8-K

UNITED STATES

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): September 6, 2006

THE COLONIAL BANCGROUP, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	1-13508	63-0661573
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

One Commerce Street

Montgomery, Alabama 36104

(Address of principal executive offices)

(334) 240-5000

(Registrant’s telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

The Colonial BancGroup, Inc. (“BancGroup”) is furnishing this Current Report on Form 8-K in connection with management’s presentation at the Morgan Keegan 2006 Equity Conference beginning on September 6, 2006. BancGroup’s presentation materials are attached hereto and incorporated herein as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

The following exhibit is furnished as Regulation FD Disclosure to this Current Report on Form 8-K:

Exhibit No.	Exhibit
99.1	Presentation materials to be used by BancGroup’s management at the Morgan Keegan 2006 Equity Conference.

This release includes “forward-looking statements” within the meaning of the federal securities laws. Words such as “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. The forward-looking statements in these reports are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. In addition to factors mentioned elsewhere in this report 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:

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

• increases in competitive pressure in the banking industry;

• 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 plans for 2006 and beyond;

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

• 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 than expected;

• natural disasters in BancGroup’s primary market areas 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;

• 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);

• acts of terrorism or war; and

• changes in the securities markets.

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.

3

SIGNATURE

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
By	/s/    SARAH H. MOORE
	Sarah H. Moore
	Senior Executive Vice President and Chief Financial Officer

Date: September 6, 2008

4

EX-99.1

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Morgan Keegan

2006 Equity Conference

September 6-8, 2006

Exhibit 99.1

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1

Forward Looking Statements

This

presentation

includes

“forward-looking

statements”

within

the

meaning

of

the

federal

securities

laws.

Words

such

as

“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.

The

forward-looking

statements

in

these

reports

are

subject

to

risks

and

uncertainties

that

could

cause

actual

results

to

differ

materially

from

those

expressed

in

or

implied

by

the

statements.

In

addition

to

factors

mentioned

elsewhere

in

this

report

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:

•

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

•

increases in competitive pressure in the banking industry;

•

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 plans for 2006 and beyond;

•

changes in the interest rate environment which expand or reduce margins or adversely affect critical estimates as applied and

projected returns on investments;

•

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 then expected;

•

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;

•

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);

•

acts of terrorism or war; and

•

changes in the securities markets.

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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2

$23 Billion in Assets with 299 Branches

27

th*

Largest U.S. Commercial Bank

Proven Community Banking Philosophy with Regional Bank

Management and Local Boards of Directors

Consistent Earnings Per Share Growth –

3 year CAGR 9%

Overview

*Source:  SNL Financial

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3

FL

58%

Corp

9%

GA

6%

AL

17%

TX

6%

NV

4%

NV

14

TX

13

FL

162

GA

18

AL

92

FL

60%

AL

23%

TX

4%

GA

5%

NV

5%

Corp

3%

70%

1

of Colonial’s Deposits are in three of the four fastest growing states in the

U.S* -

Florida, Georgia and Nevada 

Branches, Assets and Deposits by State at 6/30/06 are as follows:

In the Right Places

299 Branches

$23 Billion in Assets

$17 Billion in Deposits

1

At 6/30/06

*Population change from 2000-2005

Source: US Census Bureau

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4

Superior Projected Population Growth

2006 - 2011 Population Growth

Colonial BancGroup, Inc.

11.94

%

SunTrust Banks, Inc.

10.24

South Financial Group, Inc.

9.83

Compass Bancshares, Inc.

9.72

Synovus Financial Corp.

8.78

Wachovia Corporation

8.60

BB&T Corporation

7.72

Whitney Holding Corporation

7.07

Bank of America Corporation

6.68

Regions Financial Corporation

6.49

Trustmark Corporation

5.59

BancorpSouth, Inc.

4.78

First Horizon National Corporation

4.23

Fifth Third Bancorp

4.20

Median

7.39

%

Low

4.20

High

11.94

Source: SNL Financial.

Deposit data as of 6/30/05.

Population growth deposit weighted by county.

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5

Florida,

now

the

4

th

most

populous

state

in

the

U.S.

with

17

million,

is

projected

to pass New York in total population by 2011*

6

th

largest commercial bank in Florida –

5

th

largest after AmSouth/Regions

merger

Florida at 6/30/06:

•

60% of Deposits in Florida –

Total Deposits of $9.9 Billion

•

58% of Assets in Florida –

Total Assets of $13.3 Billion

•

54% of Branches in Florida –

Total Branches –

162

Strong loan and deposit growth

•

Loans

1

grew 13% annualized from 12/31/05

•

Deposits were $9.9 billion at June 30, 2006, a 21% annualized increase over

December 31, 2005

Aggressive De Novo Branching Strategy

•

Plan to open 7 branches in 2006 and 10-20 over the next two years

Florida Franchise

1

Excluding Mortgage Warehouse Lending

*Source: SNL Financial

Florida Franchise and Current Population

7 Planned Branches through 12/31/06

Current Branches

Current Population

2,500,000

500,000

100,000

Current Population

2,500,000

500,000

100,000

PANHANDLE

Assets = $400 Million

Deposits = $56 Million

2 Branches

CENTRAL FLORIDA

Assets = $3.5 Billion

Deposits = $3.1 Billion

60 Branches

MORTGAGE WHSE.

Assets = $2.9 Billion

Deposits = $1.0 Billion

SOUTH FLORIDA

Assets = $3.5 Billion

Deposits = $3.0 Billion

46 Branches

FLORIDA WEST COAST

Assets = $3.0 Billion

Deposits = $2.8 Billion

54 Branches

Planned Branches beyond 12/31/06

6

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7

Regional Bank Management Structure

•

Regional Lending CEOs

•

Regional Retail Banking CEOs

Local Boards of Directors 

Local Expertise in Lending Decisions

Community Bank Philosophy with Convenience and Broad Product

Line

Proven Community Banking Philosophy 

8

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9

Retail Banking

*

*

*

*

*

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10

Key Initiatives:

•

Non-Time Deposit Growth

•

Noninterest Income Growth

•

Enhanced Consumer Services

•

Strategic Marketing Plan

Retail Banking –

Adding Value to the Franchise

•

Convenience in Markets Served

•

Sales Training Program

•

Sales Incentive Plans

Needs-based sales and service approach enhanced by:

Tactics:

•

Promote Consumer Checking and Business

Banking Products

•

Target Deposit Service Charges and Lines

of Business Revenues

•

Image Functionality Added to Online

Banking Services, Free Bill Pay

•

Improved mix and frequency of Direct Mail,

Sales Leads, Newspaper, Radio and Branch

Collateral

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Key Initiatives:

•

Enhanced business banking product offerings

•

Streamlined loan approval process for lines of credit

•

Aligned business banking production with Retail line of business

•

100% increase in loan production over 2005 results

Retail Banking –

2006 Non-Time Deposit Growth Initiatives

Key Initiatives:

•

Focus on weekly account acquisition targets and net account growth

•

Increased emphasis on cross selling of Online Banking and Bill Pay

•

40% increase in On-line banking enrollments over 2005 results

•

425% increase in Bill Pay enrollments over 2005 results

Personal Deposits Objectives:

50% increase in noninterest account openings

Continued emphasis on deposit growth in non-time

accounts

Business Banking Objectives:

35% Increase in Business Banking checking openings

30% Increase in Business Banking loan production

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Direct Mail Ads for Free Checking

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13

Marketing for Business Banking

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14

Marketing for Mortgage Financing

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15

Enhancements for Online Banking/Bill Pay

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16

Retail Banking Noninterest Income Growth Initiatives

Deposit Service Charges

•

Weekly tracking on net account growth in non-interest bearing accounts

•

Capitalize on the convenience of the franchise to price competitively with

peer sized banks

Financial Planning Services

•

Focus on building recurring revenue-managed money, insurance and

retirement plans

•

Focus on products/services for commercial and private banking clients

•

Currently

have

46

financial

consultants

–

planning

to

increase

consultants

to 60 by the end of 2006

•

352 Licensed Fixed Annuity Reps; Series 6 program with 60

professionals focused on mutual fund sales and variable annuity

business

•

Renewed emphasis on selling Trust Services and Asset Management

Mortgage Banking

•

Strategic partnership with secondary product providers to increase

breadth of programs and saleable loan production

•

Talented management that is focused on recruiting and retaining top

producing originators that integrate well into the Retail franchise

Objective:     25% of our revenue from fee based services

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17

Retail Banking-

Adding Value to the Franchise

Expanding branch network that offers marketplace convenience

Aligned our products/services, sales tracking and compensation

plans with measurable results that deliver growth in low cost

deposits and fee revenue

Restructured management and business line functions to focus on

Retail Banking

Acquiring new relationships while expanding and retaining

profitable customers through an integrated marketing plan

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18

Financial Highlights

*

*

*

*

*

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19

$0.85

$1.06

$1.26

$1.16

$1.31

$1.52

$0.75

$0.41

$0.43

2001

2002

2003

2004

2005

YTD

6/30/05

YTD

6/30/06

2Q05

2Q06

(diluted)

Earnings Per Share

19%

(8)%

13%

16%

5%

13%

3 Year CAGR = 9%

2003 -

2005

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20

$422

$455

$495

$567

$174

$192

2001

2002

2003

2004

2005

2Q05

2Q06

$709

Net Interest Income

($ in millions)

8%

9%

15%

10%

25%

3 Year CAGR = 13%

2003 -

2005

68%

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21

$13,988

$10,862

$9,419

$8,734

$8,433

$13,489

$15,714

2001

2002

2003

2004

2005

2Q05

2Q06

Average Deposits

4%

8%

15%

1

Excluding acquisitions, sale of branches, and brokered deposits

14%

1

($ in millions)

16.5%

16%

1

29%

3 Year CAGR = 14%

2003 -

2005

86%

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22

3.36%

3.41%

3.45%

3.49%

3.53%

3.58%

3.64%

3.72%

3.78%

3.85%

3.86%

3.81%

3.10%

3.20%

3.30%

3.40%

3.50%

3.60%

3.70%

3.80%

3.90%

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

2Q06

Net Interest Margin

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23

Effective Net Interest Income Management

Earning Asset growth in high quality floating / adjustable rate assets

•

67% of earning assets are floating or adjustable rate at 6/30/06

Conservative balance sheet management

•

Securitized mortgage warehouse assets -

averaged $1.5 billion in 2Q06

and YTD 2006

•

Increased by $500 million in the third quarter 2006

•

Securities portfolio comprised just 14% of earning assets at 6/30/06

•

Slightly asset sensitive

Improved funding mix

•

Average deposits funded 78% of average earning assets in 2Q06 vs. 72%

in 2Q05

•

58% of average deposits were non-time deposits in 2Q06

•

19% of average deposits were non-interest bearing in 2Q06

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24

Second Quarter Summary

Record EPS of $0.43

No Unusual Transactions

Net interest income increased 10% over prior year 2Q

Core fee based services increased 8% linked quarter

Excellent credit quality

Strong loan growth and good deposit growth

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25

Credit

*

*

*

*

*

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26

Solid and Proven Policies and Underwriting

•

We focus on lending to individuals and companies we know

•

We avoid  “speculative”

projects

•

We ensure strong guarantor support on our loans

•

We have a comprehensive Limit Model for CRE/Construction exposure

•

Model

sets

limits

for

each

property

type,

MSA,

and

property

type

within

each

MSA

•

Limits are set based on risk factors such as property type metrics (vacancy

rates, rental rates, absorption rates, price trends), Colonial’s past history within

property type, population levels, industry outlook, etc.

Strong Committee Process

•

Low individual lending authorities

•

Multi-tiered Committees

•

Regional Director involvement

Experienced Credit Group

•

Active involvement by CEO and CCO

•

Credit Review Area

•

Risk Management Team

Credit Process

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27

Excellent Credit Quality

Nonperforming Assets ratio hit a new record low of 0.18% at 6/30/06

Annualized Net Charge-Off Ratio was 0.04% 2Q06 and 0.15% YTD

Past dues > 30 days were 0.41% of net loans, down from 0.53% at

3/31/06

Allowance for loan losses was 1.14%, or 649% of nonperforming

assets

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28

0.65%

0.78%

0.64%

0.54%

0.55%

0.60%

0.71%

0.84%

0.85%

0.29%

0.21%

0.78%

1.17%

1.25%

0.18%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

'92

'93

'94

'95

'96

'97

'98

'99

'00

'01

'02

'03

'04

'05

6/30/06

All FDIC Insured Commercial Banks

Colonial BancGroup

(as originally reported)

NPAs

Consistently Below Industry

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29

0.47%

0.51%

0.09%

0.19%

0.15%

0.14%

0.33%

0.13%

0.18%

0.04%¹

0.23%

0.23%

0.21%

0.21%

0.28%

0.29%

0.31%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

'91

'92

'93

'94

'95

'96

'97

'98

'99

'00

'01

'02

'03

'04

'05

YTD

6/30/06

2Q06

All FDIC Insured Commercial Banks

Southern Regionals*

Colonial BancGroup

Net Charge-Offs/Average Loans

*Source: KBW

1

Annualized

1

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30

Why Invest in Colonial BancGroup?

High Growth Company in the Right Locations for Continued Success

•

Our goal is to be the #4 commercial bank in Florida

Conservative Lending Philosophy

•

Excellent net charge-off history

Opportunity to Improve

•

Our goal is to have 25% of our revenue from fee based services

Experienced and Strong Management Team

•

Delivered

best

shareholder

returns

in

the

Southern

United

States

for

1,

3, and 5 year returns

1

; 15% in 2005 v. S&P Bank Index (4.76%)

16 Years of Increased Dividends: $0.68* for 2006

1

Source: Wall Street Journal “Compound Annual Total Returns through 12/31/05”

*Estimated

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31

Supplemental Information

*

*

*

*

*

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32

Colonial

15.34%

15.34%

S&P 500 Index

4.91%

S&P Bank Index

(4.76)%

2005 Total Shareholder Return

33

COMPANY NAME

STOCK

SYMBOL

ONE-YEAR

RETURN (%)

SURPLUS/DEFICIT

RELATIVE TO INDUSTRY

3-YEAR

AVERAGE

RETURN (%)

SURPLUS/DEFICIT

RELATIVE TO

INDUSTRY

5-YEAR

AVERAGE

RETURN (%)

SURPLUS/DEFICIT

RELATIVE TO

INDUSTRY

10-YEAR

AVERAGE

RETURN (%)

SURPLUS/DEFICIT

RELATIVE TO INDUSTRY

Hudson City Bancorp

HCBK

8.06

5.96

30.50

14.00

33.61

21.81

NA

NA

People's Bank

PBCT

23.39

21.30

46.35

29.85

27.91

16.12

23.80

8.42

Bank of Hawaii

BOH

4.44

2.34

22.47

5.97

27.28

15.49

14.56

-0.83

UnionBanCal

UB

9.21

7.11

23.54

7.04

26.60

14.81

17.26

1.88

East West Bancorp

EWBC

-12.54

-14.64

27.42

10.92

24.86

13.07

NA

NA

Independence Community Ban

ICBC

-3.98

-6.08

19.09

2.59

22.75

10.96

NA

NA

Sovereign Bancorp

SOV

-3.37

-5.46

16.20

-0.30

22.52

10.73

13.33

-2.05

Colonial Bancgroup

CNB

15.37

13.28

30.20

13.70

21.47

9.68

15.22

-0.17

Cathay General Bancorp

CATY

-3.13

-5.22

25.05

8.55

21.10

9.31

27.12

11.73

Bank of America

BAC

2.40

0.31

14.35

-2.15

19.57

7.78

14.09

-1.29

Hudson United Bancorp

HU

10.03

7.93

14.32

-2.17

19.10

7.31

12.75

-2.64

Compass Bancshares

CBSS

2.16

0.07

19.11

2.61

18.84

7.05

16.39

1.00

South Financial Group

TSFG

-13.45

-15.55

12.54

-3.96

18.58

6.79

8.85

-6.54

Wachovia Corp.

WB

4.31

2.21

17.12

0.62

17.40

5.61

10.51

-4.87

Commerce Bancorp

CBH

8.40

6.31

18.50

2.00

16.73

4.94

28.19

12.80

New York Community Bancorp

NYB

-15.01

-17.10

5.06

-11.44

16.61

4.82

26.38

11.00

AmSouth Bancorp

ASO

5.19

3.10

15.45

-1.05

16.22

4.43

12.31

-3.07

Associated Banc-Corp

ASBC

1.19

-0.90

16.76

0.26

16.00

4.21

11.69

-3.70

City National

CYN

4.64

2.55

20.48

3.99

15.44

3.65

20.11

4.73

Golden West Financial

GDW

7.91

5.81

23.00

6.50

14.84

3.05

22.38

7.00

Sky Financial Group

SKYF

0.13

-1.96

15.60

-0.90

14.67

2.87

13.21

-2.18

North Fork Bancorp

NFB

-2.00

-4.09

10.15

-6.35

14.21

2.41

20.74

5.35

Marshall & Ilsley

MI

-0.48

-2.58

18.81

2.31

13.43

1.64

15.00

-0.38

Astoria Financial

AF

13.67

11.58

21.00

4.50

13.18

1.39

17.21

1.82

Regions Financial

RF

0.03

-2.07

11.97

-4.52

12.99

1.20

10.53

-4.86

Webster Financial

WBS

-5.39

-7.48

12.75

-3.75

12.94

1.15

14.56

-0.83

Popular

BPOP

-24.72

-26.81

10.58

-5.92

12.82

1.02

18.63

3.25

Huntington Bancshares

HBAN

-0.51

-2.61

11.98

-4.52

11.91

0.12

8.70

-6.68

M&T Bank

MTB

2.83

0.74

12.95

-3.55

11.55

-0.24

18.94

3.56

Commerce Bancshares

CBSH

11.08

8.98

17.53

1.03

11.30

-0.49

14.68

-0.71

Fulton Financial

FULT

-2.49

-4.59

14.69

-1.80

10.06

-1.73

15.47

0.08

U.S. Bancorp

USB

-0.46

-2.56

16.93

0.43

9.41

-2.39

19.84

4.45

First Horizon National

FHN

-6.92

-9.02

6.08

-10.42

9.40

-2.39

13.22

-2.17

Washington Federal

WFSL

-1.40

-3.49

10.93

-5.57

9.24

-2.55

12.03

-3.35

Mercantile Bankshares

MRBK

11.17

9.08

16.95

0.45

8.65

-3.15

15.03

-0.36

Wilmington Trust

WL

11.22

9.13

10.72

-5.78

8.13

-3.67

13.33

-2.06

Washington Mutual

WM

7.81

5.72

12.61

-3.89

8.07

-3.72

16.56

1.17

IndyMac Bancorp

NDE

17.84

15.74

32.63

16.13

7.90

-3.90

14.05

-1.34

KeyCorp

KEY

1.02

-1.07

14.04

-2.46

7.88

-3.91

10.49

-4.89

Cullen/Frost Bankers

CFR

13.15

11.06

20.92

4.43

7.78

-4.01

18.63

3.24

National City

NCC

-6.77

-8.86

11.51

-4.99

7.42

-4.37

11.61

-3.77

TCF Financial

TCB

-12.87

-14.96

10.69

-5.81

6.89

-4.90

15.49

0.11

SunTrust Banks

STI

1.51

-0.58

11.78

-4.72

5.84

-5.95

10.44

-4.95

Zions Bancorp

ZION

13.34

11.25

26.84

10.35

5.82

-5.98

16.10

0.71

BB&T

BBT

3.39

1.30

8.04

-8.46

5.81

-5.98

15.75

0.36

Valley National Bancorp

VLY

-5.11

-7.20

5.44

-11.05

5.47

-6.32

12.28

-3.11

Wells Fargo

WFC

4.48

2.39

13.81

-2.69

5.33

-6.46

17.19

1.80

Downey Financial

DSL

20.69

18.60

21.48

4.98

5.26

-6.53

19.27

3.88

FirstMerit

FMER

-5.22

-7.31

10.71

-5.79

3.45

-8.34

9.50

-5.89

Citigroup

C

4.62

2.53

15.03

-1.47

2.98

-8.81

19.60

4.21

Comerica

CMA

-3.39

-5.48

13.85

-2.65

2.80

-9.00

11.35

-4.04

Synovus Financial

SNV

-3.02

-5.11

14.72

-1.78

2.58

-9.21

14.70

-0.68

J.P. Morgan Chase

JPM

5.72

3.63

23.13

6.63

1.33

-10.46

10.79

-4.59

PNC Financial Services

PNC

11.68

9.59

18.32

1.82

0.36

-11.43

10.69

-4.70

Fifth Third Bancorp

FITB

-17.25

-19.34

-11.21

-27.71

-6.71

-18.50

12.11

-3.27

Northern Trust

NTRS

8.58

6.49

15.94

-0.55

-7.23

-19.03

15.59

0.20

Bank of New York

BK

-1.89

-3.99

13.02

-3.48

-8.20

-19.99

12.62

-2.77

Industry Group Average

2.09

16.50

11.79

15.39

Source:  Wall Street Journal, Shareholder Scoreboard, February 27, 2006

Performance of 1,000 Major U.S. Companies Compared With Their Peers in 76 Industry Groups - Banks

This table shows the performance of the 1,000 Shareholder Scoreboard companies relative to others in their own industries. The returns are compound annual total returns -- including price changes and reinvestments from any dividends or

other cash or noncash distributions -- for periods through year-end 2005. Also shown is the number of percentage points by which each company's performance beat or trailed the industry average. Within each industry, most companies are

ranked on five-year returns; companies that haven't been publicly traded for at least five years are ranked on three-year or one-year returns, depending on how long they have been traded. Although the published returns are rounded to the

nearest 10th of a percentage point, rankings are based on numbers carried out to at least seven decimal places. Rankings are by L.E.K. Consulting LLC, based on data from Dow Jones & Co., Hemscott, Inc. a division of Hemscott PLC, and

SunGard Market Data Services.

34

COMPANY NAME

STOCK

SYMBOL

ONE-YEAR

RETURN (%)

SURPLUS/DEFICIT

RELATIVE TO INDUSTRY

3-YEAR

AVERAGE

RETURN (%)

SURPLUS/DEFICIT

RELATIVE TO

INDUSTRY

5-YEAR

AVERAGE

RETURN (%)

SURPLUS/DEFICIT

RELATIVE TO

INDUSTRY

10-YEAR

AVERAGE

RETURN (%)

SURPLUS/DEFICIT

RELATIVE TO INDUSTRY

Colonial Bancgroup

CNB

15.37

13.28

30.20

13.70

21.47

9.68

15.22

-0.17

Compass Bancshares

CBSS

2.16

0.07

19.11

2.61

18.84

7.05

16.39

1.00

South Financial Group

TSFG

-13.45

-15.55

12.54

-3.96

18.58

6.79

8.85

-6.54

Wachovia Corp.

WB

4.31

2.21

17.12

0.62

17.40

5.61

10.51

-4.87

AmSouth Bancorp

ASO

5.19

3.10

15.45

-1.05

16.22

4.43

12.31

-3.07

Regions Financial

RF

0.03

-2.07

11.97

-4.52

12.99

1.20

10.53

-4.86

SunTrust Banks

STI

1.51

-0.58

11.78

-4.72

5.84

-5.95

10.44

-4.95

BB&T

BBT

3.39

1.30

8.04

-8.46

5.81

-5.98

15.75

0.36

Synovus Financial

SNV

-3.02

-5.11

14.72

-1.78

2.58

-9.21

14.70

-0.68

Fifth Third Bancorp

FITB

-17.25

-19.34

-11.21

-27.71

-6.71

-18.50

12.11

-3.27

Source:  Wall Street Journal, Shareholder Scoreboard, February 27, 2006

Performance of 1,000 Major U.S. Companies Compared With Their Peers in 76 Industry Groups

Banks

Southeastern Peers

This table shows the performance of the 1,000 Shareholder Scoreboard companies relative to others in their own industries. The returns are compound annual total returns -- including price changes and reinvestments from any

dividends or other cash or noncash distributions -- for periods through year-end 2005. Also shown is the number of percentage points by which each company's performance beat or trailed the industry average. Within each industry,

most companies are ranked on five-year returns; companies that haven't been publicly traded for at least five years are ranked on three-year or one-year returns, depending on how long they have been traded. Although the published

returns are rounded to the nearest 10th of a percentage point, rankings are based on numbers carried out to at least seven decimal places. Rankings are by L.E.K. Consulting LLC, based on data from Dow Jones & Co., Hemscott,

Inc. a division of Hemscott PLC, and SunGard Market Data Services.

The Best Things Come OUT OF THE BLUE

35

$.68

$.61

$.58

$.56

$.52

$.48

$.44

$.38

$.34

$.30

$.27

$.22

$.15

$.16

$.17

$.18

$.20

$0

$0

$0

$0

$0

$1

$1

$1

'90

'91

'92

'93

'94

'95

'96

'97

'98

'99

'00

'01

'02

'03

'04

'05

'06

16 YEARS OF INCREASED DIVIDENDS 

Solid Dividend Growth

*Estimated

*

11%

The Best Things Come OUT OF THE BLUE

36

U.S. Commercial Banks at 3/31/06

($ in thousands)

Source: SNL Financial

Total Assets

03/06 Q

Company Name

($000)

1

Citigroup Inc.

1,586,201,000

2

Bank of America Corporation

1,375,080,000

3

JPMorgan Chase & Co.

1,273,282,000

4

Wachovia Corporation

541,842,000

5

Wells Fargo & Company

492,428,000

6

U.S. Bancorp

209,907,000

7

SunTrust Banks, Inc.

178,876,476

8

National City Corporation

140,231,011

9

BB&T Corporation

110,033,689

10

Fifth Third Bancorp

105,044,000

11

Bank of New York Company, Inc.

103,611,000

12

KeyCorp

93,391,000

13

PNC Financial Services Group, Inc.

93,257,000

14

Regions Financial Corporation

84,594,518

15

Comerica Incorporated

56,441,000

16

M&T Bank Corporation

55,419,862

17

AmSouth Bancorporation

52,858,162

18

Northern Trust Corporation

50,195,000

19

Marshall & Ilsley Corporation

47,334,581

20

Zions Bancorporation

43,318,029

21

Commerce Bancorp, Inc.

40,692,382

22

Mellon Financial Corporation

37,921,000

23

First Horizon National Corporation

37,300,975

24

Huntington Bancshares Incorporated

35,665,909

25

Compass Bancshares, Inc.

32,782,179

26

Synovus Financial Corp.

29,161,177

27

Colonial BancGroup, Inc.

21,968,538

28

Associated Banc-Corp

21,518,860

The Best Things Come OUT OF THE BLUE

37

Noninterest Income

($ in millions)

2Q06

1Q06

$ Change

% Change

Service charges

15.3

$     

14.2

$    

1.1

$       

8%

Financial planning services

3.7

3.1

0.6

19%

Electronic banking

4.3

4.1

0.2

5%

Mortgage banking

3.8

2.9

0.9

31%

Mortgage warehouse fees

6.0

6.3

(0.3)

-5%

Bank-owned life insurance

4.0

4.0

-

-

Other retail banking fees

3.7

3.6

0.1

3%

Other income

4.1

2.2

1.9

86%

        Subtotal

44.9

40.4

4.5

11%

Goldleaf income (sold 1Q06)

-

1.2

(1.2)

-100%

        Core Noninterest Income

44.9

41.6

3.3

8%

Securities and derivatives gains (losses), net

-

4.2

(4.2)

-100%

Gain on sale of Goldleaf

-

2.8

(2.8)

-100%

        Total Noninterest Income

44.9

$     

48.6

$    

(3.7)

$      

-8%

Annualized Noninterest Income to Average Assets (1)

0.82%

0.78%

Noninterest Income to Total Revenue (1)

18.9%

18.1%

(1)   Core noninterest income was used in the calculation

The Best Things Come OUT OF THE BLUE

38

Noninterest Expense

($ in millions)

2Q06

1Q06

$ Change

% Change

Salaries and employee benefits

70.9

$      

68.8

$     

2.1

$       

3%

Occupancy expense of bank premises, net

16.4

15.5

0.9

6%

Furniture and equipment expense

11.9

11.4

0.5

4%

Professional services

4.9

4.4

0.5

11%

Amortization of intangibles

3.1

3.1

-

-

Advertising

3.1

2.9

0.2

7%

Communications

2.5

2.6

(0.1)

-4%

Electronic banking expense

1.4

1.3

0.1

8%

Operating supplies

1.3

1.4

(0.1)

-7%

Other expense

15.7

14.5

1.2

8%

        Total Noninterest Expense

131.2

$    

125.9

$   

5.3

$       

4%

Efficiency Ratio (1)

55.31%

54.73%

Annualized Noninterest Expense to Average Assets

2.39%

2.34%

(1)   Core noninterest income was used in calculation, see components on Noninterest Income slide

The Best Things Come OUT OF THE BLUE

39

RE

Construction

39.0%

Residential

RE

20.0%

MWL

2.4%

Commercial

7.4%

Consumer

and Other

2.5%

CRE

28.7%

Loan Portfolio Distribution

(as of June 30, 2006)

The Best Things Come OUT OF THE BLUE

40

CRE Loan Portfolio Distribution

27.1% Owner Occupied

Average loan size = $617M

Characteristics of 75 largest loans:

•

Total $796 million and represent

17.8% of CRE portfolio

•

Average loan to value ratio is 69%

•

Average debt coverage ratio = 1.40x

(as of June 30, 2006)

Office

21.5%

Warehouse

13.0%

Other

10.0%

Multi-Family

9.2%

Healthcare

7.1%

Lodging

6.0%

Church/

School

4.5%

Industrial

1.8%

Recreation

1.5%

Retail

25.4%

The Best Things Come OUT OF THE BLUE

41

Construction Loan Portfolio Distribution

(as of June 30, 2006)

Average loan size = $732M

Characteristics of 75 largest loans:

•

Total $1.3 billion and

represent 20.9% of portfolio

•

Average loan to value ratio is

63.6%

Land Only

24.7%

Residential

Home

Construction

16.5%

Office

3.3%

Multi-Family

3.1%

Other

5.4%

Commercial

Development

5.6%

Retail

5.6%

Condo

7.7%

Residential

Development

and Lots

28.1%

The Best Things Come OUT OF THE BLUE

42

We appreciate your time and interest in

Colonial BancGroup.

Robert E. Lowder

Chairman and CEO

Colonial BancGroup

Sarah H. Moore

Chief Financial Officer

Colonial BancGroup

Patti Hill

Chief Operating Officer

Colonial BancGroup

Glenda Allred

Director of Investor Relations

Colonial BancGroup

Ph. 334-240-5008