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): April 18, 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) 676-5000

(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 2.02 Results of Operations and Financial Condition.

Item 7.01 Regulation FD Disclosure.

Information regarding the registrant’s earnings results for the quarter ended March 31, 2007 is furnished herein pursuant to Item 2.02 of this Current Report on Form 8-K and as Regulation FD Disclosure.

Item 9.01 Financial Statements and Exhibits.

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

Exhibit No.	Exhibit
99.1	Press Release Announcing First Quarter Earnings.
99.2	Presentation materials to be used in connection with Colonial BancGroup’s conference call to be held on April 18, 2007.

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;

• 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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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: April 18, 2007

4

EX-99.1

Exhibit 99.1

PRESS RELEASE

For more information contact:	April 18, 2007
Lisa Free
(334) 676-5105

COLONIAL BANCGROUP ANNOUNCES

FIRST QUARTER EARNINGS PER SHARE OF $0.43

FIRST QUARTER 2007 HIGHLIGHTS:

• Quarterly EPS of $0.43, up 2% over 1Q06

• Core noninterest income increased 11% over 1Q06

• Loans grew 3% over 1Q06, excluding the sale of $490 million of residential real estate loans in 1Q07

• Period end deposits grew 7% annualized over December 31, 2006 – noninterest bearing deposits grew 13% annualized

• Excellent credit quality—annualized net charge-offs were 0.06% of average loans

• The allowance for loan losses increased to 1.16% of loans – 525% of nonperforming assets

MONTGOMERY, AL. - The Colonial BancGroup, Inc. Chairman, CEO and President, Robert E. Lowder, announced today that the Company earned $0.43 per diluted share for the quarter ended March 31, 2007, a 2% increase over the $0.42 earned for the same quarter of the previous year. Net income for the quarter was $65 million. “Taken as a whole, the Financial Services industry went on a roller coaster ride in the first quarter of 2007. I am pleased to report that Colonial’s performance did not join that ride, and continues to reflect the results of our long time commitment to conservative lending to borrowers we know,” said Mr. Lowder.

1

Specifically, net charge-offs were an annualized 0.06% of average loans in the first quarter, down from 0.12% for the fourth quarter of 2006 and 0.26% for the first quarter of 2006. Nonperforming assets were 0.22% of net loans at March 31, 2007 down two basis points from 0.24% at March 31, 2006 and up six basis points from 0.16% at December 31, 2006. “Colonial’s credit quality has historically been measurably ahead of its southeastern peer average and the average of all FDIC insured commercial banks. The results at the end of the first quarter continue to reflect that trend,” said Mr. Lowder. Consistent with its conservative approach, Colonial increased its allowance for loan losses as a percentage of total loans to 1.16%, up from 1.13% at December 31, 2006. The allowance represented 525% of nonperforming assets at March 31, 2007.

Mortgage warehouse assets ended the quarter at $4.1 billion in assets under management with $2 billion in interests sold to third-party commercial paper conduits. Total mortgage warehouse assets retained by Colonial decreased 11% from December 31, 2006 to $2.1 billion. “Colonial’s mortgage warehouse lending customers include mortgage companies which originate primarily “A” paper. Credit quality remains excellent in Colonial’s warehouse division. Our borrowers are experiencing no difficulty in selling their production in a timely fashion,” said Mr. Lowder.

Net interest income was $181 million in the first quarter of 2007, a 2% decrease from the fourth quarter of 2006. Net interest margin contracted five basis points from the fourth quarter of 2006. “Net interest income continues to be impacted by our policy of accepting slower asset growth in return for dealing only with borrowers who meet our credit standards and the migration of customer deposits from low or no rate products to higher rate products. Having said that, it has always been Colonial’s belief that flexibility is one of the keys to sound management, and utilizing that approach the Company has taken a number of steps to deal with the impact of margin compression on earnings. Examples of these steps are selling low yielding assets, redeeming high rate debt, introducing new deposit products such as remote deposit capture, focusing on fee income opportunities and continuing to emphasize strong expense controls,” said Mr. Lowder.

2

At the end of the quarter, Colonial sold approximately $490 million of residential mortgage loans which had an average yield of 6.04%. Colonial recognized a pretax gain of $3.9 million on the sale of those mortgages. In February, Colonial redeemed $70 million of trust preferred securities with an interest rate of 8.92%. The debt was replaced with short term borrowings at lower rates. As previously announced, Colonial reduced its workforce by approximately 170 positions in January and incurred severance charges of $3 million. The benefit of the reduction in staffing is expected to be realized beginning in the second quarter of 2007.

Core noninterest income increased 11% over the first quarter of 2006. Retail banking fees, which consist primarily of deposit service charges, overdraft fees and electronic banking fees, increased 18% over the first quarter of 2006, while mortgage banking revenues from the origination and sale of fixed rate mortgages increased 10% over the first quarter of 2006. The financial planning services unit had a strong quarter, increasing revenues by 22% over the first quarter of 2006.

Noninterest expenses were well controlled in the quarter. Excluding the $3 million in severance and $429,000 of merger expenses related to the pending acquisition of Commercial Bankshares, Inc., noninterest expenses were approximately even with the fourth quarter of 2006.

Loans, excluding mortgage warehouse loans and the sale of $490 million of residential mortgage loans, grew 3% from March 31, 2006 and were even with December 31, 2006.

Period end deposits grew by $292 million, or 7% annualized, over December 31, 2006. Noninterest bearing checking accounts grew by 13% annualized over December 31, 2006. Average deposits, excluding brokered deposits, increased 5% over the first quarter of 2006 and 2% annualized over the fourth quarter of 2006.

3

In January, Colonial announced plans to acquire Commercial Bankshares, Inc. (Commercial) and its bank subsidiary Commercial Bank of Florida, headquartered in Miami, Florida. At March 31, 2007, Commercial had $1 billion in assets, $838 million in deposits and 14 locations in south Florida. “The acquisition of Commercial is reflective of our strategy to acquire high quality, well-run institutions which add convenience and enhance our revenue generating capability in our existing markets. Pending shareholder and regulatory approvals, we expect the merger to be completed by June 30, 2007,” said Mr. Lowder.

Effective January 1, 2007, Colonial elected early adoption of Statements of Financial Accounting Standards (SFAS) Nos. 157 and 159, which permit the measurement of selected eligible financial instruments at fair value at specified election dates. The adoption of SFAS No. 159 is expected to provide Colonial with greater flexibility to extinguish high rate debt and to sell lower yielding assets which the Company anticipates will improve the Company’s profitability for 2007 and in future periods.

Colonial BancGroup operates over 300 branches in Florida, Alabama, Georgia, Nevada and Texas with more than $23 billion in assets. The Company’s common stock is traded on the New York Stock Exchange under the symbol CNB and is located online at www.colonialbank.com. In most newspapers, the stock is listed as ColBgp.

Colonial’s management has scheduled a conference call on April 18, 2007 at 3 p.m. ET to discuss the earnings results for the first quarter. Individuals are encouraged to listen to the live webcast and view a slide presentation that will be available on Colonial’s web site at www.colonialbank.com. The webcast will be hosted under “Events and Presentations” located under the “Investor Relations” section of the website. To participate in the Q&A session of the conference call, dial (800) 819-9193 (Domestic Toll-Free) or (913) 981-4911 (Toll International), (Leader: Lisa Free). A replay of the conference call will be available beginning at 6 p.m. ET on April 18, 2007 and ending at midnight on April 25, 2007 by dialing (888) 203-1112 (Domestic Toll-Free) or (719) 457-0820 (Toll International). The passcode for both numbers is 4679607.

4

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,” “potential” and “anticipates,” the negative of these terms and similar expressions, as they relate to The Colonial BancGroup, Inc. (BancGroup) (including its subsidiaries or its management), are intended to identify forward-looking statements. The forward-looking statements in this release 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 release 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 and from non-banks;

• 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 and 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.

5

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (Unaudited)

Statement of Condition Summary (Dollars in millions)	Mar 31, 2007		Mar 31, 2006		% Change Mar 31, ‘06 to ‘07
Total assets	$	23,073	$	21,969	5	%
Total loans, net:
Mortgage warehouse loans		167		436	-62	%
Loans, excluding mortgage warehouse loans		14,755		14,846	-1	%
Total securities		3,394		2,869	18	%
Non-time deposits		9,409		9,295	1	%
Total deposits		16,383		15,855	3	%
Shareholders’ equity		2,084		1,947	7	%

	Three Months Ended
Earnings Summary (In thousands, except per share amounts)	Mar 31, 2007			Mar 31, 2006			% Change Mar 31, ‘06 to ‘07
Net Income:
Net interest income	$	180,830		$	188,160		-4	%
Provision for loan losses		2,250			12,342		-82	%
Core noninterest income		46,240			41,501		11	%
Securities, derivatives and debt gains(losses), net		3,044			4,228		-28	%
Gain on sale of mortgage loans		3,850			—		NM
Gain on sale of Goldleaf		—			2,829		NM
Total noninterest income		53,134			48,558		9	%
Noninterest expense excluding the following items:		130,291			125,861		4	%
Merger related expenses		429			—		NM
Severance expense		3,025			—		NM
Total noninterest expense		133,745			125,861		6	%
Income before tax		97,969			98,515		-1	%
Income tax		32,722			33,495		-2	%
Net Income	$	65,247		$	65,020		0	%
EARNINGS PER SHARE:
Net Income
Basic	$	0.43		$	0.42		2	%
Diluted	$	0.43		$	0.42		2	%
Average shares outstanding		152,309			153,968
Average diluted shares outstanding		153,450			155,183
KEY RATIOS:
Net interest margin		3.48	%		3.86	%	-10	%
Book value per share	$	13.63		$	12.61		8	%
Dividends paid per share	$	0.1875		$	0.1700		10	%

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

Earnings Summary (Dollars in thousands, except per share amounts)	1st Qtr. 2007			4th Qtr. 2006			3rd Qtr. 2006			2nd Qtr. 2006			1st Qtr. 2006
Net interest income	$	180,830		$	184,468		$	190,552		$	192,087		$	188,160
Provision for loan loss		2,250			3,400			1,450			4,950			12,342
Noninterest income:
Service charges on deposit accounts		17,679			18,884			16,642			15,332			14,213
Electronic banking		4,401			4,356			4,470			4,279			4,107
Other retail banking fees		3,612			3,543			3,618			3,754			3,521
Retail banking fees		25,692			26,783			24,730			23,365			21,841
Financial planning services		3,822			3,316			3,944			3,665			3,129
Mortgage banking		3,187			3,706			3,154			3,783			2,897
Mortgage warehouse fees		6,955			6,935			6,105			6,021			6,262
Bank-owned life insurance		4,955			3,797			4,242			3,976			3,939
Goldleaf income		—			—			—			—			1,171
Other income		1,629			4,904			3,631			4,063			2,262
Core noninterest income		46,240			49,441			45,806			44,873			41,501
Securities, derivatives and debt gains(losses), net		3,044			388			156			—			4,228
Gain on sale of mortgage loans		3,850			—			—			—			—
Gain on sale of Goldleaf		—			—			—			—			2,829
Total noninterest income		53,134			49,829			45,962			44,873			48,558
Noninterest expense:
Salaries and employee benefits		69,554			67,432			72,472			70,915			68,793
Severance expense		3,025			413			—			—			—
Occupancy expense of bank premises, net		18,505			18,210			17,188			16,406			15,534
Furniture and equipment expense		13,122			12,953			12,333			11,907			11,392
Professional services		4,767			5,398			4,340			4,917			4,435
Amortization of intangibles		3,051			3,050			3,051			3,051			3,057
Advertising		2,215			2,514			2,278			3,103			2,887
Merger related expenses		429			—			—			—			—
Other expense		19,077			20,559			20,323			20,927			19,763
Total noninterest expense		133,745			130,529			131,985			131,226			125,861
Income before tax		97,969			100,368			103,079			100,784			98,515
Income tax		32,722			34,125			35,047			34,266			33,495
Net Income	$	65,247		$	66,243		$	68,032		$	66,518		$	65,020
Earnings per share - Diluted	$	0.43		$	0.43		$	0.44		$	0.43		$	0.42
Selected ratios
Return on average assets*		1.15	%		1.16	%		1.19	%		1.21	%		1.23	%
Return on average equity*		12.91	%		12.85	%		13.51	%		13.58	%		13.44	%
Efficiency ratio(1)		57.39	%		55.55	%		55.79	%		55.31	%		54.73	%
Noninterest income(1)/ avg assets*		0.81	%		0.86	%		0.80	%		0.82	%		0.78	%
Noninterest expense(1)/ avg assets*		2.27	%		2.29	%		2.33	%		2.39	%		2.34	%
Net interest margin		3.48	%		3.53	%		3.64	%		3.81	%		3.86	%
Equity to assets		9.03	%		9.03	%		9.03	%		8.53	%		8.86	%
Tier one leverage		7.40	%		7.81	%		7.65	%		7.90	%		7.88	%
Tangible capital ratio		6.31	%		6.26	%		6.20	%		5.74	%		5.94	%

(1) These ratios utilize core noninterest income and noninterest expense excluding severance expense.

* Annualized

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)

STATEMENTS OF CONDITION (Dollars in thousands)	Mar 31, 2007			Dec 31, 2006			Sept 30, 2006			June 30, 2006			Mar 31, 2006
Assets:
Cash and due from banks	$	359,233		$	425,148		$	371,898		$	393,945		$	449,556
Interest bearing deposits in banks, federal funds sold		238,105			17,534			84,484			168,696			32,092
Securities purchased under agreements to resell - MWL		827,610			605,937			593,572			609,262			578,743
Securities purchased under agreements to resell - Other		500,000			—			—			—			—
Held to maturity securities		1,570			1,874			1,971			2,547			2,656
Securities available for sale		2,194,175			3,083,614			2,958,472			2,863,833			2,866,513
Trading securities		1,198,606			—			—			—			—
Loans held for sale		1,113,998			1,474,000			1,322,318			1,873,025			1,227,520
Total loans, net:
Mortgage warehouse loans		166,552			281,693			282,985			371,787			436,248
Loans, excluding mortgage warehouse loans		14,754,924			15,197,196			15,232,710			15,174,136			14,845,657
Less: Allowance for loan losses		(172,602	)		(174,850	)		(176,117	)		(177,139	)		(173,632	)
Loans, net		14,748,874			15,304,039			15,339,578			15,368,784			15,108,273
Premises and equipment, net		426,893			407,696			372,980			356,619			348,023
Intangible assets, net		671,282			674,333			677,383			680,477			683,234
Bank-owned life insurance		462,238			457,812			354,004			350,998			348,325
Accrued interest and other assets		330,263			332,262			335,903			342,647			323,603
Total Assets	$	23,072,847		$	22,784,249		$	22,412,563		$	23,010,833		$	21,968,538
Liabilities and Shareholders’ Equity:
Noninterest bearing transaction accounts	$	2,964,585		$	2,869,845		$	2,849,718		$	3,639,310		$	3,107,338
Interest bearing transaction accounts		6,444,194			6,222,818			6,188,859			6,137,708			6,187,503
Total non-time deposits		9,408,779			9,092,663			9,038,577			9,777,018			9,294,841
Time deposits		6,532,932			6,596,827			6,473,436			6,263,428			5,871,746
Brokered time deposits		441,012			401,564			283,199			488,713			688,741
Total deposits		16,382,723			16,091,054			15,795,212			16,529,159			15,855,328
Repurchase agreements		768,705			832,672			882,561			948,327			938,170
Federal funds purchased and other short-term borrowings		511,076			1,133,000			1,285,000			1,136,893			956,725
Long-term debt		3,071,260			2,522,273			2,278,391			2,296,326			2,106,998
Other liabilities		254,645			147,915			147,298			138,113			164,381
Total liabilities		20,988,409			20,726,914			20,388,462			21,048,818			20,021,602
Total shareholders’ equity		2,084,438			2,057,335			2,024,101			1,962,015			1,946,936
Total Liabilities and Shareholders’ Equity	$	23,072,847		$	22,784,249		$	22,412,563		$	23,010,833		$	21,968,538
Common Shares Issued		156,662,992			156,258,708			156,196,005			156,013,266			155,788,685
Common Shares Outstanding		152,954,065			152,852,381			153,265,378			154,653,339			154,428,758

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

	Three Months Ended
AVERAGE VOLUME AND RATES (unaudited)	March 31, 2007							December 31, 2006							March 31, 2006
(Dollars in thousands)	Average Volume		Interest			Rate		Average Volume		Interest			Rate		Average Volume		Interest			Rate
Assets:
Loans, excluding mortgage warehouse loans, net of unearned income (2)	$	15,153,371	$	289,572		7.74	%	$	15,210,508	$	296,732		7.75	%	$	14,576,424	$	264,653		7.35	%
Mortgage warehouse loans		195,951		3,902		8.08	%		252,583		5,069		7.96	%		417,913		5,811		5.64	%
Loans held for sale (2)		1,287,027		21,981		6.93	%		1,460,508		25,390		6.90	%		1,124,866		18,006		6.49	%
Securities (2)		3,225,107		43,587		5.41	%		3,169,289		41,103		5.19	%		2,901,936		36,205		4.99	%
Securities purchased under agreements to resell - MWL		639,052		11,023		7.00	%		593,989		10,488		7.01	%		606,062		9,477		6.34	%
Securities purchased under agreements to resell - Other		419,444		6,941		6.68	%		—		—		0.00	%		—		—		0.00	%
Other interest earning assets		97,005		1,171		4.90	%		125,954		1,695		5.34	%		76,871		840		4.43	%
Total interest earning assets (1)		21,016,957	$	378,177		7.28	%		20,812,831	$	380,477		7.27	%		19,704,072	$	334,992		6.87	%
Nonearning assets (2)		2,032,481							1,920,659							1,813,076
Total assets	$	23,049,438						$	22,733,490						$	21,517,148
Liabilities and Shareholders’ Equity:
Interest bearing non-time deposits	$	6,313,784	$	48,481		3.11	%	$	6,163,786	$	49,059		3.16	%	$	6,036,232	$	35,021		2.35	%
Time deposits (2)		6,872,764		84,603		4.99	%		6,889,267		84,038		4.84	%		6,525,529		64,947		4.04	%
Total interest bearing deposits		13,186,548		133,084		4.09	%		13,053,053		133,097		4.05	%		12,561,761		99,968		3.23	%
Repurchase agreements		763,461		8,555		4.54	%		852,918		9,827		4.57	%		874,665		8,117		3.76	%
Federal funds purchased and other short-term borrowings		1,164,191		15,277		5.32	%		1,198,104		16,030		5.31	%		650,394		7,270		4.53	%
Long-term debt (2)		2,941,646		39,715		5.46	%		2,526,515		36,730		5.78	%		2,294,318		31,160		5.49	%
Total interest bearing liabilities		18,055,846	$	196,631		4.41	%		17,630,590	$	195,684		4.41	%		16,381,138	$	146,515		3.62	%
Noninterest bearing demand deposits		2,780,374							2,886,424							3,033,596
Other liabilities (2)		164,056							171,297							140,298
Total liabilities		21,000,276							20,688,311							19,555,032
Shareholders’ equity		2,049,162							2,045,179							1,962,116
Total liabilities and shareholders’ equity	$	23,049,438						$	22,733,490						$	21,517,148
Rate differential						2.87	%						2.86	%						3.25	%
Net yield on interest-earning assets on a tax equivalent basis			$	181,546		3.48	%			$	184,793		3.53	%			$	188,477		3.86	%
Taxable equivalent adjustments:
Loans				(146	)						(94	)						(83	)
Securities				(570	)						(231	)						(234	)
Total taxable equivalent adjustments			$	(716	)					$	(325	)					$	(317	)
Net interest income			$	180,830						$	184,468						$	188,160
TOTAL AVERAGE DEPOSITS
Total interest bearing deposits	$	13,186,548	$	133,084		4.09	%	$	13,053,053	$	133,097		4.05	%	$	12,561,761	$	99,968		3.23	%
Noninterest bearing demand deposits		2,780,374		—		—			2,886,424		—		—			3,033,596		—		—
Total average deposits	$	15,966,922	$	133,084		3.38	%	$	15,939,477	$	133,097		3.31	%	$	15,595,357	$	99,968		2.60	%

(1) Interest earned and average rates on securities and loans exempt from income taxes are reflected on a fully tax equivalent basis using a federal income tax rate of 35%, net of nondeductible interest expense.

(2) Unrealized gains(losses) on available for sale securities, the adjustments for mark to market valuations on hedged assets and liabilities and accrued interest on instruments carried at fair value have been classified in either nonearning assets or other liabilities.

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

ASSET QUALITY (unaudited)

RATIOS	March 31, 2007			Dec 31, 2006			Sept 30, 2006			June 30, 2006			March 31, 2006
Period end:
Allowance as a percent of net loans		1.16	%		1.13	%		1.14	%		1.14	%		1.14	%
Total nonperforming assets as a percent of net loans and nonperforming assets		0.22	%		0.16	%		0.10	%		0.18	%		0.24	%
Allowance as a percent of nonperforming assets		525	%		695	%		1120	%		649	%		468	%
Allowance as a percent of nonperforming loans		601	%		1247	%		1366	%		802	%		519	%
Net charge-offs as a percent of average net loans:
Quarter to date (annualized)		0.06	%		0.12	%		0.06	%		0.04	%		0.26	%
Year to date (annualized)		0.06	%		0.12	%		0.12	%		0.15	%		0.26	%
NONPERFORMING ASSETS (Dollars in thousands)	March 31, 2007			Dec 31, 2006			Sept 30, 2006			June 30, 2006			March 31, 2006
Nonaccrual loans	$	28,721		$	14,025		$	12,765		$	21,957		$	33,287
Restructured loans		—			—			128			137			145
Total nonperforming loans		28,721			14,025			12,893			22,094			33,432
Other real estate owned		4,134			1,869			2,826			5,208			3,633
Loans held for sale		—			9,255			—			—			—
Total nonperforming assets	$	32,855		$	25,149		$	15,719		$	27,302		$	37,065
Aggregate loans contractually past due 90 days for which interest is being accrued	$	6,247		$	8,138		$	6,875		$	8,608		$	8,384
Total charge-offs	$	3,542		$	6,301		$	6,809		$	4,533		$	13,136
Total recoveries		(1,347	)		(1,634	)		(4,337	)		(3,090	)		(3,375	)
Net charge-offs:
Quarter to date	$	2,195		$	4,667		$	2,472		$	1,443		$	9,761
Year to date	$	2,195		$	18,343		$	13,676		$	11,204		$	9,761

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

RECONCILIATION OF CERTAIN FINANCIAL MEASURES (unaudited)

RECONCILIATION OF CERTAIN FINANCIAL MEASURES (Dollars in thousands)
Period end loan growth:
Loans, excluding mortgage warehouse loans at March 31, 2006	$	14,845,657
Excluding:
Residential real estate loans sold in 1st Qtr. 2007		(489,625	)
Loans, excluding mortgage warehouse loans at March 31, 2006 as adjusted	$	14,356,032
Organic loan growth		398,892
Loans, excluding mortgage warehouse loans at March 31, 2007	$	14,754,924
Organic loan growth % change		3	%
Average deposit growth:	1st Qtr. 2007			1st Qtr. 2006			% Change		4th Qtr. 2006			Annualized % Change
Average total deposits	$	15,966,922		$	15,595,357				$	15,939,477
Excluding:
Brokered deposits		(401,432	)		(799,393	)				(437,414	)
Average total deposits as adjusted	$	15,565,490		$	14,795,964		5	%	$	15,502,063		2	%
Period end mortgage warehouse assets under management:	Mar 31, 2007			Mar 31, 2006			% Change		Dec 31, 2006			% Change
Securities purchased under agreements to resell - MWL	$	827,610		$	578,743		43	%	$	605,937		37	%
Loans held for sale		1,062,388			1,186,556		-10	%		1,422,980		-25	%
Mortgage warehouse loans		166,552			436,248		-62	%		281,693		-41	%
Total mortgage warehouse assets on balance sheet		2,056,550			2,201,547		-7	%		2,310,610		-11	%
Securitization of mortgage warehouse assets		2,000,000			1,500,000		33	%		2,000,000		—
Total mortgage warehouse assets under management	$	4,056,550		$	3,701,547		10	%	$	4,310,610		-6	%

EX-99.2

First Quarter 2007

Earnings Overview

Exhibit 99.2

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

and

from

non-banks;

•

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

1Q07 Highlights

Quarterly Earnings Per Share of $0.43, up 2% over 1Q06

Core Noninterest

Income increased 11% over 1Q06

Loans grew 3%

1

over 1Q06

Period End Deposits grew 7% annualized over December 31, 2006 –

Noninterest

Bearing Deposits grew 13% annualized

Excellent Credit Quality -

Annualized Net Charge-Offs were 0.06% of

average loans

Allowance for loan losses increased to 1.16% of loans –

525% of

nonperforming assets

1

Excluding Mortgage Warehouse Lending and sale of residential

real estate loans

4

Excellent Credit Quality

Credit Quality remains excellent

No subprime

products

Annualized Net Charge-Off Ratio was 0.06%

of average loans

for the

quarter compared to 0.26% for 1Q06 and 0.12% for 4Q06

Increased the allowance for loan losses to 1.16% of total loans,

compared to 1.13% at 12/31/06

The allowance was 525% of nonperforming assets

5

Summary of Loan Loss Experience

2003 –

1Q07

1

Annualized

1Q07

2006

2005

2004

2003

Reserve Ratio to Net Loans

1.16%

1.13%

1.15%

1.16%

1.20%

Reserve

$172,602

$174,850

$171,051

$148,802

$138,549

Coverage of Nonperforming Assets

525%

695%

536%

402%

184%

Net Charge-off Ratio to Average Loans

0.06%

1

0.12%

0.14%

0.19%

0.31%

Net Charge-offs

$2,195

$18,343

$19,211

$23,598

$35,471

Years of Net Charge-offs in Reserve

19.66

1

9.53

8.90

6.31

3.91

Nonperforming Assets

$32,855

$25,149

$31,931

$37,039

$75,440

Ratio of Nonperforming Assets to Net Loans

0.22%

0.16%

0.21%

0.29%

0.65%

6

Our portfolio is diversified by property type, location and borrower.

We loan to builders and developers who have a substantial level of

expertise within their markets, and they personally support the deal

through their guarantees and financial strength.

Our average builder/developer has been a long time customer with

expertise in the industry. They have successfully been through real

estate cycles in the past. It is evident that they are taking appropriate

actions during this market cycle:

working through inventory

slowing new starts

requiring more presales

diversifying into other areas of real estate

Construction Lending Strengths

7

In order to mitigate the risk of higher inventory levels, Colonial has

focused on:

high presale levels

equity

strong guarantor support

lower price points

market support (i.e., in Florida we target having a minimum of 75% pre-sales)

We closely monitor all inventory levels and project status

Commercial real estate within our markets remains very strong and is 

projected to remain strong with solid occupancy and rental rates

Thus far, any problems we have experienced have been isolated

Construction Lending Strengths (continued)

8

We do not offer subprime

lending products

We do not offer low document, stated income, “Option ARMs”

or “Pick

a Payment”

products

All ARM loans are underwritten with rate increases already factored in

Our past dues and charge-offs within this portfolio remain very low

and compare favorably to the industry

1-4 Family Residential Real Estate Portfolio

9

Outstanding loans, excluding mortgage loans sold and mortgage

warehouse, remained stable during the quarter

The slow down in loan growth was due to:

•

Loan

demand

within

the

residential

sector

has

slowed

as

builders

and

developers

have

pulled back and adjusted to the market conditions.

•

In

mid-2006,

Colonial

recognized

a

possible

slowdown

in

the

residential

market.

As

a

result, we have been very selective on all new loan requests.

•

Furthermore, our strategy is to exit problem relationships or potential problem

relationships very quickly.

•

Liquidity in the market continues to be strong.  We are experiencing large payoffs of

loans as projects are sold or moved to the secondary market.

We expect slow loan growth throughout the remainder of 2007

Colonial is focusing its efforts on growing the commercial real estate

portfolio, C&I and commercial construction. We continue to finance

strong residential development projects which have guarantor and

market support.

Loan Growth

10

Mortgage Warehouse Lending

$4.1 billion in assets under management at 3/31/07; $2 billion sold to

third-party commercial paper conduits

Mortgage Warehouse Lending customers are mortgage companies

which originate primarily “A”

paper

Colonial is not the primary funding source of subprime

originations

Colonial manages the collateral files on substantially all outstandings

Average FICO score on Colonial’s collateral is approximately 700

Investor requests to our customers to repurchase loans have not

trended up

Closely monitor aging on collateral

11

$1.06

$1.26

$1.16

$1.31

$1.52

$1.72

2001

2002

2003

2004

2005

2006

$0.42

$0.43

1Q06

1Q07

(diluted)

Consistent Earnings Per Share Growth

5 Year CAGR = 10%

2001 -

2006

19%

(8)%

13%

16%

13%

2%

12

$422

$455

$495

$567

$709

$755

$188

$181

2001

2002

2003

2004

2005

2006

1Q06

1Q07

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%   

3.86%

3.48%

Net Interest

Margin

13

Net Interest Income and Margin

($ in millions)

Tax

Equivalent

NII

NIM

4Q06

184.8

$      

3.53%

Deposit Mix Change

(2.6)

-0.05%

Impact of Trust Preferred Redemption

0.4

0.01%

Spread Compression on Earning Assets

1.0

-0.01%

Day Count

(2.1)

-

1Q07

181.5

$      

3.48%

14

Interest rate risk position has been managed to a neutral position

Sold $490 million of adjustable rate residential real estate loans (ARMs)

on March 30 which yielded 6.04%

Marked the following financial instruments to fair value on January 1,

2007 as a result of adopting SFAS 159:

$1.2

billion

of

available

for

sale

securities

which

yielded

4.78%

-

resulted

in

a

reclassification

of a $26 million after tax loss from accumulated other comprehensive income to retained

earnings.  The securities were sold in April at no additional gain or loss. 

$383 million of debt which resulted in a cumulative effect adjustment (loss) of approximately

$15

million,

net

of

tax,

which

reduced

shareholders’

equity

-

Redeemed $70 million on February 2, 2007, interest rate of 8.92%

Changes in fair value during the first quarter resulted in a gain of $2 million

The adoption of SFAS 159 increases the Company’s flexibility to manage its interest rate risk

position and is expected to increase the Company’s net interest income, net interest margin

and earnings in 2007 and in future periods. 

Continue to focus on increasing consumer and business checking

accounts

Net Interest Income Management

15

$15,967

$15,595

$15,788

$8,433

$8,734

$9,419

$10,862

$13,988

2001

2002

2003

2004

2005

2006

1Q06

1Q07

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%

2%

5%

1

16

Noninterest Income

1Q07

4Q06

1Q06

4Q06

1Q06

Service charges on deposit accounts

17.7

$

18.9

$    

14.2

$    

-6%

25%

Electronic banking

4.4

4.4

4.1

-

7%

Other retail banking fees

3.6

3.5

3.5

3%

3%

        Retail Banking Fees

25.7

26.8

21.8

-4%

18%

Financial planning services

3.8

3.3

3.1

15%

22%

Mortgage banking

3.2

3.7

2.9

-14%

10%

Mortgage warehouse fees

6.9

6.9

6.3

-

10%

Bank-owned life insurance

4.9

3.8

3.9

29%

26%

Goldleaf income

-

-

1.2

-

-100%

Other income

1.7

4.9

2.3

-65%

-26%

        Core Noninterest Income

46.2

49.4

41.5

-6%

11%

Gain on sale of residential real estate loans

3.9

-

-

100%

100%

Securities, derivatives and debt gains, net

3.0

0.4

4.2

650%

-28%

Gain on sale of Goldleaf

-

-

2.8

-

-100%

        Total Noninterest Income

53.1

$

49.8

$    

48.5

$    

7%

9%

Annualized Noninterest Income to Average Assets

0.81%

0.86%

0.78%

Noninterest Income to Total Revenue

20.4%

21.1%

18.1%

% Change

($ in millions)

1

Core noninterest income was used in the calculation

1

1

17

$62.9

$74.6

$82.4

$87.6

$96.7

$21.8

$25.7

2002

2003

2004

2005

2006

1Q06

1Q07

Retail Banking Fees

($ in millions)

18%

19%

10%

6%

10%

18

Noninterest Expense

($ in millions)

1

Core

noninterest

(see

components

of

core

noninterest

income

on

noninterest

income

slide)

and

total

noninterest

expense

excluding

severance

are

used

in

the

calculation

1Q07

4Q06

1Q06

4Q06

1Q06

Salaries and employee benefits

69.6

$  

67.4

$ 

68.8

$ 

3%

1%

Severance expense

3.0

0.4

-

650%

100%

Occupancy expense of bank premises, net

18.5

18.2

15.5

2%

19%

Furniture and equipment expense

13.1

13.0

11.4

1%

15%

Professional services

4.8

5.4

4.4

-11%

9%

Amortization of intangibles

3.1

3.1

3.1

-

-

Advertising

2.2

2.5

2.9

-12%

-24%

Communications

3.0

2.9

2.6

3%

15%

Electronic banking expense

1.7

1.7

1.3

-

31%

Merger related expense

0.4

-

-

100%

100%

Operating supplies

1.0

1.2

1.4

-17%

-29%

Other expense

13.3

14.7

14.5

-10%

-8%

Total Noninterest

Expense

133.7

$

$130.5

$125.9

2%

6%

Efficiency Ratio

1

57.39%

55.55%

54.73%

Annualized Noninterest

Expense to Average Assets

1

2.27%

2.29%

2.34%

% Change

19

Solid Earnings Per Share of $0.43, up 2% over 1Q06

Excellent Credit Quality

Strong Fee Income growth and effective expense management

Increased dividend to $0.1875 per quarter -

$0.75 estimate for 2007

Forbes

Platinum 400 List of Best Large Companies in America

Summary

20

$.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%

21

Supplemental Information

22

Summary Income Statement

1Q07

4Q06

1Q06

4Q06

1Q06

Net interest income

180.8

$    

184.5

$    

188.2

$    

-2%

-4%

Core noninterest income

46.2

49.4

41.5

-6%

11%

   Total Revenue

227.0

233.9

229.7

-3%

-1%

Provision for loan losses

2.2

3.4

12.3

-35%

-82%

Gain on sale of residential real estate loans

3.9

-

-

100%

100%

Securities, derivatives and debt gains, net

3.0

0.4

4.2

650%

-28%

Gain on sale of Goldleaf

-

-

2.8

-

-100%

Noninterest expense, excluding severance

130.7

130.1

125.9

-

4%

Severance expense

3.0

0.4

-

650%

100%

   Pretax Income

98.0

100.4

98.5

-2%

-1%

Income tax expense

32.7

34.1

33.5

-4%

-2%

   Net Income

65.3

$     

66.3

$     

65.0

$     

-2%

-

Earnings Per Share - Diluted

0.43

$     

0.43

$     

0.42

$     

Weighted Average Shares Outstanding - Diluted

153,450

153,580

155,183

% Change

($ in millions)

23

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

1Q07

4Q06

1Q06

4Q06

1Q06

Earning Assets

21,017

$  

20,813

$  

19,704

$  

1%

7%

Loans, excluding MWL

15,153

15,211

14,576

-

4%

MWL Assets

1

2,084

2,269

2,117

-8%

-2%

MWL Managed Assets

2

4,079

4,269

3,617

-4%

13%

Securities

3,225

3,169

2,902

2%

11%

Total Assets

23,049

22,733

21,517

1%

7%

Assets Under Management

25,044

24,733

23,017

1%

9%

Total Deposits

15,967

15,939

15,595

-

2%

Noninterest Bearing Deposits

2,780

2,886

3,034

-4%

-8%

Interest Bearing Transaction Accounts

6,314

6,164

6,036

2%

5%

Time Deposits

6,873

6,889

6,525

-

5%

Shareholders' Equity

2,049

2,045

1,962

-

4%

% Change

24

72%

1

of Colonial’s Deposits are in four states where the population is

expected to grow twice as fast as the rest of the U.S.* -

Florida,

Georgia, Nevada  and Texas

Branches, Assets and Deposits by State at 3/31/07 are as follows:

In the Right Places

$23.1 Billion in Assets

$16.4 Billion in Deposits

308 Branches

1

At 3/31/07

*Projected Population change from 2006-2011

Source: US Census Bureau

NV

15

TX

14

FL

170

GA

18

AL

91

FL

58%

AL

25%

TX

4%

GA

5%

NV

5%

Corp

3%

FL

56%

GA

6%

AL

19%

Corp

9%

TX

6%

NV

4%

25

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.

26

0.65%

0.78%

0.64%

0.54%

0.55%

0.60%

0.71%

0.84%

0.85%

0.22%

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

3/31/07

All FDIC Insured Commercial Banks

Colonial BancGroup

(as originally reported)

NPAs Consistently Below Industry

27

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

'06

3/31/07

All FDIC Insured Commercial Banks

Southern Regionals*

Colonial BancGroup

Net Charge-Offs/Average Loans

*Source: KBW

(as originally reported)

Low Loss Ratio

1

Annualized

1