1

The Best Things Come OUT OF THE BLUE

Third Quarter 2006

Earnings Overview

Exhibit 99.2

2

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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.

3

The Best Things Come OUT OF THE BLUE

Record EPS of $0.44, up 22% over 3Q05

Excellent credit quality –

annualized net charge-offs of 0.06% in 3Q06;

0.12% YTD

New record low nonperforming assets ratio of 0.10%

Solid loan growth of 7.6% annualized from December 31, 2005 –

excluding mortgage warehouse lending

Strong organic average deposit growth of 12% , annualized over 4Q05

Retail banking revenues increased 23%, annualized over 2Q06

Overview

1

Excluding brokered deposits and 4Q05 branch sale

1

4

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69%

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 9/30/06 are as follows:

In the Right Places

$22 Billion in Assets

$16 Billion in Deposits

1

At 9/30/06

*Population change from 2000-2005

Source: US Census Bureau

FL

59%

AL

24%

TX

4%

GA

5%

NV

5%

Corp

3%

303 Branches

FL

56%

Corp

10%

GA

6%

AL

18%

TX

6%

NV

4%

NV

15

TX

13

FL

165

GA

18

AL

92

5

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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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Florida, now the 4   most populous state in the U.S. with 17 million people, is

projected to pass New York in total population by 2011*

5   largest commercial bank in Florida

Florida at 9/30/06:

•

59% of Deposits in Florida –

Total Deposits of $9.3 Billion

•

56% of Assets in Florida –

Total Assets of $12.6 Billion

•

54% of Branches in Florida –

Total Branches –

165

Strong loan and deposit growth

•

Loans grew 11%  annualized from 12/31/05

•

Average deposit growth was 12% for 3Q06 vs. 3Q05 and 11% annualized over

4Q05

Aggressive De Novo Branching Strategy

•

Plan to open 3 branches in 4Q06 and 15-25 over the next two years

Florida Franchise

*Source: SNL Financial

1

Excluding Mortgage Warehouse Lending

th

th

1

Florida Franchise and Current Population

3 Planned Branches in 4Q06

Current Branches

Current Population

2,500,000

500,000

100,000

Current Population

2,500,000

500,000

100,000

PANHANDLE

Assets = $386 Million

Deposits = $52 Million

2 Branches

CENTRAL

FLORIDA

Assets = $3.5 Billion

Deposits = $3.1 Billion

59 Branches

MORTGAGE

WHSE.

Assets = $2.3 Billion

Deposits = $479 Million

SOUTH FLORIDA

Assets = $3.3 Billion

Deposits = $2.9 Billion

48 Branches

FLORIDA

WEST

COAST

Assets = $3.0 Billion

Deposits = $2.7 Billion

56 Branches

Planned Branches beyond 12/31/06

7

8

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$0.36

$0.44

3Q05

3Q06

$1.06

$1.26

$1.16

$1.31

$1.52

$1.12

$1.29

2001

2002

2003

2004

2005

YTD

9/30/05

YTD

9/30/06

(diluted)

Consistent Earnings Per Share Growth

5 Year CAGR = 9%

2000 -

2005

19%

(8)%

13%

16%

15%

22%

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$422

$455

$495

$567

$571

$185

$191

$523

2001

2002

2003

2004

2005

YTD

9/30/05

YTD

9/30/06

3Q05

3Q06

$709

Net Interest Income

($ in millions)

8%

9%

15%

3%

25%

3 Year CAGR = 16%

2002 -

2005

68%

9%

3.57%     3.55%     3.38%     3.52%     3.75%     3.72%    3.77%

3.78%    3.64%

Net Interest

Margin

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Net Interest Income and Margin

($ in millions)

Tax

Equivalent

NII

NIM

2Q06

192.4

$       

3.81%

Increase Due to Asset Sensitivity

1.8

0.03%

Earning Asset Growth Spread

3.1

-0.07%

Spread Compression on MWL Assets (-0.03%)

(2.2)

-0.01%

Deposit Mix Change & Pricing Increase

(5.3)

-0.11%

Other

(0.4)

-0.01%

Increase in Days

1.4

-

3Q06

190.8

$       

3.64%

       Net of Additional Securitization (+0.02%)

11

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$15,737

$13,564

$13,988

$10,862

$9,419

$8,734

$8,433

$14,786

$15,244

$15,899

2001

2002

2003

2004

2005

3Q05

4Q05

3Q06

YTD

9/30/05

YTD

9/30/06

Average Deposits

4%

8%

15%

1

Excluding acquisitions, sale of branches, and brokered deposits

*Annualized

($ in millions)

8%

29%

3 Year CAGR = 17%

2002 -

2005

89%

16%

6%*

12%

*

1

16%

1

12%

1

14%

1

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Noninterest Income

($ in millions)

3Q06

2Q06

3Q05

2Q06

3Q05

Service charges on deposit accounts

16.6

$     

15.3

$     

15.3

$     

8%

8%

Electronic banking

4.5

4.3

3.9

5%

15%

Other retail banking fees

3.6

3.7

3.6

-3%

-

        Retail Banking Fees

24.7

23.3

22.8

6%

8%

Financial planning services

3.9

3.7

3.6

5%

8%

Mortgage banking

3.2

3.8

4.5

-16%

-29%

Mortgage warehouse fees

6.1

6.0

4.5

2%

36%

Bank-owned life insurance

4.2

4.0

3.6

5%

17%

Goldleaf income

-

-

2.8

-

-100%

Net cash settlement of swap derivatives

-

-

2.5

-

-100%

Other income

3.7

4.1

2.1

-10%

76%

        Core Noninterest Income

45.8

44.9

46.4

2%

-1%

Securities and derivatives gains, net

0.2

-

-

100%

100%

Change in fair value of derivatives

-

-

(7.1)

-

-100%

        Total Noninterest Income

46.0

$     

44.9

$     

39.3

$     

2%

17%

Annualized Noninterest Income to Average Assets (1)

0.80%

0.82%

0.86%

Noninterest Income to Total Revenue (1)

19.4%

18.9%

20.0%

(1) Core noninterest income was used in the calculation

% Change

13

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Noninterest Expense

($ in millions)

3Q06

2Q06

3Q05

2Q06

3Q05

Salaries and employee benefits

72.5

$     

70.9

$     

70.2

$     

2%

3%

Occupancy expense of bank premises, net

17.2

16.4

16.0

5%

8%

Furniture and equipment expense

12.3

11.9

11.5

3%

7%

Professional services

4.3

4.9

5.5

-12%

-22%

Amortization of intangibles

3.1

3.1

3.0

-

3%

Advertising

2.3

3.1

3.6

-26%

-36%

Communications

2.8

2.5

2.6

12%

8%

Electronic banking expense

1.6

1.4

1.3

14%

23%

Merger related expenses

-

-

0.6

-

-100%

Operating supplies

1.2

1.3

1.3

-8%

-8%

Other expense

14.7

15.7

16.7

-6%

-12%

     Subtotal

132.0

131.2

132.3

1%

-

Net losses related to extinguishment of debt

-

-

1.7

-

-100%

     Total Noninterest Expense

132.0

$   

131.2

$   

134.0

$   

1%

-1%

Efficiency Ratio (1)

55.77%

55.31%

57.02%

Annualized Noninterest Expense to Average Assets

2.33%

2.39%

2.47%

        the calculation, see components of core noninterest income on Noninterest Income slide

% Change

(1)   Core noninterest income and noninterest expense excluding net losses related to the early extinguishment of debt were used in

14

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Excellent Credit Quality

Nonperforming Assets ratio hit a new record low of 0.10% at 9/30/06

•

Nonperforming Assets were $15.7 million at 9/30/06 down $11.6 million, or 42%,

from 6/30/06 and down $16.2 million, or 51%, from 12/31/05

Annualized Net Charge-Off Ratio was 0.06%

for the quarter and was

0.12% YTD

YTD provision exceeded YTD Net Charge-Offs by $5 million

Allowance for loan losses was 1.14% of total loans

15

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Summary

Record diluted EPS of $0.44, up 22% over 3Q05

Excellent credit quality

Solid loan growth

Strong organic average deposit growth

Retail banking revenues increased 23%, annualized over 2Q06

16

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Outlook for 2006

Diluted earnings per share are expected to be $1.72

There are a number of uncertainties that would impact the expectations noted above,

including the overall strength of the economy and changes in market rates. 

17

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16 YEARS OF INCREASED DIVIDENDS 

Solid Dividend Growth

*Estimated

*

11%

$.68

$.61

$.58

$.56

$.52

$.48

$.44

$.38

$.34

$.30

$.27

$.22

$.15

$.16

$.17

$.18

$.20

'90

'91

'92

'93

'94

'95

'96

'97

'98

'99

'00

'01

'02

'03

'04

'05

'06

18

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Supplemental Information

19

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Summary Income Statement

($ in thousands)

3Q06

2Q06

3Q05

2Q06

3Q05

Net interest income

190,552

$

192,087

$

185,266

$

-1%

3%

Core noninterest

income

45,806

44,873

46,398

2%

-1%

Total Revenue

236,358

236,960

231,664

-

2%

Provision for loan losses

1,450

4,950

6,007

-71%

-76%

Securities and derivatives gains, net

156

-

-

100%

100%

Change in fair value of derivatives

-

-

(7,072)

-

-100%

Net losses related to the early extinguishment of debt

-

-

(1,673)

-

-100%

Noninterest

expense

131,985

131,226

132,291

1%

-

Pretax Income

103,079

100,784

84,621

2%

22%

Income tax expense

35,047

34,266

28,145

2%

25%

Net Income

68,032

$  

66,518

$  

56,476

$  

2%

20%

Earnings Per Share -

Diluted

0.44

$      

0.43

$      

0.36

$      

2%

22%

Weighted Average Shares Outstanding -

Diluted

154,954

155,396

155,510

-

-

% Change

20

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Average Balance Sheet

($ in millions)

3Q06

2Q06

3Q05

2Q06*

3Q05

Earning Assets

20,886

$

20,220

$

19,559

$

13%

7%

Loans, excluding MWL

15,167

15,004

13,912

4%

9%

MWL Assets (1)

2,614

2,204

2,433

74%

7%

MWL Managed Assets (2)

4,332

3,704

3,444

68%

26%

Securities

3,035

2,949

3,035

12%

-

Total Assets

22,691

21,990

21,416

13%

6%

Assets Under Management

24,408

23,490

22,427

16%

9%

Total Deposits

15,899

15,714

14,786

5%

8%

Noninterest Bearing Deposits

2,926

3,033

3,103

-14%

-6%

Interest Bearing Transaction Accounts

6,136

6,106

5,802

2%

6%

Time Deposits

6,838

6,575

5,881

16%

16%

Shareholders' Equity

1,998

1,965

1,904

7%

5%

* Annualized

(1) Includes loans, loans held for sale and securities purchased under agreements to resell

(2) Includes MWL assets and assets securitized

% Change

21

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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%

0.10%

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

9/30/06

All FDIC Insured Commercial Banks

Colonial BancGroup

(as originally reported)

NPAs

Consistently Below Industry

22

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0.47%

0.49%

0.09%

0.19%

0.12%

0.14%

0.33%

0.13%

0.18%

0.06%

0.23%

0.26%

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

9/30/06

3Q06

All FDIC Insured Commercial Banks

Southern Regionals*

Colonial BancGroup

Net Charge-Offs/Average Loans

*Source: KBW

1

Annualized

1

1

(as originally reported)