  |      |      |   |       |     
|                             | Interest rate swaps  received
fixed/pay floating |                                | $       | 1,526.5               |       |           |  | 30       |   |          |  | 7.09  | % |        |  | 1.98 | % |                | $ | 79.5 |     |  |  |     |      |   | $     | 79.5 |     
|Cash Flow Hedges:            |                                                   |                                |         |                       |       |           |  |          |   |          |  |       |   |        |  |      |   |                |   |      |     |  |  |      |      |   |       |     
|                             | Interest rate swaps  received
fixed/pay floating |                                |         | 450.0                 |       |           |  | 55       |   |          |  | 6.77  |   |        |  | 1.88 |   |                |   | 41.9 |     |  |  |     |      |   |       | 41.9 |     
|                             | Interest rate swaps- received
floating/pay fixed  |                                |         | 700.0                 |       |           |  | 7        |   |          |  | 2.01  |   |        |  | 2.40 |   |                |   |     |     |  |  | (2.0 | )    |   |       | (2.0 | )   
|Mortgage Lending Commitments |                                                   |                                |         |                       |       |           |  |          |   |          |  |       |   |        |  |      |   |                |   |      |     |  |  |      |      |   |       |     
|                             |                                                   | Forward contracts              |         |                       | 417.6 |           |  |          | 2 |          |  |       |  |        |  |      |  |                |   |      |    |  |  |      | (0.1 | ) |       |      | (0.1 | )
|                             |                                                   | Interest rate lock commitments |         |                       | 135.5 |           |  |          | 2 |          |  |       |  |        |  |      |  |                |   |      | 1.4 |  |  |      |     |   |       |      | 1.4  |  
|                             |                                                   |                                |         |                       |       |           |  |          |   |          |  |       |   |        |  |      |   |                |   |      |     |  |  |      |      |   |       |     
|Total Derivatives            |                                                   | $                              | 3,229.6 |                       |       |           |  |          |   |          |  |       |   |        |  |      |   |                |   |      |     |  |  |      |      | $ | 120.7 |     
|                             |                                                   |                                |         |                       |       |           |  |          |   |          |  |       |   |        |  |      |   |                |   |      |     |  |  |      |      |   |       |     

Some of the Companys derivative financial instruments do not qualify for
hedge accounting. The Companys mortgage banking subsidiary enters into
interest rate locks, where customers have locked into mortgage loans at a set
interest rate, and forward sales commitments, which are sales of mortgage loans
to third parties at a specified price. The Company also enters into various
contracts to provide derivative products to customers and enters into
offsetting positions with third parties. Since the Company offsets its
customer positions with positions through third parties, there is no impact to
net earnings for these derivatives, other than fees associated with
facilitating the transaction for the customer.

Contingencies

Certain of the Companys subsidiaries are defendants in various legal
proceedings arising in the normal course of business. These claims relate to
the lending and investment advisory services provided by the Company and
include alleged compensatory and punitive damages.

In addition, subsidiaries of the Company have been named as defendants in
suits that allege fraudulent, deceptive or collusive practices in connection
with certain financing and deposit-taking activities, including suits filed as
class actions. These suits are typical of complaints that have been filed in
recent years challenging financial transactions between plaintiffs and various
financial institutions. The complaints in such cases frequently seek punitive
damages in transactions involving fairly small amounts of actual damages, and
in recent years, have resulted in large punitive damage awards to plaintiffs.

Although it is not possible to determine with any certainty at this point
in time the potential exposure related to punitive damages in connection with
these suits, Management, based upon consultation with legal counsel, believes
that the ultimate resolutions of these proceedings will not have a material
adverse effect on the Companys financial statements.

32



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##### Table of Contents



PART II  OTHER INFORMATION

Item 4.     Submission of Matters to a Vote of Security Holders

The Annual Meeting of Stockholders of SouthTrust Corporation was held on
April 17, 2002, and the stockholders elected five nominees as directors. The
following is a tabulation of the voting on this matter.

|                  |  |           |             |                |  |  |            | 
|----------------- |  | --------- | ----------- | -------------- |  |  | ---------- | 
|Names             |  | Votes For |             | Votes Withheld
|                  |  |           |             |               
|Julian W. Banton  |  |           | 265,964,378 |                |  |  | 31,171,623 | 
|Gary N. Drummond  |  |           | 295,320,866 |                |  |  | 1,815,135  | 
|H. Allen Franklin |  |           | 295,339,533 |                |  |  | 1,796,468  | 
|Donald M. James   |  |           | 295,324,258 |                |  |  | 1,811,743  | 
|Rex J. Lysinger   |  |           | 292,927,802 |                |  |  | 4,208,199  | 

In addition, stockholders voted to approve an amendment to the Restated
Certificate of Incorporation of the Company to increase the number of shares of
Common Stock authorized for issuance from 500,000,000 to 1,000,000,000. The
number of votes for this measure was 278,915,529, the number of votes against
this measure was 15,998,234 and the number of votes abstained was 2,222,238.

Item 6. Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits
| | --- |  | --------

| |  |   |  |       |  |                                                                                                                                                                                                                                                                                                   
| |  | - |  | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | * |  | 3(i)  |  | Composite Restated Certificate of Incorporation of SouthTrust Corporation,
which was filed as Exhibit 3(i) to
SouthTrust Corporations Quarterly Report on
Form 10Q for the quarter ended March 31,
2002 (File No. 0-3613)                                                                        
| |  |   |  |       |  |                                                                                                                                                                                                                                                                                                   
| |  | * |  | 3(ii) |  | Composite Restated Bylaws of SouthTrust Corporation which was filed as Exhibit 4(e) to
the Registration Statement on Form S-4 of
SouthTrust Corporation (Registration No.
33-61557)                                                                                                               
| |  |   |  |       |  |                                                                                                                                                                                                                                                                                                   
| |  | * |  | 4(a)  |  | Articles FOURTH, SIXTH, SEVENTH, and ELEVENTH of the Restated
Certificate of Incorporation of SouthTrust Corporation (included at Exhibit 3)                                                                                                                                                      
| |  |   |  |       |  |                                                                                                                                                                                                                                                                                                   
| |  | * |  | 4(b)  |  | Certificate of Designation of Preferences and Rights of Series 1999 Junior
Participating Preferred Stock, adopted December 16, 1998 and effective February
22, 1999, which was filed as Exhibit A to Exhibit 1 to SouthTrust Corporations
Registration Statement on Form 8-A (File No. 001-14781)
| |  |   |  |       |  |                                                                                                                                                                                                                                                                                                   
| |  | * |  | 4(c)  |  | Amended and Restated Shareholders Rights Agreement, dated as of August 1,
2000 between SouthTrust Corporation and American Stock Transfer & Trust
Company, Rights Agent, which was filed as
Exhibit 1 to SouthTrust Corporations
Registration Statement on Form 8-A (File No.
001-14781)        

33



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##### Table of Contents



| |  |   |  |      |  |                                                                                                                                                                                                                                       
| |  | - |  | ---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |   |  |      |  |                                                                                                                                                                                                                                       
| |  | * |  | 4(d) |  | Indenture, dated as of May 1, 1987, between SouthTrust Corporation and National
Westminster Bank USA, which was filed as
Exhibit 4(a) to SouthTrust Corporations
Registration Statement on Form S-3
(Registration No. 33-13637)      
| |  |   |  |      |  |                                                                                                                                                                                                                                       
| |  | * |  | 4(e) |  | Subordinated Indenture, dated as of May 1, 1992, between SouthTrust Corporation
and Chemical Bank, which was filed as
Exhibit 4(b)(ii) to the Registration
Statement on Form S-3 of SouthTrust
Corporation (Registration No. 33-52717)
| |  |   |  |      |  |                                                                                                                                                                                                                                       
| |  | * |  | 4(f) |  | Form of Senior Indenture, which was filed as Exhibit 4(b)(i) to the
Registration Statement on Form S-3 of
SouthTrust Corporation (Registration No.
33-52717)                                                                          
| |  |   |  |      |  |                                                                                                                                                                                                                                       
| |  | * |  |      |  | Incorporated herein by reference                                                                                                                                                                                                      



| | (b) |  | Reports on Form 8-K filed in the second quarter of 2002: a
Form 8-K was filed on April 11, 2002, to announce the appointment of
KPMG, LLP as independent auditor for 2002.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------




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.

|                      |  |                                                                  
|--------------------- |  | -----------------------------------------------------------------
|                      |  | SOUTHTRUST CORPORATION                                           
|                      |  |                                                                  
|Date: August 13, 2002 |  | /s/ Wallace D.
Malone, Jr.                                       
|                      |  |                                                                  
|                      |  | Wallace D. Malone, Jr.
Chairman and Chief
Executive Officer      
|                      |  |                                                                  
|Date: August 13, 2002 |  | /s/ Alton E. Yother                                              
|                      |  |                                                                  
|                      |  | Alton E. Yother
Executive Vice President
Treasurer and Controller

34