If SunTrust were to merge with National Commerce, what would be your recommendation regarding the split between cash and stock in the consideration and why? (The information attached can be used for supporting the answer)

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Consumer 14% HELOC 8% Centruation.5% Commercial RE 11% -6- Figure 5. Pro forma business mix. SunTrust Loan Composition Other 7% Consumer 14% Commercial 34% 1-4 Family 21% Yield=4.52% SunTrust Deposit Composition Consumer Time 996 Jumbo CDs, Brokered, Foreign 16% Non-Interest Bearing 25% HELOC 9% CARUCION 7% Pro Forma Loan Composition Other 6% Commercial RE 12% Jumbo Savings, NOW, MM 50% CDs, Brokered, Foreign 16% UVA-F-1554 Commercial 34% 1-4 Family 21% Yield = 4.66% Pro Forma Deposit Composition Consumer Time 12% Non-Interest Bearing 24% Savings, NOW, MM 49% Cost = 0.86% Cost = 0.79% Source: SunTrust corporate presentation on May 10, 2004 (accessed via SNL Securities). SunTrust could opt to pay for National Commerce using a combination of its common stock and cash. Humann instructed the Corporate Development department to construct a table that would determine the optimal level of common stock and cash to employ in the transaction. (See Figures 6 and 7 for SunTrust and National Commerce key financials.) Using a set of key assumptions about both companies (Figure 8), the Corporate Development department was able to project the pro forma earnings impact of acquiring National Commerce with 100% common stock (Figure 9). Naturally, this acquisition scenario would be highly dilutive to anticipated earnings. Therefore, Humann was curious to see how the presence of cash in the consideration mix might affect pro forma earnings. Specifically, it would be necessary to run the same analysis with 25%, 50%, 75%, and 100% cash levels in order to make an informed decision about the proposed transaction. Consumer 14% HELOC 8% Centruation.5% Commercial RE 11% -6- Figure 5. Pro forma business mix. SunTrust Loan Composition Other 7% Consumer 14% Commercial 34% 1-4 Family 21% Yield=4.52% SunTrust Deposit Composition Consumer Time 996 Jumbo CDs, Brokered, Foreign 16% Non-Interest Bearing 25% HELOC 9% CARUCION 7% Pro Forma Loan Composition Other 6% Commercial RE 12% Jumbo Savings, NOW, MM 50% CDs, Brokered, Foreign 16% UVA-F-1554 Commercial 34% 1-4 Family 21% Yield = 4.66% Pro Forma Deposit Composition Consumer Time 12% Non-Interest Bearing 24% Savings, NOW, MM 49% Cost = 0.86% Cost = 0.79% Source: SunTrust corporate presentation on May 10, 2004 (accessed via SNL Securities). SunTrust could opt to pay for National Commerce using a combination of its common stock and cash. Humann instructed the Corporate Development department to construct a table that would determine the optimal level of common stock and cash to employ in the transaction. (See Figures 6 and 7 for SunTrust and National Commerce key financials.) Using a set of key assumptions about both companies (Figure 8), the Corporate Development department was able to project the pro forma earnings impact of acquiring National Commerce with 100% common stock (Figure 9). Naturally, this acquisition scenario would be highly dilutive to anticipated earnings. Therefore, Humann was curious to see how the presence of cash in the consideration mix might affect pro forma earnings. Specifically, it would be necessary to run the same analysis with 25%, 50%, 75%, and 100% cash levels in order to make an informed decision about the proposed transaction.