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): February 27, 2007

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.)

100 Colonial Bank Blvd.

Montgomery, Alabama 36117

(Address of principal executive offices)

(334) 240-5000

(Registrant’s telephone number)

One Commerce Street

Montgomery, Alabama 36104

(Former name or former address, if changed since last report)

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 KBW Regional Bank Conference beginning on February 27, 2007. 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 KBW Regional Bank Conference.

2

This report 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 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. 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 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 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

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/    T. BRENT HICKS
	T. Brent Hicks
	Chief Accounting Officer

Date: February 27, 2007

4

EX-99.1

Exhibit 99.1

KBW Regional Bank Conference

February 28, 2007

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.

*

*

Current Branches

Planned Branches

10 to 12 in Dallas/Austin in next 3 to 4 years

6 in San Antonio

Texas Franchise

Texas

Assets = $1.4 billion

Deposits = $722 million

14 Branches

9

Current Branches

Planned Branches

10 to 15 in Las Vegas/ Reno in next 3 years

Nevada

Assets = $966 million

Deposits = $750 million

15 Branches

Nevada Franchise

10

Retail Banking

12

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

13

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

14

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

15

13

16

Financial Highlights

18

$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%

19

$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

20

$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

21

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

22

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

23

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

25

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

26

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

27

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)

28

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%

29

$.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

31

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

32

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

33

Loan Portfolio Distribution

CRE

28%

RE

Construction

41%

Residential RE

19%

MWL

2%

Commercial

7%

Consumer and

Other

3%

(as of Dec. 31, 2006)

34

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)

35

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%