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Home My WebLink About2007 04 24 Handout Regarding Trusco Capital Management, Inc. April 24, 2007 HANDOUT GIVEN TO THE BOARD OF TRUSTEE MEMBERS FROM BOGDAHN CONSULTING, LLC AT THE APRIL 24, 2007 REGULAR MEETING. i i , i . I j i j i f I, , . . i i i. I . . i j . . Trusco Capital Management, Inc. Defined Benefit & Trust for the Employees of the City of Winter Springs Fi rst Quarter 2007 Molly Halcom Investment Manager Trusco Capital Management 407 -237 -4372 molly.halcom @truscocapital.com Dianne Garcia Relationship Manager SunTrust Retirement Services 407-237-4513 dianne.garcia@suntrust.com 1 4 ~;<<" !! i t,!<pl "f "i # tit:iJ :~:t. Puripose. ~assion:. Perfotfnance" . "," ~.r.~:"~t ">'';; ;~.' "'" tv.... 'l. f!iiiI - ~ tn ... s:: CD ... s:: 0 0 s s Q) Q) .- .- ..... 2: > Q) 0 Q) a: >< > 0 .- M CD 0 "'C .- C +-' - Q) 0 Q) ..c ~ ...... c... ~ t::: c... ca CO 0 <( I- ~ a.. .viii 1_ j "' i .. j I i I. _ . '" Key Q1 Themes: Slower Growth Raises Hopes for Fed Ease Current Fed Funds Target is 5.25% .................... ................... .....................1 . Economic momentum ebbed in the first quarter though growth remained positive. 5.3 5.2 5.1 Dee '07 Fed Funds Futures (Daily Close) . Continued fallout from rising subprime mortgage delinquencies and defaults raised fears of contagion to the broader markets. 5.0 4.9 4.8 . Inflation remained stubborn at levels above the Fed's 1-20/0 comfort zone. Oil and gasoline prices rose following an initial drop. 4.7 4.6 12/31/2006 Source: CBor 1/31/2007 2/28/2007 3/31/2007 . Housing weakness continued as oversupply kept downward pressure on prices. While markets are generally softer, there are significant regional variances. . The push-pull of increased corporate M&A activity versus slowing growth and lower earnings estimates left equities modestly higher in the first quarter. International markets outperformed. . Bonds slightly outperformed stocks for the period and the yield curve steepened in anticipation of future Fed rate cuts. . Bottom line: Softening economic growth, lower corporate profits estimates, and increased credit concerns raised market volatility and increased the likelihood of Fed ease later in the year. , ;1; Ji~R' """~ 2 ~~,;trr:~sco - -'~anagement Inc. Defin~d Benefit & T 'st for the E ~yees of " '"j of Winte '. w ~ I ~R " , ~ m ~_ .], , If. Market Snapshot: 3/31/2007 . .. . S&P 500 Russell Top 200 Russell 1 000 Russell MidCap Russell 2000 Russell 3000 MSCI EAFE MSCI EAFE Small Cap MSCI Emerging Markets Russell Top 200 Growth Russell Top 200 Value Russell 1 000 Growth Russell 1 000 Value Russell MidCap Growth Russell MidCap Value Russell 2000 Growth Russell 2000 Value Russell 3000 Growth Russell 3000 Value Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities csrr Equity Market Neutral csrr Event Driven csrr Long Short Equity csrr Multi-Strategy FTSE NAREIT Equity Index U.S. % % % % % % Ann. % Ann. FIX-INCOME INDEXES Yield 1 Mo. 3.Mos. 6 Mos. YTD 1-Yr. 3-Yr. S-Yr. 1420.86 1.1 0.6 7,4 0.6 11.8 10.1 6.3 5.28 0.00 1.50 2.76 1.50 6.59 3.31 5.35 599.82 1.1 0.0 6.6 0.0 11.9 8.8 4.8 4.68 -0.05 1,45 2.18 1,45 5.87 2.60 5.11 1491.66 1.0 1.2 8.2 1.2 11.8 10.7 6.9 5.06 0.14 1,48 2.64 1,48 6.29 3.05 5.30 2645.04 0.8 4.4 12,4 4,4 11.8 15.7 12.9 5.61 -0.57 1,48 2.86 1,48 7.10 3.17 6.29 1990.01 1.1 1.9 11.0 1.9 5.9 12.0 10.9 5.54 0.25 1.55 3.11 1.55 6.90 3.93 5.01 1523.01 1.0 1.3 8.5 1.3 11.3 10.8 7.2 5.08 -0.17 1,47 2.52 1,47 6.38 2.90 5.57 2147.51 2.6 4.1 15.0 4.1 20.7 20.3 16.1 4.97 0.17 1.59 2.64 1.59 6.14 2.60 4.91 206.10 3.3 7.2 19.8 7.2 15.9 23.7 24.7 7.59 0.11 2.64 6.95 2.64 11.58 8.59 10.39 929.03 4.0 2.3 20,4 2.3 21.0 28.0 24.8 3.98 -0.25 0.81 1.93 0.81 5,43 3.96 5.50 4.85 0.35 1.56 2.59 1.56 5.68 2,45 4.05 627.39 4.70 0.38 1,40 2.33 1,40 5.02 2.31 3.11 843.63 369.34 5.03 0,45 1.27 5.11 508.23 5.07 0,44 1.27 5.12 917.19 4.57 0,42 1.50 4.98 1192.93 4.54 0.24 1.78 5.60 2458.23 4.64 -0.35 1,47 5.84 4399.22 4.84 -2.35 0.28 5,40 2205.70 3136.77 299.93 272.68 463.37 478.27 391.15 324.51 352.34 234.71 165.02 202.34 II ~' i\ ' . .: :. ., - C;~!pit~li 1\lbrJ~" .'c_..GiC SPrin9'&: 1 =-1 c... C') c-l c:..~. CI c-. c. . c...l C:!I c.. - c..."""]I t:'".J l:..:"1 C ...J - r:... t::...:J Domestic Equity Markets in the First Quarter, 2007 Mid-caps outperform ed Small-Caps alld Large-Caps ill the first quarter. Materials stocks generally outpelformed across market caps, while Financials ullderperform ed. Growth and Value Style relative performance was mixed. 25% 20% 16.8% Drivers of Return Utilities, Materials, Telecom Detractors from Return Financials, Technology, Consumer Discretionary 15% 10% . 5% 1.2% 1.2% 1.2% . 0% 1st Quarter 2007 1 Year Ending 3/31/2007 o Russell 1 000 Grow th Index . Russell 1 000 Core Index Iiil Russell 1000 Value Index 25% 20% 17.1% Drivers of Return Materials, Health Care, Energy, Consumer Staples Detractors from Return Financials, Telecom, Consumer Discretionary 15% 10% . 5% 0% . 1 st Qua rter 2007 1 Year Ending 3/31/2007 o Russell Mid-Cap Grow th Index . Russell Mid-Cap Core Index III Russell Mid-Cap Value Index 25% 20% Drivers of Return Materials, Consumer Staples, Energy, Industrials Detractors from Retu rn Financials . 15% 10.4% 10% . 5% 2.5% 2.0% 1.5% 1.6% 0% 1st Quarter 2007 1 Year Ending 3/31/2007 o Russell 2000 Grow th Index . Russell 2000 Core Index I!Il Russell 2000 Value Index Past Performance is not indicative of future results. Please refer to appendix for full disclosure. .Source: FactSet, 2007 ,; i 4~~oalltnagement,lnc. 1 II Defi1+Benef"&;ttforthe,\yeeSOfEw~ ~ :-"J [- ) c.. 1 [ J CII c. _ c...J C_I - JI::.'1 C:J r.:.. C::J c-J c.. c.~ c:...:J ell International Equity Markets in the First Quarter, 2007 /nternatio nal Large-Cap and Small-Cap MSC/ EAF E indexes outpaced their domestic counterparts in the first quarter, though there was a wide return range among individual countries. The Emerging Markets index recovered to positive territory following the late February sell-off, though some popular country indexes underperformed. 20.7% 20% International Large Cap Core . Drivers of Return Finland, Singapore, Australia, Demark . Detractors from Return Ireland, Hong Kong, Italy, New Zealand 1 00/0 4.2% 00/0 1 st Quarter 2007 1 Year Ending 3/31/2007 . MSCI EAFE Index 25% 15.9% International Small Cap . Drivers of Return Austria, Singapore, Spain, Portugal . Detractors from Return Denmark, New Zealand, Sweden, UK 15% 5% -5% 1 st Quarter 2007 1 Year Ending 3/31/2007 III MSCI EAFE Index Small Cap Index 25% 21.0% 15% International Emerging Market . Drivers of Return Peru, Morocco, Malaysia, Pakistan . Detractors from Return Venezuela, Columbia, India, Taiwan, Russia, China 5% 2.4% -5% 1 st Quarter 2007 1 Year Ending 3/31/2007 . MSCI EAFE Emerging Mkls. Index Past Performance is not indicative of future results. Please refer to appendix for full disclosure. 'Source: FactSet, 2007 ')1 I~' liiiIiii.: I i I Ii U ---. ~',,_._~'~ :;: 5 ~~co,""Management, Inc. I Defiljd Benefit &Fst for the '1Pibyees of . of w~ ...,~ C.I L I [-] r:-, (-:I C:J C":J C 1 C. Cl Ell 1:..1 ["'I C. ~J c.. ell _ C:I C.:1 Bond Markets in Q1, 2007 US Treasury Benchmark Security Yields 5.2 - 5.1 5.0 4.9 - 4.8 - 4.7 4.6 - 4.5 - 0 -3/31/07 -12/31/06 - - - .9/30/06 - - 3/31/06 - -- --- ...,------ .. . . - .. .. 5 10 15 20 25 30 US Sector Benchmark Returns 12.0 10.0 - 8.0 - 6.0 - 4.0 - 7.0 - 6.0 - 5.0 4.0 - 3.0 2.0 1.0 - 0.0 - US Treasury Benchmark Returns 3~ . 3-~s. 1.27 . 6 ~s. 2.54 6~ 1.27 2.54 5.12 2 Yr 5 Yr 10Yr 30Yr 1.50 2.39 4.98 1.78 2.32 5.60 1.47 1.93 5.84 0.28 0.73 5.40 .1-Yr. 5.11 . Ebbing economic momentum helped push shorter-term bond yields lower in the first quarter, while stubborn inflation pressures kept long-term yields anchored. . The yield curve "pivoted" around the 7-year maturity range, and the yield curve from 2 to 10 years returned to a positive slope. . The "middle" of the yield curve tended to outperform both ends during the quarter. . All major bond sectors improved in the first quarter. High Yield and TIPS outperformed on an absolute and duration adjusted basis. 'Sources: FactSet, Lehman Brothers, 2007 :!! I~' lIiit [11.n. lJ , 'f~ ~ ~ jj l ' 6~co.~~.nagementllnc. 1 Defll,dBeneflt&pstforthe~PIOyeeSOf.Of~ ',,_ :'-1 C: J C I c.~ C I _ L 1 C. I C _1 L I Ell CI C.. _ a.::. L_. c.. C. !I L I 40% 30% 20% 10% 0% -10% -20% -30% Perspectives on Growth, Inflation, Profits, & Rates 7% 6% 5% 4% 3% 2% -. 1% - 0% -1% -2% Actual Forecast l i 90 92 94 96 98 00 02 04 06 08 35 30 25 20 15 10 5 o ........1\... ...... _7"'>Kij' , , , , , ,~, "--I-H "'" r " r " Actual Forecast t i S&P 500 Op. EPS (YOY%) ~O ~? ~4 ~R ~R 00 O? 04 OR 10 Actual ~ .(~) Fed Funds (%) Forecast 2 - o 90 92 94 96 98 00 02 04 06 08 Sources: Trusco, BEA, FRB, S&P, Blue Chip Financial Forecasts, 2007 ; I! 7,jt;.,Jljagement, Inc. I j I oell1+ Benel~ &~Ut lor the ,\yees ot';: w~ ~ 2007: Moderating Growth Slowing Inflation 3/31/07 Cycle Short Intermediate Position Trend Trend Comments Fading Fading At Risk Weak housing and recent energy price rise dampening post-holiday spending and consumer sentiment. Job growth now key driver of consumer strength. High Fading Neutral Slower profits growth after extended period of above-average gains likely to curb pace of future investment. Low Weaker Weaker / Weaker growth and expectations of Fed ease in the Neutral U.S. contrasts with firm growth and more restrictive monetary policies overseas. Stable / Core Core Core inflation above 2% remains a policy concern, Slightly Peaking Moderately driven by tighter capacity and higher unit labor Lower Lower costs. Slower growth expected to curb core inflation later this year. Energy and food inflation may keep top line inflation numbers elevated. Moderately Moderately Restrictive / Fed on hold at 5 1,4 % following 17 rate hikes since Restrictive Restrictive Neutral 6/30/04. Anti-inflation rhetoric continuing and "data- dependent" / "forecast dependent" policy approach likely to keep markets volatile near term. Fed focus may have to shift to sustaining growth if recent softness persists. Ease expected later in 2007. Neutral Neutral Neutral / Tax revenues enjoying cyclical growth, offset in part Stimulative by stimulus from hurricane relief in addition to war costs. 2008 presidential race likely to generate new spending proposals. This perspective was prepared tor clients and prospective clients at Trusco Capital Management. Inc. Neither Trusco or any affiliations make any representation or warranties as to the accuracy 01 merit of this analYSIS for indiVidual use. Past returns are not indicative of future results. Comments and projectIOns were based on Information available at the time of writing. are for Informational purposes only. are not Intended as indiVidual or specific adVice. and may not be relied upon for future Investing. Investors are adVised to consult With their investment profeSSIOnal about their specific financial needs and goals before making any investment decisions. .'._..IPSi' Asset Allocation: Current Strategy NEUTRAL U.s. Stock Market "'~ ];I, Equities .6. '~' . . . . ~onds ~ . . . . . . . . . . . . . 1 Small j . . . . . . . . . . . . Maintaining moderate equity overweight Valuations reasonable I attractive, profits growth expectations more realistic, economic growth appears sustainable, and eventual Fed ease IS likely. Attractive relative valuation. Flatter yield curve. Neutral: Valuation. the shape of the Yield curve, and sentiment favor Value, but the extended value outperformance and recent mixed performance tempers enthusiasm. Moderate: Attractive valuations, Improved foreign growth prospects In ASia and Europe. Projected weaker dollar Subpnme mortgage weakness raising market concerns about credit quality. Remain underweight and shift higher on quality spectrum despite expectations of continued economic expansion. .......March 31. 2007 .6 December 31, 2006 Large/Small Growth/Value 6 Value~ Domestic/Foreign (developed) 6 .... : : F;oreign 1 High Yield ,~ Undenveight ~ ,~'; ::;: ::;: ::;: ::;: t:ll 0 0 0 ~ Q Q Q '3 CD CD CD c:: ill ~ ~ :3 q;- . . Ovefweight~ . ::;: ::;: o t:ll Q '" ~ :3 q;- ~ Economic growth expected to continue at a sub-average pace. Recession probability higher but still low. Job growth is the key economic driver currently. We expect housing will continue to slow and the pace of consumer spending will soften. CAPEX growth is likely to slow as well due to slower profits growth. Lower, more realistic corporate earnings forecasts have reduced some valuation risks. Fed policy is on hold, but could shift toward ease if economic momentum continues to slide. Core inflation remains a focus for policymakers, but is likely to trend somewhat lower this year. "Data-dependent" / "Forecast-dependent" - Economic volatility around slower growth rates will help generate market volatility. Valuations are reasonable, particularly after the recent correction which followed eight consecutive monthly gains. Moderate overweight position in Equities. Maintain emphasis in Large-Caps, and slightly increase exposure to International. Shift to balanced exposure between Growth and Value styles. Bonds: Emphasize quality. Reduce High Yield weighting and move up quality scale. Maintain overweight position in Mortgages. (1) StrateglclTactical Asset Allocation models approved by Trusco's Investment Policy Group (IPG) on 3/20/07. (2) Portfolio allocations are In accordance With IPG deciSions and may change at any time and without notice. .\, TrlJ:;r;CJ C;::lpj~::li I\JI::l(J~_ i-\/;$ , Account Activity Summary Beginning Portfolio Market Value 12/31/06 Portfolio Additions/Withdrawals Total Additions/Withdrawals Portfolio Earnings Total Portfolio Earnings Ending Portfolio Market Value 3/31/07 Net Change $ 14,538,397.98 $ 401,196.51 Please refer to appendix for full disclosure, Period Ending March 31, 2007 Source: First Rate Investment performance system. Data Includes accrued income, $ 239,041.31 $ 15,178,635.80 $ 640,237.82 II .', .'- T (U~";:;0 C;~!pi~~d I\jl~!( , s~ri"~>I...' , Account Activity Summary Beginning Portfolio Market Value 3/31/06 $ 12,507,272.35 Portfolio Additions/W ithdra w a Is Total Additions/Withdrawals 1,373,868.79 Portfolio Earnings Tota I Portfolio Ea rn i ngs $ $ 1,297,494.66 Ending Portfolio Market Value 3/31/07 Net Change Please refer to appendix for full disclosure. $ 15,178,635.80 $ 2,671,363.45 Period Ending March 31. 2007 Source: First Rate Investment performance system. Data Includes accrued Income. .~,~ TrlJ"C;,) r;::.!pi~::.d i\jl::'!(l~ ~ " L-'~ .,t_..Gi! SPd,,~,a: \ Portfolio Composition Total Equity 69.3% Fixed Income 30.1% Current Actual Assets Market Value Allocation Total Portfolio $ 15,177,690 100.0% Total Equity $ 10,521,336 69.3% Total Fixed Income $ 4,571,708 Total Cash $ 84,645 0.6% Please refer to appendix for full disclosure. Period Ending March 31. 2007 lit I" I T(.~0 SC!pi", . . mem:_ .!.I~.~...- "'f' ,. . : ~'-'fl8Si" SP(ifl~'a..~ 1 Performance Comparisons TOTAL PORTFOLIO 1.62% 6.51% 9.77% 8.96% 7.26% 8.76% Total Equity 1.71% 8.41% 11 .54 % 11 .61 % 7.60% 9.36% High Grade Relative Value** 0.08% 6.93% 11.61% 12.55% 7.82% 9.26% Russell 1000 Value Index 1.24% 9.34% 16.83% 14.42% 10.25% 10.85% S&P 500 Index 0.64% 7.38% 11.83% 10.05% 6.27% 8.20% High Grade Growth 0.73% 5.16% 10.15% 5.96% 2.83% 9.36% Russell 1000 Growth Index 1.19% 7.19% 7.06% 7.01% 3.48% 5.51% S&P 500 Index 0.64% 7.38% 11.83% 10.05% 6.27% 8.20% International Index 4.31% 15.73% 20.27% 19.83% 15.96% 9.48% MSCI-EAFE Index 4.08% 14.86% 20.21% 19.84% 15.78% 8.28% Mid Cap Equity 5.01% 12.53% 10.08% 15.29% 8.50% 14.51% Russell Mid Cap Index 4.38% 12.38% 11.79% 15.72% 12.91% 12.71% Small Cap Growth 2.44% 7.05% -7.80% 7.37% 8.30% Russell 2000 Growth Index 2.48% 11.46% 1.56% 9.41% 7.88% 6.31% Small Cap Value 5.46% 12.12% 7.41% 17.81% 16.23% 13.49% Russell 2000 Value Index 1.46% 10.62% 10.38% 14.47% 13.61% 13.47% Total Fixed Income 1.37% 2.32% 5.94% 2.74% 5.19% 6.39% High Grade Bond 1.37% 2.31% 5.92% 2.86% 5.36% 6.48% Lehman Govt Credit Bond 1.47% 2.52% 6.38% 2.90% 5.57% 6.38% Lehman Aggregate Bond 1.50% 2.76% 6.59% 3.31% 5.35% 6.46% Past Performance IS not indicative of future results. Please refer to appendix for full disclosure. W\ Tru~y) C;~!pit~!II\jl~ =1 - .. - 1:"'_1 C"::I CII - c. - - - C_"1 - .:.:J - .. .:!I Ir:lI Period Ending March 31,2007. SunTrust Retirement High Grade Growth Fund Fund Type: Large Growth Value Blend Growth EfBLarge Medium Small Objeetive and Strategy The Fund seeks capital appreciation by investing primarily in large, well- established domestic corporations. The Fund is designed to comply with guidelines that are based principally on Florida laws governing the investment of municipal retirement plans for fire, police and general government employees. Portfolio Data Cusip . . . . . . . . . . . . . . . . . . . .990001273 Benchmark. . . . . . . . . . .. S&P 500 Index Unit Value. . . . . . . . . . . . . . . . .. $63.41 Assets ($mil) . . . . . . . . . . . . . . . $24.54 Portfolio Manager Ellioll Perny, CFA Top Holdings' Baxter International Inc. Microsoft Corp. Precision Castparts Corp. Praxair Inc. % Fund 4.0% 4.0% 3.9% 3.6% Cumulative and Annualized Total Return Annualized Three Year to One I Th re e Five Ten Inceptiorl Months Date Year Years Years Years 4/1/1990 Fund 0.73% 0.73% 10.15% 5.96% 2.83% 9.36% 1 0.81 % S&P 500 Index 0.6400 o 640;0 11830'0 10.0500 6.270/0 8.20% 9 960(0 Lipper Large Cap Growth Index 1.02% 1.02% 3.39% 6.51% 2.75% N/A N/A Portfolio Characteristics. Sector Concentration I Cha racteris tic Dividend Yield (Current) EPS Growth (3 -5 yr. est.) Market Capitalization ($bil) Price-to-Book PIE (12 months trailing) Return on Equity Fund 1.0% 15.0% 71.1 4.1 x 21.2x 22.3% Index 1 90/0 1 1 90io Consumer Discretionary 13.7% 10.5% 8.7'% .Portfolio Characteristics are subject to change. Consumer Staples 9.60/0 979 2.8x 16.4x 20.60'0 Energy 3.60/0 10.1% 12.90/0 Financials 21.60/0 16.2% Healthcare 11.90/0 Indus trials 16.1% 10.9% 25.10/0 Asset Allocation Information Technology 14.9% U.S. Stocks. . . . . . . . . . . . . . . . . . Cash....................... . Materials 3.6% 3.1% 0.0% 96.5% 3.5% Telecom Services 3.70/0 . Fund o Index Utilities 0.00/0 3.70/0 Stryker Corp. 3.5% Procter & Gamble Co. 3.4% Hew lell-Packard Co. 3.2% PepsiCo Inc. 3.2% American Express Co. 2.9% Cisco Systems Inc. 2.8% 'H 0 Idings are subject to change. This fund is a common fund managed by Trusco Capital Management and trusteed by SunTrust Bank. Please refer to appendix for full disclosure. I! .~ ~ r II II U ~ ~... ~ l I! 1 aa~I~H~c~Managementl Inc. 1 Defi1id Benefit &Fst for the ~r;ibyees Of. of w~ \~ :-1 C I - - - IEJ ~ ~ c..-:l l:..-:J ClI _ _ m!I c...., EI C.-I [""_-. c..""'J Period Ending March 31,2007. SunTrust Retirement High Grade Growth Fund -continued Manager's Quarterly Perspective The first quarter was a volatile one as investors' optimism early in the quarter diminished as inflation stayed above the Fed's target and hopes of interest rate cuts were pushed out until the second half of 2007. The market did finish on the upside with the Fund up 0.73% and the S&P 500 Index up 0.64%. During the quarter, the Fund had strong performance from the Healthcare and Industrial sectors while returns from the Energy and Technology sectors lagged. The quarter saw Growth stock returns match Value stock returns. That subtle shift from long running Value outperformance may signal the much awaited return of Growth stock relative outperformance. However, the trend of Mid Cap and Small Cap stocks outperforming their larger counterparts continued. We expect that trend will also reverse as slower economic growth is seen in 2007. Historical Quarterly / Calendar Returns 2002 2003 2004 2005 2006 2007 First Quarter 2.39% -2.02% 1.30% -3.60% 2.19% 0.73% Second Quarter -10.89% 9.57% 0.96% 0.12% -2.42% Third Quarter -14.94% 2.03% -3.40% 0.91% 7.34% Forth Quarter 4.03% 10.41% 7.01% 3.12% 4.40% Fund -19.26% 20.94% 6.62% 0.43% 11.75% 0.73% S&P ::>0(; Index ct:. 1 J "lj be 1 0 88 4 91 v " 811' .b4 Lipper Large Cap Growth Index -24.20% 26.97% 7.50% 7.58% 4.71% 1.02% Growth of $10,000 from 4/1/1990 to 03/31/2007 $60,000.00 $50,000.00 $40,000.00 $30,000.00 $20,000.00 $10,000.00 ~,. $- Apr-90 Apr-92 Apr-94 Apr-02 Apr-04 Apr-06 Apr-96 Apr-98 Apr-OO I-Fund -S&P500[ MPT Statistics / Other Measurements 3 Year Fund S&P 500 Index Alpha -0.32 0.00 R-Squared 89.21 100.00 Sharpe Ratio 0.36 0.98 Standard Deviation 7.27 686 Beta 1.00 1 00 This fund is a common fund managed by Trusco Capital Management and trusteed by Sun Trust Bank. Please refer to appendix for full disclosure. ill _J,W ~.. '1 II U , ~'7 ~ ~ I . 1 itl~sc~Managementl Inc. f I Defiljd Benefit &pst for the 'Plbyees of .. of w~ Q =- _I c.. ~ - 1:'1 c.-J C!I 1:"1 C~ - ~ - c-, L_-' r-. c. - - C"J Period Ending March 31,2007 SunTrust Retirement High Grade Relative Value Fund Fund Type: Large Value Value Blend Growth ~Large Medium Small Objeetive and Strategy The Fund seeks long-term capital appreciation with a secondary goal of current income by using a value-oriented investment strategy. The Fund is designed to comply with guidelines that are based principally on Florida laws governing the investment of municipal retirement plans for fire, police and general government employees. Portfolio Data Cusip . . . . . . . . . . . . . . . . . . . .990001182 Benchmark. . . . . . .. Russell Value Index Unit Value. . . . . . . . . . . . . . . . .. $16.26 Assets ($mil) . . . . . . . . . . . . . . . $31.00 Portfolio Manager James L. Savage. CFA Top Holdings' 1. Citigroup 2. ConocoPhillips 3. Chevron 4. Exxon Mobil 5. General Electric 6. Bank of America 7. Archer Daniels Midland 8. Pfizer 9. AT&T 10. Berkshire Hathaway B % Fund 2.3 2.2 2.2 2.1 2.0 1.9 1.8 1.8 1.8 1.7 Cumulative and Annualized Total Return Annualized Three One I Two Three Inception Months Year Years Years 6/30/2002 Fund 0.08% 11.61 % 11.88% 12.55% 10.77% Russell Value Index 1.24% 16.83% 15.05% 14.42% 12.91 % S&P 500 0.64% 11.83% 11 .78% 10.05% 9.88% Portfolio Characteristics. Sector Concentration Characteristic Dividend Yield (Current) EPS Growth (3-5 yr. est.) Market Capitalization ($bil) Price-to-Book PIE (12 months trailing) 5 Year Return on Equity Fund 1.9% 10.9% 81.3 2.5x 15.4x 20.0% Index 2.5% 9.3% 107.1 2.1x 13.6x 17.0x Consumer Discretionary 9.4% ) 8.4% 'Portfolio Characteristics are subject to change. Cons umer Staples 12.3% 8.4% Energy 10.5% 14.0% 21.4% Financials 34.8% Asset Allocation Materials . Fund D Index U.S. Stocks. . . . . . . . . . . . . . . . Cash..................... . Healthcare 10.5% 6.9% Industrials 10.2% 6.9% Information Technology 14.0% 98.13% 1.87% Telecom Services Utilities .Holdings are subject to change. This fund is a common fund managed by Trusco Capital Management and trusteed by SunTrust Bank. Please refer to appendix for full disclosure. II _J..U./ ~ I il It u .... ~... ~ 1 i t 1 il~Vl?c~Ma"agementl Inc. I Defintld Benefit &just for the ~pmyees of _ of w~ \~ :-.... c-I - em c:...-. c.. I:'" J ~ - ~ .. cw - - .. - - [ ... r:-g Period Ending March 31,2007 SunTrust Retirement High Grade Relative Value Fund -continued Manager's Quarterly Perspective The market had a slow start to 2007, with good performance in January and March mostly offset by a weak February. The S&P 500 returned .6% for the quarter, while the Fund's return was ,1 %. Corporations reported good profits, the economy continued to grow, and there was a lot of merger and acquisition activity, However, inflation has begun to increase, the Federal Reserve is unclear about its next interest rate move, and the geopolitical situation is as treacherous as ever. Sub prime mortgages and resurgent credit concerns could prompt investors to reassess the risk in their portfolios, We remain fully invested in a diverse portfolio of high-quality, large-cap stocks. Historical Quarterly / Calendar Returns 2002 2003 2004 2005 2006 2007 First Quarter N/A -4.11 % 2.36% 1.68% 4.00% 0.08% Second Quarter N/A 13.45% 2.59% 1.16% -1.02% Third Quarter -17.45% 2.10% 0.05% 3.94% 5.45% Fourth Quarter 6.53% 14.05% 9.14% 2.57% 6.85% Fund -12.05% 26.68% 14.67% 9.65% 15.98% 0.08% Russell Value Index -11 .29% 30.03% 16.49% 7.05% 22.25% 1.24% S&P 500 -10.30% 28.68% 10.88% 4.91% 15.80% 0.64% Growth of $10,000 from 6/30/2002 to 03/31/07 $19,000 $16,000 $13,000 $10,000 $7,000 Jun Sept Dee Mar Jun Sept Dee Mar June Sept Dee Mar June Sept Dee Mar June Sept Dee Mar - SunTrust Retirement High Grade Relative Value - Russell 1000 Value This fund is a common fund managed by Trusco Capital Management and trusteed by SunTrust Bank. Please refer to appendix for full disclosure. I _1!~' ~. ! 11 .n . U '- ~ ~ ." ! I 11J~usc~LManagement. Inc. I Defllid Benefit &rst for the ';iPIOyeeS of .' of w~ \~ :- .1 r.1 - - .. c:. c=I - c..-s C:I c-. - cw CI - - ('1 C I C~ Period Ending March 31,2007 SunTrust Retirement Mid-Cap Equity Fund Fund Type: Mid-Cap Blend Value Blend Growth OOLarge Medium Small Objeetive and Strategy The Fund seeks long-term capital growth by investing in domestic corporations with a market capitalization between $1 billion and $20 billion. The Fund is designed to comply with guidelines that are based principally on Florida laws governing the Investment of municipal retirement plans for fire, police and general government employees. Portfolio Data Cusip . . . . . . . . . . . . . . . . . . . .990001653 Benchmark. . . . .. Russell Mid-Cap Index Unit Value. . . . . . . . . . . . . . . . .. $38.32 Assets ($mil) . . . . . . . . . . . . . . . $36.3 Portfolio Managers Scott Yuschak, CFA Chuck Arrington, CFA Top Holdings' 1 . American Electric Power Co. 2. WellCare Group 3. Alliant Energy 4. Noble Energy 5. Cameron International 6. PMI Group 7. Cadence Design 8. PG&E 9. Edison International 10. CIT Group 'Holdings are subject to change. % Fund 1.6 1.5 1.4 1.4 1.4 1.4 1.4 1.4 1.3 1.3 Cumulative and Annualized Total Return Fund Russell Mid-Cap Index Lipper Mid-Cap Core Funds Avg.* Th ree Months 5.01% 4.38% 4.49% Portfolio Characteristics* Characteristic Dividend Yield (Current) EPS Growth (3 yr. hist.) Market Capitalization ($bil) Price-to-Book PIE (12 months trailing) Return on Equity Fund 1.1% 28.5% 8.8 2.5x 16.3x 18.3% Index 1.3% 25.1% 8.8 2.8x 17.4x 17.6% 'Portfolio Characteristics are subject to change. Asset Allocation U.S. Stocks. . . . . . . . . . . . . . . . 100.00% Annualized One Year 10,08% 11 .79% 8.98% I Three Years 15.29% 15.72% 12.33% Five Years 8.50% 12.91 % 9.73% Ten Years 14.51 % 12.71% 10.99% Inception 12/1996 13.97% 12.07% 10.35% Sector Concentration 'Source: Lipper Inc. Consumer Discretionary Consumer Staples Financials Healthcare Industrials Information Technology rv\a.terials Telecom Services Energy 18. 17. 7.00/0 5.90/0 7.00/0 ... 6.60/0 15.00/0 - '0. 9.90/0 ,- 9.60/0 11.00/0 ':1 11.50/0 13.50/0 I 13.00/0 7.50/0 5.90/0 ~2.3% 2.20/0 8.80/0 . Fund 8.6% D Index go/. 1% 90/0 Utilities This fund is a common fund managed by Trusco Capital Management and trusteed by SunTrust Bank. Please refer to appendix for full disclosure. : 1 oJIU,,' ~ r I f.n f' TU f h E'I f~f-W' ~s- ~ i i 1 ~~qsc~N1anagementl Inc. De 11er Bene It &just or t e ~'(iJ byees 0 __ 0 ~ ,~ ("""1 L J ~ CI - C.I If:) c.:.. .. - CI - CI - - - C -I C~ C-I Period Ending March 31,2007 SunTrust Retirement Mid-Cap Equity Fund -continued Manager's Quarterly Perspective The Russell Mid Cap was up 4.4% in the 1st quarter of 2007. Each sector in the benchmark advanced in the quarter. The Basic Materials sector had the best performance, advancing 12.3%. The Energy sector returned 10.1 %, and Utilities 9.1 % The worst performance came from Financials, which was up 1.2%. Information Technology was up 1.4%, and Consumer Discretionary advanced 2.4%. The Russell Midcap Growth index returned 4.0%, the Russell Midcap Value index 4.9%. The STI Classic Mid Cap Equity Fund total return for the quarter was a return of 4.8%. During the quarter we added to the Information Technology, Industrials, Basic Materials, Consumer Staples, and Healthcare sectors and reduced the weighting of the Financials, Consumer Discretionary, Utilities, and Energy sectors. Historical Quarterly / Calendar Returns 2003 2004 2005 2006 2007 First Quarter -4.92% 3.78% 1.60% 5.98% 5.01% Second Quarter 14.12% 0.50% 5.40% -2.14% Third Quarter 4.05% 0.18% 5.98% -0.05% Fourth Quarter 13.20% 13.01% 1.80% 7.16% Fund 28.37% 18.04% 15.49% 11 .09% 5.01% Russell Mid-Cap Index 40.06% 20.20% 12.65% 15.26% 4.38% Lipper Mid-Cap Core Funds Avg. * 36.11 % 15.50% 10.30% 7.44% 4.49% 'Source: Lipper Inc. Growth of $10,000 from 12/01/1996 to 3/31/2007 $40,000 . $30,000 $20,000 . $10,000 - SunTrust Retirement Mid-Cap Equity Fund - Russell Mid Cap MPT Statistics / Other Measurements Fund Russell Mid-Cap Index Alpha 1.80 0.00 3 Year I Sharpe Standard Beta R-Sauared Ratio Deviation 0.96 1.00 0.89 1.00 1.39 1.26 9.9 9.8 This fund is a common fund managed by Trusco Capital Management and trusteed by SunTrust Bank. :: i 1~~~anagement.lnc. I !i Defi~+Benef~&jJSlforlhe,\yeesotliF~ , L":J C'"_~ - c.. c...... .. C"l C"J C:J - - - .. c..1 C-.... - .. (.:1 r 1 Period Ending March 31,2007 SunTrust Retirement High Grade Bond Fund Fund Type: Intermediate-Term Bond E8JShort Int. Long High Medium Low Objective and Strategy The fund seeks to provide a high level of total return through current income and capital appreciation by investing in domestic corporate investment grade bonds rated A or higher by major credit rating agencies and U.S. Government securities. Portfolio Data Cusip . . . . . . . . . . . . . . . . . . 990001265 Benchmark. . . . . . . . . . . . . Merrill Lynch Government/Credit A Rated and Above Index Unit Value. . . . . . . . . . . . . . . .. $34.63 Assets ($mil) . . . . . . . . . . . . . .. $154.6 Portfolio Managers John Talty, CFA Perry Troisi Quality Distribution Treasury AAA AA A Cumulative and Annualized Total Return Annualized Three One I Three Five Ten Inception Months Year Years Years Years 8/31/1 989 Fund 1.37% 5.92% 2.86% 5.36% 6.48% 7.47% Merrill Lynch Gov't/Credit A+ Index 1 .45% 6.19% 2.85% 5.33% 6.41% 8.20% Portfolio Characteristics* Characteristic Average Rating Average Coupon Current Yield Yield-to-Maturity Average Maturity (Years) Effective Duration (Years) Fund AGY 4.7% 4.6% 4.9% 7.3 4.9 Index AAA 5.4% 5.3% 5.0% 7.2 4.9 'Portfolio Characteristics are subject to change. Distribution by Market Sector Characteristic Fund Index Treasury 44.8% 49.2% % Fund TIPS 4.2% 0.0% 48.9 Agency/Gov't Related 23.2% 25.4% 38.4 7.8 Mortgages 11.5% 0.0% 4.9 Corporate Bond 15.0% 25.4% Cash Equivalents 1.3% 0.0% Distribution by Duration 0.1 Year 36.1% 1-3 Years 3-5 Years 27.7% 5-7 Years 12.4% 15.3% 7-10 Years 10+ Years . Fund o Index This fund is a common fund managed by Trusco Capital Management and trusteed by SunTrust Bank. Please refer to Appendix for full disclosure. t ~ ~ Jr~: lilli, I; I It U .... ... - ~ I; I 2~~sc~Management. Inc. I Defileld Benefit & pst for the ~proyees of . of w~ .,~ CI (_I _ II:W _ _ .. CB __ .. - C. I C, r I - - ~ all Period Ending March 31,2007 SunTrust Retirement High Grade Bond Fund -continued Manager's Quarterly Perspective The first quarter produced excellent returns of 1.5% for the Merrill Gov't/Credit A+ Index, as investors were rewarded across all major sectors. For the past year, returns of 5.9% for the portfolio kept pace with strong results for the Index of 6.2%. The Fed has effectively kept rates range- bound and inflationary pressures under control, and we would be surprised to see any Fed action before the fourth quarter, absent surprises. Although recent events in the sub-prime mortgage market have impacted investor's views about the economy, we believe the sub-prime problem is an isolated phenomenon with little risk to the portfolio. Our mortgage allocation is composed of conventional agency guaranteed pass- through securities and AAA-rated senior tier CMBS. In addition, while the major commercial banks have nominal exposure to the sub-prime market, their risk is well managed. On the other hand, we have reduced our mortgage overweight which was added last year, providing higher incremental yield during a lower volatility period than we currently see. We continue to be underweight corporate exposure, and have worked to minimize LBO risk. We believe these strategies will serve you well as we move through the year. Historical Quarterly / Calendar Returns 2003 2004 2005 2006 2007 First Quarter 1.56% 2.90% -0.11 % -1.15% 1.37% Second Quarter 2.52% -2.96% 3.01% -0.07% Third Quarter -0.41% 3.27% -0.88% 3.60% Fourth Quarter -0.06% 0.97% 0.76% 0.94% Fund 3.63% 4.12% 2.76% 3.29% 1.37% Merrill Lynch Gov't/Credit A+ Index 3.20% 3.73% 2.62% 3.69% 1.45% Growth of $10,000 from 8/31/1989 to 3/31/2007 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 - - $5,000 Aug-89 Aug-92 Aug-95 Aug-98 Aug-01 Aug-04 -Fund -Merrill Lynch Gov'tlCredit A+ Index This fund is a common fund managed by Trusco Capital Management and trusteed by SunTrust Bank. Please refer to Appendix for full disclosure. ji! 2~~sc.anagement,lnc. I II Defi1~Benem&;Jstfor~e~\yeeSOfEw~ '8 ('"1 c-. - - 0. - - - - - - - .. - - - - c-. - Adviser: T"""o UpiuJ r-bNg<m",,~ Inc. Portfolio Managers . Chad Oealcins. CIA PcnIoIio manager since 1m 'And_AdOns Portfolio rnaNget" since 200S Objective The f1nj ...ks to prcoMe ilMStmenl mullS tNI comspond to the 'ggreg2le price perlonnance of the stCuritie$ included i1 the Morpn SUrHy upitallllltrNtiONl Europe. Austr2Juia. Far WI (EAfE).GDPWe;gf1led Index (Price Rel1.WTl~ Suitability Ths Fund is sUtaIlIe lor ~ ......lOtl YIilo wm exposure to fc>reigo 1Nrl<<15 and ore ...;Uing 10 ..copt the incre...d rislu cI foreitn ........g for the pou.bility 01 foigber returns. Share Class Description I Shares ve ol!ered exdusMly to r...nci>llnstitutions and intennedi>nes lor their own accountS or for the "CO<llU cI llMllmen lor wbidl they ><l U I\clucQry ..""~ irrmunent adviser. or rostodi.n and which CalSists cI nseu cI. boN fide lnJlt. or Ulets cI. buliness entity possessl1g . ux identiration runber. Growth of SIOO.OOO Investment III 111I1 . .l((0Uft1 ,... ..Q ',*flhYftll J if(l)1IIf &lid upiuf &:tftl, lb, obe,. fr:lp/1 OSl.".., on iM<>I frpctheti<oJ ,",.,:m,n! o( II 00.000 (rom JIJm] to JIJ 1 10]. The perfor"",nce quoled h"",in r.pre..nts post performonc.. To Ten Holdin s of Portfolio · YlIlIIl En S-p.A. s,...,.,., NPV A1fianz SE TO"fO".J Motor Lh1iCredi'o luI;,oo Total SA New Eon AG (fom><n, Vtb, AG) Banco Sanund<r Cenlral H,spano D.imler Chrysler Nj T*lonie> Tot~ Return. as 00131107 Count Wei htin s. 1.4~ U~ 1.2~ 1.2~ 1.2~ 1.2~ 1.2~ Au.tnl~ Austria Belgium D""",", FmlV\d Fnnce GOf11W1y Greece Hen! Kong Irel,n<J luly Jap.n Ne.het1ands New Zewn<J Norway Portug>l s,ng>pore $poin Swe<len S...;tzerbnd Uniled KinrOOm United Sutes Other Fund Benchm.rk --m% --m% --m% --m% ~~ ~~ -o:m -o:m ~~ ~~ I.WI". ~ -om -om --r.iS% --r.iS% ----sm ----sm 21.12~ ----ri:72i ---------r.9ij ---------r.9ij ~~ --rni --rni -wi -wi -----o:75i -----o:75i ~~ ~ 2.06~ --em --em ~ -.om ----0:00% ---0:00% ~~ 2xgregate Returns Average Annual Total Returns utest 3 S Qu.rter YTO Year Year Year 1~1~1~119.3ll(, I l81% l31% 17.991. 18.15" q~ 4.2~ 20.6J~ 20.72~ -- I.I~ I.~ I.~ Com sition of NctAsseu .. Ec;Uties Cash Equivalent 9H~ SJ" Inception Date 61619~ HSCI EAFE Inde. GDPWcighted (Price Return) HSCI EAFE Inde. GDPWtighted (Tot.1 Relurn) 'M of 1""'1(0 J 1.200] and 'ubjt<t 10 INnge. Pa.t performance doc. not guaRlntee future re.uru. The performance dOlO quo led repre.enu past performance and current return. may be lower or higher. Total relurn figure. include change I in .hare price,relnve.tment of dividends and capnal gains. The investment return and principal value will fluctuale '0 that an Investor'. shares, when redeemed, may be worth more or Ie.. than the original cost For performance data current 10 lhe most recenl month end, visit our web.;te at www.sticla..;cfund..com. Sh.res" "The expense ratio for I Shares is 0.67%. I . __ Classic Funds I 10 Year IS.wX. IH6% 17_~% 9.48" a.o2~ 9.81% . , 'u.~. I II It IJ -... ~-.. ~ :; ~ 2~~~~sc~Managementl Inc. j Defilid Benefit &lst for the ~Pibyees of . of ~ \~ L"I L":J - - - - - - - - - - - - - - c:I ~ - I BiD Classic Funds I I" M. ...... . '.. .. Fund In/onn.tion Modem Portfolio Theo Statistics' Ticker CUSI? Net AsletV>lue SIEIX 78~76659. $18.6<4 A!pIu Beu R.SqUlred S1urpe IUtio Suodml o.v;alion . As of Marth 3 I, 2007 and subjO<t 10 clunge. Portfolio Characteristics. Toul fund Asseu UJ:fer Ut~ Marke, C.pwution (SbJ) Price-,o-Boo< PriCe-to-Earnings (12 month ,raHing) Retu.-n on Eq<l;'Y (12 tnOI1th traihng) SI.ooa.600.H2 1"<<,,"atlONl Multi.up Core Fund. Ht2(b) 2J 15.7 17.2% C.lend.rYear Return' 451'. 351'. 25'1. 151'0 Wi .51'0 .15'10 .25'10 1997 19ge -199 2000 2001 2002 200, 2004 2005 2006 .1 S1ures 1:1 M$O EAFE lodex GDPWeigt1ted (Price Return) Pa,t performance doe, nol guarontee (uture re,ultJ. . MSCI EAFE Index GDPWeigh'ed (loul Return) An Investor should consider the fund's investment obJectives, rides, and charges and e"pen,es core(ully be(ore Investing or sending money, This and other /mpononlln(ormatlon about the STI Classic Funds con be (ound in the (und's prospectus. To obtain 0 prospectus, plea,e call' -888-STI-FUND or visil www.stlclosslcfund..cam. Please read the prospectu, care(ully before inve,ting. The STI Oassic Funds ore aclvised by Trusco CaPitol Managemen~ Inc.. "'nich recrives 0 (ee (or its services, and afe diWibuted by BISYS Fund Servi<:es limited Paftrlership, whkh is not a(firiated v.ith Trusco Capitol Managemen~ rnc. . Not FDIC Insured' No Bank Guarantee' May Lose Value 0.2~ 0.9. 97.67 1.70 9.73% InvestmentTenns & Index Definitions Pric"lo-Book Rallo is used 10 rompare . 'lOCk', nurlce: value to ia boo!< value. The higher the raoo.lI1e higher lI1e premium the marke, i, ""ling to pay for a rompan)' u.o.. ia turd 1U<U. Pric"lo-&rnlnts Rotio iPIE") is . valU1tion ntio of a company', currem share price to its ptr.sIwe earnings. The ligher the Pie ndo,lI1e more the marl<et is wili"l '0 paylor e>ch doIbr of annual wnings. Alpha meuures , fund', fisk-odjust<d performance ,nd represents lI1e difference between a fund', acMl performJnce and ia expected periofmance.given its Ievtl of ri,k u meuured byl>eta. Beta Is . mean' of mmuring ,he 'IOb~ d . securi1y or portfolio of securities in comparisal with the ""nee u a whole. A beta of I incicates that the 'tcUnty will mowe v.im lI1e nwl<<t: greater than I indicJtes tha, it', more 'IOb"'e than the muI<t.. and less than , Indiace, tha, its less voIatle than lI1e marke.. R-S'I"ort4 mmores the portion of , fund', mowment tha, is tl<pla;ned by movernentS in the ""nee index.3nd helps indicate lI1e muner cI . funcf, Jlp/la and beta. Sharpe Ratio is , ri'k-,djusted measure that is cJlcubted ~ sundJn:t deviaOon and excess retum to detemW1e reward per lnt of risk. The ligher the Sharpe ntio. the bener lI1e blcf, historical fisk-adjusted petfonnance. StandOld O...iotion is . ,utistic" meuuremtnt of dilj>l!rsion ,bout an Mnl". """ch depicu how widely returns vuied (JYfr . ceruin period of time. MSCI WE ln4tx. GOP wellhled (Price Return) ond (Totol Return) ve unnunaged gross domestic produc:t.weigIlled eqWy indices c~ 20 of the 48 cOl.l>Ules in the MSCI universe Jnd tepmenling the dMIoped worid ootsidt of NorthAmena. Each MSCI country lodex is anted sepantely then agveg>ted. witl'<lut ctwlge. into rqioNI MSCIlndices. EAFE performance data is aIallaced in US. dolIa" Jnd in local curre<lCy. The I".sa EAFE Index.GDPwegh,ed (Total Rewm) is ~t<d lor lI1e ........unent 01 income di-.iclends.lnvestors cannot imoesc clitut!y in~inc!ex.. Investment Concerns ifl<e",.li<lNl ~ iMlhes incre>sed risk and IOOlatffity. Stocks ve more voIatle 3nd any more risk and rt<mI pacenOal than cdler forms of ~ The net Ulet value per shMe of tli, fm:l WIll fluctuate.. the vJIue of the securities in the ponfolio changes. It is imporunt to remember tN, there are risks usociated with index investing. including the pac"";" risk cI market dedine... well., lI1e risks associated v.im inYesting in specific cOfT"llJl'ies. 148-0307 04107 i I~..:. ~~ t II .n . lJ ""- ~wr~"' - ~ I ! 2~~sc~UManagement, Inc. I DeflTlo Benefit &pst for the ~Pibyees of _ of w~ .~~ :-"1 - c-. - [B - - - - - EI .u .. - - - - - r:I Adviser: Trusco Upial Mvl3gem"'~ Inc. Portfolio Managers . J""'" P.Fester f'ort/d;o lNru:tr .ince 2006 . Christopher G.-..ner Portfdio lNru:tr .ince 2007 . l"..cIlael A S3nsottrn PortKlrio lNru:tr .ince 2007 Objective The fund seeks to ptC'Ade lcc1g-tl!m1 c>pial appre<iation by l~tinI in u.s. com~ with lNrf<ec apt1mtions 01 up to $3 billion thot demonstnte obooe ~ growth po<<n.ul. Suitability "INs fund is Slfuble for ifM!ston ...tlo W3Ilt the v>lue 01 their l~unentS to zrow.bu: do nee need anenc income. Share Class Description I Sture. are ol!ered excMMly to fmnci>! institutions and intermediaries for their awn a<<ounu 0< for the acCounlS 01 customers for wf1lch they act as tiduciuy >Z"'~ irNoestment a<lwiser, I 0< custodi.n and wtich consists 01....... 01. boru fide trUS~ or ....a 01. business entity pouesw.g. t1X identifation runber. Growth of S 100,000 Investment 1i Ten Holdin % of Portfolio · Sector We; htin . laO.COO P,1<hiuric Solutions.~. 1.1% Fund Benchm.rk 11')).<100 HoIog;c Inc. O.~ Consumtr Oi.c~.,oo,1)' 19.07% 16H\ 1110.000 Gener>! uble Corp. O.~ Consumer Su;>le. 2.97% 2.68\ 1I;lJ,000 Flow Inti Corp. O.~ Energy H5\ 5.68\ 1110.<100 Diglt1IRr-tr o.~ FifUJ'lCi.1 Services 6.68% 9.10\ 1100.<100 New Amr f'!1.rm"eutical., Inc. O.~ Health Core 21.48% 19.47\ 110.<100 T.HQ,lnc. O.~ IndUlUi.I. IH8% 17.90\ 10 Atherm Ccmrronic.tions O.~ Inlomution Technolozy 2329\ 14.01\ l/)llll 11\1191 ItlIm 1018198 Commsccpe Inc. 0.8% Muerials 4.35\ J.IJ\ _"((OWaC _t'" .~ 1t~1II II _~ JIId ur-Ui1 t~f:$ Varian Semiconductor Equ;pment o.n Telecom ServiCes 1.53% 1.35\ 1Itt obeY, troth os"",.. 011 ..1t<lJ l>jpWJet<:cJ inmtmenl 0{ S' 00.000 (= rhe Uti~tie. o.~ 0.15\ flJlld"s ""WJM dale to 313/107. The performonee quoted h...ein rt~re..nt. post p<rforrnonee. Tot.1 Returns.. 01J1J 1107 Com o.ition % of Net Assets . Shares" I Ru..elI2000' G...wth Index Inception Date IOi8m 2ggregate Return. Late.t Quarter 2.44\ lAS% Average Annu.1 To...1 Return. 3 5 YTD Year Year Year I~I~I~I 8':0% Hn L56X 9.4 1\ 7.65% - EQlities ush Equivalent 97.8\ 2.1\ Since Inception lJ.sn 9.U%'" .,.. of Much JI. 2007 and subject to cllange. Post performance doe. not guoranlee future reJulu. The performance dota quoled represenU pa.1 performance and current reCUm. may be fower or higher. Tolal relurn (lgure.lnclude chonge in JhOre price, reinve.tment of dividend. and copilal gain.. The inve.tment return ond prine/pal value will fluctuale .0 that an irrvestar'. Jhare., when redeemed, may be worth more or 'en Ihan Ihe origInal co.L For performance data curnnt to the most recenl month end, vi.it our web.ile at www..tlclalllcfund..com. '*The expense ratio for I Shares i. 1.17%. -Rerum fn:m I OiS,I'; S. 11II Classic Funds I ~ , AJI~~' ~... r 'I D f.lldB f' 1I f h E-" f ~~fW" 'S~ ~ 'ii 2.~_uSc~.VM~nagement,lnc. I ell' enelt&pstorte"=j'Pibyeesouo ~ \~ r 1 - - - - - - - - - - - - - - - - - C~ l __ Classic Funds I r'. ......... . ...... Fund In(onnation Modem Portfolio Thea Statistics' Ticker CUSI? Net AssetVIl"" SSCTX 7W66l6J $lO.61 AJph, !leu R.Squortd SIurpe Rotlo lur>dard Devi,tioo 'As of M.rth J l.l007 Vld lubje<< to tl1lnge. Portfolio Characteristics' Toul Fund Assets Upper Utegory Mmet Upiuliution (S!>iI) ?nce-I~800~ Pnce-I~E.mongs (12 month tn,ling) RetUfn on E<jtJlty (12 month tnlhng) $SH,417,610 Smoll.Ca:> Grovoth Fund. SLllbl 17 141 lJ.n CalenduYear Returns 51'10 41'10 31'10 ll'l, II'!. I'!. .1'1. .11'1. .11'1. -JI'I. "" ~ "" ~ ::: ~ 1997 . I Sh>rt1 99' 1999 lOOO lOOI 2002 l003 lOO~ 1001 1006 ., Ru"e~ 2000' Grovoth Index Post performance does not guarontee fUlure relulu. An Investor should consider Ihe fund's investmenl objectives, risles, and charges and expenses carefully before invesling or sending money. This and other Impartanl/nformat/on abOUI the STl Classle Funds con be found In the fund's prospectus. To oblaln 0 prospectus, please call 1-888-STl-FUND or vis;1 www.sliclass/cfunds.ca/IL Please read the prospectus carefully before Invesling, The ST/ Gassic Funds are advised by Trusco Copjlal/~anagemen~ Inc., Yon/en receives a (ee (or its semces. and are <lisfJibuled by B1SYS Fund Services Lim;ted Partnership, whkh is not affiliated with Trusco Capital Manogemen~ Inc. . Not FDIC Insured . No Bank Guarantee . May Lose Value .(1.12% 0.91 94.5l 0.27 11.09% InvestmentTenns & Index Definitions Price-Io-llook Rallo is used to compare a stock's marlcet VII"" to iu book ",Iut. The higher die mio.\he higher \he premium the muket is wiling to pq for a coml""T ol>ooe lu Iwd useu. Price-Io-&mlnrs Rotla ('"P/E") is a ",lunion nOo 01. coml""T's current share price to its per-share e.mings. The higher the PIE ndo,!he more \he m.trlcet is ding to pq lor each doll... 01 annual WIling>. Alpha measures. W's risk.>djusted perfonnance .nd ~ts the do~rence ~ . fund's Ktual perfor-.:e and iu expected perfc<mance.g;..n its Ievol c:l ris~ as measund bybeu. ~1O is . m..ns oA measuring the ..u~ d . security or portIolia 01 securities in comp1riuln with !he nurtet as . whole. A beta 011 in6cates WI die security will mowe >>ish the nuritec: grener clwIl indiates tl1lt it's more ..u~le tNn \he nurlce~ and less tNn I ind~at.s Wt it's less -olatile tNn \he m.trl<e~ R-Squared meuures the portion d . iInl's m<>mnenC that is expa;ned by movements .. the m.trlcet inclex. and helps indicate the "oncy d . funcl's alpha and bell. Sharp. Ralio Is a risk-"jUSted me.\lUfe tlut is calcubtecl usit>g standard deviation '"" excess rewm to determine reward per .m 01 rnk. The IM&her the Sh>rpe ntio, the better die bId's hiStorical risk4djusted performance. Slandotd Devlalion is a satistial measur<ment d dispenion .bout an :rvenge.....tlich cl<pirn hew widely reo.ms ",lied ..... a cerain period 01 time. Russell 2000' Growth In<1ex is comprised 01 !he se<uricies bMld in die Russell 2000 k>dex with . grtater.than....ng. growth orientation. Comparm in th.'s index tend to ex/ibit higher , price-eo-boolc and price-to-wnings ntios.llweston C1MOt invest dorectly In an index. Investment Concerns Sm.tI capiuJiZ3t1on Ws typicaIy carry .dditiorW risI<s since smaI1er companies genenL'y have . higher risk oA bill.... &pty securities (stoclcs) are"""" ..utie and wry more risk clwI odier iorms 01 inwestments. includWlg ~ts in high grade fi:xed income securiti<<. The net asset ",Iut per sture oIms hlnd WIll flucwate as !he VIlue 01 the securities il the ponIoIio cl1lnga. I.SCG.(IJ07 04107 1, II J. ~~ II jt lJ . ~. - ."..... : . ..... _~.. (', l. ... cf~"'~ ~ : j; 2~~sciiiitjU~lLMa,nagementl Inc. j Def'11d Benefit &just for the 'PIOyeeS of .. of w~ ';(~ L_ J CII - - C!I - - - .. - - - - - - - - - - Adviser: r"",o Upi'" Managem<n~ Inc. Portfolio Manager . hI 8uner. CfA PortIoI"IO mwger sit>ce 1m Objective The ftrod stW 10 pt'O'Iide apitaJ appreciation and income by i"""'linl prirNriy In small apt1iz>ticn companies t1ut P>l' tqlA" income cl<vidonds and "e unde<volued in d1e opinion of the Advistr. Suitability The ftrod is l<iuble ....Iong-Ienn ~ ...king to ~ the I~ portion of their eqtity ponIoIio. \Oith the odcition of a $IN!I-<op find. ~ mrr al$O cOl1$lder the ftnj.. m.. 10M for 06di:iofUl '!lIe cfveniflCaticn. Share Class Description I Slum "e ol!ete<l exdu5Nely co fll.1nciol n.otuti"", and interrnediorie5 .... their own xcouncs or br d1e xc""", of ""'''''''',, .... "'*" they act OS foducitry og"'~ I1vewnent ><Mser. or Mtodion and wtich eonsi5u of U5eU of a bono fode tMtoor mot. oIa lMineu entity po$5eUinz a ux identifotion runber. Growth 01 S 100.000 Inv"'tment 1111/01 1I11m . "<(Milt n"w ..th rf.....UllM.1 tI ~fCfIf Jnd upolbl 1.1111 The oboY. t1Of;/1 011""''' "" ...[!OJ 1rypod>.c.:oII1!\'t>lmt1l1 of 1/00.000 f- 3131197 to 3m 107. The ~rformonct quol.d h....in ,."....nu PO$1 performolKe. To Ten Holdin 01 Portfolio · Sector Wei htin . GA TX Corp. Cooper CompoRe. Inc. SteM Corp. Gf\.90A.roporwuio ADR Grno Inc. 'Nobtet Cnh Amerkaln"rNtional Inc. CHC Htli,op-.er Corp. LOIli'D"'l5coresCorp. Jon<> Long Luane Inc. 4.6~ Fund Benchmark 4.01- Comumer [)i,creti"...')" 11.101- 15.59~ 3.5% C"",urner Sup/e. 5.0S'l: 3.81~ 3.4% Ent~ 5.9&% 4.15% 2.4% FilWlCial Servic.. 14.9~ 33.22% 2.2~ H.ahh ure 10.89\ H5% 2.01- Induwial, 35.41% 11.18% 1.9X Inlamalion T",hno/ozy 4.27% IJJ3% 1.8% Material. 7.81% 6.54% 1.5% Telecom ~rviC.. 0.49X 1.43% Unliti.. 102% 5.39% Total Return,.. ol3n 1107 Com osition % 01 Net Assets · ~gregate Returns Average Annual Total Returns Equities 98.S~ Inception Latest ) S 10 Shar", .. Date Quarter YTD Year Year Year Year u.h Equivalent 1.4~ I 8/31/94 I~I~I~I 17.81% I~I IH9X Russell2000'Value Index 1.46% 1.46% 10JS'l: 14.47% 11QI~ 13.46% --- - 'As of Marth 31.2007 and ,ubj"IIO eN"te. Post ptrformance doe. not guaranl.e fUlure re.u/u. Th. ptrformance dolo quol.d reprelenU past performanc< and current relums may be lower or higher. Total return figures Include chonge In share price. relnv<srm.nl of dividends and copital gains. The ;nv<stm.nt return and principal value will fluctuate 10 that an inve.tor's shares, wh.n rede.med. may ~ worth more or Ie.. Ihon Ihe original cost. For performance dOlO cumnl to the most recent month end, vlsil our w.bs/le at www.stJcla..icfundl.com. "*The expense ratio lor I Shares is 1.20%. The perform.n,,, queled /t.<eS<1TlS poll pr1(M7IOIlC' of rIl. SunTIUSI ~nk'l fl:'mollt m.....{td ',,",IT.on UUSI (un.;. oC,usttd fOi (,,, ond tx~<1 for tfI. prnod pr.... 10 IIJ //97. lht ~ tIUSl (iJod"'" nOI rtflll./td undfr the 1,>Wm.nl c..r.po.'l)' Aa of /910 ond theftf'" .... IlOl1llbjeclle em... _ml <eSV"1CWlS .h~h mur""'" odottStly effected per{cnnanc.. I I I 11II Classic Funds I I . :U~.' ~ t ill II U " Jr7'"' _ ~ ;; 2~~~Sc~1 Management, Inc. II Defil1d Benefit & /pst for the ~PIOyeeS of _ of ~ \~ I - - - - - - - - - - - - - - - .. - - InvestmentTenns & Index Definitions Pric..lo-Book Rollo is used 10 comP>"' a Ilock's martet value 10 its book V>Ive. The higher the ratio. the higher the premium the marlcet is wiling 10 P>1 for a comp>oy >l>>ie ilS /wll assets. Pric..to-EGmintl ROIio ("?/El is a ....'...lion noo 01 a company's cumnt shue price to ilS per-s.hve earnings. The higher "'" PIE ntlo. the men! the mu1<tt " wiling to P>1lor each doIlu 01 ."nuaI ea",iogs. Alpho musum a f1.rld's risk-adjusttd perfomw>ce and represents the difference IletweUl a fundS actlJal perforrnance and its expected perfonnance. gi><n its i<'vd 01 risk u meaSU<ed by beta. Bdo is a tTlW1S 01 measuring the YOb~ of a security or ponIoIio of S<<Urities in comparison WIth the marl<tt u a whole. A beu ot I indiate\ that the security WIll mcM! with the martec greater than I indic.ttes that it's more voI.tile than the marte~ and ~ lhan I ind"'ates that it's Itss YObde than the marl<et. R.Squorod measures the portion 01 a f1.rld's ~ that is explained by movements in the marl<tt index. and helps ilxState the acaney d a funcfs alpha and Ilea. Shorpe Ratio is a risk.adjusted mea..... that " calwbted us;ng slandard deviation and excess rtlUm to detetnWle IOW1rd per ....'c 01 mk. The "&her the Sharpe noe. the better the bld", historic.1 mk->djusted perfomw>ce. Slondonl On-iotion is a sutistk1l me_en! 01 dispenion about an avmge,..t>ch depicu how widely rtturns vuk!d over a ceruin period ot time. The Russell 100l)lVo'ue Index is an IXVNNged index wlich is comprised of the securities in the IMsel 2000 Index ",th a Jess.than....ng. &1'tlW1h ori....tion. C","paIM" in dOs Index genenlly Iwe low price.tO-book and price-co-eamings ntios. Irwestor'S cannot in...t directly in an index. Investment Concerns Small capitaliZJtion f1.rlds cnCaJ1 arry a6:l,tionaJ risks since smaI1er c~ genenlly Iwe a "&her risk 01 ~I't. EqJity soeurid.. (stocks) are ITlOIl! \'Obtlle and wry men! Iisk than other forms 01 .....tments. inclucli1& l~lS in hi&h &rade fiXtd income securities. The net uset ....Iue per share d this fund ...,1llUwate u the .we 01 the secLrities il the pon.folio changes. VaIuo-based .....tments art S>.Jt:ject to the Iisk that the broad martet nw not recognize their Intmsic ....Iue. rill Classic Funds I I . . Fund In'ormation Modem Portfolio Thee Statistics' T~ker CUSIP Net As\etYalue SCETX 78-4766370 $17.35 Alp/la Bou R.Squartd SIwpe IUtiO SundJrd o.,.,;.tion 'As of Mmh JI,2oo7 and ,ubje<t to change. Portfolio Characterislics' Tool fund Asse... Upper Category Maket CapiU511tion (5bi1) Poce-to-Book Poce-co-E.amings (12 month trailing) Re<um on E<;uilY (12 mooth tnil,ng) $719.545.951 Sml".~DV1'~ Funds illil>J 2 ~ 18.8 16.1% CalenclarYear Returns \\Vo 45\', 3SY. "" = ~ "" e:; :;i 2SY. "" ~ ISY. ~ I -..cf -; L-II 5Y. -SY. .15Vo .lIVo .lIO/. 1997 .1 Shar.. 1998 1099 1000 2001 2002 200l 100.< 200' 1006 U RlISSeD 2000'VaIuo Index Post performance does nol guoranlee fUlure ~sulu. An InveSlor should consider Ihe fund's investment obJectives, rilla, and charges and expenses co~fully befo~ investing or lending money, This and olher Importonl Informollon oboul the STI Closs;c Funds con be found In the fund', prospeclus. To obloln 0 prospectus, please call I.aSS.STI-FUND or visit www.stlcloss/cfunds.com. Please ~od Ihe prospectus cortfully befo~ Invesling. The STI Oani< Funds afe advised by Trusca CoPital Manogemenr,/nc,. v.hieh feee;ves a (ee (Of its services, and afe distributed by B1SYS Fund Serl'ices Limited Partlltfship, which is nOl affiliared with Trusco Capiral Monogemenr,/nc. . Not FDIC Insured . No Bank Guarantee . May Lose Value 0,)5% 0.91 85.28 1.20 12.11% ,.$Cy.o307 0-1107 l' '~. ~,; II II It · ~. _ ~........ 1: - _~' I I ,l'..J ~ ...... . . _' ~. ! I I 2aJLrqsc~.llManagement, Inc. I Def'lid Benefit &~st for the 'ilPlbyeeS of _ of w~ - ~ (, ~ .. i. Important Disclosure Information This material must be preceded or accompanied by a prospectus. An investor should consider the fund's investment objectives, risks, and charges and expenses carefully before investing or sending money. This and other important information about the STI Classic Funds can be found in the fund's prospectus. To obtain a prospectus, please call1-800-STI-FUND, or by visiting www.sticlassicfunds.com. Please read the prospectus carefully before investing. Mutual fund investing involves risk, including possible loss of prineipal. STI Classic Funds are advised by Trusco Capital Management, Inc., which receives a fee for its services, and are distributed by BISYS Fund Services, LP, which is not affiliated with Trusco Capital Management, Inc. MPT STATISTICS/OTHER MEASUREMENTS Alpha - is defined as the difference between the average realized return of a portfolio manager with private information and the expected return of the passive strategy based upon public information with equal systematic risk. Beta - is a measure of an investment's volatility, relative to an appropriate asset class. R-Squared - a statistical measure of how well a regression line approximates real data points; an r-squared of 1.0 (100%) indicates a perfect fit. r- squared measures how well the Capital Asset Pricing Model predicts the actual performance of an investment or portfolio. Sharpe Ratio - also known as Reward-to-Volatility-Ratio, indicates the excess return per unit of risk associated with the excess return. The higher the Sharpe Ratio, the better the performance. Standard Deviation - a statistical measurement of dispersion about an average, which, for a mutual fund, depicts how widely the returns varied over a certain period of time. PORTFOLIO CHARACTERISTICS DEFINITIONS 30 Day SEC Yield - is calculated by dividing the net investment income per share for the 30 days ended on the date of calculation by the offering price per share on that date. The figure is compounded and annualized. 5 Year EPS Growth - is the five-year reported earnings per share growth rate for each company in percent per year. Price-to-Book - is used to compare a stock's market value to its book value. This ratio gives some idea of whether you're paying too much for what would be left if the company went bankrupt immediately. PIE (12 months trailing) - is the price of a stock divided by its historical earnings per share. Return on Equity - is a measure of a corporation's profitability, calculated by taking a company's net income and dividing it by the shareholder's equity. Investments in the STI Classic Funds are not insured by the FDIC or any other Federal agency nor are they guaranteed by any bank, and may lose value. 1 ; ~ ~ " ~:. '11'" ~ ~ ~i :#C"'.... 28~': 'rrusc ''Pl'Management, Inc. Defin,~d Benefit & ~st for the E yees of t of Winteli .",~ ~ ~ Jl;;; ~ ~.- " ~-. l i i i i- t t .. Important Disclosure Information INVESTMENT PERFORMANCE Past performance is not indicative of future results. Performance data related to accounts managed by Trusco represents returns gross of investment management fees. See Trusco's Form ADV, Part II for a description of investment advisory fees. The performance information reported herein may be for a variety of products which have different methods of presenting performance data, i.e. net of fees, gross of fees, or a combination of these. This information should not be evaluated independent of or without reference to the investment advisory agreement that more specifically addresses applicable investment advisory fees. Fees have a compounding effect on cumulative results. For example, assume the account achieves a 10% annual return prior to the deduction of fees each year for a period of ten years. If an annual fee of 0.5% of assets under management were charged each of the ten years, the resulting annual average return net of fees would be reduced to 9.48%. YIELD INFORMATION Yield information more closely reflects the current earnings of the Fund than the total return. In the absence of current fee waivers the yield would be reduced. A SEC Yield relates aggregate net earnings of a fund to its aggregate net assets. In any given period a fund may distribute more or less than its actual income. SECTOR WEIGHTINGS AND PORTFOLIO CHARACTERISTICS The sector weightings and portfolio characteristics are presented as of the date shown in the left-hand corner of this presentation, and may change without notice. A complete list of sector weightings and individual security positions for any specific period are available upon request ECONOMIC AND MARKET REVIEW This perspective was prepared for clients and prospective clients of Trusco Capital Management, Inc. Neither Trusco nor any affiliations make any representation or warranties as to the accuracy or merit of this analysis for individual use. Comments and projections are based on information available at the time of writing and believed to be accurate, are for informational purposes only, and may not be relied upon for future investing. Investors are advised to consult with their investment professional about their specific circumstances before making any investment decisions. COMMON AND COLLECTIVE FUNDS Are operated by SunTrust Bank as Trustee and managed by Trusco Capital Management, in accordance with the laws of Georgia and applicable banking regulations. They open to investment only by trusts for which SunTrust Bank serves as trustee or qualified retirement plans which adopt the terms of a collective trust They are not subject to direct regulation by the United States Securities and Exchange Commission and are exempt from registration as securities. The Plan and Declaration documents which govern their operations are available upon request The sheets should not be used by anyone who is a registered rep absent approval from the compliance office of the broker through whom they are registered. Recent experience suggests that such approval is unlikely. '" ~ ~~<;:J~ $ ",,,;)'0~ 29",r Trusco :i; Management Inc. . Defin~d Benefit & T. 'st for the E Jeyees of U:l $l2 of Winte( :;'" .~ ~~ I Hi ~~' l ~ >ill' '-:"f.ff _ 1t ~~ ~'Iff < J!'. f- ,~ z -- UJ ::J :E 0 > O......lL.I.J u<~ ~ V)~z s:: ~c::< ca .s:: E-6:E I- ~