Exhibit 99.1

For more information contact: July 31, 2009

Lisa Free

(334) 676-5105

COLONIAL BANCGROUP REPORTS

SECOND QUARTER 2009 RESULTS

MONTGOMERY, Ala. – July 31, 2009 - (NYSE: CNB) The Colonial BancGroup, Inc. today reported results for the quarter ended June 30, 2009. A summary of the results is presented below.

• Net loss of $606 million, or $3.02 per common share, in the quarter compared to a net loss of $168 million, or $0.86 per common share, in the 1^st quarter of 2009; non-cash charges of $377 million, or $1.87 per common share related to a valuation allowance on its deferred tax assets ($302 million, or $1.50 per common share) and to write down goodwill ($75 million, or $0.37 per common share); the valuation allowance on deferred taxes may be reversed in the future to offset taxable income;

• Loan loss provision was $294 million, up 14% from the first quarter of $257 million; net charge-offs for the quarter were $244 million, or 7.02% annualized of average loans, compared to $132 million, or 3.72% annualized of average loans, in the 1^st quarter of 2009; other credit costs include write downs and expenses on foreclosed properties of $43 million in the quarter, up $36 million from the 1^st quarter of 2009;

• The balance in the allowance for loan losses was $500 million or 3.69% of net loans at June 30, 2009;

• Nonperforming assets increased to $1.7 billion or 12.29% of net loans, other real estate owned and repossessions at June 30, 2009, up $603 million over March 31, 2009; the increase in nonperforming assets reflects the continued economic distress in our markets, primarily in Florida; the weakness in the portfolio continued to be primarily in the construction-related sector, which comprised approximately 72% of Colonial’s nonperforming assets at June 30, 2009;

• FDIC insurance and other regulatory fees were $29.6 million, up $18.4 million from the 1^st quarter of 2009 due primarily to the FDIC’s special assessment of $12.2 million charged to banks in the quarter;

• Pre-tax, pre-credit results excluding goodwill impairment and FDIC insurance and other regulatory fees resulted in a profit of $19.0 million or $0.09 per common share;

• Strong liquidity position: cash and interest bearing deposits in banks and the Federal Reserve were approximately $1.5 billion at June 30, 2009;

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• Total deposits increased 7.3% from December 31, 2008;

• Colonial’s regulatory capital ratios at June 30, 2009 were:

	Colonial BancGroup		Colonial Bank
Tier I Risk-Based Capital ratio	5.44	%	6.46	%
Total Risk-Based Capital ratio	9.43	%	9.21	%
Tier I Leverage ratio	3.49	%	4.18	%

• Tangible book value per share of $1.29 at June 30, 2009;

• Net interest margin of 1.97% for the 2^nd quarter compared to 2.04% in the 1^st quarter of 2009, resulting primarily from the lower yielding assets due to Colonial’s significant liquidity position, the impact of increasing nonperforming assets, and continued customer preference for higher cost time deposits;

• Core noninterest income for the 2^nd quarter increased $2.8 million, or 6% from the 1^st quarter of 2009, driven by a $2.1 million or 17% increase in retail mortgage banking fees;

• Core noninterest expenses, excluding FDIC insurance and other regulatory fees, losses and expense on other real estate and professional fees, for the 2^nd quarter were down 2% from the 1^st quarter of 2009.

“During the second quarter, we took aggressive action related to capital strategies, liquidity, credit quality and expense reduction. Going forward, we believe these actions put our company in a better position to reinforce its value as a gateway to over 400,000 business and household customers who currently bank with Colonial. Our loyal employee force of over 4,500 resourceful individuals and our branch network of over 350 locations continue to serve as a solid foundation for Colonial’s multi-state franchise in spite of difficult economic and regulatory conditions,” said Lewis Beville, Colonial’s CEO and President.

Capital Action Plan

Colonial is actively pursuing a variety of strategic capital alternatives including, but not limited to the following:

• Exploring a sale or merger of the Company

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• Selling the Nevada branches

• Possibly selling other branches

• Exploring the sale of problem assets

• Reducing expenses

• Initiating an exchange of bank level subordinated debt for senior debt which is expected to increase Tier I capital at the bank

• Seeking sources of private capital

• Reducing assets

Colonial has engaged Citigroup Global Markets Inc. (Citi), as its financial advisor. Since Citi’s engagement on July 9, 2009, Colonial has held private management meetings with potential strategic acquisition candidates and private equity investment firms. Colonial can give no assurances as to whether any of these candidates or firms will enter into a long term agreement with Colonial or whether any other candidates will emerge in the future, and Colonial does not expect to make any further statement about the outcome of such meetings unless an agreement satisfactory to Colonial can be reached.

On July 14, 2009, Colonial announced the signing of an asset purchase agreement with Global Consumer Acquisition Corporation (GCAC) for the sale of 21 Colonial Bank branch offices located in Nevada. Upon the closing of the transaction, GCAC is expected to acquire the branch network including approximately $492 million in deposits and approximately $440 million in loans, for a deposit premium of approximately $28 million or 5.7% of total deposits. The transaction is expected to close on or before September 30, 2009 and is subject to GCAC shareholder and regulatory approval. For a full description of the transaction please refer to a copy of the asset purchase agreement attached to the Current Report on Form 8-K filed by Colonial BancGroup, Inc. on July 14, 2009 with the SEC. The 8-K can be accessed through the Company’s website at www.colonialbank.com or at the SEC’s website at www.sec.gov.

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In December 2008, Colonial launched the Colonial 1^st program which is an on-going, company-wide review of business practices with goals of enhancing the customer experience and improving the Company’s overall efficiency. Over 4,000 ideas were generated from 30 cross-functional teams from throughout the Company. Colonial plans to implement approximately 700 of those ideas which are expected to generate pre-tax savings of $25 million in 2009 and over $50 million in 2010. As part of the Colonial 1^st program, during July 2009, Colonial reduced the overall staffing level by approximately 3% through the elimination of 136 positions company-wide. The total number of employees decreased from 4,930 at December 31, 2008 to 4,627 currently, a 6% decrease.

Termination of Agreement

As previously announced, Colonial signed a stock purchase agreement, as amended, with investors led by Taylor, Bean & Whitaker Mortgage Corp. (TBW) for a $300 million equity investment in Colonial. The transaction was subject to regulatory approvals and certain other conditions, and the terms of the agreement included a provision under which either Colonial or TBW, on behalf of all investors, could terminate if the transaction did not close by July 31, 2009. Since the regulatory approval process with the OTS remained pending as of July 31, 2009 and all of the conditions necessary for closing did not occur as of that date, and since there could be no assurance that the required regulatory approvals or other conditions would be satisfied in the future, both Colonial and TBW elected on July 31, 2009 to mutually terminate the stock purchase agreement. “We are disappointed that the transaction with TBW was not completed by July 31, 2009; however, we have shifted our focus to the alternatives described in the Capital Action Plan,” said Mr. Beville.

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Regulatory Update

Colonial is operating under C&D orders with the Federal Reserve, FDIC and the State of Alabama which require that Colonial Bank maintain certain capital levels. As of June 30, 2009, Colonial Bank was not in compliance with the capital requirements for the Tier I Leverage Ratio and Total Risk-Based Capital Ratio. In connection with its efforts to comply with the regulatory orders and requirements, the Board of Directors has retained Promontory Financial Group to advise and assist in satisfying regulatory requirements and expectations. For more information about the C&D orders, refer to the Current Reports on Form 8-K filed by Colonial BancGroup, Inc, on June 9, 2009 and July 27, 2009 which are available on the SEC’s website and in the investor relations portion of Colonial’s website.

Going Concern Assessment

As a result of the above described regulatory actions and the current uncertainties associated with Colonial’s ability to increase its capital levels to meet regulatory requirements, management has concluded that there is substantial doubt about Colonial’s ability to continue as a going concern. The Company expects to update its 2008 financial statements contained in the Company’s Annual Report on Form 10-K, prior to filing its June 30, 2009 Form 10-Q. The Company is working to implement the Capital Action Plan described above which includes strategies to increase capital or to sell the Company in order to address the uncertainties giving rise to the going concern assessment.

About Colonial

Colonial BancGroup operates 355 branches in Florida, Alabama, Georgia, Nevada and Texas with over $25 billion in assets. The Company’s common stock is traded on the New York Stock Exchange under the symbol CNB and is located online at www.colonialbank.com. In some newspapers, the stock is listed as ColBgp.

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This release includes “forward-looking statements” within the meaning of the federal securities laws. Words such as “believes,” “estimates,” “plans,” “expects,” “should,” “may,” “might,” “could,” “outlook,” “potential,” “would” and “anticipates,” and the negative of these terms and similar expressions, as they relate to The Colonial BancGroup, Inc. (BancGroup) (including its subsidiaries or its management), are intended to identify forward-looking statements. The forward-looking statements in this release are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements.

In addition to factors mentioned elsewhere in this release or previously disclosed in BancGroup’s SEC reports (accessible on the SEC’s website at www.sec.gov or on BancGroup’s website at www.colonialbank.com), the following factors, among others, could cause actual results to differ materially from forward-looking statements and future results could differ materially from historical performance. These factors are not exclusive:

• continued deterioration in Colonial Bank’s financial condition, including losses in our loan portfolio greater than estimated or expected;

• failure to close on the pending sale of 21 branch offices of Colonial Bank located in Nevada pursuant to the asset purchase agreement with Global Consumer Acquisition Corporation (GCAC);

• an inability to raise additional capital on terms and conditions that are satisfactory, including the failure to receive final approval and actual funding from the U.S. Treasury Department’s Capital Purchase Program;

• imposition of regulatory conditions or requirements on either BancGroup or the other parties to the transaction referenced above that could make consummation of such transaction impracticable;

• failure to comply with the recent regulatory orders and additional regulatory measures that could be imposed independently or as a result of such failures;

• possible inability of the Company to continue as a going concern;

• the impact of current economic conditions and the results of our operations on our ability to borrow additional funds to meet our liquidity needs;

• economic conditions affecting real estate values and transactions in BancGroup’s market and/or general economic conditions, either nationally or regionally, that are less favorable or take longer to recover than expected;

• changes in the interest rate environment which expand or reduce margins or adversely affect critical estimates as applied, projected returns on investments, and fair values of assets;

• continued or sustained deterioration of market and economic conditions or business performance could increase the likelihood that we would have an additional goodwill impairment charge;

• deposit attrition, customer loss, or revenue loss in the ordinary course of business;

• increases in competitive pressure in the banking industry and from non-banks;

• costs or difficulties related to the integration of the businesses of BancGroup and institutions it acquires are greater than expected;

• the inability of BancGroup to realize elements of its strategic and operating plans for 2009 and beyond, including a reduction of assets in order to improve capital ratios;

• the anticipated cost savings and revenue enhancements from the Colonial 1^st program may not be achieved in their entirety or accomplished within our expected time frame;

• natural disasters in BancGroup’s primary market areas which result in prolonged business disruption or materially impair the value of collateral securing loans;

• management’s assumptions and estimates underlying critical accounting policies prove to be inadequate or materially incorrect or are not borne out by subsequent events;

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• the impact of recent and future federal and state legislative and regulatory changes;

• current or future litigation, regulatory investigations, proceedings, inquiries or directives;

• strategies to manage interest rate risk may yield results other than those anticipated;

• changes which may occur in the regulatory environment;

• a significant rate of inflation (deflation);

• unanticipated litigation or claims;

• changes in the securities markets;

• acts of terrorism or war; and

• details of the recently enacted Emergency Economic Stabilization Act of 2008, the American Recovery and Reinvestment Act of 2009, the Homeowner Affordability and Stability Plan and various announced and unannounced programs implemented by the U.S. Treasury Department and bank regulators to address capital and liquidity concerns in the banking system are still being finalized and may have a significant effect on the financial services industry and BancGroup.

Many of these factors are beyond BancGroup’s control. The reader is cautioned not to place undue reliance on any forward looking statements made by or on behalf of BancGroup. Any such statement speaks only as of the date the statement was made or as of such date that may be referenced within the statement. BancGroup does not undertake any obligation to update or revise any forward-looking statements.

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THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (Unaudited)

Statement of Condition Summary (Dollars in millions)	June 30, 2009		March 31, 2009		June 30, 2008 As Adjusted (1)		% Change March ‘09 to June ‘09		% Change June ‘08 to June ‘09
Assets	$	25,496	$	26,440	$	26,031	-4	%	-2	%
Cash and deposits in banks		1,540		2,451		553	-37	%	178	%
Loans, net of unearned income		13,541		14,119		15,469	-4	%	-12	%
Allowance for loan losses		500		450		247	11	%	102	%
Securities		4,165		3,327		3,454	25	%	21	%
Intangible assets, net		370		449		1,066	-18	%	-65	%
Deposits		20,027		20,257		18,349	-1	%	9	%
Shareholders’ equity		925		1,576		2,715	-41	%	-66	%

	Three Months Ended								Six Months Ended
Key Ratios:	June 30, 2009			March 31, 2009			% Change March ‘09 to June ‘09		June 30, 2009			June 30, 2008 As Adjusted (1)			% Change June ‘08 to June ‘09
Colonial BancGroup Capital Ratios:
Tier I risk-based capital ratio		5.44	% *		7.33	%	-26	%		5.44	% *		10.12	%	-46	%
Total risk-based capital ratio		9.43	% *		11.56	%	-18	%		9.43	% *		14.16	%	-33	%
Tier I leverage ratio		3.49	% *		5.02	%	-30	%		3.49	% *		7.38	%	-53	%
Tangible common equity ratio (2) (3)		1.04	%		3.21	%	-68	%		1.04	%		5.43	%	-81	%
Tangible capital ratio (3)		2.21	%		4.34	%	-49	%		2.21	%		6.60	%	-67	%
Colonial Bank Capital Ratios:
Tier I risk-based capital ratio		6.46	% *		8.02	%	-19	%		6.46	% *		9.88	%	-35	%
Total risk-based capital ratio		9.21	% *		10.78	%	-15	%		9.21	% *		12.65	%	-27	%
Tier I leverage ratio		4.18	% *		5.54	%	-25	%		4.18	% *		7.20	%	-42	%
Net interest margin		1.97	%		2.04	%	-3	%		2.00	%		2.91	%	-31	%
Loans to deposits ratio		67.61	%		69.70	%	-3	%		67.61	%		84.30	%	-20	%
Dividends paid per common share	$	—		$	—		0	%	$	—		$	0.285		-100	%
Tangible book value per common share (3)	$	1.29		$	4.12		-69	%	$	1.29		$	6.72		-81	%
	Three Months Ended								Six Months Ended
Earnings Summary (In thousands, except per share amounts)	June 30, 2009			March 31, 2009			% Change March ‘09 to June ‘09		June 30, 2009			June 30, 2008 As Adjusted (1)			% Change June ‘08 to June ‘09
Net Income:
Net interest income	$	117,473		$	117,812		0	%	$	235,285		$	356,048		-34	%
Provision for loan losses		294,092			257,220		14	%		551,312			114,543		381	%
Core noninterest income (3)		53,254			50,449		6	%		103,703			104,370		-1	%
Securities gains (losses), net		—			(837	)	100	%		(837	)		9,100		-109	%
Total noninterest income		53,254			49,612		7	%		102,866			113,470		-9	%
Professional services		15,140			10,442		45	%		25,582			13,445		90	%
FDIC insurance and other regulatory fees		29,609			11,208		164	%		40,817			8,976		355	%
Losses and expenses on other real estate		43,143			7,002		516	%		50,145			5,275		851	%
Other core noninterest expenses (3)		139,652			141,924		-2	%		281,576			289,620		-3	%
Goodwill impairment		75,000			28,477		163	%		103,477			—		100	%
Severance expense		—			—		0	%		—			786		-100	%
Net losses (gains) related to the early extinguishment of debt		(3,110	)		(20,320	)	-85	%		(23,430	)		10,043		-333	%
Total noninterest expense		299,434			178,733		68	%		478,167			328,145		46	%
Income (loss) before income taxes		(422,799	)		(268,529	)	-57	%		(691,328	)		26,830		-2677	%
Income tax expense (benefit)		182,869			(100,165	)	283	%		82,704			317		25990	%
Net Income (Loss)	$	(605,668	)	$	(168,364	)	-260	%	$	(774,032	)	$	26,513		-3019	%
Net Income (Loss) Attributable to Colonial BancGroup	$	(608,276	)	$	(173,700	)	-250	%	$	(781,976	)	$	15,841		-5036	%
Earnings (Loss) Per Share - Diluted	$	(3.02	)	$	(0.86	)	-251	%	$	(3.89	)	$	0.09		-4422	%
Average diluted shares outstanding		201,219			200,953					201,087			172,857

(1) Amounts for periods prior to 2009 have been restated to reflect the adoption of SFAS 160, Noncontrolling Interests in Consolidated Financial Statements. Under SFAS 160, REIT preferred securities are included in total shareholders’ equity and the related dividends are excluded from net income (loss).

(2) This ratio excludes the REIT preferred securities included in total shareholders’ equity.

(3) Represents non-GAAP measures.

* Estimated

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

																Six Months Ended
Earnings Summary (In thousands, except per share amounts)	2nd Qtr. 2009			1st Qtr. 2009			4th Qtr. 2008 As Adjusted (1)			3rd Qtr. 2008 As Adjusted (1)			2nd Qtr. 2008 As Adjusted (1)			June 30, 2009			June 30, 2008 As Adjusted (1)
Net interest income	$	117,473		$	117,812		$	140,716		$	166,749		$	174,424		$	235,285		$	356,048
Provision for loan loss		294,092			257,220			455,000			159,399			79,000			551,312			114,543
Noninterest income:
Service charges on deposit accounts		16,466			16,685			17,926			19,645			19,259			33,151			38,487
Electronic banking		5,365			4,982			4,935			5,149			5,275			10,347			10,279
Other retail banking fees		1,968			1,935			2,120			2,209			2,540			3,903			5,088
Retail banking fees		23,799			23,602			24,981			27,003			27,074			47,401			53,854
Mortgage banking origination and sales		14,319			12,268			7,143			8,095			7,953			26,587			14,713
Wealth management services		4,285			5,160			3,687			4,370			5,061			9,445			9,873
Mortgage warehouse fees		2,154			1,449			1,522			1,467			1,251			3,603			2,246
Bank-owned life insurance		4,030			3,894			4,386			4,720			5,169			7,924			10,289
Other income		4,667			4,076			3,067			6,042			6,190			8,743			13,395
Core noninterest income		53,254			50,449			44,786			51,697			52,698			103,703			104,370
Securities gains (losses), net		—			(837	)		—			(6,057	)		3,025			(837	)		9,100
Total noninterest income		53,254			49,612			44,786			45,640			55,723			102,866			113,470
Noninterest expense:
Salaries and employee benefits		73,910			72,064			72,324			75,129			74,761			145,974			148,428
Occupancy expense of bank premises, net		23,257			23,718			24,189			24,177			24,064			46,975			47,119
Furniture and equipment expenses		14,987			15,641			14,813			15,215			15,134			30,628			29,837
Professional services		15,140			10,442			8,415			7,252			7,807			25,582			13,445
FDIC insurance and other regulatory fees		29,609			11,208			4,936			4,169			4,414			40,817			8,976
Amortization of intangible assets		4,154			4,154			4,154			4,154			4,142			8,308			8,305
Electronic banking and other retail banking expenses		3,737			3,273			4,271			3,479			4,136			7,010			8,293
Losses and expenses on other real estate		43,143			7,002			19,830			3,261			4,068			50,145			5,275
Loan closing costs		1,881			1,983			1,515			1,901			1,079			3,864			3,212
Communications		2,913			2,917			2,890			2,799			2,863			5,830			5,682
Advertising		1,621			2,700			3,665			3,440			2,384			4,321			4,987
Postage and courier		2,035			2,258			2,631			2,373			2,270			4,293			4,892
Loss on equity investments		1,594			3,411			7,463			4,995			1,720			5,005			4,467
Travel		1,039			1,463			1,992			1,572			1,522			2,502			2,961
Other expenses		8,524			8,342			6,592			8,239			9,142			16,866			21,437
Core noninterest expense		227,544			170,576			179,680			162,155			159,506			398,120			317,316
Goodwill impairment		75,000			28,477			575,000			—			—			103,477			—
Severance expense		—			—			—			—			550			—			786
Net losses (gains) related to the early extinguishment of debt		(3,110	)		(20,320	)		—			284			4,111			(23,430	)		10,043
Total noninterest expense		299,434			178,733			754,680			162,439			164,167			478,167			328,145
Income (loss) before income taxes		(422,799	)		(268,529	)		(1,024,178	)		(109,449	)		(13,020	)		(691,328	)		26,830
Income tax expense (benefit)		182,869			(100,165	)		(204,409	)		(43,575	)		(9,400	)		82,704			317
Net Income (Loss)		(605,668	)		(168,364	)		(819,769	)		(65,874	)		(3,620	)		(774,032	)		26,513
Less: Net (income) loss attributable to noncontrolling interest (REIT preferred shareholders)		(2,608	)		(5,336	)		(5,336	)		(5,336	)		(5,336	)		(7,944	)		(10,672	)
Net Income (Loss) Attributable to Colonial BancGroup	$	(608,276	)	$	(173,700	)	$	(825,105	)	$	(71,210	)	$	(8,956	)	$	(781,976	)	$	15,841
Net Income (Loss) Allocated to Common Shareholders	$	(608,276	)	$	(173,700	)	$	(825,105	)	$	(71,210	)	$	(8,956	)	$	(781,976	)	$	15,540
Earnings (Loss) Per Share - Diluted	$	(3.02	)	$	(0.86	)	$	(4.11	)	$	(0.35	)	$	(0.05	)	$	(3.89	)	$	0.09
Average Diluted Shares Outstanding		201,219			200,953			200,817			200,757			188,730			201,087			172,857

(1) Amounts for periods prior to 2009 have been restated to reflect the adoption of SFAS 160, Noncontrolling Interests in Consolidated Financial Statements. Under SFAS 160, REIT preferred securities are included in total shareholders’ equity and the related dividends are excluded from net income (loss).

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)

Statements of Condition (Dollars in thousands, except per share amounts)	June 30, 2009			March 31, 2009			Dec 31, 2008 As Adjusted (1)			Sept 30, 2008 As Adjusted (1)			June 30, 2008 As Adjusted (1)
Assets:
Cash and due from banks	$	425,633		$	606,214		$	482,755		$	1,328,493		$	451,281
Interest bearing deposits in banks and Federal Reserve		1,114,747			1,845,048			1,534,463			669			101,391
Federal funds sold		8,495			6,087			7,642			7,096			8,891
Securities purchased under agreements to resell		1,474,359			1,640,712			1,556,157			1,493,585			2,185,174
Total securities (AFS and HTM)		4,165,074			3,327,124			3,503,380			3,825,523			3,453,859
Loans held for sale		3,192,345			2,800,139			2,082,248			2,060,709			1,984,723
Loans, net of unearned income		13,541,130			14,119,489			14,530,018			15,168,356			15,468,832
Less: Allowance for loan losses		(500,000	)		(450,000	)		(325,000	)		(285,000	)		(247,009	)
Net loans		13,041,130			13,669,489			14,205,018			14,883,356			15,221,823
Premises and equipment, net		563,834			568,472			565,769			507,167			498,941
Intangible assets, net		369,877			449,031			481,662			1,060,816			1,066,215
Bank-owned life insurance		501,664			498,839			494,983			490,585			485,840
Accrued interest and other assets		638,712			1,028,740			902,229			604,572			573,153
Total Assets	$	25,495,870		$	26,439,895		$	25,816,306		$	26,262,571		$	26,031,291
Liabilities and Shareholders’ Equity:
Noninterest bearing transaction accounts	$	3,350,710		$	3,397,994		$	2,816,699		$	2,843,971		$	2,912,071
Interest bearing transaction accounts		4,809,853			4,714,457			5,173,208			5,232,769			6,052,774
Total non-time deposits		8,160,563			8,112,451			7,989,907			8,076,740			8,964,845
Time deposits		9,839,207			9,617,336			9,117,388			8,706,622			7,941,228
Brokered time deposits		1,759,015			2,044,490			1,297,651			1,562,099			1,345,397
Reciprocal brokered time deposits		268,615			482,941			268,319			147,472			97,695
Total brokered time deposits		2,027,630			2,527,431			1,565,970			1,709,571			1,443,092
Total deposits		20,027,400			20,257,218			18,673,265			18,492,933			18,349,165
Repurchase agreements		263,208			315,605			472,706			458,658			525,724
Federal funds purchased		—			—			—			—			135,000
Other short-term borrowings		—			—			700,000			300,000			—
Long-term debt		3,957,569			3,964,274			4,043,807			4,038,675			4,037,741
Other liabilities		322,766			326,373			288,492			290,290			268,611
Total liabilities		24,570,943			24,863,470			24,178,270			23,580,556			23,316,241
Noncontrolling interest (REIT preferred securities)		293,058			293,058			293,058			293,058			293,058
Total Colonial BancGroup shareholders’ equity		631,869			1,283,367			1,344,978			2,388,957			2,421,992
Total shareholders’ equity		924,927			1,576,425			1,638,036			2,682,015			2,715,050
Total Liabilities and Shareholders’ Equity	$	25,495,870		$	26,439,895		$	25,816,306		$	26,262,571		$	26,031,291
Common shares issued		212,552,026			212,559,635			212,408,915			212,317,639			211,829,234
Common shares outstanding		202,650,846			202,592,908			202,442,188			202,350,912			201,862,507
Book value per common share	$	3.12		$	6.33		$	6.64		$	11.81		$	12.00
Tangible book value per common share (2)	$	1.29		$	4.12		$	4.26		$	6.56		$	6.72

(1) Amounts for periods prior to 2009 have been restated to reflect the adoption of SFAS 160, Noncontrolling Interests in Consolidated Financial Statements. Under SFAS 160, REIT preferred securities are included in total shareholders’ equity and the related dividends are excluded from net income (loss).

(2) Represents a non-GAAP measure.

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

DETAIL OF DEPOSITS

Period End Deposits (Dollars in thousands)	June 30, 2009		March 31, 2009		Dec 31, 2008		Change from Prior Quarter
							$			%
Regional banks	$	16,140,145	$	15,704,286	$	14,796,166	$	435,859		2.8	%
Public Funds - Regional banks		795,000		930,000		1,621,000		(135,000	)	-14.5	%
Mortgage warehouse lending		1,050,525		1,056,341		617,509		(5,816	)	-0.6	%
Subtotal		17,985,670		17,690,627		17,034,675		295,043		1.7	%
Brokered time deposits		1,759,015		2,044,490		1,297,651		(285,475	)	-14.0	%
Reciprocal brokered time deposits		268,615		482,941		268,319		(214,326	)	-44.4	%
Corporate		14,100		39,160		72,620		(25,060	)	-64.0	%
Total	$	20,027,400	$	20,257,218	$	18,673,265	$	(229,818	)	-1.1	%
Average Deposits (Dollars in thousands)	2nd Qtr. 2009		1st Qtr. 2009		4th Qtr. 2008		Change from Prior Quarter
							$			%
Regional banks	$	16,756,327	$	16,375,188	$	15,924,539	$	381,139		2.3	%
Mortgage warehouse lending		1,218,025		982,802		681,166		235,223		23.9	%
Brokered time deposits		1,967,430		1,655,219		1,607,023		312,211		18.9	%
Reciprocal brokered time deposits		427,472		357,561		243,890		69,911		19.6	%
Corporate		29,016		61,905		108,352		(32,889	)	-53.1	%
Total	$	20,398,270	$	19,432,675	$	18,564,970	$	965,595		5.0	%

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

	Three Months Ended
Average Volume and Rates (unaudited)	June 30, 2009							March 31, 2009							June 30, 2008 As Adjusted (1)
(Dollars in thousands)	Average Volume		Interest			Rate		Average Volume		Interest			Rate		Average Volume		Interest			Rate
Assets:
Loans, net of unearned income (2) (3)	$	13,938,711	$	169,320		4.87	%	$	14,409,104	$	179,666		5.05	%	$	15,797,611	$	236,737		6.02	%
Loans held for sale (3)		2,795,672		38,998		5.60	%		2,451,628		33,633		5.56	%		2,953,444		34,061		4.64	%
Securities (2) (3)		4,241,282		49,682		4.69	%		3,707,868		50,688		5.47	%		3,663,516		53,897		5.88	%
Securities purchased under agreements to resell		1,559,270		20,612		5.30	%		1,689,334		22,088		5.30	%		2,110,183		24,814		4.73	%
Federal funds sold		5,891		3		0.19	%		5,684		3		0.24	%		44,854		302		2.71	%
Interest bearing deposits in banks and the Federal Reserve		1,828,212		1,107		0.24	%		1,416,042		752		0.21	%		6,873		30		1.75	%
Total interest earning assets		24,369,038	$	279,722		4.60	%		23,679,660	$	286,830		4.89	%		24,576,481	$	349,841		5.72	%
Nonearning assets (3)		1,998,503							2,041,306							2,439,659
Total assets	$	26,367,541						$	25,720,966						$	27,016,140
Liabilities and Shareholders’ Equity:
Interest bearing non-time deposits	$	4,787,630	$	14,134		1.18	%	$	5,036,645	$	17,458		1.41	%	$	6,308,837	$	22,988		1.47	%
Time deposits		9,709,298		82,222		3.40	%		9,193,808		84,135		3.71	%		7,937,069		79,567		4.03	%
Brokered time deposits		1,967,430		12,562		2.56	%		1,655,219		12,526		3.07	%		1,574,093		17,102		4.37	%
Reciprocal brokered time deposits		427,472		2,385		2.24	%		357,561		2,363		2.68	%		85,338		750		3.53	%
Total brokered time deposits		2,394,902		14,947		2.50	%		2,012,780		14,889		3.00	%		1,659,431		17,852		4.33	%
Total interest bearing deposits		16,891,830		111,303		2.64	%		16,243,233		116,482		2.91	%		15,905,337		120,407		3.04	%
Repurchase agreements		320,597		552		0.69	%		410,552		822		0.81	%		522,045		2,528		1.95	%
Federal funds purchased		—		—		0.00	%		1,500		1		0.23	%		400,846		2,159		2.17	%
Other short-term borrowings		—		—		0.00	%		7,778		53		2.78	%		74,835		391		2.10	%
Long-term debt (3)		3,957,210		48,215		4.88	%		4,013,318		49,566		4.99	%		4,076,494		47,831		4.71	%
Total interest bearing liabilities		21,169,637	$	160,070		3.03	%		20,676,381	$	166,924		3.27	%		20,979,557	$	173,316		3.32	%
Noninterest bearing demand deposits		3,506,440							3,189,442							3,067,322
Other liabilities (3)		283,076							266,407							265,528
Total liabilities		24,959,153							24,132,230							24,312,407
Noncontrolling interest (REIT preferred securities)		293,058							293,058							293,058
Total Colonial BancGroup shareholders’ equity		1,115,330							1,295,678							2,410,675
Total shareholders’ equity		1,408,388							1,588,736							2,703,733
Total liabilities and shareholders’ equity	$	26,367,541						$	25,720,966						$	27,016,140
Rate differential						1.57	%						1.62	%						2.40	%
Net yield on interest-earning assets on a tax equivalent basis			$	119,652		1.97	%			$	119,906		2.04	%			$	176,525		2.88	%
Taxable equivalent adjustments (2):
Loans				(277	)						(187	)						(161	)
Securities				(1,902	)						(1,907	)						(1,940	)
Total taxable equivalent adjustments				(2,179	)						(2,094	)						(2,101	)
Net interest income			$	117,473						$	117,812						$	174,424
Total Average Deposits
Total interest bearing deposits	$	16,891,830	$	111,303		2.64	%	$	16,243,233	$	116,482		2.91	%	$	15,905,337	$	120,407		3.04	%
Noninterest bearing demand deposits		3,506,440		—		—			3,189,442		—		—			3,067,322		—		—
Total average deposits	$	20,398,270	$	111,303		2.19	%	$	19,432,675	$	116,482		2.43	%	$	18,972,659	$	120,407		2.55	%
Total average deposits, excluding brokered time (4)	$	18,430,840	$	98,741		2.15	%	$	17,777,456	$	103,956		2.37	%	$	17,398,566	$	103,305		2.39	%

(1) Amounts for periods prior to 2009 have been restated to reflect the adoption of SFAS 160, Noncontrolling Interests in Consolidated Financial Statements. Under SFAS 160, REIT preferred securities are included in total shareholders’ equity and the related dividends are excluded from net income (loss).

(2) Interest earned and average rates on securities and loans exempt from income taxes are reflected on a fully tax equivalent basis using a federal income tax rate of 35%, net of nondeductible interest expense.

(3) Unrealized gains (losses) on available for sale securities, the adjustments for mark to market valuations on hedged assets and liabilities and lower of cost or fair value adjustments have been classified in either nonearning assets or other liabilities.

(4) Reciprocal brokered time deposits are not excluded.

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

	Six Months Ended
Average Volume and Rates	June 30, 2009							June 30, 2008 As Adjusted (1)
(unaudited) (Dollars in thousands)	Average Volume		Interest			Rate		Average Volume		Interest			Rate
Assets:
Loans, net of unearned income (2) (3)	$	14,172,608	$	348,986		4.96	%	$	15,895,842	$	498,176		6.30	%
Loans held for sale (3)		2,624,601		72,631		5.58	%		3,057,090		74,458		4.90	%
Securities (2) (3)		3,976,048		100,370		5.05	%		3,670,331		108,509		5.91	%
Securities purchased under agreements to resell		1,623,942		42,700		5.30	%		2,112,696		53,073		5.05	%
Federal funds sold		5,788		6		0.22	%		71,776		1,253		3.51	%
Interest bearing deposits in banks and the Federal Reserve		1,623,266		1,859		0.23	%		14,202		70		1.00	%
Total interest earning assets		24,026,253	$	566,552		4.74	%		24,821,937		735,539		5.95	%
Nonearning assets (3)		2,019,787							2,511,054
Total assets	$	26,046,040						$	27,332,991
Liabilities and Shareholders’ Equity:
Interest bearing non-time deposits	$	4,911,449	$	31,591		1.30	%	$	6,459,247	$	55,622		1.73	%
Time deposits		9,452,977		166,357		3.55	%		7,674,577		164,629		4.31	%
Brokered time deposits		1,812,187		25,088		2.79	%		1,583,488		36,133		4.59	%
Reciprocal brokered time deposits		392,710		4,747		2.44	%		80,623		1,529		3.81	%
Total brokered time deposits		2,204,897		29,835		2.73	%		1,664,111		37,662		4.55	%
Total interest bearing deposits		16,569,323		227,783		2.77	%		15,797,935		257,913		3.28	%
Repurchase agreements		365,326		1,374		0.76	%		533,131		6,233		2.35	%
Federal funds purchased		746		1		0.23	%		732,986		11,197		3.07	%
Other short-term borrowings		3,867		53		2.78	%		194,835		2,945		3.04	%
Long-term debt (3)		3,985,109		97,782		4.94	%		4,080,255		96,941		4.77	%
Total interest bearing liabilities		20,924,371	$	326,993		3.15	%		21,339,142	$	375,229		3.54	%
Noninterest bearing demand deposits		3,348,817							3,067,268
Other liabilities (3)		274,788							287,537
Total liabilities		24,547,976							24,693,947
Noncontrolling interest (REIT preferred securities)		293,058							293,058
Total Colonial BancGroup shareholders’ equity		1,205,006							2,345,986
Total shareholders’ equity		1,498,064							2,639,044
Total liabilities and shareholders’ equity	$	26,046,040						$	27,332,991
Rate differential						1.59	%						2.41	%
Net yield on interest-earning assets on a tax equivalent basis			$	239,559		2.00	%			$	360,310		2.91	%
Taxable equivalent adjustments (2):
Loans				(464	)						(356	)
Securities				(3,810	)						(3,906	)
Total taxable equivalent adjustments				(4,274	)						(4,262	)
Net interest income			$	235,285						$	356,048
Total Average Deposits
Total interest bearing deposits	$	16,569,323	$	227,783		2.77	%	$	15,797,935	$	257,913		3.28	%
Noninterest bearing demand deposits		3,348,817				—			3,067,268		—		—
Total average deposits	$	19,918,140	$	227,783		2.31	%	$	18,865,203	$	257,913		2.75	%
Total average deposits, excluding brokered time (4)	$	18,105,953	$	202,695		2.26	%	$	17,281,715	$	221,780		2.58	%

(1) Amounts for periods prior to 2009 have been restated to reflect the adoption of SFAS 160, Noncontrolling Interests in Consolidated Financial Statements. Under SFAS 160, REIT preferred securities are included in total shareholders’ equity and the related dividends are excluded from net income (loss).

(2) Interest earned and average rates on securities and loans exempt from income taxes are reflected on a fully tax equivalent basis using a federal income tax rate of 35%, net of nondeductible interest expense.

(3) Unrealized gains (losses) on available for sale securities, the adjustments for mark to market valuations on hedged assets and liabilities and lower of cost or fair value adjustments have been classified in either nonearning assets or other liabilities.

(4) Reciprocal brokered time deposits are not excluded.

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

ASSET QUALITY (unaudited)

Selected Credit Quality Ratios	June 30, 2009			March 31, 2009			Dec 31, 2008			Sept 30, 2008			June 30, 2008
Period end:
Allowance as a percent of net loans		3.69	%		3.19	%		2.24	%		1.88	%		1.60	%
Nonperforming loans as a percent of net loans		10.99	%		6.24	%		3.67	%		3.58	%		1.91	%
Nonperforming assets as a percent of net loans, other real estate and repossessions		12.29	%		7.58	%		4.83	%		4.43	%		2.62	%
Allowance as a percent of nonperforming loans		34	%		51	%		61	%		53	%		84	%
Allowance as a percent of nonperforming assets		30	%		41	%		46	%		42	%		60	%
Net charge-offs as a percent of average net loans:
Quarter to date (annualized)		7.02	%		3.72	%		11.15	%		3.17	%		1.85	%
Year to date (annualized)		5.35	%		3.72	%		4.16	%		1.94	%		1.35	%
Nonperforming Assets (Dollars in thousands)	June 30, 2009			March 31, 2009			Dec 31, 2008			Sept 30, 2008			June 30, 2008
Nonaccrual loans	$	1,475,349		$	879,309		$	532,766		$	542,785		$	294,816
Renegotiated loans		13,301			1,453			586			—			—
Total nonperforming loans		1,488,650			880,762			533,352			542,785			294,816
Other real estate owned and repossessions		174,009			182,690			127,908			134,951			113,604
Nonperforming assets excluding loans held for sale		1,662,659			1,063,452			661,260			677,736			408,420
Nonaccrual loans transferred to held for sale		25,905			21,988			49,198			—			—
Total nonperforming assets	$	1,688,564		$	1,085,440		$	710,458		$	677,736		$	408,420
Aggregate loans contractually past due 90 days for which interest is being accrued	$	23,637		$	34,823		$	41,579		$	42,454		$	31,337
Total charge-offs	$	248,580		$	134,706		$	416,055		$	122,687		$	74,101
Total recoveries		(4,488	)		(2,486	)		(1,055	)		(1,279	)		(1,315	)
Net charge-offs:
Quarter to date	$	244,092		$	132,220		$	415,000		$	121,408		$	72,786
Year to date	$	376,312		$	132,220		$	642,787		$	227,787		$	106,379

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

SELECTED RATIOS (unaudited)

Selected Financial Ratios	2nd Qtr. 2009		1st Qtr. 2009		4th Qtr. 2008 As Adjusted (1)		3rd Qtr. 2008 As Adjusted (1)		2nd Qtr. 2008 As Adjusted (1)
Colonial BancGroup Capital Ratios:
Tier I risk-based capital ratio	5.44	% **	7.33	%	8.58	%	10.00	%	10.12	%
Total risk-based capital ratio	9.43	% **	11.56	%	12.88	%	14.18	%	14.16	%
Tier I leverage ratio	3.49	% **	5.02	%	5.90	%	7.29	%	7.38	%
Tangible common equity ratio (2) (3)	1.04	%	3.21	%	3.41	%	5.27	%	5.43	%
Tangible capital ratio (3)	2.21	%	4.34	%	4.56	%	6.43	%	6.60	%
Colonial Bank Capital Ratios:
Tier I risk-based capital ratio	6.46	% **	8.02	%	8.54	%	9.88	%	9.88	%
Total risk-based capital ratio	9.21	% **	10.78	%	11.37	%	12.70	%	12.65	%
Tier I leverage ratio	4.18	% **	5.54	%	6.03	%	7.20	%	7.20	%
Return on average assets*	NM		NM		NM		NM		NM
Return on average equity*	NM		NM		NM		NM		NM
Efficiency ratio (4)	131.60	%	100.13	%	95.79	%	73.52	%	69.59	%
Noninterest income(4)/ average assets*	0.81	%	0.80	%	0.68	%	0.79	%	0.78	%
Noninterest expense(4)/ average assets*	3.45	%	2.65	%	2.73	%	2.49	%	2.36	%
Net interest margin	1.97	%	2.04	%	2.37	%	2.85	%	2.88	%

(1) Amounts for periods prior to 2009 have been restated to reflect the adoption of SFAS 160, Noncontrolling Interests in Consolidated Financial Statements. Under SFAS 160, REIT preferred securities are included in total shareholders’ equity and the related dividends are excluded from net income (loss).

(2) This ratio excludes the REIT preferred securities included in total shareholders’ equity.

(3) Represents non-GAAP measures.

(4) These ratios utilize core noninterest income and core noninterest expense which represent non-GAAP measures.

* Annualized

** Estimated

NM Not meaningful

Reconciliation of Certain Financial Matters	2nd Qtr. 2009			1st Qtr. 2009			4th Qtr. 2008 As Adjusted (1)			3rd Qtr. 2008 As Adjusted (1)			2nd Qtr. 2008 As Adjusted (1)
Book value per common share	$	3.12		$	6.33		$	6.64		$	11.81		$	12.00
Effect of intangible assets	$	(1.83	)	$	(2.21	)	$	(2.38	)	$	(5.25	)	$	(5.28	)
Tangible book value per common share	$	1.29		$	4.12		$	4.26		$	6.56		$	6.72
Common equity ratio		2.48	%		4.85	%		5.21	%		9.10	%		9.30	%
Effect of intangible assets		-1.44	%		-1.64	%		-1.80	%		-3.83	%		-3.87	%
Tangible common equity ratio		1.04	%		3.21	%		3.41	%		5.27	%		5.43	%
Capital ratio		3.63	%		5.96	%		6.34	%		10.21	%		10.43	%
Effect of intangible assets		-1.42	%		-1.62	%		-1.78	%		-3.78	%		-3.83	%
Tangible capital ratio		2.21	%		4.34	%		4.56	%		6.43	%		6.60	%
Annualized noninterest income / average assets		0.81	%		0.78	%		0.68	%		0.70	%		0.83	%
Effect of non-core income		0.00	%		0.02	%		0.00	%		0.09	%		-0.05	%
Annualized core noninterest income / average assets		0.81	%		0.80	%		0.68	%		0.79	%		0.78	%
Annualized noninterest expense / average assets		4.54	%		2.78	%		11.47	%		2.49	%		2.43	%
Effect of non-core expense		-1.09	%		-0.13	%		-8.74	%		0.00	%		-0.07	%
Annualized core noninterest expense / average assets		3.45	%		2.65	%		2.73	%		2.49	%		2.36	%
Efficiency ratio		173.18	%		105.44	%		402.31	%		75.72	%		70.69	%
Effect of non-core income and expense		-41.58	%		-5.31	%		-306.52	%		-2.20	%		-1.10	%
Core efficiency ratio		131.60	%		100.13	%		95.79	%		73.52	%		69.59	%

Management believes that these non-GAAP measures provide information that is useful to investors in understanding the financial viability of the Company as well as performance of the Company’s underlying operations and performance trends. Specifically these measures permit evaluation and comparison of results for ongoing business operations, and it is on this basis that Management internally assesses the Company’s performance.

In light of diversity in practice, other companies may define or calculate these measures differently.