CREDIT QUALITY

We established a conservative credit culture at the very beginning of our bank. And we’ve never wavered from it. In fact, in recent years our standards have gotten even tougher. As a result, our credit quality metrics continue to be superior to other banks.

No matter where the prevailing winds blow our competitors, Colonial Bank makes loans to customers we know. They are customers who make deposits in our bank. Sometimes they are customers of our customers. Or, we meet them through the business leaders on our local boards of directors. We perform significant due diligence – getting to know our future customers and their businesses.

Only when our community-based loan committees are satisfied do we make the loan. Compare that to institutions where an individual can make a snap loan decision for millions of dollars. We don’t do business that way. Never have. Never will. Colonial will not sacrifice its underwriting standards for growth. We are proud that we have grown to be a $22 billion institution without sacrificing credit quality.

As a result, Colonial has excellent credit quality – net charge-offs of 0.12% of average loans and a nonperforming assets ratio of 0.16% at December 31, 2006, an improvement over net charge-offs of 0.14% of average loans and a nonperforming assets ratio of 0.21% in 2005. We continue to be recognized for our solid credit quality metrics which are again well below the average of all FDIC insured commercial banks and many of our southern regional peers.

The bottom line of our credit culture is that we handle each loan today just like the first loans we made 25 years ago.