EX-99.1 2 dex991.htm PRESENTATION MATERIALS TO BE USED AT THE CITIGROUP FINANCIAL SERVICES CONFERENCE Presentation materials to be used at the Citigroup Financial Services Conference
Citigroup Financial Services Conference
January 30, 2007
Exhibit 99.1

2
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,”
“potential”
and “anticipates,”
the negative of these terms 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
this
presentation
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 presentation 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 2007 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;
•
the impact of recent and future federal and state regulatory changes;
•
current or future litigation, regulatory investigations, proceedings or inquiries;
•
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
$22.8 Billion in Assets with 305 Branches
Top 30
*
U.S. Commercial Bank
Proven Community Banking Philosophy with Regional Bank
Management and Local Boards of Directors
Top 5 Market Share in 83% of Deposit Franchise
Consistent Earnings Per Share Growth –
5 year CAGR 10%
Forbes
Platinum 400 List of Best Large Companies in America
Overview
*Source:  SNL Financial

4
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 12/31/06 are as follows:
In the Right Places
$22.8 Billion in Assets
$16 Billion in Deposits
1
At 12/31/06
*Population change from 2000-2005
Source: US Census Bureau
305 Branches
NV
15
TX
14
FL
166
GA
18
AL
92
FL
59%
AL
24%
TX
4%
GA
5%
NV
5%
Corp
3%
FL
56%
Corp
10%
GA
6%
AL
18%
TX
6%
NV
4%

5
Superior Projected Population Growth
2006 - 2011 Population Growth
Colonial BancGroup, Inc.
11.92
%
SunTrust Banks, Inc.
10.50
South Financial Group, Inc.
9.90
Compass Bancshares, Inc.
9.88
Synovus Financial Corp.
8.99
Wachovia Corporation
8.61
BB&T Corporation
7.94
Whitney Holding Corporation
7.38
Bank of America Corporation
6.79
Regions Financial Corporation
6.69
Trustmark Corporation
5.21
BancorpSouth, Inc.
4.80
First Horizon National Corporation
4.42
Fifth Third Bancorp
4.30
Median
7.66
%
Low
4.30
High
11.92
Source: SNL Financial.
Deposit data as of 6/30/06.
Population growth deposit weighted by county.

6
Florida, now the 4
th
most populous state in the U.S. with 18 million
people, is projected to pass New York in total population by 2011*
5
th
largest commercial bank in Florida
Florida at 12/31/06 and Pro Forma with Commercial
2
:
Strong loan and deposit growth
•
Loans grew 7%
1
from 12/31/05
•
Average organic deposit growth for 2006 was 13% over 2005
Aggressive De Novo Branching Strategy
•
Plan to open 15-25 branches over the next two years
Florida Franchise
*Source: SNL Financial
1
Excluding Mortgage Warehouse Lending
2
On January 23, 2007, Colonial signed a definitive agreement to acquire Commercial Bankshares, Inc.
Branches
Assets
Deposits
Colonial
166
54%
$12.8 B
56%
$9.4 B
59%
Colonial/Commercial
180
56%
$13.8 B
57%
$10.2 B
60%

7
Deposit Market Share
(June 2006 FDIC balances)
10.74%
-2.50%
-2.70%
-7.75%
-3.35%
% Change from
6/30/05
35
5
5
4
3
2
1
Rank #
0.24%
Commercial
2.68%
Colonial
2.92%
Colonial/Commercial
2
5.07%
Regions
9.73%
SunTrust
19.08%
B of A
19.92%
Wachovia
Florida
2
On January 23, 2007, Colonial signed a definitive agreement to acquire Commercial Bankshares, Inc.

*
*

Retail Banking

10
2006
Key
Initiatives: 
•
Non-time Deposit Growth
Promote consumer checking and business
banking products
•
Noninterest Income Growth
Target deposit service charges and lines of  
business revenues
•
Enhanced Consumer Services
Image
functionality
added
to
online
banking
services,
Free
Bill
Pay
•
Business Banking
Increase in business banking checking
openings and loan production
•
Strategic Marketing Plan
Improve mix and frequency of marketing
channels
Results*:
•
22% increase in noninterest bearing checking                   
accounts opened
•
10% growth in retail service charges
•
11% growth in mortgage fee income
•
7%   growth in financial planning revenue
•
99.5% of customers converted to imaged statements
•
Check images and customer statements available online
•
“Paperless”
option launch to online banking customers
•
Online banking penetration increased from 38% of total DDAs to
45%
•
136% increase in business banking loan production
•
41% increase in business checking account production
•
12% lift in Free Checking accounts due to direct mail campaigns
•
Targeted segmentation for Free Checking direct mail response
rates increased over 300% with a 75% savings in average
account acquisition cost**
Retail Banking
*YTD 12/06 Compared to YTD 12/05
**Q306 Compared to Q106

11
2007 Retail Growth Initiatives
NON-TIME DEPOSIT GROWTH
Key Initiatives:
•
New Products
•
Remote Deposit Capture
•
Title Company Checking
•
Enhance Free Checking offering with bundled product approach and innovative rewards program
•
Advanced Sales Culture
•
Quarterly campaigns focus on low-cost deposit growth
•
Additional emphasis of commercial and business banking compensation on low-cost deposits
•
Launching new corporate sales training program
NON-INTEREST INCOME GROWTH
Key Initiatives:
•
Retail Service Charges
•
Focus on household checking account growth
•
Increase debit card penetration in consumer and business banking households
•
Financial Planning
•
Aligned reporting structure with Treasury Management, Business
Banking and Mortgage
•
Unified sales approach with Retail sales teams
•
Additional resources and lines of business restructure
•
Mortgage Banking
•
Continue production shift to secondary markets
•
Expand production in growth markets
10% INCREASE IN NONINTEREST BEARING CHECKING
ACCOUNTS
25% OF REVENUE FROM FEE-BASED SERVICES’
Retail Banking

12
Aligned our products/services, sales tracking and compensation plans
with measurable results that deliver growth in low-cost deposits
Continue positive momentum toward achieving 25% growth in revenue
in fee-based services through:
•
Double-digit growth in consumer and business banking households
•
Shared synergies in sales approach between regional executives
and line of
business executives
Unite
the
Colonial
franchise
in
all
markets
under
one
consistent
brand
message, encompassing all lines of business, and maximizing the
marketing and advertising investment across the diverse markets
Continue to maximize strategic multi-channel marketing initiatives to
expand cross-sell opportunities and increase products and services per
household
Adding Value to the Franchise
Retail Banking

Financial Highlights

16
$0.40
$0.43
4Q05
4Q06
$1.06
$1.26
$1.16
$1.31
$1.52
$1.72
2001
2002
2003
2004
2005
2006
(diluted)
Consistent Earnings Per Share Growth
5 Year CAGR = 10%
2001 -
2006
19%
(8)%
13%
16%
13%
8%

17
$422
$455
$495
$567
$709
$755
$187
$184
2001
2002
2003
2004
2005
2006
4Q05
4Q06
Net Interest Income
($ in millions)
8%
9%
15%
25%
3 Year CAGR = 15%
2003 -
2006
79%
6%
3.57%     3.55%     3.38%     3.52%     3.75%     3.71%   
3.85%   3.53%
Net Interest
Margin

18
$15,899
$15,244
$15,788
$8,433
$8,734
$9,419
$10,862
$13,988
$15,939
2001
2002
2003
2004
2005
2006
4Q05
3Q06
4Q06
Average Deposits
4%
8%
15%
1
Excluding acquisitions, sale of branches, and brokered deposits
($ in millions)
13%¹
29%
3 Year CAGR = 19%
2003 -
2006
87%
13%
5%
9%¹

19
Noninterest Income
4Q06
3Q06
4Q05
3Q06
4Q05
2006 v.
2005
Service charges on deposit accounts
18.9
$    
16.6
$    
14.5
$    
14%
30%
12%
Electronic banking
4.4
       
4.5
       
4.0
       
-2%
10%
12%
Other retail banking fees
3.5
       
3.6
       
3.3
       
-3%
6%
3%
        Retail Banking Fees
26.8
     
24.7
     
21.8
     
9%
23%
10%
Financial planning services
3.3
       
3.9
       
2.6
       
-15%
27%
7%
Mortgage banking
3.7
       
3.2
       
2.8
       
16%
32%
11%
Mortgage warehouse fees
6.9
       
6.1
       
6.8
       
13%
1%
57%
Bank-owned life insurance
3.8
       
4.2
       
3.5
       
-10%
9%
14%
Goldleaf income
-
         
-
         
2.7
       
nm
nm
nm
Net cash settlement of swap derivatives
-
         
-
         
1.5
       
nm
nm
nm
Other income
4.9
       
3.7
       
1.9
       
32%
158%
23%
        Core Noninterest Income
49.4
     
45.8
     
43.6
     
8%
13%
3%
Securities and derivatives gains (losses), net
0.4
       
0.2
       
(20.0)
    
Change in fair value of derivatives
-
         
-
         
(6.7)
      
Gain on sale of branches and other
-
         
-
         
27.4
     
        Total Noninterest Income
49.8
$    
46.0
$    
44.3
$    
8%
12%
8%
Annualized Noninterest Income to Average Assets (1)
0.86%
0.80%
0.82%
Noninterest Income to Total Revenue (1)
21.1%
19.4%
18.9%
% Change
($ in millions)
(1) Core noninterest income was used in the calculation
nm –
not meaningful

20
Noninterest Expense
4Q06
3Q06
4Q05
3Q06
4Q05
2006 v.
2005
Salaries and employee benefits
67.8
$  
72.5
$  
66.6
$  
-6%
2%
7%
Occupancy expense of bank premises, net
18.2
    
17.2
    
17.4
    
6%
5%
7%
Furniture and equipment expense
13.0
    
12.3
    
11.8
    
6%
10%
11%
Professional services
5.4
     
4.3
     
6.9
     
26%
-22%
-14%
Amortization of intangibles
3.1
     
3.1
     
3.1
     
-    
-    
6%
Advertising
2.5
     
2.3
     
3.7
     
9%
-32%
-11%
Communications
2.9
     
2.8
     
2.6
     
4%
12%
5%
Electronic banking expense
1.7
     
1.6
     
1.4
     
6%
21%
3%
Merger related expenses
-
       
-
       
0.4
     
nm
nm
nm
Operating supplies
1.2
     
1.2
     
1.6
     
-    
-25%
-5%
Other expense and losses on early ext. of debt
     14.7
     14.7
     17.0
-    
-14%
-20%
     Total Noninterest Expense
130.5
$
132.0
$
132.5
$
-1%
-1%
1%
Efficiency Ratio (1)
55.73%
55.77%
57.48%
Annualized Noninterest Expense to Average Assets
2.30%
2.33%
2.51%
% Change
($ in millions)
(1)  Core noninterest income was used in the calculation, see components  
of core noninterest income on Noninterest Income slide
nm –
not meaningful

21
Financial Summary
1
Excluding acquisitions, sale of branches and brokered deposits
2
Excluding Mortgage Warehouse Lending
Record Earnings Per Share of $1.72, up 13% over 2005
Strong
Earnings
Per
Share
of
$0.43
for
the
fourth
quarter,
up
8%
over 2005
Record Net Income of $266 million for 2006, up 16% over 2005
Excellent Credit Quality
Net Interest Income increased 6% over 2005
Strong
Organic
Average
Deposit
Growth
of
13%
1
over 2005
Solid Period End Loan Growth of 5%
2
over 2005
Noninterest Income increased 8% over 2005
Excellent cost control –
Noninterest Expenses up less than
1% over 2005

Credit

23
Excellent Credit Quality
Nonperforming Assets Ratio continues to be low at 0.16% as of
12/31/06
•
Nonperforming Assets were $25 million at 12/31/06 down $6.8 million,
or 21%, from 12/31/05
Net Charge-Off Ratio was 0.12%
of average loans
for the year and the
4
th
quarter of 2006
Allowance for loan losses was 1.13% of total loans

24
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%
0.16%
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
'06
All FDIC Insured Commercial Banks
Colonial BancGroup
(as originally reported)
NPAs Consistently Below Industry
RECORD LOW FOR YEAR END
16
bps

25
0.47%
0.49%
0.09%
0.19%
0.12%
0.14%
0.33%
0.13%
0.18%
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
'06
All FDIC Insured Commercial Banks
Southern Regionals*
Colonial BancGroup
Net Charge-Offs/Average Loans
*Source: KBW
(as originally reported)

26
Why Invest in Colonial BancGroup?
In the Right Locations for Continued Success
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 strong shareholder returns
17 Years of Increased Dividends: $0.75* for 2007, a 10% increase
over
2006
*Estimated
Total
Annualized
1 Year
11%
11%
2 Year
28%
13%
3 Year
62%
17%
5 Year
115%
17%

27
$.15
$.16
$.17
$.18
$.20
$.22
$.27
$.30
$.34
$.38
$.44
$.48
$.52
$.56
$.58
$.61
$.68
$.75*
$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
'07
17 YEARS OF INCREASED DIVIDENDS 
Solid Dividend Growth
*Estimated
10%

Supplemental Information

29
Summary Income Statement
($ in millions)
nm –
not meaningful
2006 v.
4Q06
3Q06
4Q05
3Q06
4Q05
2005
Net interest income
184.5
$  
190.6
$  
186.6
$  
-3%
-1%
6%
Core noninterest income
49.4
      
45.8
      
43.6
      
8%
13%
3%
Total revenue
233.9
    
236.4
    
230.2
    
-1%
2%
6%
Provision for loan losses
3.4
         
1.5
         
5.9
         
127%
-42%
-17%
Securities and derivatives gains (losses), net
0.4
         
0.2
         
(20.0)
     
nm
nm
nm
Change in fair value of derivatives
-
        
-
        
(6.7)
       
nm
nm
nm
Gain on sale of branches and other
-
        
-
        
27.4
      
nm
nm
nm
Noninterest expense and loss on early ext. of debt
130.5
    
132.0
    
132.5
    
-1%
-1%
1%
Pretax income
100.4
    
103.1
    
92.5
      
-3%
9%
17%
Income tax expense
34.1
      
35.1
      
31.0
      
-3%
10%
19%
Net income
66.3
$    
68.0
$    
61.5
$    
-3%
8%
16%
Earnings per share - diluted
0.43
$    
0.44
$    
0.40
$    
-2%
8%
13%
Weighted average shares outstanding - diluted
153.6
    
155.0
    
155.6
    
-1%
-1%
3%
% Change

30
2006
2005
% Change
Earning Assets
20,410
$  
18,944
$  
8%
Loans, excluding MWL
14,992
   
13,411
   
12%
MWL Assets (1)
2,277
     
2,002
     
14%
MWL Managed Assets (2)
3,958
     
2,860
     
38%
Securities
3,014
     
3,401
     
-11%
Total Assets
22,238
   
20,682
   
8%
Assets Under Management
23,919
   
21,540
   
11%
Total Deposits
15,788
   
13,988
   
13%
Noninterest Bearing Deposits
2,969
     
2,961
     
- 
Interest Bearing Transaction Accounts
6,111
     
5,583
     
9%
Time Deposits
6,708
     
5,444
     
23%
Shareholders' Equity
1,993
     
1,779
     
12%
Average Balance Sheet
($ in millions)
(1) Includes
loans,
loans
held
for
sale
and
securities
purchased
under
agreements to resell
(2) Includes MWL assets and assets securitized

31
Loan Portfolio Distribution
CRE
28%
RE
Construction
41%
Residential RE
19%
MWL
2%
Commercial
7%
Consumer and
Other
3%
(as of Dec. 31, 2006)

32
Office
22%
Multi-Family
8%
Other
7%
Warehouse
14%
Retail
25%
Healthcare
7%
Farm
2%
Industrial
2%
Church/School
5%
Lodging
7%
Recreation
1%
CRE Loan Portfolio Distribution
28% Owner Occupied
Average loan size = $646 thousand
Characteristics of 75 largest loans:
•
Total $737 million and represent
17.2% of CRE portfolio
•
Average loan to value ratio is 67.4%
•
Average debt coverage ratio = 1.41x
(as of Dec. 31, 2006)

33
Construction Loan Portfolio Distribution
(as of Dec. 31, 2006)
Average loan size = $829 thousand
Characteristics of 75 largest loans:
•
Total $1.3 billion and represent
20.8% of construction portfolio
•
Average loan to value ratio is 62.9%
Land Only
24%
Residential Home
Construction
16%
Condominium
7%
Commercial
Development
6%
Residential
Development and
Lots
28%
Multi-Family
3%
Warehouse
2%
Retail
6%
Office
4%
Other
4%