Commercial real estate loans are categorized by the type of collateral. Owner-occupied properties include mortgages where the borrower is a primary tenant, such as factory or warehouse loans. Nonowner-occupied lending represents those loans where the primary method of repayment is anticipated to come from the rental income and generally has inherently more risk than owner-occupied lending.

Each commercial loan recorded at AmSouth is assigned a risk rating on a 13-point numerical scale by the loan officer using established credit policy guidelines. Consumer loan portfolios are assigned risk ratings based on a nine-point scale and are based on the type of loan and its performance. All risk ratings are subject to review by an independent Credit Review Department. In addition, regular reports are made to senior management and the Board of Directors regarding the credit quality of the loan portfolio as well as trends in the portfolio.

The Credit Administration function includes designated credit officers, some of whom are industry specialists and all of whom are organizationally independent of the production areas. They oversee the loan approval process, ensure adherence to credit policies and monitor efforts to reduce nonperforming and classified assets. Additionally, a centralized special assets function handles the resolution and disposition of certain problem loans. Risk in the consumer loan portfolio is further managed through utilization of computerized credit scoring, in-depth analysis of portfolio components and specific account selection, management and collection techniques. In addition, the consumer collection function is centralized and automated to ensure timely collection of accounts and consistent management of risk associated with delinquent accounts.

Finally, AmSouth’s Credit Review Department performs ongoing independent reviews of the risk management process, adequacy of loan documentation and the risk ratings or specific loan loss reserves for outstanding loans. Furthermore, this department is independent of the lending function. The results of its examinations are reported to the Audit and Community Responsibility Committee of the Board of Directors.

Nonperforming Assets Management closely monitors loans and other assets that are classified as nonperforming assets. Nonperforming assets include nonaccrual loans, restructured loans, foreclosed properties, and repossessions. Loans are generally placed on nonaccrual if full collection of principal and interest becomes unlikely (even if all payments are current) or if the loan is delinquent in principal or interest payments for 90 days or more, unless the loan is well-secured and in the process of collection. The Special Assets Department manages collection of commercial nonperforming loans and business banking loans greater than $250,000 while the Consumer Collections Department manages the consumer nonperforming loan portfolio. The Business Banking Collections Department manages collections of business banking loans under $250,000.

Nonperforming Assets Table 15

		December 31
(Dollars in thousands)		2000	1999	1998	1997	1996
Nonaccrual loans		$ 179,659	$ 141,134	$ 113,985	$ 109,488	$ 112,509
Restructured loans		-0-	-0-	-0-	-0-	694
Nonperforming loans		179,659	141,134	113,985	109,488	113,203
Foreclosed properties		12,360	17,767	17,322	19,143	26,844
Repossessions		4,259	2,644	828	632	1,822
Total nonperforming assets*		$ 196,278	$ 161,545	$ 132,135	$ 129,263	$ 141,869
Nonperforming assets* to loans net of
unearned income, foreclosed properties
and repossessions		0.80%	0.61%	0.54%	0.53%	0.61%
Accruing loans 90 days past due		$ 85,410	$ 61,050	$ 62,528	$ 66,792	$ 58,943
*Exclusive of accruing loans 90 days past due