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                       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): March 16, 1998



                          THE COLONIAL BANCGROUP, INC.
             (Exact name of registrant as specified in its charter)





       Delaware                     0-07945                   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



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ITEM 5.  OTHER EVENTS
ACQUISITION AND RESTRUCTURING COSTS AND YEAR 2000 COSTS

         Colonial BancGroup has incurred and expects to continue to incur costs
outside the course of its normal ongoing operations in connection with
acquisitions and related restructuring of acquired companies' operations, costs
associated with Year 2000 computer systems compliance and upgrades to
technological capabilities. Substantial portions of these costs are internal and
not incremental to the ongoing operations of the Company. Certain costs are
however additional costs incurred from third parties or in connection with
write-downs of existing systems. The current status of these costs is discussed
below:

ACQUISITION AND RESTRUCTURING COSTS:

         During February 1998, BancGroup completed the acquisition of four
banks with total assets of $743 million. Consolidation of the back-office
operations of these four institutions as well as the restructuring of
BancGroup's regional banks in Florida, with total assets of approximately $2.2
billion, will result in one-time charges estimated to be approximately $6.6
million of which approximately $6.1 million will be incurred in the first
quarter of 1998. These one-time costs should be more than offset by cost savings
in 1998 and 1999 from the consolidation of back-office operations and revenue
growth from the acquired banks.

YEAR 2000 COSTS AND TECHNOLOGICAL RESTRUCTURING:

         BancGroup has established a full time Year 2000 task force to address
all Year 2000 compliance issues as well as enhancements to computer and
communications systems resulting from upgrades initiated in response to Year
2000 issues. Currently BancGroup is in the process of implementing its plans to
bring all major computer systems into Year 2000 compliant status by the last
quarter of 1998. Testing of all systems and changes will begin in the last
quarter of 1998 and continue through the full year of 1999. The major computer
systems involved are:

     -    Colonial Bank's mainframe based systems: These systems are provided by
          third-party vendors of national stature. Upgrades to these systems are
          in progress and are intended to bring the systems into Year 2000
          compliant status and provide enhancements to current capabilities. The
          costs associated with these upgrades are part of BancGroup's ongoing
          operating costs.

     -    Colonial Mortgage Company's (CMC) servicing and production systems:
          CMC's systems are primarily in-house systems and are currently being
          rewritten to Year 2000 compliant status. The cost of the rewrites is
          estimated to be $1.0 million and is incremental to the Company's
          ongoing operating costs. This cost is expected to be incurred through
          September 30, 1998. In


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          addition, CMC's computer hardware is being upgraded to Year 2000
          compliant status. This upgrade will also provide additional capacity
          for the servicing systems as well as an enhanced capability for
          production. The additional annual cost of the mainframe upgrade
          (approximately $240,000) is expected to be absorbed through growth in
          the servicing portfolio and through increased production.


     -    Branch automation operating systems: Colonial Bank's branch automation
          operating systems are being converted to Windows NT from OS/2. This
          conversion along with establishment of an intranet and increased
          capacity of communication lines is the most cost effective method of
          bringing the operating system to Year 2000 compliant status while
          allowing for more efficient flow of information to and from the
          branches and providing the highest assurance of continuing vendor
          support for the Company's branch automation solution. The incremental
          operating cost for these upgrades (approximately $400,000 annually) is
          expected to be absorbed through operational efficiencies and increased
          revenue. The Company will incur a one-time pretax charge during the
          first quarter of 1998 of approximately $2 million to write-off the
          remaining book value of the current branch automation equipment that
          is not Windows NT compatible.

         BancGroup incurred $432,000 in costs during 1997 related to assessing
the status of the Company's systems and defining its strategy to bring all
systems into Year 2000 compliance. BancGroup expects to incur certain additional
third-party costs totaling approximately $300,000 in 1998 relating to the
completion of the assessment of the Company's systems and the definition of its
strategy to bring all systems into Year 2000 compliance. These costs have been
and will continue to be expensed as incurred and are not significant to
BancGroup's on-going operating costs.

         The above reflects management's current assessment and estimates.
Various factors could cause actual results to differ materially from those
contemplated by such assessments, estimates and forward-looking statements. Some
of these factors may be beyond the control of BancGroup, including but not
limited to, vendor representations, technological advancements, economic factors
and competitive considerations.

         Management's evaluation of Year 2000 compliance and technological
upgrades is an on-going process involving continual evaluation. Unanticipated
problems could develop and alternative solutions may be available that could
cause current solutions to be more difficult or costly than currently
anticipated.


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CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995:

This report contains "forward-looking statements" within the meaning of the
federal securities laws. The forward-looking statements in this report 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) deposit attrition, customer loss, or revenue loss in the
ordinary course of business; (ii) increases in competitive pressure in the
banking industry; (iii) costs or difficulties related to the integration of the
businesses of BancGroup and the institutions acquired are greater than expected;
(iv) changes in the interest rate environment which reduce margins (v) general
economic conditions, either nationally or regionally, that are less favorable
than expected, resulting in, among other things, a deterioration in credit
quality; (vi) changes which may occur in the regulatory environment; (vii) a
significant rate of inflation (deflation); and (viii) changes in the 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.

                                   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 the
undersigned hereunto duly authorized.

                                       THE COLONIAL BANCGROUP, INC.
                                       ----------------------------------------
                                               (Registrant)




Date:    March 16, 1998                /s/ W. Flake Oakley
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                                       W. Flake Oakley
                                       Chief Financial Officer

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