Colonial BancGroup announces earnings.

MONTGOMERY, Ala.--(BUSINESS WIRE)--Oct. 15, 1996--Colonial BancGroup (NYSE:CNB) Chairman of the Board, Chief Executive Officer and President Robert E. Lowder announced today that the company's operating earnings for the quarter ended Sept. 30, 1996 increased 27% to $14,766,000 compared to $11,665,000 in the prior year.

Operating earnings per share increased 16% to $.88 per share compared to $.76 per share for the previous year. Net income, giving effect to a special assessment by the Savings Association Insurance Fund (SAIF), was $12,300,000 for the quarter or $.73 per share.

On Sept. 30, 1996 Congress passed a law requiring thrifts and commercial banks which have acquired thrifts in the past to pay a one-time special assessment in order to recapitalize SAIF. As a result of acquiring several thrifts over the past few years, Colonial has deposits insured by SAIF. The special one-time payment resulted in a pre-tax expense of $3.8 million or $.15 per share after tax in September.

Excluding the SAIF assessment, return on average assets was 1.27% for the quarter compared to 1.22% in the prior year and return on average equity was 18.01% compared to 18.29% in the prior year.

Year to date, operating earnings per share were $2.52 compared to $2.13 in the prior year, an 18% increase, return on assets was 1.26% and return on equity was 17.83%.

"We believe $3.35 operating EPS for 1996 ($3.20 including the SAIF special assessment) is achievable, and should allow the company to continue its strong loan loss provisions in the fourth quarter to provide for the strong loan growth experienced during the year," Lowder said.

Internal loan growth continues to be strong at an annualized rate of 18% excluding acquisitions. At Sept. 30, nonperforming loans were .59% of loans with reserves equal to 1.26%, representing a 213% coverage of nonperforming loans. Year-to-date net charge-offs represent .12% of average loans with loan provision expense equal to .24% of average loans. Colonial continues to make loan provisions in excess of charge-offs and maintains reserves at levels believed adequate to absorb future potential losses.

Financial results for all of 1996 and prior years include the results for the Southern Bank (Orlando) and Commercial Bank (Atlanta) mergers which were completed on July 3, 1996. These mergers have been accounted for as poolings of interest resulting in a restatement of results for all periods presented.

During the third quarter, Colonial announced several agreements to acquire other institutions in Georgia and Florida. When these transactions are completed in the first half of 1997, Colonial should have a $1.2 billion bank with offices in five of the six largest metropolitan statistical areas of Florida, a $600 million bank in Atlanta and North Georgia, a $100 million bank in southern Tennessee and a $4 billion bank in Alabama.

Colonial BancGroup currently operates 132 full service offices in Alabama, Florida, Georgia and Tennessee and is traded on the New York Stock Exchange under the symbol CNB. In some newspapers the stock is listed as ColBgp. -0-

                        COLONIAL BANCGROUP, INC.
                   SELECTED FINANCIAL DATA (Unaudited)
             (Dollars in thousand, except per share amounts)
                                                            % Change
                          Sept. 30,  Dec. 31,  Sept. 30,    Sept. 30,
                           1996       1995       1995     1996 to 1995
Statement of Condition
 Summary
Total assets            $4,713,524 $4,202,194 $3,837,969      23%
Loans, net of unearned
 income                  3,570,490  3,175,506  2,848,089      25%
Total earnings assets    4,324,106  3,823,233  3,518,662      23%
Deposits                 3,561,923  3,204,260  2,935,768      21%
Shareholders' equity       329,917    289,463    260,038      27%
Book value per share        $20.24     $18.65     $17.71      14%

                                        Nine Months Ended Sept. 30,
                                                           % Change
                                        1996      1995     96 to 95
Earnings Summary
Net interest income
 (taxable equivalent)                $126,766  $104,374       21%
Provision for loan losses               6,023     4,155       45%
Noninterest income                     49,854    39,291       27%
Noninterest expense (excl SAIF
 special assessment)                  104,042    87,049       20%
SAIF special assessment(a)              3,817                 --
Net income (excl SAIF special
 assessment)                           41,816    32,432       29%
Net income                             39,350    32,432       21%
Average primary shares outstanding     16,465    14,826
Average fully diluted shares
 outstanding                           16,754    15,597
Earnings per share excluding SAIF
 special assessment(a):
 Primary                                $2.54     $2.19       16%
 Fully diluted                           2.52      2.13       18%
Earnings per common share:
 Primary                                $2.39     $2.19        9%
 Fully-diluted                           2.37      2.13       11%

Selected Ratios:
Return on average assets                 1.20%     1.23%
Return on average assets (excl SAIF
 assessment)(a)                          1.26%     1.23%
Return on average equity                17.05%    17.90%
Return on average equity (excl SAIF
 assessment)(a)                         17.83%    17.90%
Efficiency ratio (excl SAIF
 assessment)(a)                         58.91%    60.59%
Equity to assets                         7.00%     6.78%
Total capital                            8.04%     8.17%
Tier one leverage                        6.52%     6.34%

                                     Three Months Ended Sept. 30,
                                                           % Change
                                        1996      1995     96 to 95
Earnings Summary
Net interest income
 (taxable equivalent)                 $44,255   $36,716       21%
Provision for loan losses               2,555     1,433       78%
Noninterest income                     16,614    13,640       22%
Noninterest expense (excl SAIF
 special assessment)                   34,890    30,043       16%
SAIF special assessment(a)              3,817                 --
Net income (excl SAIF special
 assessment)                           14,766    11,665       27%
Net income                             12,300    11,665        5%
Average primary shares outstanding     16,698    14,942
Average fully diluted shares
 outstanding                           16,985    15,706
Earnings per share excluding SAIF
 special assessment(a):
 Primary                                $0.88     $0.78       13%
 Fully diluted                           0.88      0.76       16%
Earnings per common share:
 Primary                                $0.74     $0.78       -5%
 Fully-diluted                           0.73      0.76       -4%

Selected Ratios
Return on average assets                 1.21%     1.22%
Return on average assets (excl SAIF
 assessment)(a)                          1.27%     1.22%
Return on average equity                17.25%    18.29%
Return on average equity (excl SAIF
 assessment)(a)                         18.01%    18.29%
Efficiency ratio (excl SAIF
 assessment)(a)                         57.32%    59.68%


Nonperforming Assets                  Sept. 30,  Dec. 31,  Sept. 30,
                                         1996      1995      1995

Total nonperforming assets ratio         0.85%     0.83%     0.75%
Loan loss reserve ratio                  1.26%     1.31%     1.38%
Allowance as a percent of
 nonperforming loans                      213%      265%      385%
Net charge-offs ratio (annualized)       0.12%     0.15%     0.11%

    NOTE:  Restated financial results above reflect the July 3, 1996
mergers of Colonial BancGroup with Commercial Bancorp of Georgia and
Southern Banking Corporation.  These mergers were accounted for as
poolings of interest and the financial results restated accordingly.

(a) Legislation approving a one-time special assessment on SAIF
deposits resulted in $3,817,000 in expense before income taxes and
$2,466,000 net of applicable income taxes in the third quarter.

CONTACT: Colonial BancGroup, Inc., Montgomery

W. Flake Oakley, 334/240-6035