Fredric T. Walls, IIManaging DirectorSunTrust Banks, Inc.Foundations and Endowments Specialty Practice(202)879-6689fredric.walls@suntrust.com

Economic and Market UpdateApril 30, 2014

Taylor Howerton Director SunTrust Robinson HumphreyFinancial Risk Management (404)926-5735taylor.howerton@suntrust.com

Andy Richman, CTFA Director of Fixed IncomeSunTrust Banks, Inc.Private Wealth Management (561)972-9333andy.richman@suntrust.com

Table of Contents

I. Investment Overview

II. Economic Overview

III.Monetary Policy Overview

IV.Investment Outlook

V. Q&A

Summary

Global stocks were slightly higher in March, capping off a choppy first quarter

– Equities proved resilient in March despite ongoing tensions in Ukraine and soft China economic data. A rebound in payrolls and manufacturing indicates the US is thawing from the winter chill, while Europe’s recovery continued at a gradual pace.

– The MSCI ACWI, a proxy for global equities, rose 0.4% in March, finishing a choppy first quarter with a gain of 1.1%. The S&P 500 gained 0.8% in the month, bringing its year-to-date return to 1.8%; eight of the ten S&P 500 sectors were positive for the month, with Telecom, Utilities, and Financials gaining over 3%.

– Emerging markets (EM) equity was the clear leader last month, gaining 3.1%. This rebound helped cut EM’s first quarter loss to just 0.4%. Conversely, Developed International markets declined 0.6% in March but closed the first quarter up 0.7%.

Bonds were mixed in March, but outperformed stocks in the first quarter

– Remarks from new Fed Chair Janet Yellen suggested short term interest rates could rise earlier in 2015 than market expectations led to a slight rise in yields; the benchmark 10-year US Treasury yield ended March at 2.72%, up from 2.65%.

– The Barclays Aggregate Index declined 0.2% in March, but returned 1.8% in the first quarter. The Barclays High Yield Index extended its year-to-date outperformance by gaining 0.2% in March, while EM bonds snapped back with a return of 1.3%. Municipal bonds also continued its 2014 leadership, gaining 0.2% for the month and is now up 3.3% for the year.

REITs and Commodities posted another positive month, as the FTSE NAREIT All Equity Index and DJ-UBS Commodity Index each gained 0.4%. Both asset classes are up strongly thus far in 2014.

2014 base case outlook remains intact

– With economic series rebounding, we expect the US growth will rise near 3% over the course of the year. Our 2014 equity outlook remains unchanged; we anticipate positive but moderate returns with greater volatility. This view is predicated on an improving economic and earnings outlook as we progress through the year. Within fixed income markets, we continue to favor a slightly short maturity portfolio and taking credit risks over interest rate risks.

3

Economic Overview

4

Sluggish Recovery in World’s Largest Economies

Source: Bloomberg, IMF, Consensus Estimates

Country 2013 GDP GDP 2014E GDP 2015EUnemployment Rate

2014E

United States 1.9% 2.7% 3.0% 6.4%

China 7.7% 7.4% 7.2% 4.1%

Japan 1.5% 1.4% 1.2% 3.8%

Germany 0.4% 1.8% 2.0% 6.7%

France 0.2% 0.9% 1.3% 10.8%

UK 2.7% 2.7% 2.5% 6.8%

Brazil 2.2% 1.9% 2.3% 5.7%

Italy (1.9%) 0.5% 1.0% 12.7%

Russia 1.3% 1.1% 2.1% 5.7%

India 4.5% 4.7% 5.3% 4.8%

Canada 2.0% 2.3% 2.5% 2.8%

World 2.1% 2.7% 3.0% 7.6%

The US holds 4.5% of the world’s population and produces 22% of global GDP

5

US Economic Indicators have Lagged by Most Measures…

Source: Strategas Research Partners. Data through February 2014. Charts begin at cycle peak of Dec 2007 where indexed to 100. Average recovery ends after approx. 20 mos.

-18

-17

-16

-15

-14

-13

-12

-11

-10

-9-8-7-6-5-4-3-2-101234567891

01112131415161718192021222324252627282930313233343536373839404142434445464748495051525354555657

81

85

89

93

97

101

105

109Industrial Production

Average Re-covery

-18

-17

-16

-15

-14

-13

-12

-11

-10

-9-8-7-6-5-4-3-2-101234567891

011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556

92

94

96

98

100

102

104

106Total Workers Employed

Average Re-covery

9M jobs lost651K to go

-18

-17

-16

-15

-14

-13

-12

-11

-10

-9-8-7-6-5-4-3-2-101234567891

0111213141516171819202122232425262728293031323334353637383940414243444546474849505152535455

879297

102107112117122127

Retail Sales

Average Re-covery

-18

-17

-16

-15

-14

-13

-12

-11

-10

-9-8-7-6-5-4-3-2-101234567891

0111213141516171819202122232425262728293031323334353637383940414243444546474849505152535455

9193959799

101103105107109

Real Personal Income

Average Re-covery

6

US Economic Indicators by Comparable Recessions

Since the Great Depression, ten recessions have been

followed by a recovery that lasted at least three years

The recovery that started June 2009 was the weakest coming

out of a recession as shown in the graphs to the left:

(1) GDP growth never been weaker

(2) Unemployment rate never remained so high

History suggests recessions caused by financial crisis lead to

much slower recoveries

US GDP Growth Three Years Into Recovery

US Unemployment Rate Three Years Into Recovery

8.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

1948-49 1953-54 1960-61 1969-70 1973-75 1981-82 1990-91 2001 2007-09

Recession Cycles

6.8%

0%

5%

10%

15%

20%

25%

30%

1948-49 1953-54 1960-61 1969-70 1973-75 1981-82 1990-91 2001 2007-09

Recession Cycles

Source: Bloomberg, US Department of Labor7

But We Expect Growth to Pick Up in 2014

Source: STI Econ

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

282.5%250.0%

190.0%

-275.0%

-15.0%

277.5%205.0% 195.0%

250.0%

>3%

US Annual Real Economic Growth (%)

STI EST

8

Recently Improved US Macro Backdrop

-200%

-150%

-100%

-50%

0%

50%

Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14

US

Man

ufa

ctu

rin

g J

ob

s

50

55

60

65

70

75

80

85

90

Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14

Co

nsu

mer

Sen

tim

ent

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14

Mo

M%

Ch

ang

e

DescriptionMetric

Case-Shiller Home Price Index

Consumer Sentiment

US Manufacturing Jobs

Natural Gas Production

Housing

Consumer

Manufacturing

Energy

U.S. Natural Gas Production (Trillions of cubic feet per year)

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020

Shale Gas

Other

EIA Forecast

Home prices up 8% YOY

Housing starts up 11% YOY

Residential investment growing > 20% and contributing

~0.5% to GDP

US consumer ~70% of GDP

Consumer sentiment recently reached a five year high

Profound impact on sentiment due to rising equity prices

US manufacturing growth has outpaced other advanced

economies, adding over 500,000 jobs in the past three years

Rising costs of labor abroad and shipping to the US has led to

a repatriation of jobs as technological innovation and

specialized skills lead to efficiencies in production

The EIA estimates the US will become a net exporter of natural

gas by 2016

Recently, the United States became a net exporter of liquefied

petroleum gases (LPG) for the first time

US carbon emission hit a 20 year low as producers converted

from coal to less expensive natural gas

Source: Bloomberg, Haver Analytics, US Census Bureau, PIMCO, National Association of Realtors, EIA9

Data source: Bloomberg

Economic Overview

Depending on the industry,

most US economic data is

beginning to reverse the

larger-than-normal impact

from the harsh winter season.

Auto sales jumped to 16.3

million units (SAAR), up 6.9%

in March, after weaker results

during December and

January. Retail and food sales

rose 0.3% in February,

snapping a two-month slump.

Manufacturing gauges also

rebounded for February, as

new durable goods orders

surged 2.2% and industrial

production increased 0.6%.

The trend of housing data,

however, remains somewhat

unknown as the most recent

housing data still included the

impacted weather timeframe

and showed monthly declines.

Some, but not all, economic data no longer impacted by the winter weather distortions

2008

2008

2008

2009

2009

2009

2010

2010

2010

2011

2011

2011

2012

2012

2012

2013

2013

2013

2014

6.00

8.00

10.00

12.00

14.00

16.00

18.00

US Auto Sales (SAAR)Though March 2014

Un

its

in m

illi

on

s

10

Recent jobs data appears back on prior trend, helping US private payrolls finally exceed pre-recession high

Data source: FactSet

Economic Overview, continued

As expected, job growth

accelerated once the wicked

winter weather passed.

Nonfarm payrolls increased

by 192,000 jobs in March,

along with revisions of

37,000 more than previously

reported for January and

February. That took the six-

month average to 188,000,

roughly in-line with the prior

trend. The composition of

the March gains illustrate

that the industries that

suffered the worst weather-

related declines, such as

construction and retail,

accelerated in March (or in

February and March). This

has helped US private

payrolls finally exceed pre-

recession high.

1994 1998 2002 2006 2010 201490,000

95,000

100,000

105,000

110,000

115,000

120,000

Total US Private PayrollsThrough March 2014

In m

illi

on

s

11

Monetary Policy Overview

12

13

The Fed’s Dual Mandate

62%

63%

64%

65%

66%

67%

68%

Mar-96 Mar-02 Mar-08 Mar-14

An

nu

al %

Rat

e

Participation Rate Average: 66.0%

0%

1%

2%

3%

4%

Feb-96 Feb-02 Feb-08 Feb-14

An

nu

al %

Rat

e

Core CPI Core PCE

2%

4%

6%

8%

10%

12%

14%

16%

18%

Apr-96 Apr-02 Apr-08 Apr-14

An

nu

al %

Rat

e

Unemployment Rate Underemployment Rate

Unemployment (U-3) & Underemployed (U-6): Since 1994 Core Inflation Metrics

Labor Force Participation Rate

The unemployment rate has fallen to 6.7% from a peak of 10%.

Large part of the drop is due to falling participation rate

Core inflation metrics, the second part of the Fed’s dual mandate,

remain dormant

Yet, given the expansion of the Fed’s balance sheet, price

stability may become a greater challenge in the future

Source: Bloomberg14

Economists’ Interest Rate Outlook (Bloomberg Survey – March 2014)

Current Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

10Y UST 2.78% 2.84% 3.00% 3.16% 3.34% 3.46% 3.59%

2Y UST 0.43% 0.39% 0.49% 0.63% 0.80% 0.94% 1.13%

3M LIBOR 0.24% 0.27% 0.31% 0.35% 0.41% 0.47% 0.63%

Fed Funds 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.38%

Real GDP 2.40% 1.90% 2.80% 3.00% 3.05% 3.00%

CPI 1.60% 1.40% 1.70% 1.80% 1.90% 1.95%

Unemployment Rate

6.70% 6.60% 6.50% 6.40% 6.20% 6.10%

Based on Bloomberg Economist Survey (3/13/2014)

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

0.90%

1.00%

Q4 12 Q2 13 Q4 13 Q2 14 Q4 14

Economist Averages

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

Q4 12 Q2 13 Q4 13 Q2 14 Q4 14Economist Averages Economist Predictions

3M LIBOR – Past & Projected

10Y Treasury – Past & ProjectedEconomic Expectations

The charts on the right show the Bloomberg consensus forecast for 3-

Month LIBOR (48 economists) and the 10-Year Treasury (76 economists)

through the fourth quarter of 2014

With a few exceptions, there is a general sense within the

economic community that short-term rates will remain low for an

extended period. This view is consistent with recent comments by

the Fed

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

Q4 12 Q2 13 Q4 13 Q2 14 Q4 14Economist Averages Economist Predictions

Source: Bloomberg, Indicative only – Not a recommendation or offer to deal15

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Apr-04 Apr-06 Apr-08 Apr-10 Apr-12 Apr-14

US GDP (rt. Axis) 10-yr UST

QE1 QE2

Op. Twist & QE 3/4

Market Response to QE

GDP is expanding (slowly), yet US treasury rates are still near record lows

10-yr Treasury Yield vs. GDP (annualized)

Even in the depth of the recession, the

10-year Treasury yield was above 2%.

Over the past 12 months, the 10-year

yield reached new record lows following

QE despite an expanding economy

Treasury rates are lower now than at any point during the great recession

Source: Bloomberg 16

500

700

900

1100

1300

1500

1700

1900

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

Apr-04 Apr-06 Apr-08 Apr-10 Apr-12 Apr-14

10-yr UST S&P 500 (rt. Axis)

QE1 QE2

Op. Twist & QE 3/4

Market Response to QE

10-Year Treasury Yield vs. S&P 500

The typical relationship between treasuries and stocks has decoupled since the Fed began QE programs

Since the announcement on March

18, 2009 of the first round of

Quantitative Easing (ending March

2010), the S&P has gained over

100%

The announcement came in

December that the Fed would begin

reducing their quantitative easing

program by $10bln per month

Source: Bloomberg 17

1.30%

1.50%

1.70%

1.90%

2.10%

2.30%

2.50%

2.70%

2.90%

Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14

Interest Rate Volatility – 10 Year Treasury Yield

Interest rate markets dominated by the Euro-zone, FOMC, and negotiations in Washington

Congress passes bill to avoid many of the

“Fiscal Cliff” tax increases

Better than expected February payrolls

Fed announces QE4: $45BN of

Treasury purchases monthly

Positive April employment

report

Possible QE slowdown

Fed refrains from QE taper

Fed begins QE taper

Yield reaches 3% for first time since July

2011

Russia/Ukraine situation escalates

Yellen more hawkish than expected at

press conference

Source: Bloomberg 18

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014

10 Year Treasury Avg (6.66%) Avg Since '90 4.98%

Historical 10 Year Treasury – Last 30 Years

History suggests long-term rates may increase rapidly once the Fed begins signaling an increase in short-term rates, and/or if the market begins to price in the risks associated with current monetary policy and the unprecedented US debt burden

Despite recent move higher, interest rates are still near historic lows

Source: Bloomberg

19

Investment Outlook

20

March 2014 Market Returns

Total Return*Periods ending March 31, 2014

1 Month YTD 12 Months

Global Markets (in US $)

MSCI AC World Equity Index (net) 0.4% 1.1% 16.6%

Citi World BIG USD un-hedged -0.1% 2.5% 2.4%

US Equities

Large-Cap US Stocks (S&P 500) 0.8% 1.8% 21.9%

Small-Cap US Stocks (Russell 2000) -0.7% 1.1% 24.9%

International Equities

Developed Countries (MSCI EAFE) (net) -0.6% 0.7% 17.6%

Emerging Markets (MSCI EM) (net) 3.1% -0.4% -1.4%

US Fixed Income

US Treasury Bonds (Benchmark 10 Yr.) -0.3% 3.4% -4.4%

Barclays Aggregate Bond Index -0.2% 1.8% -0.1%

BofAML High Yield Master 0.2% 3.0% 7.5%

Barclays Municipal Bond Index 0.2% 3.3% 0.4%

International Bonds

Citi World BIG non-USD un-hedged 0.0% 3.0% 4.5%

JPM Emerging Mkts Bond Index 1.3% 3.5% -1.1%

Non-Traditional

REITs (FTSE NAREIT Equity Index) 0.4% 8.5% 3.3%

Commodities (Dow Jones UBS) 0.4% 7.0% -2.1%

* All returns in US dollars Data Source: Factset

The MSCI ACWI, a proxy for global equities, rose

0.4% in March, finishing a choppy first quarter

with a gain of 1.1%. Emerging markets equity was

the clear leader last month, gaining 3.1%, while

Developed international was down 0.6%

Remarks from new Fed Chair Janet Yellen

suggested short term interest rates could rise

earlier in 2015 than market expectations led to a

slight rise in yields; the benchmark 10-year US

Treasury yield ended March at 2.72%, up from

2.65% the previous month.

The Barclays Aggregate Index declined 0.2% in

March, but returned 1.8% in the first quarter. The

Barclays High Yield Index and the Barclays

Municipal Bond Index each rose 0.2% last month,

extending their year-to-date outperformance. EM

bonds also snapped back with a monthly return of

1.3%.

REITs and Commodities had another positive

month and are up strongly thus far in 2014.

21

Returns are represented by the follow indices: Barclays Municipal Bond Index, Citi World BIG Index, Barclays Aggregate Bond Index, Barclays US Corporate High Yield Index, Barclays Bellwether 10 and 30 year US Treasury Index, Barclays Financial Institutions Bond Index, Barclays MBS Fixed Rate Bond Index and Barclays US Investment Grade Corporate Index. Data source: Morningstar and Barclays Live

Market Overview

After the best year for global

equities since 2003 and the

worst annual performance for

the Barclays US Aggregate

Bond Index since 1994, a

reversion in trends took hold

as bonds outperformed

stocks in the first quarter.

World equities generally

rallied during March and in

the first quarter, but returns

were uneven. There was a

great deal of rotation within

and across markets. The MSCI

ACWI gained 0.4% for the

month and 1.1% for the

quarter. The S&P 500 rose

0.8% in March, bringing its

year-to-date gain to 1.8%. The

MSCI Emerging Markets Index

raced up 3.1% for the month,

but remained the biggest

laggard for the year.

Global stocks rose modestly in March, capping off an uneven first quarter in which bonds outperformed

S&

P 5

00

Sm

all C

ap

Dev

elop

ed I

nt'l

Em

ergi

ng M

kts

Agg

Bon

d

HY

Bon

d

Mun

i Bon

ds

Wor

ld B

ond

Com

mod

ity

-2%

0%

2%

4%

6%

8%

0.8%

-0.7% -0.6%

3.1%

-0.2%

0.2% 0.2%

-0.1%

0.4%

1.8%1.1%

0.7%

-0.4%

1.8%

3.0% 3.3%

2.5%

7.0%

Major Market Returns Through March 2014

MTD YTD

22

Global stocks were slightly higher in March, capping off a choppy first quarter

Equity Market Overview

Returns are represented by the following indices: S&P 500 Stock Index, MSCI Emerging Market Index in US dollars and local currencies, MSCI EAFE developed country index in US dollars and local currencies. Data source: Morningstar

Emrg Int'l Local (MSCI EM)

Emrg Int'l USD (MSCI EM)

Developed Int'l Local (EAFE)

Developed Int'l USD (EAFE)

US (S&P 500)

Global (MSCI ACWI)

-0.5%

-0.4%

-0.3%

0.7%

1.8%

1.1%

1.9%

3.1%

-0.5%

-0.6%

0.8%

0.4%

US & International Equity Market Returns Through March 2014

MTD YTD

The MSCI ACWI, a proxy for

global equities, rose 0.4% in

March, finishing a choppy first

quarter with a gain of 1.1%.

The S&P 500 gained 0.8% in

the month, bringing its year-to-

date return to 1.8%; eight of

the ten S&P 500 sectors were

positive for the month, with

Telecom, Utilities, and

Financials gaining over 3%.

Emerging markets (EM) was

the clear leader last month,

gaining 3.1%. This rebound

helped cut EM’s first quarter

loss to just 0.4%. Conversely,

Developed international was

down 0.6% in March but closed

the first quarter up 0.7%.

23

Modest headline index gains masked significant rotation below the surface

Equity Market Overview, continued

Data source: Factset, country returns based on MSCI indices; data shown in USD on a net basis

Despite relatively flat

headline index performance,

a tremendous amount of

rotation within and across

markets occurred in the

quarter. Many of the more

expensive, high growth

areas, such as internet and

biotechnology stocks, sold

off late in the March, as

investors re-priced the

amount they were willing to

pay for future growth

expectations. Japan, 2013’s

star performer, has

struggled this year, while

peripheral European markets

Italy and Ireland jumped

14.6% and 14.0%,

respectively.

Russia

China

Japan

Germany

USA

India

Ireland

Italy

-24.0% -14.0% -4.0% 6.0% 16.0%

-14.5%

-5.9%

-5.6%

-0.3%

1.7%

8.2%

14.0%

14.6%

Select First Quarter CountryStock Market Performance

24

Remarks from Fed Chair Yellen suggested short term

interest rates could rise earlier than market expectations led

to a slight rise in yields; the benchmark 10-year US Treasury

yield ended March at 2.72%, up from 2.65% last month. As a

result, the yield curve flattened during the first quarter. The

Barclays Aggregate Index declined 0.2% in March, but

returned 1.8% in the first quarter. Meanwhile, the Barclays

High Yield Index rose 0.2%, extending its year-to-date

outperformance. EM bonds also snapped back with a

monthly return of 1.3%.

Spurred by low rates and strong investor demand,

companies continued to borrow in record amounts during

the first quarter. With rising demand, spreads on corporate

bonds closed the quarter at their lowest levels since July

2007. The average spread on investment grade bonds was

106 basis points at the end of March. Still, we find value in

corporate bonds from the incremental yield they offer over

Treasuries and recommend investors maintain an

overweight position.

With spreads are at seven-year lows and some of the recent

issuance driven by equity-friendly motives on the part of

corporations, we believe security selection and active

management of positions is critical.Data source: Bloomberg

Returns are represented by the following indices: Barclays Municipal Bond Index, Citi World BIG Index, Barclays Aggregate Bond Index, Barclays US Corporate High Yield Index, Barclays Bellwether 10 and 30 year US Treasury Index, Barclays Financial Institutions Bond Index, Barclays MBS Fixed Rate Bond Index and Barclays US Investment Grade Corporate Index.

Taxable Bond Market OverviewH

igh

Yie

ld

Co

rpo

rate

Mu

ni B

on

ds

Mo

rtg

Ba

ck

ed

Wo

rld

Bo

nd

Ag

g B

on

d

US

Ts

y 1

0 Y

r

US

Ts

y 3

0 Y

r

-2%

0%

2%

4%

6%

8%

10%

0.2% 0.1% 0.2%

-0.3% -0.1% -0.2% -0.3%

0.9%

3.0% 2.9% 3.3%

1.6%2.5%

1.8%

3.4%

8.1%

Fixed Income Market Sector Returns Through March 2014

MTD YTD

1 2 3 5 7 10 15 20 25 300.00%

1.00%

2.00%

3.00%

4.00%

5.00%

Treasury Yield Curve Comparison

3/31/2014 12/31/2013

Maturity (years)

25

Commodity Market Overview

Returns are represented by the follow indices: DJ-UBS Commodity Index and the following Sector Sub-Indexes of the DJ UBS Commodity Index: Industrial Metals, Precious Metals, Energy and Agriculture. Data source: Morningstar.

Surge in agriculture help commodities notch fourth straight monthly gain

Industrial Metals

Precious Metals

Energy Agriculture DJ-UBS Commodity

Index

-1000%

-500%

0%

500%

1000%

1500%

2000%

-156.0%-397.0%

-177.0%

497.0%

41.0%

-455.0%

542.0% 420.0%

1651.0%

699.0%

Commodity Index and Sector ReturnsThrough March 2014

MTD YTD

Gains in agricultural

commodities offset a selloff in

precious and industrial metals

as the DJ-UBS Commodity

Index gained 0.4% in March,

bringing its year-to-date gain

to 7.0%.

Wheat prices surged over 15%

while corn and grains jumped

over 8% in March, aided by

extreme weather conditions.

Metals prices were generally

lower. Copper fell over 5% on

China growth concerns. The

DJ-UBS Gold Index fell 2.9% in

March and Silver declined

7.0%.

Energy markets were mixed;

natural gas gave back some of

its previous gains.

26

Hedge funds stumble in March, but post solid first quarter results

Alternatives Investment Overview

Data Source: Hedge Fund Research, Factset

Hedge fund investing involves substantial risks and may not be suitable for all clients. Hedge funds are intended for sophisticated investors who can bear the economic risks involved. Hedge funds may engage in leveraging and speculative investment practices that may increase the risk of investment loss, can be illiquid, and are not required to provide periodic pricing or valuation information to investors. Hedge funds may involve complex tax structures, have delays in distributing tax information, are not subject to the same regulatory requirements as mutual funds and often charge higher fees.

Choppy equity markets

hampered hedge fund returns

during March as the HFRI

Fund Weighted Composite

Index slipped 0.3%. Similarly,

most of the major equity-

related strategies were

negative for the month.

Conversely, fixed income-

based approaches

outperformed as the HFRI

Relative Value Index rose 0.6%

in March and were the best

performing strategy during the

first quarter, up 2.4%. Other

narrowly-focus fixed income

approaches also did well in

March. Hedge funds, however,

largely kept pace for the first

quarter as the HFRI Fund

Weighted Composite Index

gained 1.1% compared to 1.8%

for the S&P 500 Index.

S&P 500

Barclays Aggregate Bond

Fund of Funds Diversified

Relative Value

Macro: Systematic Diversified

Equity Hedge

Fund Weighted Composite

-2.0% 0.0% 2.0% 4.0%

1.8%

1.8%

0.1%

2.4%

-1.8%

1.4%

1.1%

0.8%

-0.2%

-0.9%

0.6%

-1.9%

-0.2%

-0.3%

Comparative HFRI Hedge Fund ReturnsThrough March 2014

MTD YTD

27

Category Underweight Neutral Overweight Investment Rationale

PORTFOLIO RISK Improving economy and record corporate profitability vs. a maturing economic cycle, fair equity valuations, still fragile European recovery and emerging market risks.

EQUITY Stocks are reasonably valued and offer dividend yields competitive with bond yields.

US Large Cap US leads recovery; reasonable valuations, strong balance sheets, and diverse revenue.

US Small & Mid Cap Earnings growth potential, improved lending conditions and increased M&A activity.

Master Limited Partnerships Valuations at rich levels and expectations for rising rates to increase borrowing costs.

Non-US Developed Markets Improving economies, but these markets remain vulnerable and structural issues remain.

Non-US Dev. Mkts. Small Cap Improving growth and credit environment is especially positive for smaller-cap companies.

Emerging Markets While economically important and favorably priced, these markets still face headwinds.

Real Estate Securities Should be a near-term beneficiary of a moderately improving economy and labor market.

Natural Resources Though valuations are fair, commodity supply dynamics are not favorable.

FIXED INCOME With a better economy and a transition in Fed policy, rates should move higher; we continue to underweight the more interest-rate sensitive bond market sectors.

US Government Particularly vulnerable to a rise in rates; TIPS continue to provide some relative value.

US Mortgage-Backed Securities Tend to outperform government bonds when rates rise and have a slightly higher yield.

US Investment Grade Corporate Within credit, investment-grade bonds have lower yields and a longer duration profile.

US Preferred Securities High risk profile and sensitivity to interest rates increase chance for negative returns.

US Convertible Opportunity relative to US equity and credit is not compelling.

Municipal Attractive on an after-tax basis, but underweight due to potential for rising rates.

US High Yield Better yield, lower duration and current environment supports low default expectations.

US Leveraged Loans Provides duration management and return opportunity should rates rise.

Non-US Developed Markets Yields likely to remain lower than US as economic trends/monetary policy lag.

Emerging Markets Attractive yields and diversification opportunity, but volatility may persist near term.

NON-TRADITIONAL Allocations to hedge funds should smooth returns and expand the opportunity set as stock market returns moderate and a move up in interest rates pressures fixed income.

Alternative Strategies Offers differentiated sources of return and lower risk profile vs. equity. Hedged equity should benefit from falling intra-stock correlations.

Real Assets Current data do not support adding inflation protection to portfolios. Commodities expected to be pressured by a stronger dollar, slower growth in China and improving supply.

Allocations based on a balanced portfolio. Neutral = within 10% of benchmark weight; Over/Underweight = over 11% deviation from benchmark weight. Opportunistic allocations are out-of-benchmark and are made within a range of 0-20%. Benchmark = 50% MSCI All Country World Index, 50% Barclays Aggregate Bond Index. = No Allocation; = Current Allocation; = Opportunistic Allocation

These positions represent SunTrust’s outlook regarding the attractiveness of asset classes and strategies versus our benchmark over a tactical time horizon in a balanced portfolio. Our opinions are informed by the assessment of global economic variables, financial stress indicators, valuation metrics and technical analysis under a broad range of potential risk and return scenarios.

Strategy Summary April 2014

28

What Next?

Reasons for Optimism Reasons for Concern

Improving economic backdrop

Housing market recovery

Wealth impact from increasing home

and equity prices

Rapid technological innovation

Stabilizing European debt crisis

Structural employment problems

Global monetary policy can distort

markets and create unintended

consequences

Aging demographic trends

Large fiscal deficit

29

Q & A

30

The information and material presented in this commentary are for general information only and do not specifically address individual investment objectives, financial situations or the particular needs of any specific person who may receive this commentary. Investing in any security or investment strategies discussed herein may not be suitable for you, and you may want to consult a financial advisor.  Nothing in this material constitutes individual investment, legal or tax advice.  Investments involve risk and an investor may incur either profits or losses. Past performance should not be taken as an indication or guarantee of future performance.

Services provided by the following affiliates of  SunTrust Banks, Inc. : Banking and trust products and services, including investment advisory products and services, are provided by SunTrust Bank. Securities, insurance (including annuities) and other investment products and services are offered by SunTrust Investment Services, Inc., an SEC registered broker-dealer and a member of the FINRA and SIPC, and a licensed insurance agency.  Investment advisory products and services are offered by SunTrust Investment Services, Inc., RidgeWorth Capital Management, Inc., and GenSpring Family Offices, LLC, investment advisers registered with the SEC.

SunTrust Bank and its affiliates and the directors, officers, employees and agents of SunTrust Bank and its affiliates (collectively, "SunTrust") are not permitted to give legal or tax advice. Clients of SunTrust should consult with their legal and tax advisors prior to entering into any financial transaction.

If included as a part of the presentation, any Baseline Financial Services, Inc. (Baseline), or Crandall, Pierce & Company (Crandall Pierce), or First Rate (First Rate) statistical data is provided as a service of SunTrust Banks, Inc. and its affiliates (including SunTrust Investment Services, Inc.) by Baseline, Crandall Pierce or First Rate, all of which are unaffiliated third party vendors. While this information is believed to be accurate, SunTrust Banks, Inc., including its affiliates, does not guarantee the accuracy, completeness or timeliness of, or otherwise endorse these analyses or market data.

Investment and Insurance Products: •Are not FDIC or any other Government Agency Insured• Are not Bank Guaranteed •May Lose Value

The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but SunTrust Investment Services, Inc. (STIS) makes no representation or guarantee as to their timeliness, accuracy or completeness or for their fitness for any particular purpose.   The information contained herein does not purport to be a complete analysis of any security, company, or industry involved.  This material is not to be construed as an offer to sell or a solicitation of an offer to buy any security.

Opinions and information expressed herein are subject to change without notice. STIS and/or its affiliates may have issued materials that are inconsistent with or may reach different conclusions than those represented in this commentary, and all opinions and information are believed to be reflective of judgments and opinions as of the date that material was originally published.  STIS is under no obligation to ensure that other materials are brought to the attention of any recipient of this commentary. 

STIS shall accept no liability for any loss arising from the use of this material, nor shall STIS treat any recipient of this material as a customer or client simply by virtue of the receipt of this material.

The information herein is for persons residing in the United States of America only and is not intended for any person in any other jurisdiction.

Investors may be prohibited in certain states from purchasing some over-the-counter securities mentioned herein.

The information contained in this material is produced and copyrighted by SunTrust Banks, Inc. and any unauthorized use, duplication, redistribution or disclosure is prohibited by law.   

STIS’s officers, employees, agents and/or affiliates may have positions in securities, options, rights, or warrants mentioned or discussed in this material.

Important Disclosures

31

Asset Allocation does not assure a profit or protect against loss in declining financial markets.

Emerging Markets: Investing in the securities of such companies and countries involves certain considerations not usually associated with investing in developed countries, including unstable political and economic conditions, adverse geopolitical developments, price volatility, lack of liquidity, and fluctuations in currency exchange rates.

Fixed Income Securities are subject to interest rate risk, credit risk, prepayment risk, market risk, and reinvestment risk. Fixed Income Securities, if held to maturity, may provide a fixed rate of return and a fixed principal value. Fixed Income Securities prices fluctuate and when redeemed, may be worth more or less than their original cost.

Hedge funds may involve a high degree of risk, often engage in leveraging and other speculative investment practices that may increase the risk of investment loss, can be highly illiquid, are not required to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual funds often charge high fees which may offset any trading profits, and in many cases the underlying investments are not transparent and are known only to the investment manager.

High Yield Fixed Income Investments, also known as junk bonds, are considered speculative, involve greater risk of default and tend to be more volatile than investment grade fixed income securities.

Important Disclosures

International investing entails greater risk, as well as greater potential rewards compared to U.S. investing. These risks include potential economic uncertainties of foreign countries as well as the risk of currency fluctuations. These risks are magnified in emerging market countries, since these countries may have relatively unstable governments and less established markets and economies.

Investing in smaller companies involves greater risks not associated with investing in more established companies, such as business risk, significant stock price fluctuations, and illiquidity.

uncomfortable with this level of risk should not trade managed futures or commodities.

Real Estate Investments are subject to special risks, including interest rate and property value fluctuations, as well as risks related to general economic conditions. Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.

32

It is not possible to invest directly in an indexBarclays Aggregate Bond Index: The broadest measure of the taxable U.S. bond market, including most Treasury, agency, corporate, mortgage-backed, asset-backed, and international dollar-denominated issues, all with investment-grade ratings (rated Baa3 or above by Moody’s) and maturities of one year or more.Barclays US Corporate High Yield includes USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high-yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below. Barclays Corporate Bond Index includes fixed rate corporate bonds with a maturity of at least one year rated investment-grade (Baa3/BBB-/BBB-) or higher using the middle rating of Moody’s, S&P, Fitch after dropping the highest and lowest available ratings. Barclays US Government Index is representative of fixed income obligations issued by the U.S. Treasury, government agencies, and quasi-federal corporationsBarclays 10-Year U.S. Treasury Bellwethers Index is a universe of Treasury bonds, and used as a benchmark against the market for long-term maturity fixed-income securities. The index assumes reinvestment of all distributions and interest payments. Barclays 1-15 Year Municipal Index is an unmanaged index of investment grade tax-exempt municipal bonds with maturities of one - 15 years

The J.P Morgan Emerging Markets Bond Index Plus (EMBI+) tracks total returns for traded external debt instruments (external meaning foreign currency denominated fixed income) in the emerging markets. The regular EMBI index covers U.S.dollar-denominated Brady bonds, loans and Eurobonds. The EMBI+ expands upon J.P.Morgan's original Emerging Markets Bond Index (EMBI), which was introduced in 1992 and covered only Brady bonds. An external debt version, the EMBI+ is the JPMorgan EMBI Global. JPMorgan EMBI Global Index is an unmanaged index that tracks debt securities of emerging markets

FTSE NAREIT Equity REIT Index is an unmanaged index reflecting performance of the U.S. real estate investment trust market

BofAML US Treasury 3-Month Bill is represented by the a subset of The Bank of America Merrill Lynch 0-1 Year US Treasury Index including all securities with a remaining term to final maturity less than 3 months.

US intermediate term government bonds index is derived from Morningstar’s database and tends to have a similar duration of three to five year treasuries

Index DefinitionsCredit Suisse Leverage Loans is a representative index of tradable, senior secured, U.S. dollar denominated non-investment-grade loans

DJ Dividend Select Index is an index that selects stocks by dividend yield, dividend per share growth, dividend payout ratio, and average trading volume and weighted by indicated annual dividend.

The S&P GSCI® Gold Index provides investors with a reliable and publicly available benchmark tracking the COMEX gold future

S&P 500 Index is comprised of 500 widely-held securities considered to be representative of the stock market in general.

MSCI EAFE Index comprises 21 MSCI developed country indices outside of North America: Europe, Australasia and the Far East.

MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. As of May 27, 2010 the index consisted of the following 21 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. MSCI All-Country World ex-US Index: is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets, ex-US equities.

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