Colonial Bank to enter Florida with purchase of Southern Bank of Central Florida in Orlando.

MONTGOMERY, Ala.--(BUSINESS WIRE)--Dec. 21, 1995--Colonial BancGroup (NYSE:CNB) Chairman of the Board, CEO and President Robert E. Lowder along with Southern Banking Corporation Chairman J. Donald Prewitt and Charlie W. Brinkley, Jr., President and CEO, jointly announced today that the companies have entered into a letter of intent to merge Southern Banking Corporation into Colonial BancGroup.

Southern Banking Corporation's subsidiary Southern Bank of Central Florida based in Orlando will become a wholly-owned subsidiary of Colonial BancGroup. Colonial will exchange 1,632,653 shares of its' common stock, with a market value of approximately $50 million, for all of the outstanding shares and options of Southern Banking Corporation.

The Florida institution has total assets of $225 million and most recently reported net income of $2.1 million for the nine months ended Sept. 30, 1995, a 91% increase over the same period last year. These results represent a 1.40% Return on Assets and an 18.52% Return on Equity.

Southern Bank is the largest independent bank in the three-county Central Florida area, considered to be one of the fastest-growing markets in the Southeast. Southern Bank's offices are located in Orlando, Altamonte Springs, Casselberry, Kissimmee, Lake Mary, Longwood and Winter Park.

"This merger agreement coupled with our recently completed acquisition of Colonial Bank in north Atlanta, formally Mt. Vernon Savings, represent a strategic commitment to expand Colonial's community banking management approach to the higher growth markets in the Southeast.

"I am very pleased to have an agreement with such a well-run bank," said Lowder. "It is not often that it is possible to acquire a rapidly-growing bank with the quality of assets and management that we see in Southern Bank. This is the foundation on which together we can grow our community banking. The profit and deposit growth potential are exciting."

Lowder went on to say, "I believe that our existing shareholders and Southern's shareholders will some day mark this transaction as a fundamentally important corporate decision combining Colonial's proven strengths and efficiencies with a first-rate financial institution in Florida."

Southern Bank President Charlie Brinkley said, "I am enthusiastic about the prospects for our merged companies. It is exciting to be involved in a transaction which is good for our stockholders as well as for our employees and management.

"The philosophies and style of Colonial BancGroup and Southern Bank are very similar. Our future partner is highly conscious of the importance of local management and local boards staying in touch with their communities and customers and has demonstrated this approach in its' operations in Alabama, Georgia and Tennessee."

Completion of the transaction is subject to the execution of a definitive agreement as well as approval by various regulatory bodies and Southern's shareholders.

Southern Bank which opened in 1988 with one office in Longwood, Florida, currently has eight offices, a residential mortgage division and 106 employees. Colonial BancGroup is a multi-bank holding company headquartered in Montgomery with assets of $3.6 billion and 103 full service offices in Alabama, Tennessee and Georgia. It is currently traded on the New York Stock Exchange under the symbol CNB. In most newspapers the stock is listed as ColBgp.

CONTACT: Colonial BancGroup, Inc., Montgomery

W. Flake Oakley, 334/240-6035

Walter Hargrove, 334/240-5590

or

Southern Bank of Central Florida

Charlie W. Brinkley, Jr., 407/481-8833