8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):    May 28, 2002

THE COLONIAL BANCGROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-13508	63-0661573
(State of Incorporation)	(Commission File No.)	(IRS Employer I.D. No.)

Colonial Financial Center, Suite 800

One Commerce Street, Montgomery, Alabama    36104

(Address of Principal Executive Office)            (Zip code)

Registrant’s telephone number, including area code:    334-240-5000

Item 9.    Regulation FD Disclosure

Information regarding the Registrant’s signing of a definitive agreement to acquire Palm Beach National Holding Company is furnished herein as Regulation  F-D Disclosure.

This Current Report on Form 8-K and the release which it contains each contain “forward-looking statements” within the meaning of the federal securities laws. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities; (i) an inability of the company to realize elements of its strategic plans for 2002 and beyond; (ii) expected cost savings from the merger announced herein, if consummated, cannot be fully realized; (iii) costs or difficulties related to the integration of acquired institutions are greater than expected; (iv) increases in competitive pressure in the banking industry; (v) general economic conditions, either nationally or regionally, that are less favorable than expected; (vi) acts of terrorism or war; (vii) and changes which may occur in the regulatory environment or securities markets. When used in this Report, the words “believes,” “estimates,” “plans,” “expects,” “should,” “may,” “might,” “outlook,” and “anticipates,” and similar expressions as they relate to BancGroup (including its subsidiaries) or its management are intended to identify forward-looking statements. Forward-looking statements speak only as to the date they are made. BancGroup does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

As Regulation F-D Disclosure, the Registrant furnishes its press release, dated May 28, 2002, as Exhibit No. 99.1.

Exhibit No.	Document Description
99.1	Press Release Announcing Definitive Agreement.
99.2	Additional 8-K information.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by this undersigned hereunto duly authorized.

THE COLONIAL BANCGROUP, INC.

 (Registrant)

Date: May 28, 2002	/s/    W. FLAKE OAKLEY, IV
	BY:  W. Flake Oakley
	ITS:  Chief Financial Officer

EX-99.1

EXHIBIT 99.1

For more information contact:	For immediate release
Colonial BancGroup	May 28, 2002
Lisa Free (334) 240-5105
Palm Beach National
Loy Anderson (561) 653-5560

COLONIAL BANCGROUP TO ACQUIRE

PALM BEACH NATIONAL BANK

MONTGOMERY, AL — Colonial BancGroup Chairman and CEO Robert E. Lowder announced today that Colonial has entered into a definitive agreement to acquire Palm Beach National Holding Company and its banking subsidiary, Palm Beach National Bank & Trust Company, headquartered in Palm Beach, Florida. The transaction will be a stock for stock exchange at a price of $50 per share for each share of Palm Beach National stock, subject to certain market pricing conditions of Colonial’s stock, resulting in a total value of approximately $105.5 million.

Palm Beach National Bank & Trust Company was established in 1973 and its main office is located on world-renowned Worth Avenue. In addition to the Worth Avenue location, Palm Beach National has seven other offices located in Palm Beach, West Palm Beach, North Palm Beach, Jupiter, Palm Beach Gardens and Lantana. Five of these locations are full-service branches and three are boutique offices. As of March 31, 2002, Palm Beach National had $344 million in assets with $286 million in loans and $305 million in deposits, 30% of which are noninterest bearing demand deposits.

“Colonial is pleased to expand its presence in Palm Beach County. This acquisition will be a great addition to the five Colonial branches currently in Palm Beach County located in Atlantis, Boca Raton,

East Boca Raton, Palm Beach Lakes and Royal Palm Beach. Thus, this acquisition is consistent with our strategy to expand in market areas where we are already established,” said Mr. Lowder.

Mr. Lowder continued, “Colonial’s philosophy of locally run banks fits well with Palm Beach National’s status as the premier independent bank in the Palm Beach market. Moreover, Colonial expects that our enhanced emphasis on non-interest income will be boosted by the exceedingly strong financial base of this institution and its nationally prominent location.”

Demographically, the Palm Beach market is one of the strongest in America. Population during the decade of the nineties grew at a 31% rate compared to the State of Florida’s already robust growth rate of 23.5% and the county is the third most populated county in the state with 1.2 million people. Median household income in the market is 12.6% greater than the State of Florida’s measurement, according to the most recent data available.

“We are very pleased with this merger agreement,” said Loy Anderson, CEO of Palm Beach National. “It offers our customers a broader array of products and services within the same community banking environment they have known.”

George Slaton, Chairman of the Board of Palm Beach National, added, “Colonial is an excellent organization. This deal represents tremendous value for our shareholders, customers and employees.”

Completion of the transaction with Palm Beach National is subject to approval by various regulatory agencies and Palm Beach National Holding Company shareholders.

Lehman Brothers advised Palm Beach National on this transaction.

Colonial BancGroup is a multi-state bank holding company headquartered in Montgomery, Alabama with assets of $13 billion operating 263 offices in Alabama, Florida, Georgia, Nevada, Tennessee and Texas. It is traded on the New York Stock Exchange under the symbol CNB. In most newspapers the stock is listed as ColBgp.

2

EX-99.2

Exhibit 99.2

8-K Information

Additional disclosure on transaction between Colonial BancGroup and Palm Beach National Holding Company:

Cost Savings

Cost savings from this transaction are expected to be between $3.5 and $4.5 million annually and should be fully implemented by the second quarter of 2003. Cost savings include reductions in cost for duplicate positions, directors fees, legal & accounting fees, insurance expenses, and data and item processing fees.

One time costs

One time merger related costs in connection with the transaction are anticipated to be between $5.5 and $6.5 million some of which will be capitalized. These costs include: contract buyouts for data processing, item processing and merchant processing, computer equipment write offs, severance payments, broker commissions and expenses connected to the consolidation of facilities. In addition to the above costs, Colonial anticipates approximately $1 to $2 million in additional loan loss provision to bring reserves in line with Colonial methodologies.

Revenue enhancements

Colonial has identified opportunities for additional fee income with the introduction of Colonial’s products and services to the customers of Palm Beach National resulting in an expected increase in fee income of approximately $500,000 per year beginning in 2003.

Core Deposit Valuation

Colonial has estimated the core deposit valuation to be approximately 5 ¹/2% of non-time deposits, which is expected to be amortized over an 8 year period on a straight line basis. Total deposits of Palm Beach National at March 31, 2002 were approximately

1

$305 million of which $44 million were time deposits. The estimated core deposit intangible related to this transaction is expected to be approximately $14 million, amortized at $1.8 million per year after tax.

Purchase Price Details

Colonial will acquire all of the outstanding shares of Palm Beach National in a stock for stock exchange and holders of Palm Beach National stock options will receive either cash for the gain on their options or Colonial stock options. Colonial expects to issue between 5 and 6 million shares of stock in exchange for 100% of the stock of Palm Beach National. Colonial intends to purchase up to approximately 2 million shares of Colonial stock on the open market to be reissued as part of this transaction.

Selected financial information on Palm Beach National (in millions):

Balance Sheet trends:

	March 31, 2002		Dec 31, 2001		Dec 31, 2000
Total Assets	$	344.4	$	338.6	$	345.6
Total Deposits		304.9		299.5		314.4
Total Equity		33.7		33.1		29.9

Palm Beach National’s deposit mix at March 31, 2002 consisted of: 30% noninterest demand deposits, 56% interest bearing demand deposits, savings, and money market accounts and, 14% time deposits. Rates on these deposits are generally at market and consistent with Colonial’s pricing.

Net Income components:

	YTD March 31, 2002		YTD Dec 31, 2001		YTD Dec 31, 2000
Net Interest Income	$	3.853	$	16.201	$	15.300
Provision for loan loss		.137		.875		1.886
Noninterest income:
Wealth mgmt & trust		.559		1.362		1.401
Other income		.497		1.903		1.443
Noninterest expense		4.955		13.561		12.508
Net Income		.751		3.167		2.447

2