Colonial Bank to Sell Substantial Portion of Its Mortgage Servicing Portfolio.

Business Editors

MONTGOMERY, Ala.--(BUSINESS WIRE)--Feb. 16, 2000

Robert E. Lowder, Chairman and Chief Executive Officer of Colonial Bank (NYSE:CNB) announced today that it has reached an agreement in principle to sell approximately $9 billion in principal value of its mortgage servicing portfolio to a third party. This sale in conjunction with other pending transactions will reduce the bank's servicing portfolio to approximately $5.5 billion.

The transaction is subject to, among other conditions, the execution of a mutually acceptable definitive agreement, completion of due diligence, approvals by GNMA, FNMA and FHLMC and obtaining any necessary regulatory approval. Colonial expects to record the sale prior to the end of the first quarter of 2000.

Colonial BancGroup currently operates 238 offices in Alabama, Florida, Georgia, Tennessee, Texas and Nevada. Its common stock is traded on the New York Stock Exchange under the symbol CNB. In most newspapers the stock is listed as ColBgp.

Pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, the reader is cautioned that this announcement contains "forward looking statements" regarding the consummation of the transaction described herein and the Company's future performance and its mortgage servicing portfolio, all of which are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.