Colonial finished another year with outstanding credit quality. We continue to have some of the best credit quality metrics in the nation for banks over $10 billion. Our nonperforming asset ratio was a record low of 0.21% at year end and net charge-offs were 0.14% of average loans.
How do we maintain such excellent credit quality? By sticking to what we do best - making loans to people we know, in markets that we know and for purposes that we understand. By involving our directors, who are community leaders and business people in our local markets, in the decision-making process, we are able to avoid many negative trends and problem areas. Our underwriting has remained conservative despite market pressures, and we believe our loan committee structure is vital and differentiates us from our competition.
As we conduct business across the nation’s fastest-growing markets, our loan portfolio reflects that geographic diversity. History shows that the economic health of markets can vary from region to region, and we believe our wide geographic diversity offers protection for our portfolio during challenging national economic conditions. Even when times are good, Colonial doesn’t loosen its underwriting standards and in fact tightens standards as we did at the beginning of 2005. While we believe that credit quality is unlikely to improve from, or remain at, these record low levels, we believe that our underwriting philosophy and our committee structure will enable Colonial to continue to post credit quality metrics that are superior to other banks our size.