<PAGE>
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003

                          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 offices)      (Zip Code)

                                 (205) 254-5000

              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all reports
         required to be filed by section 13 or 15(d) of the Securities Exchange
         Act of 1934 during the 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       [ ]

         Indicate by check mark whether the registrant is an accelerated filer
         (as defined in Rule 12b-2 of the Exchange Act)

                      Yes      [X]           No       [ ]

         At June 30, 2003, 337,529,556 shares of the Registrant's Common Stock,
         $2.50 par value, were outstanding.

================================================================================

<PAGE>

                         PART I - FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Statement Description                                                 Page(s)
---------------------                                                 -------
<S>                                                                   <C>
Consolidated Condensed Balance Sheets (Unaudited)
         June 30, 2003, December 31, 2002 and
         June 30, 2002                                                  3

Consolidated Condensed Statements of Income (Unaudited)
         Three and six months ended June 30, 2003 and 2002              4

Consolidated Condensed Statements of Stockholders' Equity
  and Comprehensive Income (Unaudited)
         Six months ended June 30, 2003 and 2002                        5

Consolidated Condensed Statements of Cash Flows (Unaudited)
         Six months ended June 30, 2003 and 2002                        6

Notes to Consolidated Condensed Financial Statements (Unaudited)        7-15
</TABLE>



         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, 2003 and 2002. Results of operations for the interim 2003 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 accounting principles generally accepted in the
United States 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, 2002. 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
                  and

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         These items are included on Pages 16-34.

ITEM 4.  CONTROLS AND PROCEDURES

         This item is included on page 35.


                                       2
<PAGE>
                             SOUTHTRUST CORPORATION
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
(In Thousands, except share data)                             JUNE 30               DECEMBER 31               JUNE 30
                                                                2003                    2002                    2002
                                                           ---------------         ---------------         ---------------
<S>                                                        <C>                     <C>                     <C>
ASSETS
  Cash and due from banks                                  $     1,185,445         $     1,005,327         $       869,635
  Short-term investments:
    Federal funds sold and securities purchased
      under resale agreements                                      108,296                   6,638                 256,959
    Interest-bearing deposits in other banks                         6,355                   4,574                   4,307
    Trading securities                                             148,198                  56,356                 107,132
    Loans held for sale                                          1,267,092               1,134,013                 477,976
                                                           ---------------         ---------------         ---------------
         Total short-term investments                            1,529,941               1,201,581                 846,374
  Available-for-sale securities                                 11,216,942              10,644,634              10,216,236
  Held-to-maturity securities(1)                                   271,291                 368,791                 436,775
  Loans                                                         34,530,291              34,483,228              33,423,017
  Less:
    Unearned income                                                233,183                 245,649                 242,279
    Allowance for loan losses                                      501,068                 498,501                 488,340
                                                           ---------------         ---------------         ---------------
         Net loans                                              33,796,040              33,739,078              32,692,398
  Premises and equipment, net                                      922,921                 918,962                 899,522
  Due from customers on acceptances                                      0                       0                  12,500
  Goodwill and core deposit intangible assets                      805,944                 797,857                 799,882
  Bank owned life insurance                                      1,005,347                 984,766                 959,647
  Other assets                                                     974,354                 909,860                 696,836
                                                           ---------------         ---------------         ---------------
         Total assets                                      $    51,708,225         $    50,570,856         $    48,429,805
                                                           ===============         ===============         ===============
LIABILITIES
  Deposits:
    Interest-bearing                                       $    28,978,343         $    28,292,911         $    27,244,732
    Non-interest-bearing                                         5,390,392               4,652,495               4,342,125
                                                           ---------------         ---------------         ---------------
         Total deposits                                         34,368,735              32,945,406              31,586,857
  Federal funds purchased and securities sold
    under agreements to repurchase                               5,105,064               4,756,286               4,934,226
  Other short-term borrowings                                      287,090                 509,658                 256,375
  Bank acceptances outstanding                                           0                       0                  12,500
  Federal Home Loan Bank advances                                3,670,881               4,470,944               4,271,005
  Long-term debt                                                 2,533,741               2,181,894               2,144,305
  Other liabilities                                              1,245,835               1,079,087                 901,923
                                                           ---------------         ---------------         ---------------
         Total liabilities                                      47,211,346              45,943,275              44,107,191
STOCKHOLDERS' EQUITY
   Preferred stock, par value $1.00 a share(2)                           0                       0                       0
   Common stock, par value $2.50 a share(3)                        891,848                 889,450                 889,017
   Capital surplus                                                 616,243                 604,034                 602,689
   Retained earnings                                             3,181,598               2,979,822               2,766,624
   Accumulated other comprehensive income                          263,107                 334,928                 244,544
   Treasury stock, at cost(4)                                     (455,917)               (180,653)               (180,260)
                                                           ---------------         ---------------         ---------------
         Total stockholders' equity                              4,496,879               4,627,581               4,322,614
                                                           ---------------         ---------------         ---------------
         Total liabilities and stockholders' equity        $    51,708,225         $    50,570,856         $    48,429,805
                                                           ===============         ===============         ===============

(1) Held-to-maturity securities-fair value                 $       305,475         $       400,587         $       462,897
(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           1,000,000,000           1,000,000,000
    Common shares issued                                       356,739,011             355,779,957             355,606,785
(4) Treasury shares of common stock                             19,209,455               8,855,791               8,840,529
</TABLE>

                                       3
<PAGE>

                             SOUTHTRUST CORPORATION
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED                SIX MONTHS ENDED
(IN THOUSANDS, EXCEPT PER SHARE DATA)                                   JUNE 30                            JUNE 30
                                                             -----------------------------      -----------------------------
                                                                 2003             2002              2003              2002
                                                             -----------       -----------      -----------       -----------
<S>                                                          <C>               <C>              <C>               <C>
INTEREST INCOME
  Loans, including fees                                      $   437,425       $   490,834      $   882,614       $   995,538
  Available-for-sale securities                                  148,502           164,281          297,468           322,698
  Held-to-maturity securities                                      5,084             8,226           11,078            17,363
  Short-term investments                                          15,109             8,446           29,555            18,131
                                                             -----------       -----------      -----------       -----------
      Total interest income                                      606,120           671,787        1,220,715         1,353,730
                                                             -----------       -----------      -----------       -----------
INTEREST EXPENSE
  Deposits                                                       116,901           153,824          238,602           321,075
  Short-term borrowings                                           15,470            23,727           32,423            52,019
  Federal Home Loan Bank advances                                 40,502            50,814           85,803           103,182
  Long-term debt                                                  16,491            15,475           31,913            28,999
                                                             -----------       -----------      -----------       -----------
      Total interest expense                                     189,364           243,840          388,741           505,275
                                                             -----------       -----------      -----------       -----------
      Net interest income                                        416,756           427,947          831,974           848,455
      Provision for loan losses                                   30,300            28,728           59,700            56,378
                                                             -----------       -----------      -----------       -----------
    NET INTEREST INCOME AFTER PROVISION FOR
        LOAN LOSSES                                              386,456           399,219          772,274           792,077

NON-INTEREST INCOME
  Service charges on deposit accounts                             72,096            68,457          142,884           130,823
  Mortgage banking operations                                     26,655            13,795           46,033            26,386
  Bankcard fees                                                   12,749            11,383           23,153            22,020
  Debit card fees                                                 11,305             9,814           21,768            18,284
  Trust fees                                                       8,630             8,950           16,053            16,921
  Investment fees                                                 18,878            15,075           35,029            28,548
  Bank owned life insurance                                       13,943            12,641           30,059            24,841
  Gains on sales of loans held for sale, net                      15,667             6,931           27,409            16,319
  Securities gains (losses), net                                  (1,379)            1,175           (2,475)            3,356
  Other                                                           17,136            11,727           32,952            26,219
                                                             -----------       -----------      -----------       -----------
      Total non-interest income                                  195,680           159,948          372,865           313,717
                                                             -----------       -----------      -----------       -----------
NON-INTEREST EXPENSE
  Salaries and employee benefits                                 199,324           183,430          393,738           365,548
  Net occupancy                                                   26,730            28,058           52,716            54,666
  Equipment                                                       16,268            16,746           32,203            33,244
  Professional services                                           15,489            18,447           28,991            32,642
  Data processing                                                 14,270            10,509           25,963            20,664
  Communications                                                  12,657            15,692           24,903            30,207
  Other                                                           39,621            47,963           77,826            96,196
                                                             -----------       -----------      -----------       -----------
      Total non-interest expense                                 324,359           320,845          636,340           633,167
                                                             -----------       -----------      -----------       -----------
Income before income taxes                                       257,777           238,322          508,799           472,627
Income tax expense                                                82,997            77,383          162,674           153,918
                                                             -----------       -----------      -----------       -----------
        NET INCOME                                           $   174,780       $   160,939      $   346,125       $   318,709
                                                             ===========       ===========      ===========       ===========
Average shares outstanding - basic (in thousands)                340,220           346,741          342,853           346,624
Average shares outstanding - diluted (in thousands)              343,578           351,464          347,017           350,937
Net income per share - basic                                 $      0.51       $      0.46      $      1.01       $      0.92
Net income per share - diluted                                      0.51              0.46             1.00              0.91
Dividends declared per share                                        0.21              0.17             0.42              0.34
</TABLE>

                                       4
<PAGE>

                             SOUTHTRUST CORPORATION
            CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                              ACCUMULATED
                                                 COMMON STOCK                                    OTHER
                                            -----------------------   CAPITAL     RETAINED   COMPREHENSIVE   TREASURY
                                              SHARES        AMOUNT    SURPLUS     EARNINGS       INCOME        STOCK     TOTAL
                                            -----------    --------   -------     --------   -------------   --------    -----
                                                                     (IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                         <C>            <C>        <C>        <C>         <C>            <C>         <C>
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       318,709            0           0       318,709
Change in:
   Unrealized gain on available-for-sale
      securities, net*                                0           0          0             0      146,936           0       146,936
   Unrealized gain on derivatives, net*               0           0          0             0        6,579           0         6,579
                                                                                                                        -----------
   Total other comprehensive income, net                                                                                    153,515
                                                                                                                        -----------
Comprehensive income                                                                                                        472,224
                                                                                                                        ===========
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   $ 2,766,624    $ 244,544   ($180,260)  $ 4,322,614
                                            ===========    ========   ========   ===========    =========   =========   ===========

BALANCE AT JANUARY 1, 2003                  346,924,166    $889,450   $604,034   $ 2,979,822    $ 334,928   $(180,653)  $ 4,627,581

Net income                                            0           0          0       346,125            0           0       346,125
Change in:
   Unrealized loss on available-for-sale
      securities, net*                                0           0          0             0      (70,681)          0       (70,681)
   Unrealized gain on derivatives, net*               0           0          0             0        2,317           0         2,317
   Additional minimum benefit liability
     adjustment, net*                                 0           0          0             0       (3,457)          0        (3,457)
                                                                                                                        -----------
   Total other comprehensive loss, net                                                                                      (71,821)
                                                                                                                        -----------
Comprehensive income                                                                                                        274,304
                                                                                                                        ===========
Dividends declared ($.42 per share)                   0           0          0      (144,349)           0           0      (144,349)
Common stock issued pursuant to:
     Long-term incentive plan                   814,238       2,036      9,603             0            0           0        11,639
     Employee discounted stock
       purchase plan                            144,816         362      2,606             0            0           0         2,968
Treasury stock acquired                     (10,353,664)          0          0             0            0    (275,264)     (275,264)
                                            -----------    --------   --------   -----------    ---------   ---------   -----------
BALANCE AT JUNE 30, 2003                    337,529,556    $891,848   $616,243   $ 3,181,598    $ 263,107   $(455,917)  $ 4,496,879
                                            ===========    ========   ========   ===========    =========   =========   ===========
</TABLE>

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


                                       5
<PAGE>

               SOUTHTRUST CORPORATION
   CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                     (UNAUDITED)

<TABLE>
<CAPTION>

                                                                   SIX MONTHS ENDED
(In Thousands)                                                          JUNE 30
                                                              -----------------------------
                                                                 2003               2002
                                                              -----------       -----------
<S>                                                           <C>               <C>
OPERATING ACTIVITIES
  Net income                                                  $   346,125       $   318,709
  Adjustments to reconcile net income to net cash
    provided by operating activities:
   Provision (credit) for:
      Loan losses                                                  59,700            56,378
      Depreciation of premises and equipment                       31,085            29,008
      Amortization of intangibles                                   8,891             7,399
      Amortization of security premium                              2,651             1,607
      Accretion of security discount                              (17,232)           (9,522)
      Deferred income taxes                                        23,018            13,674
      Bank owned life insurance                                   (30,059)          (24,841)
   Gain on sales of loans held for sale, net                      (27,409)          (16,319)
   Securities (gains) losses, net                                   2,475            (3,356)
   Origination of loans held for sale                          (3,330,821)       (1,578,994)
   Proceeds from sales of loans held for sale                   3,225,151         1,905,048
   Net increase in trading securities                             (91,842)          (45,852)
   Net increase in other assets                                   (76,510)          (34,253)
   Net increase in other liabilities                              143,908           150,493
                                                              -----------       -----------
       Net cash provided by operating activities                  269,131           769,179

INVESTING ACTIVITIES
  Proceeds from maturities, calls or prepayments of:
     Available-for-sale securities                              3,043,308         1,311,842
     Held-to-maturity securities                                   97,762            98,215
   Proceeds from sales of:
     Available-for-sale securities                              1,164,713         1,006,046
     Held-to-maturity securities                                        0             8,568
   Purchases of:
     Available-for-sale securities                             (4,824,096)       (1,940,105)
     Premises and equipment                                       (33,919)          (87,939)
  Net increase in:
     Short-term investments                                       (95,139)         (207,039)
     Loans                                                        (21,506)         (100,436)
  Net cash paid in acquisitions                                   (17,149)          (31,300)
                                                              -----------       -----------
     Net cash provided by (used in) investing activities         (686,026)           57,852

FINANCING ACTIVITIES
  Net increase (decrease) in:
     Deposits                                                   1,328,752        (1,193,094)
     Short-term borrowings                                        125,159          (738,095)
  Proceeds from:
     Common Stock issuances                                        12,377             4,753
     Federal Home Loan Bank advances                              300,013           200,013
     Long-term debt issuances                                     450,000           877,484
  Payments for:
     Repurchase of common stock                                  (274,774)                0
     Federal Home Loan Bank advances                           (1,100,076)         (150,074)
     Long-term debt                                              (100,514)              (86)
     Cash dividends                                              (143,924)         (117,533)
                                                              -----------       -----------
     Net cash provided by (used in) financing activities          597,013        (1,116,632)
                                                              -----------       -----------
     INCREASE (DECREASE) IN CASH AND DUE FROM BANKS               180,118          (289,601)
  CASH AND DUE FROM BANKS AT BEGINNING OF YEAR                  1,005,327         1,159,236
                                                              -----------       -----------
  CASH AND DUE FROM BANKS AT END OF PERIOD                    $ 1,185,445       $   869,635
                                                              ===========       ===========
</TABLE>


                                       6
<PAGE>

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Note A - Recent Accounting Pronouncements

Statement of Financial Accounting Standards ("SFAS") 147 - Acquisitions of
Certain Financial Institutions

         In October 2002, the Financial Accounting Standards Board ("FASB")
issued SFAS 147, which removes certain acquisitions of financial institutions
(other than transactions between two or more mutual enterprises) from the scope
of SFAS 72, Accounting for Certain Acquisitions of Banking or Thrift
Institutions and FASB Interpretation 9, Applying APB Opinions 16 and 17 When a
Savings and Loan or a Similar Institution Is Acquired in a Business Combination
Accounted for by the Purchase Method. These types of transactions are now
accounted for under SFAS 141, Business Combinations and SFAS 142, Goodwill and
Other Intangible Assets. In addition, this Statement amends SFAS 144, Accounting
for the Impairment or Disposal of Long-Lived Assets, to include in its scope
long-term customer relationship intangible assets of financial institutions. The
provisions of this Statement were effective October 1, 2002, with earlier
adoption permitted; the Company early-adopted effective September 30, 2002 and
retroactively restated amortization expense for 2002. Therefore, the June 30,
2002 comparative information included in this report has been restated for the
adoption of SFAS 147.

SFAS 148 - Accounting for Stock-Based Compensation - Transition and Disclosure

         In December 2002, the FASB issued SFAS 148, which provides alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based compensation. In addition, this Statement amends the
disclosure requirements of SFAS 123, Accounting for Stock-Based Compensation, to
require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. Finally, this Statement amends
Accounting Principles Bulletin ("APB") Opinion 28, Interim Financial Reporting,
to require disclosure about those effects in interim financial information. This
Statement is effective for fiscal and interim periods ending after December 15,
2002. The effect of this Statement on the Consolidated Financial Statements was
not material.

         The Company applies APB Opinion 25, Accounting for Stock Issued to
Employees, and related Interpretations in accounting for employee stock
compensation plans and, accordingly, does not recognize compensation cost for
stock options granted when the option price is greater than or equal to the
underlying stock price. This accounting method is referred to as the intrinsic
value method. The Company follows the pro-forma disclosures of SFAS 123, as
amended by SFAS 148, using the fair value method of accounting for stock-based
compensation.


                                       7
<PAGE>

         If the Company had elected to recognize compensation cost for options
based on the fair value of the options as permitted by SFAS 123, net income and
earnings per share would have been reduced to the pro forma amounts indicated
below:

<TABLE>
<CAPTION>

(Dollars in Thousands, except per share data)          Three Months Ended                 Six Months Ended
                                                -------------------------------     -------------------------------
                                                June 30, 2003     June 30, 2002     June 30, 2003     June 30, 2002
                                                -------------     -------------     -------------     -------------
<S>                                             <C>               <C>               <C>               <C>
Net income - as reported                         $   174,780       $   160,939       $   346,125       $   318,709
Deduct: Total stock-based employee
   compensation expense determined
   under fair value based methods,
   net of related tax effects                         (2,936)           (2,391)           (5,884)      $    (4,611)
                                                 -----------       -----------       -----------       -----------
Net income - pro forma                           $   171,844       $   158,548       $   340,241       $   314,098
                                                 ===========       ===========       ===========       ===========

Earnings per share - as reported
   Basic                                         $      0.51        $     0.46       $      1.01       $      0.92
   Diluted                                              0.51              0.46              1.00              0.91

Earnings per share- pro forma
   Basic                                         $      0.51        $     0.46       $      0.99       $      0.91
   Diluted                                              0.50              0.45              0.98              0.90
</TABLE>

         The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option-pricing model using the following assumptions:

<TABLE>
<CAPTION>
                                                Three and Six Months Ended
                                              -------------------------------
                                              June 30, 2003     June 30, 2002
                                              -------------     -------------
<S>                                           <C>               <C>
Expected dividend yield                               3.20%             3.21%
Expected stock price volatility                          28                28
Risk-free interest rate                                3.67              4.82
Expected life of options                            7 years           7 years
</TABLE>

         The FASB plans to issue an Exposure Draft for a new Statement later
this year that could become effective in 2004, which would require all companies
to expense the value of employee stock options and measure that cost according
to the fair value of the options. Until a new Statement is issued, the
provisions of APB 25, SFAS 123 and SFAS 148 remain in effect. Management is
currently assessing the provisions of the impending Exposure Draft and has not
yet determined its potential impact to the Consolidated Financial Statements.


                                       8
<PAGE>

SFAS 149 - Amendment of Statement 133 on Derivative Instruments and Hedging
Activities

         In April 2003, the FASB issued SFAS 149, which amends and clarifies
accounting for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities under SFAS 133. In
particular, this Statement clarifies under what circumstances a contract with an
initial net investment meets the characteristic of a derivative as discussed in
SFAS 133. In addition, it clarifies when a derivative contains a financing
component that warrants special reporting in the statement of cash flows.
Finally, this Statement amends certain other existing pronouncements. This
Statement is effective for contracts entered into or modified after June 30,
2003, except as stated below, and for hedging relationships designated after
June 30, 2003. The provisions of this Statement that relate to SFAS 133
Implementation Issues that have been effective for fiscal quarters that began
prior to June 15, 2003, should continue to be applied in accordance with their
respective effective dates. In addition, certain provisions relating to forward
purchases or sales of when-issued securities or other securities that do not yet
exist, should be applied to existing contracts as well as new contracts entered
into after June 30, 2003. The effect of this Statement on the Consolidated
Financial Statements was not material.

SFAS 150 - Accounting for Certain Financial Instruments with Characteristics of
Both Liabilities and Equity

         In May 2003, the FASB issued SFAS 150, which establishes standards for
how an issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances). Many of those instruments were previously
classified as equity. SFAS 150 affects the issuer's accounting for three types
of freestanding financial instruments. One type is mandatorily redeemable
shares, which the issuing company is obligated to buy back in exchange for cash
or other assets. A second type, which includes put options and forward purchase
contracts, involves instruments that do or may require the issuer to buy back
some of its shares in exchange for cash or other assets. The third type of
instrument that is a liability under this Statement is an obligation that can be
settled with shares, the monetary value of which is fixed, tied solely or
predominantly to a variable such as a market index, or varies inversely with the
value of the issuers' shares. SFAS 150 does not apply to features embedded in a
financial instrument that is not a derivative in its entirety. In addition to
its requirements for the classification and measurement of financial instruments
in its scope, SFAS 150 also requires disclosures about alternative ways of
settling the instruments and the capital structure of entities, all of whose
shares are mandatorily redeemable. Most of the guidance in SFAS 150 is effective
for all financial instruments entered into or modified after May 31, 2003, and
otherwise is effective at the beginning of the first interim period beginning
after June 15, 2003. The Company currently does not have any of these types of
financial instruments and therefore the effect of this Statement on the
Consolidated Financial Statements was not material.


                                       9
<PAGE>

FASB Interpretation ("FIN") 45 - Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others

         In November 2002, the FASB issued FIN 45, which elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize, at the inception of
the guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and initial measurement
provisions of this Interpretation are applied prospectively to guarantees issued
or modified after December 31, 2002. The adoption of these recognition
provisions did not result in the recording of any significant additional
liabilities associated with certain guarantees provided by the Company. The
disclosure requirements of this Interpretation are effective for financial
statements of interim or annual periods ending after December 15, 2002. The
effect of this Interpretation on the Consolidated Financial Statements was not
material.

         The Company currently has guarantees in the forms of standby letters of
credit and first-loss guarantees on securitizations. Standby letters of credit
are conditional commitments issued to guarantee the performance of a customer to
a third party. The Company's subsidiary bank had commitments to issue standby
letters of credit outstanding of approximately $1,358.8 million at June 30, 2003
and $1,384.3 million at December 31, 2002. In addition, the Company has recorded
a liability for the estimated fair value of these standby letters of credit of
approximately $2.0 million at June 30, 2003 and $1.9 million at December 31,
2002. The average term for standby letters of credit is approximately one year.

         Prior to December 31, 2002, the Company participated in securitizations
of its 1-4 family mortgage loans, where the Company received 100% of the
securities backed by the 1-4 family mortgage loans. These securities are
guaranteed by the Federal Home Loan Mortgage Corporation ("FHLMC") and the
Federal National Mortgage Association ("FNMA"). The Company provided first-loss
guarantees in some of these securitizations, which provide for the Company to
reimburse FHLMC or FNMA a certain percentage of credit losses. The maximum
potential future payments the Company could be required to make under these
guarantees at June 30, 2003 was $68.8 million, which is not recorded as a
liability since the securitizations were not accounted for as sales
transactions. The Company has pledged $44.8 million in available-for-sale
securities to support these guarantees as of June 30, 2003.

FIN 46 - Consolidation of Variable Interest Entities

         In January 2003, the FASB issued FIN 46, which clarifies the
application of ARB 51, Consolidated Financial Statements, to certain entities
(called variable interest entities) in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. The disclosure requirements
of this Interpretation are effective for all financial statements issued after
January 31, 2003. The consolidation requirements apply to all variable interest
entities created after January 31, 2003. In addition, public companies must
apply the consolidation requirements to variable interest entities that existed
prior to February 1, 2003 and remain in existence as of the beginning of annual
or interim periods beginning after June 15, 2003. The effect of this
Interpretation on the Consolidated Financial Statements was not material.


                                       10
<PAGE>

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:

<TABLE>
<CAPTION>

                                        Three months ended June 30  Six months ended June 30
(In Thousands, except per share data)       2003          2002          2003         2002
                                          --------      --------      --------      --------
<S>                                     <C>             <C>         <C>             <C>
Basic:
Net income                                $174,780      $160,939      $346,125      $318,709
Average common shares outstanding          339,534       346,741       342,508       346,624
Service contingency                            686             0           345             0
                                          --------      --------      --------      --------
Average basic shares outstanding           340,220       346,741       342,853       346,624
                                          --------      --------      --------      --------
Earnings per share                        $   0.51      $   0.46      $   1.01      $   0.92
                                          ========      ========      ========      ========
Diluted:
Net income                                $174,780      $160,939      $346,125      $318,709
Average common shares outstanding          339,534       346,741       342,508       346,624
Service contingency                            686             0           345             0
Dilutive effect of stock options and
performance shares                           3,358         4,723         4,164         4,313
                                          --------      --------      --------      --------
Average diluted shares outstanding         343,578       351,464       347,017       350,937
                                          --------      --------      --------      --------
Earnings per share                        $   0.51      $   0.46      $   1.00      $   0.91
                                          ========      ========      ========      ========
</TABLE>

         In addition, the Company had zero and 1,418,992 options issued that
were not included in the calculation of diluted EPS for the three and six-month
periods ending June 30, 2003, as the exercise price of these options was in
excess of the average market price. There were no such excluded options for the
three and six-month periods ending June 30, 2002.


                                       11
<PAGE>

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 and Comprehensive Income.

         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:

<TABLE>
<CAPTION>
                                                                          Three months ended June 30
                                                                  2003                                     2002
                                                   -----------------------------------      -----------------------------------
(In Thousands)                                      Before        Tax         Net of         Before         Tax         Net of
                                                     Tax         Effect         Tax           Tax         Effect         Tax
                                                   --------      -------      --------      --------     --------      --------
<S>                                                <C>           <C>          <C>           <C>          <C>           <C>
Unrealized gain (loss) on  securities:
Unrealized holding gains (losses) arising
    during the period                              $(15,091)     $ 4,222      $(10,869)     $257,424     $(89,265)     $168,159
Less: net realized gains (losses)                    (1,379)         524          (855)        2,607         (991)        1,616
                                                   --------      -------      --------      --------     --------      --------
Net unrealized gain (loss) on securities            (13,712)       3,698       (10,014)      254,817      (88,274)      166,543
                                                   --------      -------      --------      --------     --------      --------
Unrealized gain on derivatives:
Unrealized holding gains arising
    during the period                                 9,893       (3,759)        6,134        17,017       (1,659)       15,358
Less: reclassification adjustment                     5,550       (2,109)        3,441         4,367       (1,659)        2,708
                                                   --------      -------      --------      --------     --------      --------
Net unrealized gain on derivatives                    4,343       (1,650)        2,693        12,650            0        12,650
                                                   --------      -------      --------      --------     --------      --------
Total Other Comprehensive Income (Loss)            $ (9,369)     $ 2,048      $ (7,321)     $267,467     $(88,274)     $179,193
                                                   ========      =======      ========      ========     ========      ========
</TABLE>


<TABLE>
<CAPTION>
                                                                           Six months ended June 30
                                                                  2003                                     2002
                                                   -----------------------------------      -----------------------------------
(In Thousands)                                      Before        Tax         Net of         Before         Tax         Net of
                                                     Tax         Effect         Tax           Tax         Effect         Tax
                                                   --------      -------      --------      --------     --------      --------
<S>                                                <C>           <C>          <C>           <C>          <C>           <C>
Unrealized gain (loss) on securities:
Unrealized holding gains (losses) arising
    during the period                              $(76,999)     $ 4,784      $(72,215)     $229,603     $(79,698)     $149,905
Less: net realized gains (losses)                    (2,475)         941        (1,534)        4,788       (1,819)        2,969
                                                   --------      -------      --------      --------     --------      --------
Net unrealized gain (losses) on securities          (74,524)       3,843       (70,681)      224,815      (77,879)      146,936
                                                   --------      -------      --------      --------     --------      --------
Unrealized gain on derivatives:
Unrealized holding gains arising
    during the period                                14,469       (5,498)     $  8,971        15,129       (3,249)       11,880
Less: reclassification adjustment                    10,732       (4,078)        6,654         8,550       (3,249)        5,301
                                                   --------      -------      --------      --------     --------      --------
Net unrealized gain on derivatives                    3,737       (1,420)        2,317         6,579            0         6,579
                                                   --------      -------      --------      --------     --------      --------
Additional minimum benefit liability adjustment      (5,576)       2,119        (3,457)           --           --            --
                                                   --------      -------      --------      --------     --------      --------
Total Other Comprehensive Income (Loss)            $(76,363)     $ 4,542      $(71,821)     $231,394     $(77,879)     $153,515
                                                   ========      =======      ========      ========     ========      ========
</TABLE>



                                       12
<PAGE>

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, 2003 and 2002.

<TABLE>
<CAPTION>

(In Thousands)                                                  Six Months Ended June 30
                                                                2003                2002
                                                              --------            --------
<S>                                                           <C>                 <C>
Cash paid during period for:
   Interest                                                   $400,327            $551,984
   Income taxes                                                 70,416              22,323

Noncash transactions:
   Assets acquired in business combinations                    113,413             170,761
   Liabilities assumed in business combinations                104,953             160,758
   Loans transferred to other real estate                       30,195              43,376
   Financed sales of foreclosed property                        33,735              31,010
   Loans securitized into mortgage-backed securities                 0             400,728
</TABLE>

Note E - Business Combinations

         During the first six months of 2003, the Company completed the
following acquisition:

<TABLE>
<CAPTION>
(In Millions)                                                                          Consideration
                                                                                      ---------------
                                                                                               Common
    Date                Institution           Location    Assets   Loans    Deposits   Cash    Shares
-------------   -------------------------    ----------   ------   ------   --------  ------   ------
<S>             <C>                          <C>          <C>      <C>      <C>       <C>      <C>
April 4, 2003   Founders Bancshares, Inc.    Dallas, TX   $113.4   $82.1     $103.8    $23.2       --
</TABLE>

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


                                       13
<PAGE>

Note F - 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 corporate customers throughout all areas covered by SouthTrust. Types of
corporate lending include the following: commercial and industrial, commercial
real estate, middle-market lending, leasing, asset-based lending and health
care. The Regional Banking segment generates revenues through the Company's
branch banking network. Services and products include retail and small business
lending, depository services, and business banking. Also included in Regional
Banking are some residential construction lending and certain centralized
consumer lending areas such as mortgage lending and auto leasing. 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, insurance services and private
banking. All of these areas are managed as one area with the goal of providing a
variety of financial management products to customers.

         The remaining Company divisions included within the Reconciliation
grouping are divisions that have no operating revenue. They contain unallocated
costs not directly associated with the other reportable segments. Other items in
this grouping include income from bank owned life insurance, provisions for loan
losses in excess of the amounts allocated to the operating segments, 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, 2002, 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 Company's 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 the mix of the different loan types. Data processing
and other support function costs are allocated to operating segments primarily
based on resource usage.

         The Company's management accounting policies are continuously evolving
based on both internal and external factors. Therefore, the Company has restated
the comparative 2002 segment information to conform to the 2003 presentation.
The restatement for 2002 includes organizational structure changes made during
mid-2002, changes to the allocation of interest rate risk, changes to the
allocations of support function costs to operating segments and changes in the
allocation of the provision for loan losses. 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.


                                       14
<PAGE>

         The following tables present the Company's business segment information
for the three and six month periods ended June 30, 2003 and 2002:

<TABLE>
<CAPTION>
                                                                 Three months ended June 30, 2003
                                 -----------------------------------------------------------------------------------------------
                                 Commercial       Regional          Funds            Capital        Reconciling          Total
(In millions)                      Banking         Banking        Management       Management          Items            Company
                                 ----------       ---------       ----------       ----------       -----------        ---------
<S>                              <C>              <C>             <C>              <C>              <C>                <C>
Net interest margin (FTE)....    $   104.2        $   242.9        $   120.5        $    14.4        $   (62.3)        $   419.7
Provision for loan losses....          6.4             20.9              0.0              0.7              2.3              30.3
Non-interest income..........         10.8            141.6              1.3             29.7             12.3             195.7
Non-interest expense.........         43.7            286.1              1.5             30.6            (37.5)            324.4
                                 ---------        ---------        ---------        ---------        ---------         ---------
     Pre-tax income..........         64.9             77.5            120.3             12.8            (14.8)            260.7
Income tax expense (FTE).....          0.0              0.0              0.0              0.0             85.9              85.9
                                 ---------        ---------        ---------        ---------        ---------         ---------
     Net income..............    $    64.9        $    77.5        $   120.3        $    12.8        $  (100.7)        $   174.8
                                 =========        =========        =========        =========        =========         =========
</TABLE>


<TABLE>
<CAPTION>
                                                                   Six months ended June 30, 2003
                                 -----------------------------------------------------------------------------------------------
                                 Commercial       Regional          Funds            Capital        Reconciling          Total
(In millions)                      Banking         Banking        Management       Management          Items            Company
                                 ----------       ---------       ----------       ----------       -----------        ---------
<S>                              <C>              <C>             <C>              <C>              <C>                <C>
Net interest margin (FTE)....    $   208.3            481.5            242.8             27.8           (122.6)        $   837.8
Provision for loan losses....         14.0             42.4              0.0              1.7              1.6              59.7
Non-interest income..........         20.9            267.5              3.3             55.5             25.7             372.9
Non-interest expense.........         73.2            553.6              7.4             55.3            (53.1)            636.4
                                 ---------        ---------        ---------        ---------        ---------         ---------
     Pre-tax income..........        142.0            153.0            238.7             26.3            (45.4)            514.6
Income tax expense (FTE).....          0.0              0.0              0.0              0.0            168.5             168.5
                                 ---------        ---------        ---------        ---------        ---------         ---------
     Net income..............    $   142.0        $   153.0        $   238.7        $    26.3        $  (213.9)        $   346.1
                                 =========        =========        =========        =========        =========         =========
Ending assets................    $14,625.3        $21,355.0        $12,718.5        $ 1,329.9        $ 1,679.5         $51,708.2
                                 =========        =========        =========        =========        =========         =========
</TABLE>


<TABLE>
<CAPTION>
                                                                 Three months ended June 30, 2002
                                 -----------------------------------------------------------------------------------------------
                                 Commercial       Regional          Funds            Capital        Reconciling          Total
(In millions)                      Banking         Banking        Management       Management          Items            Company
                                 ----------       ---------       ----------       ----------       -----------        ---------
<S>                              <C>              <C>             <C>              <C>              <C>                <C>
Net interest margin (FTE)....    $    96.8        $   229.6        $   147.4        $    12.0        $   (54.5)        $   431.3
Provision for loan losses....          8.8             22.6              0.1              0.1             (2.9)             28.7
Non-interest income..........          8.3            112.2              1.3             25.9             12.2             159.9
Non-interest expense.........         36.3            288.4              5.8             26.5            (36.2)            320.8
                                 ---------        ---------        ---------        ---------        ---------         ---------
     Pre-tax income..........         60.0             30.8            142.8             11.3             (3.2)            241.7
Income tax expense (FTE).....          0.0              0.0              0.0              0.0             80.8              80.8
                                 ---------        ---------        ---------        ---------        ---------         ---------
     Net income..............    $    60.0        $    30.8        $   142.8        $    11.3        $   (84.0)        $   160.9
                                 =========        =========        =========        =========        =========         =========
</TABLE>


<TABLE>
<CAPTION>
                                                                   Six months ended June 30, 2002
                                 -----------------------------------------------------------------------------------------------
                                 Commercial       Regional          Funds            Capital        Reconciling          Total
(In millions)                      Banking         Banking        Management       Management          Items            Company
                                 ----------       ---------       ----------       ----------       -----------        ---------
<S>                              <C>              <C>             <C>              <C>              <C>                <C>
Net interest margin (FTE)....    $   192.5        $   456.7        $   298.5        $    23.4        $  (116.0)        $   855.1
Provision for loan losses....         14.4             35.4              0.1              0.1              6.4              56.4
Non-interest income..........         17.0            220.1              4.0             49.1             23.5             313.7
Non-interest expense.........         64.5            543.8             12.8             49.4            (37.4)            633.1
                                 ---------        ---------        ---------        ---------        ---------         ---------
     Pre-tax income..........        130.6             97.6            289.6             23.0            (61.5)            479.3
Income tax expense (FTE).....          0.0              0.0              0.0              0.0            160.6             160.6
                                 ---------        ---------        ---------        ---------        ---------         ---------
     Net income..............    $   130.6        $    97.6        $   289.6        $    23.0        $  (222.1)        $   318.7
                                 =========        =========        =========        =========        =========         =========
Ending assets................    $13,403.6        $20,577.6        $11,618.4        $ 1,115.0        $ 1,715.2         $48,429.8
                                 =========        =========        =========        =========        =========         =========
</TABLE>

                                       15
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
         and
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


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 698 banking locations in Alabama, Florida,
Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Texas and
Virginia. As of June 30, 2003, the Company had consolidated total assets of
$51.7 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 F 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
<PAGE>

SELECTED QUARTERLY FINANCIAL DATA                                        TABLE 1
(DOLLARS IN MILLIONS EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                   Quarters Ended
                                                   -----------------------------------------------------------------------------
                                                              2003                                       2002
                                                   ---------------------------       -------------------------------------------
                                                     Jun 30           Mar 31           Dec 31         Sept 30           Jun 30
                                                   ----------       ----------       ----------      ----------       ----------
<S>                                                <C>              <C>              <C>             <C>              <C>
EARNINGS SUMMARY:
        Interest income                            $    606.1       $    614.6       $    646.9      $    664.7       $    671.8
        Interest expense                                189.3            199.4            219.3           235.7            243.9
                                                   ----------       ----------       ----------      ----------       ----------
        Net interest income                             416.8            415.2            427.6           429.0            427.9
        Provision for loan losses                        30.3             29.4             34.0            36.3             28.7
                                                   ----------       ----------       ----------      ----------       ----------
        Net interest income after
            provision for loan losses                   386.5            385.8            393.6           392.7            399.2
        Non-interest income                             197.1            178.3            180.8           167.2            158.7
        Securities gains (losses)                        (1.4)            (1.1)             0.1            (0.8)             1.2
        Non-interest expense                            324.4            312.0            327.7           316.0            320.8
                                                   ----------       ----------       ----------      ----------       ----------
        Income before income taxes                      257.8            251.0            246.8           243.1            238.3
        Income taxes                                     83.0             79.7             79.9            78.8             77.4
                                                   ----------       ----------       ----------      ----------       ----------
        Net income                                 $    174.8       $    171.3       $    166.9      $    164.3       $    160.9
                                                   ==========       ==========       ==========      ==========       ==========
PER COMMON SHARE:
        Net income - basic                         $     0.51       $     0.50       $     0.48      $     0.47       $     0.46
        Net income - diluted                             0.51             0.49             0.48            0.47             0.46
        Cash dividends declared                          0.21             0.21             0.17            0.17             0.17
        Book value                                      13.32            13.23            13.34           13.07            12.47
        Market value-high                               29.98            27.44            26.66           27.14            27.20
        Market value-low                                26.75            24.19            20.76           20.52            24.86

ENDING BALANCES:
        Loans, net of unearned income              $ 34,297.1       $ 34,440.4       $ 34,237.6      $ 33,600.0       $ 33,180.7
        Total assets                                 51,708.2         51,348.6         50,570.9        49,753.7         48,429.8
        Deposits                                     34,368.7         32,312.8         32,945.4        31,563.9         31,586.9
        Federal Home Loan Bank advances               3,670.9          4,220.9          4,470.9         4,471.0          4,271.0
        Long-term debt                                2,533.7          2,329.0          2,181.9         2,185.1          2,144.3
        Stockholders' equity                          4,496.9          4,523.1          4,627.6         4,534.3          4,322.6
        Common shares (in thousands)                  337,530          341,882          346,924         346,844          346,766

AVERAGE BALANCES:
        Loans, net of unearned income              $ 34,405.1       $ 34,395.7       $ 33,890.6      $ 33,314.6       $ 32,967.1
        Earning assets                               47,116.1         46,356.7         45,743.2        44,799.3         44,373.9
        Total assets                                 51,342.1         50,493.9         49,801.4        48,638.8         48,086.8
        Deposits                                     33,880.2         32,589.7         31,627.5        30,937.3         31,690.4
        Stockholders' equity                          4,513.0          4,587.6          4,559.3         4,428.5          4,159.1
        Common shares (in thousands)
            Basic                                     340,220          345,514          346,871         346,802          346,741
            Diluted                                   343,578          350,494          350,868         351,008          351,464

SELECTED RATIOS:
        Return on average total assets                   1.37%            1.38%            1.33%           1.34%            1.34%
        Return on average stockholders' equity          15.53            15.15            14.52           14.71            15.52
        Net interest margin (FTE)                        3.60             3.69             3.77            3.86             3.92
        Average equity to average assets                 8.79             9.09             9.16            9.10             8.65
        Non-interest expense as a percent
            of average total assets                      2.53             2.51             2.61            2.58             2.68
        Efficiency ratio                                52.59            52.31            53.60           52.74            54.37
</TABLE>



                                       17
<PAGE>

AVERAGE BALANCES, INTEREST INCOME AND EXPENSE AND                        TABLE 2
AVERAGE YIELDS EARNED AND RATES PAID
(DOLLARS IN MILLIONS; YIELDS ON TAXABLE EQUIVALENT BASIS)

<TABLE>
<CAPTION>
                                                                               Quarters Ended
                                                    ----------------------------------------------------------------------
                                                              June 30, 2003                          March 31, 2003
                                                    -----------------------------------     ------------------------------
                                                                                  (1)                                (1)
                                                     Average                     Yield/      Average                Yield/
                                                     Balance       Interest       Rate       Balance     Interest    Rate
                                                    ---------      --------      ------     ---------    --------   ------
<S>                                                 <C>            <C>           <C>        <C>          <C>        <C>
ASSETS
Loans, net of unearned
   income (2)                                       $34,405.1       $ 437.8       5.10%     $34,395.7     $445.6     5.25%
Available-for-sale securities:
   Taxable                                           10,771.8         144.7       5.57       10,228.3      144.6     5.96
   Non-taxable                                          383.5           6.1       6.89          376.3        6.6     7.50
Held-to-maturity securities:
   Taxable                                              255.6           4.9       7.65          299.6        5.3     7.23
   Non-taxable                                           30.9           0.4       5.55           38.7        0.9     9.29
Short-term investments                                1,269.2          15.1       4.77        1,018.1       14.5     5.75
                                                    ---------       -------       ----      ---------     ------     ----
     Total interest-earning assets                   47,116.1       $ 609.0       5.23%      46,356.7     $617.5     5.45%
Allowance for loan losses                              (502.6)                                 (501.0)
Other assets                                          4,728.6                                 4,638.2
                                                    ---------       -------       ----      ---------     ------     ----
     Total assets                                   $51,342.1                               $50,493.9
                                                    =========       =======       ====      =========     ======     ====
LIABILITIES
Savings deposits                                    $ 2,333.9       $   4.1       0.70%     $ 2,300.4     $  4.2     0.74%
Interest-bearing demand deposits                      4,486.2           8.5       0.76        4,543.2        9.6     0.86
Time deposits                                        22,299.1         104.3       1.88       21,353.8      107.9     2.05
Short-term borrowings                                 5,212.0          15.4       1.19        5,571.1       17.0     1.23
Federal Home Loan Bank advances                       4,089.0          40.5       3.97        4,373.7       45.3     4.20
Long-term debt                                        2,470.6          16.5       2.68        2,251.8       15.4     2.78
                                                    ---------       -------       ----      ---------     ------     ----
     Total interest-bearing liabilities              40,890.8       $ 189.3       1.86%      40,394.0     $199.4     2.00%
Non-interest-bearing demand deposits                  4,761.0                                 4,392.3
Other liabilities                                     1,177.3                                 1,120.0
Total liabilities                                    46,829.1                                45,906.3
STOCKHOLDERS' EQUITY                                  4,513.0                                 4,587.6
                                                    ---------       -------       ----      ---------     ------     ----
     Total liabilities and stockholders' equity     $51,342.1                               $50,493.9
                                                    =========       =======       ====      =========     ======     ====
Net interest income                                                 $ 419.7                               $418.1
                                                    =========       =======       ====      =========     ======     ====
Net interest margin                                                               3.60%                              3.69%
                                                    =========       =======       ====      =========     ======     ====
Net interest spread                                                               3.37%                              3.45%
                                                    =========       =======       ====      =========     ======     ====
</TABLE>


(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 $9.3 MILLION, $10.2 MILLION,
         $11.6 MILLION, $10.9 MILLION, AND $11.3 MILLION FOR THE FIVE QUARTERS
         ENDED JUNE 30, 2003, 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
<PAGE>

                                                                         TABLE 2

<TABLE>
<CAPTION>


                                            Quarters Ended
--------------------------------------------------------------------------------------------------------
         December 31, 2002                    September 30, 2002                 June 30, 2002
-----------------------------------     ------------------------------    ------------------------------
                              (1)                                (1)                               (1)
 Average                     Yield/      Average                Yield/     Average                Yield/
 Balance       Interest       Rate       Balance     Interest    Rate      Balance     Interest    Rate
---------      --------      ------     ---------    --------   ------    ---------    --------   ------
<S>           <C>            <C>        <C>          <C>        <C>       <C>          <C>        <C>
$33,890.6     $   471.5       5.52%     $33,314.6     $487.5     5.81%    $32,967.1     $491.3     5.98%

  9,995.4         150.3       6.20       10,007.1      156.8     6.46       9,973.3      160.8     6.59
    374.7           6.1       6.89          370.4        5.7     6.39         357.3        6.1     6.94

    342.7           6.1       7.08          375.2        6.9     7.30         416.4        7.4     7.14
     42.0           1.0       9.19           44.9        1.0     8.96          48.6        1.1     9.11
  1,097.8          14.9       5.39          667.1        9.7     5.79         611.2        8.5     5.54
---------     ---------       ----      ---------     ------     ----     ---------     ------     ----
 45,743.2     $   649.9       5.69%      44,779.3     $667.6     5.97%     44,373.9     $675.2     6.13%
   (498.1)                                 (490.4)                           (487.4)
  4,556.3                                 4,349.9                           4,200.3
---------     ---------       ----      ---------     ------     ----     ---------     ------     ----
$49,801.4                               $48,638.8                         $48,086.8
=========     =========       ====      =========     ======     ====     =========     ======     ====

$ 2,337.1     $     5.5       0.94%     $ 2,332.2     $  7.3     1.24%    $ 2,356.1     $  7.6     1.29%
  4,421.3          10.6       0.95        4,012.6       10.5     1.04       4,014.4        9.3     0.93
 20,515.9         116.1       2.24       20,390.9      125.2     2.44      21,139.1      137.0     2.60
  5,852.3          21.5       1.46        5,701.3       25.0     1.74       5,420.1       23.7     1.76
  4,470.9          49.0       4.35        4,447.1       50.4     4.50       4,261.1       50.8     4.78
  2,185.1          16.6       3.01        2,164.8       17.3     3.17       1,724.3       15.5     3.60
---------     ---------       ----      ---------     ------     ----     ---------     ------     ----
 39,782.6     $   219.3       2.19%      39,048.9     $235.7     2.39%     38,915.1     $243.9     2.51%
  4,353.2                                 4,201.6                           4,180.8
  1,106.3                                   959.8                             831.8
 45,242.1                                44,210.3                          43,927.7
  4,559.3                                 4,428.5                           4,159.1
---------     ---------       ----      ---------     ------     ----     ---------     ------     ----
$49,801.4                               $48,638.8                         $48,086.8
=========     =========       ====      =========     ======     ====     =========     ======     ====
              $   430.6                               $431.9                            $431.3
=========     =========       ====      =========     ======     ====     =========     ======     ====
                              3.77%                              3.86%                             3.92%
=========     =========       ====      =========     ======     ====     =========     ======     ====
                              3.50%                              3.58%                             3.62%
=========     =========       ====      =========     ======     ====     =========     ======     ====
</TABLE>


                                       19
<PAGE>

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 "Federal Reserve") 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 decreased 32 basis points from the
second quarter of 2002 to 3.60% for the 2003 second quarter period. The net
interest spread between interest-earning assets and interest-bearing liabilities
decreased 25 basis points from the second quarter of 2002 to 3.37% for the
second quarter of 2003. During 2002, the interest sensitivity position of the
Company turned to a more asset sensitive position (interest-earning assets were
repricing faster than interest-bearing liabilities) from an essentially neutral
position at the beginning of 2002. Increased asset sensitivity resulted in a
compression of the net interest margin, discussed further below.

         Looking at the remainder of 2003, the current weak economic conditions
and the prolonged low interest rate environment present a challenge that the
Company believes is manageable. These factors have contributed to historically
low mortgage interest rates, leading to higher prepayments of mortgage-backed
securities, 1-4 family mortgage loans, as well as other fixed-rate
interest-earning assets tied to treasury yields (which are the benchmark for
mortgage interest rates). Prepayments from these assets, as well as fixed-rate
commercial loans, are being reinvested at lower rates, while liability costs,
which are tied to other indexes, are not declining at the same pace as asset
yields. The margin compression discussed above is likely to continue until
economic conditions improve and/or the yield curve rises enough to slow
prepayment volume. We expect slight margin compression to continue until both
long and short-term rates begin to rise. Since the balance sheet is in a
slightly asset sensitive interest rate position, an increase in interest rates
would improve the net interest margin. Management has taken steps to manage the
interest rate sensitivity position of the Company, such as remaining focused on
variable-rate lending, prudent securities purchases, avoiding long-term
fixed-rate loans, and continued growth in core deposits. These strategies allow
the Company to avoid investments in low-yielding, long-term assets that present
unacceptable future interest rate risk to the Company.

         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 2003, the Company recorded a $30.3 million
provision for loan losses. This compares to a provision of $28.7 million for the
quarter ended June 30, 2002. For the six months ended June 30, 2003 and 2002,
the provision for loan losses was $59.7 million and $56.4 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
<PAGE>

NON-INTEREST INCOME

         Total non-interest income for the quarter ended June 30, 2003 was
$195.7 million, an increase of $35.8 million or 22% over the same period in
2002. For the six months ended June 30, 2003, non-interest income was $372.9
million, an increase of $59.2 million or 19% over the same period in 2002.

         Service charges on deposit accounts, which represent the largest
portion of non-interest income, increased in the second quarter of 2003 by 5%
from the comparable year-ago period. For the six months ended June 30, 2003,
service charges on deposit accounts increased 9% over the same period in 2002.
Factors contributing to this increase include increases in service charges on
large corporate accounts and fees charged for non-sufficient funds.

         Mortgage banking operations income increased 93% and 74% for the three
and six-month periods ended June 30, 2003, respectively, compared to the same
periods in 2002. The increase was driven by increased loan production during the
first six months of 2003 when compared to the same period in 2002. Mortgage loan
production during the first six months of 2003 totaled $3,652.5 million compared
to $1,767.9 million during the first six months of 2002. This increased
production during 2003 is directly related to historically low mortgage interest
rates during this period. Once mortgage interest rates begin to increase, the
Company expects loan production to slow down accordingly. Also related to
increased mortgage loan production, gains on sales of loans held for sale
increased to $15.7 million and $27.4 million during the second quarter and first
six months of 2003, respectively. This compares to gains of $6.9 million and
$16.3 million during for the second quarter and first six months of 2002,
respectively.

         Bankcard fees increased during the second quarter of 2003 by 12%
compared to the second quarter of 2002. For the first six months of 2003, the
increase in bankcard fees was 5% over the same period in 2002. This increase was
primarily due to increased merchant fees, including increased sales volume and
an increase in certain service charges. Debit card fees increased in the second
quarter and first six months of 2003 by 15% and 19%, respectively, compared to
the same periods in 2002 as a result of increased volume. During the second
quarter of 2003, Visa and MasterCard settled lawsuits brought by some major
retailers. The effect of the settlements on the Company will likely be slower
growth in debit card fees, since the fees charged to merchants by Visa and
MasterCard to process their debit cards will decrease.

         Investment fee income increased 25% during the second quarter of 2003
compared to the second quarter of 2002. For the six months ended June 30, 2003,
investment fee income increased 23% over the same period in 2002. This increase
was driven by increased business in the capital market areas and market
conditions, resulting from higher fees earned in facilitating customer
derivative transactions. Income from bank owned life insurance ("BOLI") for the
second quarter and first six months of 2003 increased 10% and 21%, respectively,
over the comparable year-ago periods. All other income increased 46% and 26%
during the second quarter and first six months of 2003, respectively, compared
to the same periods in 2002. This increase was primarily due to increased income
associated with a program with the Company's new check provider.

         There were no other significant non-interest income items recorded in
either the second quarter or the first six months of 2003 or 2002.


                                       21
<PAGE>

NON-INTEREST INCOME                                                      TABLE 3
(In Millions)

<TABLE>
<CAPTION>
                                                                               Quarters Ended
                                                  ----------------------------------------------------------------------
                                                           2003                                      2002
                                                  -----------------------         --------------------------------------
                                                  Jun 30          Mar 31           Dec 31        Sept 30         Jun 30
                                                  -------         -------         -------        -------         -------
<S>                                               <C>             <C>             <C>            <C>             <C>
Service charges on deposit accounts               $  72.1         $  70.8         $  74.8        $  72.1         $  68.5
Mortgage banking operations                          26.7            19.4            23.1           17.2            13.8
Bankcard fees                                        12.8            10.4            11.2           10.9            11.4
Debit card fees                                      11.3            10.5            10.5            9.9             9.8
Trust fees                                            8.6             7.4             8.8            8.5             8.9
Investment fees                                      18.9            16.2            15.1           15.8            15.1
Bank owned life insurance                            13.9            16.1            12.5           12.6            12.6
Gains on sales of loans held-for-sale, net           15.7            11.7            10.5            6.2             6.9
Securities gains (losses), net                       (1.4)           (1.1)            0.1           (0.8)            1.2
Other                                                17.1            15.8            14.3           14.0            11.7
                                                  -------         -------         -------        -------         -------
     Total                                        $ 195.7         $ 177.2         $ 180.9        $ 166.4         $ 159.9
                                                  =======         =======         =======        =======         =======
</TABLE>

NON-INTEREST EXPENSE

         Total non-interest expense was $324.4 million in the second quarter of
2003 compared to $320.8 million for the same period in 2002. For the six months
ended June 30, 2003 and 2002, total non-interest expense was $636.4 million and
$633.1 million, respectively. The efficiency ratio, a measure of non-interest
expense to net interest income plus non-interest income, was 52.59% and 52.45%
for the three and six-month periods ended June 30, 2003, respectively. This
compares to an efficiency ratio of 54.37% and 54.33%, for the three and
six-month periods ended June 30, 2002, respectively. This improvement in the
efficiency ratio is attributable to the fact that non-interest expense remained
at a relatively constant level year over year, while increases in non-interest
income provided for growth in the denominator of the calculation.

         Salaries and employee benefits expense is the largest component of
non-interest expense, accounting for 61% and 62% of all non-interest expense for
the second quarter and first six months of 2003, respectively. Salary and
employee benefits expense increased during the second quarter and first six
months of 2003 by 9% and 8%, respectively, over the same year-ago periods. These
increases were driven by annual merit increases, incentive increases primarily
in the Company's mortgage banking subsidiary related to increased mortgage loan
production, and increases in certain employee benefit costs.

         Expense for professional services for the second quarter and first six
months of 2003 decreased 16% and 11%, respectively, over the same periods a year
ago. This decrease was due primarily to a decrease in fees paid to employee
recruitment firms and Visa fees. Data processing expense increased 36% and 26%
during the second quarter and six-month period ended June 30, 2003,
respectively, when compared to the same periods in 2002. This increase primarily
related to a license fee related to a patent covering certain processes used by
the Company. For the three and six months ended June 30, 2003, communications
expense decreased 19% and 18%, respectively, over the same periods in 2002. This
decrease relates primarily to lower expenses related to the conversion to a new
phone system and other renegotiated rates and contracts.


                                       22
<PAGE>

         There were no other significant non-interest expense items recorded in
either the second quarter or the first six months of 2003 or 2002.


NON-INTEREST EXPENSE                                                    TABLE 4
(In Millions)

<TABLE>
<CAPTION>
                                                             Quarters Ended
                                      ---------------------------------------------------------------
                                               2003                              2002
                                      ---------------------       -----------------------------------
                                      Jun 30        Mar 31         Dec 31       Sept 30       Jun 30
                                      -------       -------       -------       -------       -------
<S>                                   <C>           <C>           <C>           <C>           <C>
Salaries and employee benefits        $ 199.3       $ 194.4       $ 190.7       $ 186.4       $ 183.4
Net occupancy                            26.7          26.0          28.9          27.0          28.1
Equipment                                16.3          15.9          18.2          17.1          16.7
Professional services                    15.5          13.5          17.5          15.3          18.5
Data processing                          14.3          11.7          11.0          10.6          10.5
Communications                           12.7          12.3          14.3          13.6          15.7
Other                                    39.6          38.2          47.1          46.0          47.9
                                      -------       -------       -------       -------       -------
     Total                            $ 324.4       $ 312.0       $ 327.7       $ 316.0       $ 320.8
                                      =======       =======       =======       =======       =======
</TABLE>


INCOME TAX EXPENSE

         Income tax expense for the second quarter and first six months of 2003
was $83.0 million and $162.7 million, respectively, for an effective tax rate of
32.2% and 32.0%, respectively. This compares to income tax expense for the
second quarter and first six months of 2002 of $77.4 million and $153.9 million,
respectively, for an effective rate of 32.5% and 32.6%, respectively. The
statutory federal income tax rate was 35% in 2003 and 2002.


                                       23
<PAGE>

LOANS

         Loans, net of unearned income at June 30, 2003 were $34,297.1 million,
a net increase of $59.5 million over the December 31, 2002 level. During the
first six months of 2003, $82.1 million of loans were obtained in the
acquisition of another financial institution. The lending environment continues
to be challenging due to continued weak economic conditions. This economic
environment has led to lower demand for loans as well as historically low
interest rates. While loan production remains good, high payoffs related to the
prolonged low interest rate environment are out pacing new loan growth. This
trend may continue in the near future, given the uncertainty in the economy at
this time. However, Management believes that the Company is well positioned to
achieve more loan growth, through extensive calling efforts and sales culture,
once the economy begins to improve.

         The Company considers the appropriate mix of variable and fixed-rate
loans in asset/liability management strategy. As of June 30, 2003, 75% of the
Company's loan portfolio had variable interest rates. Of the Company's
variable-rate loan portfolio balance, 50% of these loans were tied to the
floating London Interbank Offered Rate ("LIBOR"), 44% were tied to the Prime
rate, and 6% were tied to other indexes.


LOAN PORTFOLIO                                                           TABLE 5
(In Millions)

<TABLE>
<CAPTION>
                                                                           Quarters Ended
                                   -----------------------------------------------------------------------------------------------
                                                  2003                                               2002
                                   -----------------------------------    --------------------------------------------------------
                                         Jun 30            Mar 31              Dec 31             Sept 30              Jun 30
                                   ----------------   ----------------    ----------------   ----------------    -----------------
                                     Amount      %     Amount      %        Amount      %      Amount     %        Amount      %
                                   ---------   ----   ---------   ----    ---------   ----   ---------   ----    ---------    ----
<S>                                <C>         <C>    <C>         <C>     <C>         <C>    <C>         <C>     <C>         <C>
Commercial, financial and
  agricultural                     $12,636.8   36.6%  $12,664.3   36.5%   $12,592.7   36.5%  $12,357.3   36.5%   $12,112.2    36.2%
Real estate construction             5,353.7   15.5     5,355.6   15.4      5,215.4   15.1     4,929.2   14.6      4,870.0    14.6
Commercial real estate mortgage      7,253.8   21.0     7,345.5   21.2      7,303.4   21.2     7,212.3   21.3      7,113.6    21.3
Residential real estate mortgage     6,178.6   17.9     6,160.5   17.8      6,123.1   17.8     6,021.7   17.8      5,918.8    17.7
Loans to individuals                 1,724.2    5.0     1,775.8    5.1      1,869.5    5.4     1,935.0    5.7      2,012.5     6.0
Lease financing:
   Commercial leases                   654.6    1.9       661.9    1.9        681.0    2.0       661.1    2.0        626.6     1.9
   Auto leases                         728.6    2.1       714.0    2.1        698.1    2.0       722.7    2.1        769.3     2.3
                                   ---------   ----   ---------   ----    ---------   ----   ---------   ----    ---------    ----
                                    34,530.3    100%   34,677.6    100%    34,483.2    100%   33,839.3    100%    33,423.0     100%
                                               ====               ====                ====               ====                 ====
Unearned income                       (233.2)            (237.2)             (245.6)            (239.3)             (242.3)
                                   ---------          ---------           ---------          ---------           ---------
Loans, net of unearned income       34,297.1           34,440.4            34,237.6           33,600.0            33,180.7

Allowance for loan losses             (501.1)            (499.5)             (498.5)           (497.6)              (488.3)
                                   ---------          ---------           ---------          ---------           ---------
Net loans                          $33,796.0          $33,940.9           $33,739.1          $33,102.4           $32,692.4
                                   =========          =========           =========          =========           =========
</TABLE>


                                       24
<PAGE>

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. The Company's senior credit managers
develop and review the methodology on a quarterly basis, and it is then
submitted to the Executive Committee of the Board of Directors for approval.

         The Company's first steps towards maintaining an adequate allowance for
loan losses are sound credit policies and thorough credit reviews on the front
end of every lending decision. The Company maintains an extensive written loan
policy manual that is disseminated to all lending personnel on a real-time basis
via the Company's internal Internet. This delivery method of the loan policy and
the credit approval process ensures consistent lending values are communicated
across the Company. The loan review function also serves as a control mechanism
to validate adherence to the loan policy and to detect any adverse trends in the
loan portfolio as early as possible.

         Loans are separated by internal risk ratings into two categories for
assessment of their estimated allowance level needs; Non-problem and Watch-list
(non-performing and other loans are included in watch-list loans). The allowance
associated with Non-problem loans 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 the prior year's loss experience and an average of the last four
years' loss experience, both of which are specific to Watch-list loans. The four
years' loss experience is used to provide an adequate historical perspective.
Additionally, certain Watch-list loans (generally large commercial credits that
the Company considers to be impaired) are specifically reviewed. This specific
review considers estimates of future cash flows, fair values of collateral and
other indicators of the borrowers' ability to repay the loan.

         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 can
lead to increased losses that are not realized until after period end. 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.


                                       25
<PAGE>

         The allowance allocated to Watch-list loans at June 30, 2003 totaled
$108.6 million, and the allowance allocated to Non-problem loans totaled $392.5
million. Based on the methodology outlined above, the total allowance for loan
losses was $501.1 million at June 30, 2003 and $498.5 million at December 31,
2002. As a percentage of outstanding loans, the total allowance for loan losses
was 1.46%, consistent with the December 31, 2002 level. Net charge-offs during
the three months ended June 30, 2003 totaled $30.2 million or .35% of average
net loans on an annualized basis, an increase of $4.4 million from the
2002-second quarter period.


ALLOWANCE FOR LOAN LOSSES                                                TABLE 6
(In  Thousands)
<TABLE>
<CAPTION>
                                                                                         Quarters Ended
                                                            ---------------------------------------------------------------------
                                                                     2003                                   2002
                                                            ------------------------      ---------------------------------------
                                                             Jun 30          Mar 31         Dec 31        Sept 30         Jun 30
                                                            ---------      ---------      ---------      ---------      ---------
<S>                                                         <C>            <C>            <C>            <C>            <C>
Balance beginning of quarter                                $ 499,452      $ 498,501      $ 497,624      $ 488,340      $ 485,389
Loans charged-off:
         Commercial, financial and agricultural                16,374         15,351         16,256         11,895         13,759
         Real estate construction                                  22             69              0             54              0
         Commercial real estate mortgage                        1,305            255          1,425          1,275            912
         Residential real estate mortgage                       2,829          3,184          2,057          2,758          2,471
         Loans to individuals                                  12,737         13,666         15,418         12,837         11,760
         Lease financing:
            Commercial leases                                      33            375          1,494             74            233
            Auto leases                                           688            762            960            855            546
                                                            ---------      ---------      ---------      ---------      ---------
                      Total charge-offs                        33,988         33,662         37,610         29,748         29,681
                                                            ---------      ---------      ---------      ---------      ---------
Recoveries of loans previously charged-off:
         Commercial, financial and agricultural                 1,127          3,060          2,269          1,096          1,286
         Real estate construction                                   1              2              0              4              0
         Commercial real estate mortgage                           27             60             62              1            175
         Residential real estate mortgage                         154            413            170            248            529
         Loans to individuals                                   2,412          1,610          1,937          1,289          1,884
         Lease financing:
            Commercial leases                                       0              0              0              0              0
            Auto leases                                            43             68             49             40              9
                                                            ---------      ---------      ---------      ---------      ---------
                      Total recoveries                          3,764          5,213          4,487          2,678          3,883
                                                            ---------      ---------      ---------      ---------      ---------
Net loans charged-off                                          30,224         28,449         33,123         27,070         25,798
Additions to allowance charged to expense                      30,300         29,400         34,000         36,354         28,728
Subsidiaries' allowance at date of purchase                     1,540              0              0              0             21
                                                            ---------      ---------      ---------      ---------      ---------
Balance at end of quarter                                   $ 501,068      $ 499,452      $ 498,501      $ 497,624      $ 488,340
                                                            =========      =========      =========      =========      =========

(In  millions)
Loans outstanding at quarter end,
         net of unearned income                             $34,297.1      $34,440.4      $34,237.6      $33,600.0      $33,180.7
Average loans outstanding,
         net of unearned income                             $34,405.1      $34,395.7      $33,890.6      $33,314.6      $32,967.1
Ratios:
         Allowance to net loans outstanding                      1.46%          1.45%          1.46%          1.48%          1.47%
         Net loans charged-off to average net loans              0.35           0.34           0.39           0.32           0.31
         Provision for loan losses to net charge-offs          100.25         103.34         102.65         134.30         111.36
         Provision for loan losses to average net loans          0.35           0.35           0.40           0.43           0.35
</TABLE>



                                       26
<PAGE>

NON-PERFORMING ASSETS

         Non-performing assets, which include non-accrual and restructured
loans, other real estate owned and other repossessed assets were $241.2 million
at June 30, 2003, a modest increase of $4.0 million from December 31, 2002. The
ratio of non-performing assets to total loans plus other non-performing assets
was 0.70% at June 30, 2003, while the allowance to non-performing loans ratio
was 257.98% for the same period. The Company has historically maintained high
credit underwriting standards and consistent credit disciplines, and does not
see any trends that would result in any significant changes in ultimate losses.

         In addition to loans on non-accrual status, the Company has loans where
known information about possible credit problems of borrowers causes Management
to have doubts as to the ability of such borrowers to fully comply with their
present loan repayment terms at June 30, 2003. These loans, although they are
currently performing, could become non-performing and be placed on non-accrual
status in the future. However, the magnitude of these loans is not such that any
potential future losses are expected to have a material effect on the
Consolidated Financial Statements.


NON-PERFORMING ASSETS                                                    TABLE 7
(Dollars In Millions)
<TABLE>
<CAPTION>
                                                                                        Quarters Ended
                                                            ---------------------------------------------------------------------
                                                                     2003                                   2002
                                                            ------------------------      ---------------------------------------
                                                             Jun 30          Mar 31         Dec 31        Sept 30         Jun 30
                                                            ---------      ---------      ---------      ---------      ---------
<S>                                                         <C>            <C>            <C>            <C>            <C>
Non-performing loans
         Commercial, financial, and agricultural             $  132.1      $   127.2      $   115.0      $   115.6      $   131.5
         Real estate construction                                10.8           23.1           24.1           24.1           22.1
         Commercial real estate mortgage                         20.2            5.3            5.1            4.6            9.3
         Residential real estate mortgage                        21.6           23.9           21.1           19.6           20.1
         Loans to individuals                                     9.5            9.7           10.2           12.7           11.2
                                                             --------      ---------      ---------      ---------      ---------
                 Total non-performing loans                     194.2          189.2          175.5          176.6          194.2
                                                             --------      ---------      ---------      ---------      ---------
Other real estate owned                                          45.6           51.4           55.1           65.5           59.5
Other repossessed assets                                          1.4            5.5            6.6            9.2           14.6
                                                             --------      ---------      ---------      ---------      ---------
                 Total non-performing assets                 $  241.2      $   246.1      $   237.2      $   251.3      $   268.3
                                                             ========      =========      =========      =========      =========

Accruing loans past due 90 days or more                      $   82.1      $    84.2      $    72.6      $    76.3      $    73.0
Ratios:
         Non-performing loans to total loans                     0.57%          0.55%          0.51%          0.53%          0.59%
         Non-performing assets to total loans
                 plus other non-performing assets                0.70           0.71           0.69           0.75           0.81
         Non-performing assets and accruing loans
                 90 days or more past due to total loans
                 plus other non-performing assets                0.94           0.96           0.90           0.97           1.03
         Allowance to non-performing loans                     257.98         264.05         284.06         281.75         251.41
</TABLE>


                                       27
<PAGE>

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 recorded 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 $474.8 million since December 31, 2002. Funds
from prepayments of mortgage-backed securities as well as loan repayments that
are unable to be reinvested in new loans due to diminished loan demand are being
invested primarily in 15-year mortgage-backed securities.


AVAILABLE-FOR-SALE AND HELD-TO-MATURITY SECURITIES                       TABLE 8


<TABLE>
<CAPTION>
                                                          Available-for-Sale Securities
                                           -------------------------------------------------------
                                                 June 30, 2003                December 31, 2002
                                           -------------------------     -------------------------
                                           Amortized         Fair        Amortized         Fair
(IN MILLIONS)                                 Cost           Value          Cost           Value
                                           ----------     ----------     ----------     ----------
<S>                                        <C>            <C>            <C>            <C>
U.S. Treasury securities                   $     43.7     $     46.4     $     36.5     $     38.9
U.S. Government agency securities             2,501.0        2,559.3        2,628.2        2,705.5
Mortgage-backed securities and
   collateralized mortgage obligations        7,404.1        7,644.1        6,311.1        6,625.7
Obligations of states and political
   subdivisions                                 343.7          376.3          333.6          353.3
Other debt securities                           228.1          228.6          550.4          550.5
Equity securities                               331.9          362.2          345.9          370.7
                                           ----------     ----------     ----------     ----------
     Total                                 $ 10,852.5     $ 11,216.9     $ 10,205.7     $ 10,644.6
                                           ==========     ==========     ==========     ==========
</TABLE>

<TABLE>
<CAPTION>
                                                           Held-to-Maturity Securities
                                           -------------------------------------------------------
                                                 June 30, 2003                December 31, 2002
                                           -------------------------     -------------------------
                                           Amortized         Fair        Amortized         Fair
                                              Cost           Value          Cost           Value
                                           ----------     ----------     ----------     ----------
<S>                                        <C>            <C>            <C>            <C>
U.S. Treasury securities                   $      0.5     $      0.5     $      1.5     $      1.5
U.S. Government agency securities                 7.5            7.7           23.0           23.6
Mortgage-backed securities and
   collateralized mortgage obligations          107.4          114.4          158.1          168.2
Obligations of states and political
   subdivisions                                  35.4           40.2           40.7           44.9
Other debt securities                           120.5          142.7          145.5          162.4
                                           ----------     ----------     ----------     ----------
     Total                                 $    271.3     $    305.5     $    368.8     $    400.6
                                           ==========     ==========     ==========     ==========
</TABLE>


                                       28
<PAGE>

SHORT-TERM INVESTMENTS

         Short-term investments at June 30, 2003 totaled $1,529.9 million,
reflecting an increase of $328.3 million from the December 31, 2002 level of
$1,201.6 million, primarily due to an increased level of loans held for sale. At
June 30, 2003, short-term investments consisted of $108.3 million in federal
funds sold and securities purchased under resale agreements, $6.3 million in
time deposits with other banks, $148.2 million in trading securities and
$1,267.1 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 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 $3,143.6 million during the six month
period ended June 30, 2003. These sales move in tandem with production of new
1-4 family loans, which is currently at a high level due to low mortgage rates.
A slowdown in loan sales should be expected if mortgage rates rise and new loan
production returns to lower levels.

         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, 2003 were $34,368.7 million, up $1,423.3 million or 4% from the
December 31, 2002 level of $32,945.4 million. Of this increase, $1,249.2 million
is from wholesale funding sources. Core deposits, defined as demand deposits and
time deposits less than $100,000, increased $174.1 million during the period. In
the first six months of 2003, deposits of $103.8 million were obtained in the
acquisition of another financial institution. At June 30, 2003 total deposits
included interest-bearing deposits of $28,978.3 million and other deposits of
$5,390.4 million.

         Short-term borrowings at June 30, 2003 were $5,392.2 million and
included federal funds purchased of $3,140.6 million, securities sold under
agreements to repurchase of $1,964.5 million and other borrowed funds of $287.1
million. At June 30, 2003 total short-term borrowings were 10% of total
liabilities and stockholders' equity, which is consistent with the December 31,
2002 level.

                                       29

<PAGE>

         FHLB advances totaled $3,670.9 million at June 30, 2003. The current
quarter end balance is down $800.0 million from the level outstanding at
December 31, 2002. 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.

         At June 30, 2003 and December 31, 2002, total long-term debt was
$2,533.7 million and $2,181.9 million, respectively. During the first six months
of 2003, $450.0 million in Bank Notes and Subordinated Notes were issued and
$100 million of 7% Debentures matured. Maturities of long-term debt during the
remainder of 2003 will include $200 million of variable-rate Bank Notes on
October 3, 2003.

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, 2003 Tier 1 and Total capital to risk weighted assets were
7.88% and 11.05%, respectively, compared to the December 31, 2002 ratios of
8.15% and 11.09%, respectively.


                                       30
<PAGE>

CAPITAL RATIOS                                                           TABLE 9
(DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                                                     2003                                    2002
                                           -------------------------       -----------------------------------------
                                            Jun 30           Mar 31          Dec 31         Sept 30         Jun 30
                                           ---------       ---------       ---------       ---------       ---------
<S>                                        <C>             <C>             <C>             <C>             <C>
Tier 1 capital:
   Stockholders' equity                    $ 4,496.9       $ 4,523.1       $ 4,627.6       $ 4,534.3       $ 4,322.6
   Intangible assets other than
        servicing rights                      (806.8)         (795.4)         (797.9)         (801.3)         (799.9)
   Accumulated other
     comprehensive income                     (263.1)         (270.4)         (334.9)         (350.6)         (244.5)
                                           ---------       ---------       ---------       ---------       ---------
        Total Tier 1 capital                 3,427.0         3,457.3         3,494.8         3,382.4         3,278.2
                                           ---------       ---------       ---------       ---------       ---------
Tier 2 capital:
   Allowable allowance for loan losses         501.1           499.5           498.5           497.6           488.3
   Allowable long-term debt                    875.0           915.0           765.0           765.0           765.0
                                           ---------       ---------       ---------       ---------       ---------
        Total Tier 2 capital                 1,376.1         1,414.5         1,263.5         1,262.6         1,253.3
                                           ---------       ---------       ---------       ---------       ---------
        Total risk-based capital           $ 4,803.1       $ 4,871.8       $ 4,758.3       $ 4,645.0       $ 4,531.5
                                           =========       =========       =========       =========       =========
Risk-weighted assets                       $43,477.3       $42,582.5       $42,890.2       $41,626.6       $40,526.2
Risk-based ratios:
   Tier 1 capital                               7.88%           8.12%           8.15%           8.13%           8.09%
   Total capital                               11.05           11.44           11.09           11.16           11.18
Leverage ratio                                  6.78            6.96            7.13            7.07            6.93
</TABLE>

         On January 15, 2003, the Company's board of directors authorized the
repurchase of up to $500 million of the Company's common stock. At current
prices, this would represent approximately 5% of the outstanding shares at
December 31, 2002. The actual amount repurchased may be less and is dependent on
overall market and economic conditions, or alternative uses of capital such as
for internal growth or acquisition opportunities that may arise. The repurchase
program, which began in the first quarter of 2003, will generally be implemented
through open market transactions at prevailing prices. The Company's strong
capital position has enabled it to adopt such a program and Management believes
it will further enhance shareholder value. As always, the Company will continue
to evaluate capital levels and the related impact of repurchases on both a book
and risk-based capital basis, and will maintain capital at levels deemed
appropriate by Management and above prescribed minimums as described above. As
of June 30, 2003, the Company has repurchased approximately 10.3 million shares
under this program.


                                       31
<PAGE>

COMMITMENTS AND STANDBY LETTERS OF CREDIT

         The Company, in the normal course of business, is a party to financial
instruments with off-balance sheet risk to meet the financing needs of its
customers. These financial instruments primarily include commitments to extend
credit to borrowers whose loans will be maintained for the Company's portfolio
and standby letters of credit. These instruments involve, to varying degrees,
elements of credit risk and market risk not reflected in the Consolidated
Balance Sheets since no amount is recorded until the instrument is funded. The
contract or notional amounts of the instruments reflect the extent of
involvement the Company has in particular classes of financial instruments.

         Creditworthiness for all instruments is evaluated on a case-by-case
basis in accordance with the Company's credit policies. Collateral, if deemed
necessary, is based on Management's credit evaluation of the counterparty and
may include business assets of commercial borrowers as well as personal property
and real estate of individual borrowers and guarantors.

         The Company's subsidiary bank had outstanding commitments to extend
credit of approximately $13,246.2 million at June 30, 2003 and $12,866.0 million
at December 31, 2002. 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 subsidiary bank had commitments to issue standby letters
of credit outstanding of approximately $1,358.8 million at June 30, 2003 and
$1,384.3 million at December 31, 2002. In addition, the Company has recorded a
liability for the estimated fair value of these standby letters of credit of
approximately $2.0 million at June 30, 2003 and $1.9 million at December 31,
2002.

INTEREST RATE RISK MANAGEMENT

         The Company's primary market risk is its exposure to interest rate
changes. 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. Actual
financial results may differ from simulated results because of many factors
including, but not limited to, the timing, magnitude and frequency of changes in
interest rates, market conditions and management strategies.


                                       32
<PAGE>

         The following table illustrates the expected effect a given parallel
interest rate shift would have on the annualized projected net interest income
of the Company as of June 30, 2003. These projections are based on a flat rate
scenario. Actual interest rate adjustments made by the Federal Reserve do not
result in parallel shifts in interest rate because of factors relating to the
sloping yield curve.

<TABLE>
<CAPTION>
                                                  INCREASE/(DECREASE) IN
                                                   NET INTEREST INCOME
                                                  ----------------------
              CHANGE IN INTEREST RATES                $              %
        ------------------------------------      ----------      ------
                                                  (DOLLARS IN THOUSANDS)
        <S>                                       <C>             <C>
        + 100 basis points..................       $ 43,448        2.69%
        +  50 basis points..................         24,026        1.49
        -  50 basis points..................        (21,343)      (1.32)
</TABLE>

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 LIBOR while receiving payments of 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 of 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 based on a floating rate. These
swaps are designated as cash flow hedges of the interest paid on long-term bank
notes.

         Some of the Company's derivative financial instruments do not qualify
for hedge accounting. The Company 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 mirror positions
through third parties, the impact to net earnings for these derivatives reflects
the fee earned for providing this service, which is recorded in non-interest
income. Also, 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.


                                       33
<PAGE>

END USER DERIVATIVE INSTRUMENTS                                         TABLE 10
(Dollars in Millions)

<TABLE>
<CAPTION>
                                                      WEIGHTED                                      CARRYING VALUE
                                                       AVERAGE     AVERAGE                  -----------------------------
                                          NOTIONAL    MATURITY    RECEIVED     AVERAGE      GROSS        GROSS
                                          BALANCE     IN MONTHS     RATE       PAY RATE     GAINS       LOSSES        NET
                                          -------     ---------   --------     --------     -----       ------        ---
<S>                                       <C>         <C>         <C>          <C>          <C>         <C>         <C>
Fair Value Hedges:
      Interest rate swaps - received
           fixed/pay floating             $  980.0        34        6.34%        1.43%     $  85.3          --      $  85.3
Cash Flow Hedges:
      Interest rate swaps - received
          fixed/pay floating                 450.0        43        6.77         1.34         66.7          --         66.7
      Interest rate swaps - received
          floating/pay fixed                 200.0         3        1.29         3.15           --        (1.1)        (1.1)
Mortgage Lending Commitments:
       Forward contracts                   1,531.7         2          --           --          0.4          --          0.4
       Interest rate lock commitments        589.2         2          --           --          3.6          --          3.6
                                          --------                                                                  -------
Total Derivatives                         $3,750.9                                                                  $ 154.9
                                          ========                                                                  =======
</TABLE>

         Credit risk represents the potential loss that may occur due to the
nonperformance by a party to a contract. The Company controls credit risk for
derivatives by applying uniform credit standards maintained for other activities
with credit risk. The Company monitors transactions under credit risk limits
previously approved as a result of the credit review and also enters into
collateralization agreements with each counterparty.

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.


                                       34
<PAGE>

ITEM 4.  CONTROLS AND PROCEDURES

         The Company has evaluated the effectiveness of its disclosure controls
and procedures pursuant to Securities Exchange Act Rule 13a-15. The evaluation
was performed under the supervision and with the participation of the Company's
Disclosure Committee and Management, including the principal executive officer
and the principal financial officer, as of the end of the period covered by this
quarterly report. Based on this evaluation, the principal executive officer and
principal financial officer have concluded that the disclosure controls and
procedures are effective in ensuring that all material information required to
be disclosed in this quarterly report has been accumulated and communicated to
them in a manner appropriate to allow timely decisions regarding required
disclosure.

         During the period covered by this quarterly report, there were no
changes in the Company's internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.


                                       35
<PAGE>

                           PART II - OTHER INFORMATION


ITEM 5.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Annual Meeting of Stockholders of SouthTrust Corporation was held
on April 16, 2003, and the stockholders elected four nominees as directors. The
following is a tabulation of the voting on this matter.

<TABLE>
<CAPTION>
         Names                         Votes For         Votes Withheld
         -----                         ---------         --------------
         <S>                          <C>                <C>
         William A. Coley             297,072,109            3,198,334
         Allen J. Keesler, Jr.        295,654,771            4,615,672
         Judy M. Merritt              296,958,945            3,311,498
         Van L. Richey                295,335,680            4,934,763
</TABLE>


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 10-Q 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(a)).

         *        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).

         *        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).


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<PAGE>


         *        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).

                  31(a)    Certification of principal executive officer pursuant
                           to Exchange Act Rule 13a-14(a) or 15d-14(a).

                  31(b)    Certification of principal financial officer pursuant
                           to Exchange Act Rule 13a-14(a) or 15d-14(a).

                  32(a)    Certification of principal executive officer pursuant
                           to 18 U.S.C. Section 1350, as adopted pursuant to
                           Section 906 of the Sarbanes-Oxley Act of 2002.

                  32(b)    Certification of principal financial officer pursuant
                           to 18 U.S.C. Section 1350, as adopted pursuant to
                           Section 906 of the Sarbanes-Oxley Act of 2002.

         *        Incorporated herein by reference

         (b)      Reports on Form 8-K filed in the second quarter of 2003: a
                  Form 8-K was filed on April 17, 2003, announcing financial
                  results and disclosing supplemental financial information for
                  the quarter ended March 31, 2003.


         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, 2003                      /s/ Wallace D. Malone, Jr.
                                              ---------------------------
                                                  Wallace D. Malone, Jr.
                                                    Chairman and Chief
                                                     Executive Officer


Date:    August 13, 2003                      /s/ Alton E. Yother
                                              ---------------------------
                                                     Alton E. Yother
                                                Executive Vice President,
                                                 Treasurer and Controller
                                              (Principal Financial Officer)


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