Prepared by R.R. Donnelley Financial -- Press release date announcing record earnings

Exhibit 99.1

For more information contact:

April 16, 2002

Lisa Free (334) 240-5105

Flake Oakley (334) 240-5061

COLONIAL BANCGROUP ANNOUNCES

RECORD 1^st QUARTER

MONTGOMERY, AL — The Colonial BancGroup, Inc. Chairman and CEO, Robert E. Lowder announced today record net income and operating earnings for the first quarter ended March 31, 2002 of $34.2 million or $0.29 per share. This represents a 17% increase in earnings and a 16% increase in earnings per share over the March 31, 2001 quarter.

Operating return on assets was 1.09% and return on equity was 15.85% for the quarter. Cash basis operating return on tangible assets was 1.11% and return on tangible equity was 18.33%.

Asset quality remains very good considering the current weak economic environment, with nonperforming assets totaling $67.3 million or 0.66% of loans and other real estate. This compares with $66.7 million or 0.64% of loans and other real estate at December 31, 2001. Annualized net charge-offs were 0.25% of average loans for the quarter. “We believe these asset quality statistics will again be among the best for banks with over $10 billion in assets,” said Mr.Lowder. Loan provision expense for the quarter was $9.5 million compared to approximately the same amount in the first quarter of 2001 and $14.7 million in the fourth quarter of 2001.

Loan balances decreased $132 million from December 31, 2001 to March 31, 2002 consisting primarily of a $413 million decline in mortgage warehouse loans substantially offset by $284 million in loans acquired in an acquisition. Volume in Colonial’s mortgage warehouse unit had been abnormally high at December 31, 2001 due to increases in mortgage refinancing activity occasioned by all time lows in mortgage rates for a period during the fourth quarter of 2001. The remaining change in loan balances consisted of an increase of $93 million in regional bank loans offset by a decrease of $96 million in Colonial’s single family real estate portfolio of mostly adjustable rate mortgage loans.

“It would appear from recent economic indicators that the worst of the economic slowdown is behind us and that economic growth is returning to our market areas, although not at pre-recession rates. I have been pleased with the quality of our loan portfolio and its performance through a difficult time. In addition, we continue to have success in growing our customer base in some of the fastest growing markets in the country,” said Mr. Lowder.

Core (non-time) deposits continue to increase, reflecting Colonial’s emphasis on building customer relationships in its growth markets. Average core deposits increased $118.9 million or 12.3%, annualized, in the first quarter of 2002 compared to the fourth quarter 2001 and $495.3 million or 14.2%, annualized, compared to the first quarter of 2001. In Colonial’s Florida markets, core deposits increased 27%, annualized, from the fourth quarter of 2001 and 24% from the first quarter of 2001.

Total noninterest income, excluding security gains, increased $3.3 million or 16.67% in the first quarter of 2002 compared to the same period in 2001. The principal areas of increase include wealth management services, up 19%, electronic banking services, up 20%, mortgage origination income, up 48% and cash management services up 29%.

Colonial’s relationship building and income diversification efforts are also reflected in the growth of its Premier Account, a combined investment, money market and checking account introduced in November 2001. To date, the account has grown to over $102 million in combined investment and deposit balances.

Noninterest expenses were $70.5 million in the current quarter compared to $68.4 million in the first quarter of 2001 and $74.6 million in the fourth quarter of 2001. The fourth quarter of 2001 included approximately $3.1 million in merger related costs. The operating efficiency ratio continued to improve to 52.78% from 55.64% in the first quarter of 2001 and 53.71% in the fourth quarter of 2001.

On March 28, 2002, Colonial completed the acquisition of Mercantile Bancorp, Inc. increasing the Company’s total assets in Texas to $628 million with seven offices in Dallas and one in Austin. The transaction was accounted for as a purchase and had an immaterial impact on earnings for the quarter.

During the quarter, Colonial also completed the sale of $100 million of Trust Preferred Securities. These securities increased the Company’s regulatory Tier I Capital and provide additional flexibility for liquidity, capital management, and growth.

Colonial BancGroup currently operates 258 offices with $13.2 billion in assets in Alabama, Florida, Georgia, Nevada, Tennessee and Texas and is traded on the New York Stock Exchange under the symbol CNB. In most newspapers the stock is listed as ColBgp.

More detailed information on Colonial BancGroup’s quarterly earnings is available on the company’s website at www.colonialbank.com or in the Current Report on Form 8-K filed today with the Securities and Exchange Commission. Copies of the Form 8-K are also available from the contact persons listed above.

This release and the above referenced Current Report on Form 8-K of which this release forms a part contain “forward-looking statements” within the meaning of the federal securities laws. 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. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities;(i) an inability of the company to realize elements of its strategic plans for 2002 and beyond; (ii) increases in competitive pressure in the banking industry; (iii) general economic conditions, either nationally or regionally, that are less favorable than expected; (iv)and changes which may occur in the regulatory environment. When used in this Report, the words “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. Forward-looking statements speak only as to the date they are made. BancGroup does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (Unaudited)

Statement of Condition Summary	March 31, 2002 (1)		December 31, 2001		March 31, 2001		% Change March 31, ’01 to ’02
	(Dollars in millions, except per share amounts)
Total Assets	$	13,184	$	13,185	$	12,440	6%
Loans		10,236		10,368		10,115	1%
Total earning assets		12,290		12,301		11,685	5%
Deposits		8,598		8,323		8,487	1%
Shareholders’ equity		951		865		808	18%
Book value per share	$	7.92	$	7.50	$	7.05	12%

	Quarter Ended				% Change March 31, ’01 to ’02
Earnings Summary	March 31, 2002 (1)		March 31, 2001		% Change March 31, ’01 to ’02
	(Dollars in thousands, except per share amounts)
Net interest income (taxable equivalent)	$	110,368	$	103,223	7%
Provision for loan losses		9,478		9,464	0%
Noninterest income		22,927		20,841	10%
Noninterest expense		70,507		68,362	3%
Net income	$	34,178	$	29,196	17%

EARNINGS PER SHARE:

Net Income
Basic	$	0.30	$	0.26	15%
Diluted	$	0.29	$	0.25	16%
Average shares outstanding		115,382		114,502
Average diluted shares outstanding		116,530		115,681

	March 31, 2002 (1)		December 31, 2001		March 31, 2001
Nonperforming Assets
Total non-performing assets ratio		0.66%		0.64%	0.52%
Allowance as a percent of nonperforming loans		281%		239%	272%
Net charge-off ratio (annualized):
Quarter to date		0.25%		0.34%	0.14%
Year to date		0.25%		0.28%	0.14%

(1)

March 31, 2002 balance sheet includes the March 28, 2002 acquisition of Mercantile Bancorp, Inc.

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

CONDENSED STATEMENT OF INCOME (unaudited)

Earnings Summary	1st Qtr. 2002			4th Qtr. 2001			3rd Qtr. 2001			2nd Qtr. 2001			1st Qtr. 2001
	(Dollars in thousands, except per share amounts)
Net Interest Income	$	109,656		$	109,340		$	105,069		$	104,917		$	102,603
Provision for Loan Loss		9,478			14,730			7,901			7,478			9,464

Noninterest Income:
Service charges on deposit accounts		10,603			11,142			10,706			10,687			9,497
Wealth Management		2,660			2,171			1,975			2,282			2,242
Electronic Banking		1,873			2,057			1,661			1,645			1,555
Mortgage Origination		2,155			2,873			1,896			2,062			1,456
Securities gains (losses), net		(1	)		6,756			—			756			1,189
Other income		5,637			4,910			4,517			4,772			4,902

Total noninterest income		22,927			29,909			20,755			22,204			20,841
Noninterest Expense:
Salaries and employee benefits		37,367			37,510			35,579			36,675			34,921
Occupancy and equipment expenses		16,472			16,832			16,106			16,146			15,623
Amortization of intangibles		162			861			2,102			1,648			1,640
Merger related expenses		64			2,710			335			4			—
Other expense		16,442			16,732			15,210			17,356			16,178

Total noninterest expense		70,507			74,645			69,332			71,829			68,362
Income from continuing operations before tax		52,598			49,874			48,591			47,814			45,618
Income tax		18,420			17,955			17,524			17,280			16,422

Income from continuing operations		34,178			31,919			31,067			30,534			29,196
Discontinued operations, net of tax		—			—			(613	)		—			—

Net Income	$	34,178		$	31,919		$	30,454		$	30,534		$	29,196
Exclude discontinued operations, net of tax		—			—			613			—			—
Merger related costs (net of tax):
Loan loss provisions		—			640			—			—			—
Personnel costs		35			257			164			—			—
Other		6			1,733			215			3			—

Total		41			2,630			379			3			—

OPERATING EARNINGS	$	34,219		$	34,549		$	31,446		$	30,537		$	29,196

Earnings per share—Diluted
Operating earnings	$	0.29		$	0.30		$	0.27		$	0.26		$	0.25
Cash basis operating earnings	$	0.29		$	0.30		$	0.29		$	0.28		$	0.27

Selected ratios from operating earnings
Return on average assets		1.09	%		1.05	%		1.00	%		0.97	%		0.97	%
Return on average equity		15.85	%		15.84	%		14.87	%		15.11	%		15.02	%
Efficiency ratio		52.78	%		53.71	%		54.31	%		56.53	%		55.64	%
Noninterest income*(excl sec gains) to average assets		0.73	%		0.71	%		0.66	%		0.68	%		0.64	%
Noninterest expense* to average assets		2.22	%		2.20	%		2.19	%		2.28	%		2.24	%
Net interest margin		3.72	%		3.57	%		3.56	%		3.56	%		3.62	%
Equity to assets (1)		7.21	%		6.56	%		6.72	%		6.57	%		6.50	%
Tier one leverage		7.46	%		6.24	%		6.57	%		6.40	%		6.43	%

Selected ratios from cash basis operating earnings
Return on average tangible assets		1.11	%		1.08	%		1.07	%		1.03	%		1.03	%
Return on average equity		15.92	%		16.20	%		15.83	%		15.85	%		15.79	%
Return on average tangible equity		18.33	%		18.41	%		17.75	%		17.90	%		17.85	%

Annualized

Net income includes pretax costs associated with mergers and acquisitions totaling $4,110,000 in the 4th quarter of 2001. In the 4th quarter 2001 these costs are composed of a $1 million additional loan provision to align Manufacturer’s loan provisions with Colonial standards, $400,000 in personnel costs to complete the mergers and $2,710,000 in other merger related expenses, consisting of severance pay, contract buyouts, brokerage commissions, legal, accounting, equipment write offs and other similar costs.

(1)

March 31, 2002 balance sheet includes the March 28, 2002 acquisition of Mercantile Bancorp, Inc.

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)

STATEMENTS OF CONDITION	March 31, 2002 (1)			December 31, 2001			September 30, 2001			June 30, 2001			March 31, 2001
	(Dollars in thousands)
Assets:
Cash and due from banks	$	288,950		$	373,024		$	306,603		$	320,091		$	297,308
Interest-bearing deposits in banks and federal funds sold		25,312			15,084			72,497			103,475			25,497
Securities available for sale		1,977,148			1,852,439			1,905,705			1,621,917			1,479,945
Investment securities		27,519			30,055			32,675			38,062			43,937
Mortgage loans held for sale		23,653			35,453			24,668			29,273			20,811
Loans		10,236,272			10,367,665			9,979,118			10,003,391			10,114,964
Less: Allowance for loan losses		(128,782	)		(122,200	)		(115,344	)		(116,642	)		(116,532	)

Loans, net		10,107,490			10,245,465			9,863,774			9,886,749			9,998,432
Premises and equipment, net		226,870			198,983			190,444			190,359			191,901
Excess of cost over tangible and identified intangible assets acquired, net		190,912			113,898			89,778			91,881			93,529
Other real estate owned		21,408			15,553			12,805			10,823			9,768
Accrued interest and other assets		295,032			305,149			287,456			277,639			278,605

Total	$	13,184,294		$	13,185,103		$	12,786,405		$	12,570,269		$	12,439,733

Liabilities and Shareholders’ Equity:
Deposits	$	8,598,167		$	8,322,979		$	8,261,121		$	8,539,571		$	8,486,991
Short-term borrowings		1,644,251			2,128,133			1,887,072			1,524,737			1,913,653
Subordinated debt		266,058			265,550			274,047			260,058			111,865
Trust preferred securities		176,866			70,000			73,000			73,000			73,000
FHLB long-term debt		1,396,521			1,361,938			1,241,053			1,162,168			833,782
Other long-term debt		57,013			88,652			89,059			89,064			103,368
Other liabilities		94,432			83,077			101,438			95,480			108,807

Total liabilities		12,233,308			12,320,329			11,926,790			11,744,078			11,631,466
Total shareholders’ equity		950,986			864,774			859,615			826,191			808,267

Total	$	13,184,294		$	13,185,103		$	12,786,405		$	12,570,269		$	12,439,733

(1)

March 31, 2002 balance sheet includes the March 28, 2002 acquisition of Mercantile Bancorp, Inc.

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

	Three Months Ended
AVERAGE VOLUME AND RATES (unaudited)	March 31, 2002						December 31, 2001						March 31, 2001
	Average Volume		Interest		Rate		Average Volume		Interest		Rate		Average Volume		Interest		Rate
	(Dollars in thousands)
Assets
Loans, net	$	9,094,471	$	153,270	6.82	%	$	9,203,012	$	165,708	7.15	%	$	9,384,831	$	204,473	8.82	%
Mortgage warehouse lending		871,239		9,381	4.31	%		1,008,271		12,726	5.01	%		503,294		8,972	7.13	%
Mortgage loans held for sale		20,624		352	6.83	%		34,016		506	5.95	%		11,987		195	6.51	%
Investment securities and securities available for sale and other interest-earning assets		1,956,832		27,527	5.63	%		2,033,762		29,757	5.85	%		1,593,016		27,473	6.90	%

Total interest-earning assets(1)		11,943,166	$	190,530	6.44	%		12,279,061	$	208,697	6.76	%		11,493,128	$	241,113	8.48	%
Nonearning assets		764,648						742,806						718,751

Total assets	$	12,707,814					$	13,021,867					$	12,211,879

Liabilities and Shareholders' Equity:
Interest-bearing non-time deposits	$	2,682,864	$	8,506	1.29	%	$	2,585,940	$	9,561	1.47	%	$	2,431,613	$	19,885	3.32	%
Time deposits		4,169,579		39,840	3.87	%		4,454,799		53,762	4.79	%		4,866,708		75,642	6.30	%
Short-term borrowings		1,703,851		7,716	1.84	%		1,927,815		10,543	2.17	%		1,638,234		23,450	5.81	%
Long-term debt		1,803,559		24,100	5.40	%		1,740,740		24,792	5.65	%		1,247,369		18,913	6.13	%

Total interest-bearing liabilities		10,359,853	$	80,162	3.14	%		10,709,294	$	98,658	3.66	%		10,183,924	$	137,890	5.49	%
Noninterest-bearing demand deposits		1,377,733						1,353,198						1,130,159
Other liabilities		94,592						94,300						109,358

Total liabilities		11,832,178						12,156,792						11,423,441
Shareholders’ equity		875,636						865,075						788,438

Total liabilities and shareholders’ equity	$	12,707,814					$	13,021,867					$	12,211,879

Rate differential					3.30	%					3.10	%					2.99	%
Net yield on interest-earning assets			$	110,368	3.72	%			$	110,039	3.57	%			$	103,223	3.62	%

(1)

Interest earned and average rates on obligations of states and political subdivisions are reflected on a tax equivalent basis. Tax equivalent interest earned is : actual interest earned times 145%. The taxable equivalent adjustment has given effect to the disallowance of interest expense deductions, for federal income tax purposes, related to certain tax-free assets.

Note:

Above table of average volume and rates is reflected on Colonial BancGroup, Inc. consolidated basis.

THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES

NONPERFORMING ASSETS AND LOAN LOSS RESERVE ANALYSIS (unaudited)

NONPERFORMING ASSETS	March 31, 2002 (1)			December 31, 2001			September 30, 2001			June 30, 2001			March 31, 2001
	(Dollars in thousands)
Nonaccrual loans	$	44,646		$	49,675		$	58,441		$	59,019		$	41,631
Restructured loans		1,233			1,507			1,125			1,137			1,147
Total nonperforming loans		45,879			51,182			59,566			60,156			42,778
Other real estate owned		21,408			15,553			12,805			10,823			9,768
Total nonperforming assets	$	67,287		$	66,735		$	72,371		$	70,979		$	52,546
Aggregate loans contractually past due 90 days for which interest is being accrued	$	19,033		$	28,249		$	21,095		$	20,080		$	16,925
Net charge-offs:
Quarter to date	$	6,333		$	8,602		$	9,200		$	7,366		$	3,556
Year to date	$	6,333		$	28,724		$	20,122		$	10,922		$	3,556
RATIOS
Period end:
Total nonperforming assets as a percent of net loans and other real estate		0.66	%		0.64	%		0.72	%		0.71	%		0.52	%
Allowance as a percent of nonperforming assets		191	%		183	%		159	%		164	%		222	%
Allowance as a percent of nonperforming loans		281	%		239	%		194	%		194	%		272	%
Net charge-offs as a percent of average net loans (annualized):
Quarter to date		0.25	%		0.34	%		0.37	%		0.28	%		0.14	%
Year to date		0.25	%		0.28	%		0.27	%		0.22	%		0.14	%

	March 31, 2002				December 31, 2001				March 31, 2001
ALLOWANCE FOR LOAN LOSSES PERCENT BY CATEGORY	Loans		Percent reserve		Loans		Percent reserve		Loans		Percent reserve
Single Family Real Estate:
Short Term lines of credit secured by real estate loans held for sale	$	874,355	0.25	%	$	1,286,532	0.25	%	$	644,484	0.25	%
1-4 Family real estate portfolio—held to maturity		1,942,522	0.50	%		1,956,143	0.50	%		2,622,641	0.50	%
Other		7,419,395	1.58	%		7,124,990	1.53	%		6,847,839	1.49	%

Total loans	$	10,236,272	1.26	%	$	10,367,665	1.18	%	$	10,114,964	1.15	%

(1)

March 31, 2002 balance sheet includes the March 28, 2002 acquisition of Mercantile Bancorp, Inc.

8-K Supplemental

Net Interest Margins

The net interest margin improved 15 basis points to 3.72% for the first quarter versus 3.57% for the fourth quarter of 2001. This reflects the margin’s adjustment to a more stable rate environment after the rapid rate declines in 2001, when the Federal Reserve cut the funds rate 11 times by a total of 475 basis points. The last reduction in the fed funds rate by the Federal Reserve was on December 11, 2001 to 1.75%. Therefore, the average fed funds rate for the first quarter was a reduction of 39 basis points from the fourth quarter average of 2.14%. The Company’s average loan yields for the quarter declined 33 basis points while interest bearing liabilities declined 52 basis points. The decline in interest bearing liabilities was driven by a 92 basis point decline in the average rate on time deposits to 3.87% from 4.79% in the fourth quarter. The stability of rates in the first quarter has allowed the repricing of the time deposit portfolio to catch up with the repeated and rapid rate declines experienced in 2001. Total time deposits stood at $4.2 billion at March 31, 2002, with an average rate of 3.71% and a weighted average remaining term of 10 months. Currently posted rates on 1 year time deposits are 3.00% but range as high as 5.25% for 5 years.

The following table is a schedule of rate sensitive assets and liabilities as of March 31, 2002. The table excludes Mercantile Bancorp, Inc. acquired March 28, 2002. The inclusion of this acquisition is not expected to materially change the amounts shown.

	1 month and less		2 months to 1 year		1 year+
($ in millions):
Rate Sensitive Assets	$	5,930	$	1,675	$	4,356

Rate Sensitive Liabilities
Estimated*	$	91	$	1,313	$	1,359
Contractual		2,567		2,430		2,638

Total	$	2,658	$	3,743	$	3,997

Current Rate/Yields:
Rate Sensitive Assets	5.32	%	7.17	%	7.19	%
Rate Sensitive Liabilities
Estimated*	2.25	%	1.51	%	1.05	%
Contractual	2.47	%	3.57	%	5.00	%
Total	2.46	%	2.85	%	3.66	%

*Estimated liability cashflows are for the interest-bearing demand and savings deposits.

These deposits may not reprice in these time periods and may not reprice the full amount of any change in market rates.

The table shows that Colonial has more assets repricing than liabilities through 12 months making the balance sheet well positioned if rates were to begin to rise.

Loans

Loans for the 1st quarter consisted of the following:

(in millions)	12/31/01		Acquired Loans		Net Internal Change			3/31/02
Mortgage Warehouse loans	$	1,287		—	$	(413	)	$	874
Single-family real estate		1,956	$	83		(96	)		1,943
Regional bank loans		7,125		201		93			7,419

Total	$	10,368	$	284	$	(416	)	$	10,236

Single-family real estate represents primarily adjustable rate loans held in the bank’s portfolio. Demand for this type of loan has declined as more borrowers are looking for fixed rate loans, which the Company originates but sells in the secondary market. Mortgage warehouse lending consists of a self-contained lending unit that funds mortgage loans held for sale in the secondary market by various independent mortgage companies. The flattening out of mortgage rates during the first quarter 2002 resulted in decreases in funding of mortgage warehouse lines.

Acquisitions

During the first quarter 2002, Colonial completed its acquisition of Mercantile Bancorp in Dallas, Texas. This acquisition consisted of approximately $354 million in assets, $302 million in deposits, of which approximately $74 million are time deposits. Cost savings from this transaction are expected to be between $1.5 and $2.5 million annually and be fully implemented in third quarter of 2002. The amount of the core deposit intangible recorded in the purchase was approximately 5% of non-time deposits and is expected to be amortized on a straight line basis over a period of approximately 8 years.

Future Earnings Outlook

The economy is showing signs of improvement. Reported GDP grew in the fourth quarter of 2001 at a pace of 1.7% compared to a reported decline of 1.3% in the third quarter. Expectations are for continued improvement in the economy. After 11 rate decreases in 2001, the Federal Reserve has now apparently shifted its bias to neutral. The markets are currently expecting the Fed to increase interest rates before year-end. Management believes that Colonial’s rate sensitivity is well positioned to respond to that eventuality without eroding our margins.

The effect of this and other economic activity is expected to cause the warehouse line volume to remain near its current level for the near term, with some seasonal variation. Other loan volumes are expected to grow but not as rapidly as in prior years. In recent months, pricing competition has been significant on both loans and deposits. These reasons are expected to minimize much further improvement in the Company’s margin, resulting in a net interest margin between 3.75% and 3.85% over the next few months.

Noninterest expenses remain under control with a 4-6% growth rate expected considering technology investments currently underway. These investments include improved automation of branch delivery systems, enhanced internet banking and wire transfer systems, an image processing system and continued product refinements, particularly with respect to the Premier account.

Analysts’ current estimates for Colonial 2002 earnings per share range from $1.17 to $1.23. Based on the above factors, the Company believes that range is reasonable.