Guiding Principles
For years, we have built one of the strongest loan portfolios in the banking business. We know our loan portfolio draws its strength from our persistent adherence to four principles: operate in markets with above-average growth rates; understand local market demographics; know our customers and employ strong underwriting standards. Due to our focus on asset quality we are not faced with large write-offs in syndicated loans, auto leasing, indirect lending, or subprime lending that many other institutions are experiencing.

Our underwriting has remained conservative despite market pressures, and we believe our loan committees are an integral part of this process. By involving many individuals in the decision-making process, such as our regional directors, we are able to stay on top of market trends and avoid problem areas. Furthermore, Chief Executive Officer Robert E. Lowder is directly involved in the lending process for large loans as a member of the bank’s loan committees, which is rare among banks our size.

Solid Performance
During the economic uncertainty of 2001, our charge-off ratio, 0.28%, compared very favorably to the ratio of our peers*, which was 0.35%. In fact, over the past ten years our charge-off ratio has remained well below the industry average. We expect our loan portfolio to be the cornerstone of our growth for decades to come, and asset quality will continue to be our major focus.

* Southern regionals as defined by Keefe, Bruyette & Woods

^©2002 Colonial BancGroup

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