Colonial BancGroup Announces Record Earnings of $0.45 Per Diluted Share for the Third Quarter of 2007.

THIRD QUARTER 2007 HIGHLIGHTS:

* Record EPS of $0.45

* Net interest income grew 3% over the second quarter of 2007; net interest margin was 3.65%

* Core noninterest income increased 16% over the same quarter of the prior year

* Core noninterest expense decreased 3% from the second quarter of 2007

* Improved efficiency ratio of 53.29% compared to 56.20% for the second quarter of 2007

* Annualized net charge-off ratio was 0.18% for the first nine months of 2007 and 0.27% for the third quarter of 2007 compared to 0.20% for the second quarter of 2007

* Nonperforming assets ratio at September 30, 2007 was 0.46% compared to 0.29% at June 30, 2007

MONTGOMERY, Ala. -- The Colonial BancGroup, Inc. (NYSE: CNB) Chairman, CEO and President, Robert E. Lowder, announced today that the Company's earnings for the quarter ended September 30, 2007 were a record $0.45 per diluted share. Net income for the quarter was a record $69 million compared to $66 million for the second quarter of 2007.

Colonial's net interest income for the quarter increased 3% over the second quarter of 2007. The increase in net interest income was attributable to a 12% annualized increase in the Company's average earning assets and improved funding costs as a result of net interest income management strategies undertaken throughout the first nine months of 2007. The net interest margin was 3.65% for the quarter compared to 3.66% for the second quarter of 2007. "While there have been significant liquidity issues in the industry, fortunately Colonial's liquidity position remains strong. Due to our high quality assets, solid core deposit base and diverse wholesale funding sources, we have not experienced funding challenges," said Mr. Lowder.

Total deposits at September 30, 2007 were $16.9 billion, down slightly from $17.1 billion at June 30, 2007; however, period-end non-time deposits grew $104 million, or 4% annualized, from June 30, 2007.

"During the third quarter, Colonial experienced declining loan volumes which we expect will continue into the fourth quarter and beyond. However, even in times of slow to no loan growth, we remain committed to our core strategy of not sacrificing credit quality for the sake of growth," said Mr. Lowder. At September 30, 2007, total loans were $15.2 billion, a 2% decline from June 30, 2007. Annualized net charge-offs were 0.18% of average loans for the first nine months of 2007 and were 0.27% for the third quarter of 2007 compared to 0.20% for the second quarter of 2007. Colonial's nonperforming assets ratio at September 30, 2007 increased to 0.46% from 0.29% at June 30, 2007. The increase in nonperforming assets primarily resulted from the addition of four loan relationships totaling approximately $21 million in Florida and Georgia. The allowance for loan losses was 1.14% of total loans and represented 246% of nonperforming assets at September 30, 2007.

"Our relationship building and income diversification efforts are reflected in the 15% year-over-year increase in core noninterest income. We are extremely pleased to have marked improvement in retail banking fees and financial planning revenue," said Mr. Lowder.

Core noninterest expense was $133.7 million in the current quarter which was a $4 million decrease from the second quarter. Strong expense management coupled with increased revenues resulted in an improved efficiency ratio of 53.29% in the current quarter compared to 56.20% for the second quarter of 2007.

The previously announced acquisition of Citrus & Chemical Bancorporation, Inc. (C&C) is progressing as anticipated and is expected to close in early December of 2007. C&C is located in deposit-rich Polk County, Florida and is expected to add strength to Colonial's balance sheet. As of September 30, 2007, C&C had assets of $868 million, deposits of $689 million and loans of $527 million.

Mr. Lowder concluded, "Volatility in the financial services industry has been prevalent this year. While we cannot predict when or how current market conditions will change in the future, we do know that Colonial Bank has successfully experienced a variety of economic cycles during our 26 year history. What has been true for us over the years is equally true today and that is, we have a strong management team, we exhibit excellent expense controls and, most important in today's environment, we have strict underwriting standards that serve us well as evidenced by our sound credit quality. As I said at the end of the second quarter, Colonial is not immune to current events, but our consistent record performance over time speaks for itself. Colonial is well positioned and we are approaching the future with confidence."

Colonial BancGroup operates 323 branches in Florida, Alabama, Georgia, Nevada and Texas with more than $24.5 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 will host a conference call on October 17, 2007 at 3:00 PM/ET to discuss the earnings results for the third quarter. Individuals are encouraged to listen to the live webcast of the presentation as well as view a slide presentation by visiting 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 [phone] or [phone] Toll International, (Leader: Lisa Free).

A replay of the conference call will be available beginning at 6:00 PM/ET on October 17, 2007 and ending at midnight on October 22, 2007 by dialing [phone] (Domestic Toll-Free) or [phone] (Toll International). The passcode for both numbers is 1064579.

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 such 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.

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