COLONIAL BANCGROUP INC
8-K, 2001-01-17
STATE COMMERCIAL BANKS
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SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

Date of Report (Date of earliest event reported):    January 17, 2001

THE COLONIAL BANCGROUP, INC.
(Exact name of registrant as specified in its charter)

         
Delaware
(State of Incorporation)		 1-13508
(Commission File No.) 		63-0661573
(IRS Employer I.D. No.)
     
Colonial Financial Center, Suite 800
One Commerce Street, Montgomery, Alabama
(Address of Principal Executive Office)		 36104 
(Zip code)

Registrant’s telephone number, including area code: 334-240-5000

INDEX TO FILING

         
Press Release as issued on January 17, 2001 2
Financial Information 8
Additional and Forward Looking Information 16

Item 5. Other Events

[PRESS RELEASE AS ISSUED ON JANUARY 17, 2001]

     
For more information contact:
Lisa Free (334) 240-5105
Flake Oakley (334) 240-5061		 January 17, 2001

COLONIAL BANCGROUP ANNOUNCES
QUARTERLY EARNINGS

•   Operating income per share increased 8% for the quarter and 9% year-to-date from the prior year
 
•   Annualized internal loan growth was 14% for the quarter and 16% year-to-date
 
•   Noninterest income from operations increased 22% for the quarter and 18% year-to-date from the prior year
 
•   Asset quality remained outstanding with non-performing assets at .54% of loans & other real estate and annual net charge-offs at 0.21% of loans

      MONTGOMERY, AL — The Colonial BancGroup, Inc. Chairman and CEO, Robert E. Lowder announced today that for the quarter ended December 31, 2000 operating earnings were $28,579,000 or $.26 per diluted share versus $27,147,000 or $.24 per share

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for fourth quarter 1999, an 8% increase. Operating earnings for the year ended December 31, 2000 were $117,796,000 or $1.06 per share as compared to $109,665,000 or $.97 per share in 1999.

                                                                                       
Operating Earnings Summary Year Ended Dec. 31, Three Months Ended Dec. 31,
(Dollars in 000's, except per share amts.) % Change % Change
2000 1999(1) 1999 to 2000 2000 1999(1) 1999 to 2000
Operating Income:
Net interest income (taxable equivalent) $ 393,342 $ 375,591 5 % $ 97,906 $ 97,830 —
Provision for loan losses 29,680 28,707 3 % 7,858 9,239 -15 %
Noninterest income 75,299 63,920 18 % 18,701 15,372 22 %
Noninterest expense 249,982 233,539 7 % 62,915 60,060 5 %
Operating Income (net of income taxes) $ 117,796 $ 109,665 7 % $ 28,579 $ 27,147 5 %
Earnings per share:
Operating Income (net of income taxes)
Diluted $ 1.06 $ 0.97 9 % $ 0.26 $ 0.24 8 %
Selected Ratios:
Operating Income to:
Average assets 1.04 % 1.04 % 0.99 % 1.01 %
Average shareholders’ equity 16.58 % 16.29 % 15.42 % 15.59 %
Operating Ratios:
Efficiency ratio 53.34 % 53.14 % 53.95 % 53.06 %
Noninterest income (annualized) to average assets 0.66 % 0.60 % 0.65 % 0.57 %
Noninterest expense (annualized) to average assets 2.21 % 2.21 % 2.19 % 2.25 %
Net interest margin 3.74 % 3.97 % 3.62 % 4.00 %
Equity to assets 6.45 % 6.41 %
Tier one leverage 6.63 % 6.55 %

(1)   Operating Income for the year ended December 31, 1999 excludes $6,405,000 after taxes, from the gain on sale of certain branches and other one time miscellaneous income.
                         
Statement of Condition Summary % Change
(Dollars in 000's, except per share amts.) Dec. 31, Dec. 31, Dec. 31,
2000 1999 '99 to '00
Total assets $ 11,727,637 $ 10,854,099 8 %
Loans, net of unearned income 9,416,770 8,228,149 14 %
Total earning Assets 10,936,187 9,843,454 11 %
Deposits 8,143,017 7,967,978 2 %
Shareholders’ equity 756,852 695,179 9 %
Book value per share $ 6.86 $ 6.20 11 %

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Nonperforming Assets December 31, December 31,
2000 1999
Total non-performing assets ratio 0.54 % 0.55 %
Loan loss reserve ratio 1.14 % 1.17 %
Allowance as a percent of nonperforming loans 256 % 269 %
Net charge-offs ratio (annualized):
Quarter to date 0.20 % 0.25 %
Year to date 0.21 % 0.21 %

      Net interest income increased 5% for the year and less than 1% for the three months ended December 31, 2000, compared to the same period last year. This increase is primarily the result of 16% and 14% annualized internal loan growth for the year and quarter, respectively. The net interest margin remained relatively stable for the fourth quarter 2000 at 3.62% compared to 3.65% for the third quarter 2000. As with other banks, the Company’s net interest margin reflects a decline from the 4.00% in the fourth quarter of 1999.

      Noninterest income increased 22% for the quarter ended December 31, 2000 and 18% year-to-date compared to the same period last year. This increase is primarily from wealth management services income, electronic banking fees and merchant/cardholder fees. Noninterest expenses increased 5% for the quarter ended December 31, 2000 and 7% year-to-date as compared to the same periods last year.

      Asset quality remains excellent with non-performing assets at .54% of loans and other real estate owned compared to 0.55% at December 31, 1999. Annualized net charge-offs remained low at 0.20% of loans for the quarter. Year to date net charge-offs

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of 0.21% of loans were equal to the 0.21% experienced for 1999. Colonial continues to focus its efforts on relationship-based lending to known customers in its geographical market areas. Loan provisions for the current quarter were $7,858,000 compared to $9,239,000 in the fourth quarter 1999. These provisions exceeded net charge-offs by $3,304,000 in 2000 and $4,241,000 in 1999. For the full year 2000 provisions exceeded net charge-offs by $11,172,000.

      The Company’s Alabama markets have experienced 5% annualized loan growth and 5% deposit growth, while the Company’s higher growth markets have contributed 25% loan growth and 12% deposit growth during this year. Excluding one-to-four family residential loans, Colonial’s loan growth has been primarily in the company’s Florida, Georgia and Dallas markets at 26%, 32% and 26%, respectively.

      “I believe Colonial ended 2000 and is poised to begin 2001 with sound asset quality, stable and potentially improving net interest margins and solid if somewhat slower loan growth. These factors should allow Colonial to continue its growth in operating income even if the concern over a slow down of the national economy is realized,” said Mr. Lowder.

      In July 2000, the Company announced definitive plans to exit the mortgage banking business. As of December 31, 2000 all sales of servicing rights and transfers of underlying loans have been completed. The financial results for this line of business have been separately reported as discontinued operations in all periods presented. The following table reflects

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income from continuing operations and net income, which includes income or loss from discontinued operations as well as the estimated loss from disposal of this line of business:

                                                     
Earnings Summary Year Ended December 31, Three Months Ended December 31,
% Change % Change
2000 1999 1999 to 2000 1999 1999 to
2000 2000
(Dollars in 000's, except per share amounts)
Continuing Operations:
Net interest income (taxable equivalent) $ 393,342 $ 375,591 5 % $ 97,906 $ 97,830 —
Provision for loan losses 29,680 28,707 3 % 7,858 9,239 -15 %
Noninterest income 75,299 74,087 2 % 18,701 15,372 22 %
Noninterest expense 249,982 233,539 7 % 62,915 60,060 5 %
Income from continuing operations
(net of income taxes)		 117,796 116,070 1 % 28,579 27,147 5 %
Income(Loss) from discontinued operations and loss on disposal
(net of income taxes)		 (5,065 ) 3,527 (366 ) 3,603
Net income $ 112,731 $ 119,597 -6 % $ 28,213 $ 30,750 -8 %
Average shares outstanding 110,761 111,678 110,297 111,968
Average diluted shares outstanding 111,472 113,252 110,948 113,350
Earnings per share:
Income from continuing operations
(net of income taxes):
Basic $ 1.06 $ 1.04 2 % $ 0.26 $ 0.24 8 %
Diluted $ 1.06 $ 1.03 3 % $ 0.26 $ 0.24 7 %
Net Income
Basic $ 1.02 $ 1.07 -5 % $ 0.26 $ 0.27 -5 %
Diluted $ 1.01 $ 1.06 -5 % $ 0.25 $ 0.27 -7 %
Selected Ratios:
Income from continuing operations to:
Average assets 1.04 % 1.10 % 0.99 % 1.01 %
Average shareholders’ equity 16.58 % 17.24 % 15.42 % 15.59 %
Continuing Operations:
Efficiency ratio 53.34 % 51.93 % 53.95 % 53.06 %
Noninterest income (annualized) to average assets 0.66 % 0.70 % 0.65 % 0.57 %
Noninterest expense (annualized) to average assets 2.21 % 2.21 % 2.19 % 2.25 %

      Colonial BancGroup currently operates 237 offices in Alabama, Florida, Georgia, Tennessee, Texas and Nevada 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

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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 2001; (ii) unanticipated impairment of asset quality; (iii) slower than anticipated growth of mortgage warehouse lending; (iv) adverse changes in federal monetary policy; (v) adverse changes in economic conditions in regions where BancGroup's operations are concentrated; (vi) increases in competitive pressure in the banking industry; (vii) general economic conditions, either nationally or regionally, that are less favorable than expected; and (viii)  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.

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FINANCIAL INFORMATION

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THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)

                                     
Year Ended Three Months Ended
December 31, December 31,
2000 1999 2000 1999
Interest Income:
Interest and fees on loans $ 789,679 $ 649,147 $ 210,552 $ 173,217
Interest on investments 105,403 99,174 24,169 24,601
Other interest income 2,679 2,507 712 697
Total interest income 897,761 750,828 235,433 198,515
Interest Expense:
Interest on deposits 351,893 273,608 95,317 72,708
Interest on short-term borrowings 96,274 51,386 27,899 14,344
Interest on long-term debt 59,703 53,412 15,139 14,432
Total interest expense 507,870 378,406 138,355 101,484
Net Interest Income 389,891 372,422 97,078 97,031
Provision for possible loan losses 29,680 28,707 7,858 9,239
Net Interest Income After Provision for Possible Loan Losses 360,211 343,715 89,220 87,792
Noninterest Income:
Service charges on deposit accounts 38,019 38,490 9,468 9,830
Other charges, fees and commissions 10,885 8,434 2,960 1,836
Securities gains(losses), net 538 497 578 (2 )
Other income 25,857 26,666 5,695 3,708
Total noninterest income 75,299 74,087 18,701 15,372
Noninterest Expense:
Salaries and employee benefits 124,370 114,790 30,869 29,297
Occupancy expense of bank premises, net 30,756 28,194 8,277 7,331
Furniture and equipment expenses 28,824 25,633 7,303 6,884
Other expense 66,032 64,922 16,466 16,548
Total noninterest expense 249,982 233,539 62,915 60,060
Income from continuing operations before income taxes 185,528 184,263 45,006 43,104
Applicable income taxes 67,732 68,193 16,427 15,957
Income from continuing operations 117,796 116,070 28,579 27,147
Discontinued Operations:
Income/(Loss) from discontinued operations and loss on disposal, net of income taxes of $(3,066), $2,134, $(222),and $2,180 for the year ended December 31, 2000 and 1999 and for the three months ended December 31, 2000 and 1999 (5,065 ) 3,527 (366 ) 3,603
Net Income $ 112,731 $ 119,597 $ 28,213 $ 30,750
Earnings per share:
Income from continuing operations:
Basic $ 1.06 $ 1.04 $ 0.26 $ 0.24
Diluted $ 1.06 $ 1.03 $ 0.26 $ 0.24
Net Income
Basic $ 1.02 $ 1.07 $ 0.26 $ 0.27
Diluted $ 1.01 $ 1.06 $ 0.25 $ 0.27

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THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)
(Dollars in thousands, except per share amounts)

                     
December 31, December 31,
2000 1999
Assets:
Cash and due from banks $ 348,891 $ 338,433
Interest-bearing deposits in banks and federal funds sold 15,855 30,482
Securities held for trading — —
Securities available for sale 1,449,386 1,489,991
Investment securities 44,310 61,682
Mortgage loans held for sale 9,866 33,150
Loans, net of unearned income 9,416,770 8,228,149
Less:
Allowance for possible loan losses (107,165 ) (95,993 )
Loans, net 9,309,605 8,132,156
Premises and equipment, net 184,831 190,946
Excess of cost over tangible and identified intangible assets acquired, net 74,393 79,468
Mortgage servicing rights — 238,405
Other real estate owned 8,928 9,215
Accrued interest and other assets 281,572 250,171
Total $ 11,727,637 $ 10,854,099
Liabilities and Shareholders’ Equity:
Deposits $ 8,143,017 $ 7,967,978
FHLB short-term borrowings 425,000 490,000
Other short-term borrowings 1,433,328 703,429
Subordinated debt 111,900 112,048
Trust preferred securities 70,000 70,000
FHLB long-term debt 547,022 572,549
Other long-term debt 132,325 134,974
Other liabilities 108,193 107,942
Total liabilities 10,970,785 10,158,920
 
Shareholders’ equity:
Preferred Stock $2.50 par value; 1,000,000 shares authorized, none issued — —
Common Stock, $2.50 par value; 200,000,000 shares authorized 113,081,198 and 112,106,663 shares issued at December 31, 2000 and December 31, 1999, respectively 282,703 280,267
Treasury shares (2,773,782 at December 31, 2000) (26,467 ) —
Additional paid in capital 118,600 118,728
Retained earnings 390,442 326,578
Unearned compensation (2,541 ) (1,622 )
Accumulated other comprehensive income (loss), net of taxes (5,885 ) (28,772 )
Total shareholders’ equity 756,852 695,179
Total $ 11,727,637 $ 10,854,099

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THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES
AVERAGE VOLUME AND RATES
(Unaudited)
(Dollars in thousands)

                                                                             
Three Months Ended
December 31, September 30, December 31,
2000 2000 1999
Average Average Average
Volume Interest Rate Volume Interest Rate Volume Interest Rate
Assets
Loans, net $ 9,234,077 $ 210,601 9.08 % $ 8,953,208 $ 202,640 9.01 % $ 8,039,047 $ 173,383 8.57 %
Mortgage loans held for sale 8,631 162 7.51 % 7,820 169 8.64 % 97,242 2,005 8.25 %
Investment securities and securities available for sale and other interest-earning assets 1,541,202 25,491 6.61 % 1,674,933 28,591 6.80 % 1,588,105 25,888 6.46 %
Total interest-earning assets(1) 10,783,910 $ 236,254 8.73 % 10,635,961 $ 231,400 8.67 % 9,724,394 $ 201,276 8.23 %
Nonearning assets 721,802 812,206 975,127
Total assets $ 11,505,712 $ 11,448,167 $ 10,699,521
Liabilities and Shareholders’ Equity:
Interest-bearing deposits $ 6,892,178 $ 95,317 5.50 % $ 6,866,967 $ 92,718 5.37 % $ 6,400,901 $ 72,708 4.51 %
Short-term borrowings 1,683,782 27,899 6.59 % 1,626,957 26,870 6.57 % 1,131,250 15,416 5.41 %
Long-term debt 945,698 15,305 6.44 % 895,477 14,630 6.50 % 995,811 15,683 6.25 %
Total interest-bearing liabilities 9,521,658 $ 138,521 5.79 % 9,389,401 $ 134,218 5.69 % 8,527,962 $ 103,807 4.83 %
Noninterest-bearing demand deposits 1,147,415 1,250,118 1,375,522
Other liabilities 99,532 95,156 105,099
Total liabilities 10,768,605 10,734,675 10,008,583
Shareholders’ equity 737,107 713,492 690,938
Total liabilities and shareholders’ equity $ 11,505,712 $ 11,448,167 $ 10,699,521
Rate differential 2.94 % 2.98 % 3.40 %
Net yield on interest-earning assets $ 97,733 3.62 % $ 97,182 3.65 % $ 97,469 4.00 %

(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.

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THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES
AVERAGE VOLUME AND RATES
(Unaudited)
(Dollars in thousands)

                                                             
Year Ended December 31,
2000 1999
Average Average
Volume Interest Rate Volume Interest Rate
Assets
Loans, net of unearned income $ 8,828,899 $ 789,621 8.94 % $ 7,617,585 $ 650,017 8.53 %
Mortgage loans held for sale 14,711 1,168 7.94 % 341,692 25,229 7.38 %
Investment securities and securities available
for sale and other interest-earning assets		 1,640,468 110,670 6.80 % 1,649,875 103,857 6.29 %
Total interest-earning assets(1) 10,484,078 $ 901,459 8.60 % 9,609,152 $ 779,103 8.11 %
Nonearning assets 850,877 981,045
Total assets $ 11,334,955 $ 10,590,197
Liabilities and Shareholders’ Equity:
Interest-bearing deposits $ 6,790,024 $ 351,893 5.18 % $ 6,191,699 $ 273,608 4.42 %
Short-term borrowings 1,521,095 96,274 6.33 % 1,306,060 66,756 5.11 %
Long-term debt 946,630 60,671 6.32 % 937,243 57,626 6.15 %
Total interest-bearing liabilities 9,257,749 $ 508,838 5.50 % 8,435,002 $ 397,990 4.72 %
Noninterest-bearing demand deposits 1,263,114 1,390,240
Other liabilities 103,799 91,700
Total liabilities 10,624,662 9,916,942
Shareholders’ equity 710,293 673,255
Total liabilities and shareholders’ equity $ 11,334,955 $ 10,590,197
Rate differential 3.10 % 3.39 %
Net yield on interest-earning assets $ 392,621 3.74 % $ 381,113 3.97 %

(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.

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THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES
NONPERFORMING ASSETS (Unaudited)
(Dollars in thousands)

                       
December 31, December 31,
2000 1999
Nonaccrual loans $ 40,624 $ 34,461
Restructured loans 1,161 1,265
Total nonperforming loans 41,785 35,726
Other real estate owned and in substance foreclosures 8,928 9,215
Total nonperforming assets $ 50,713 $ 44,941
Aggregate loans contractually past due 90 days for which interest is being accrued $ 9,841 $ 11,184
Net charge-offs (recoveries):
Quarter to date $ 4,554 $ 4,998
Year to date 18,508 16,276
 
RATIOS
 
Period end:
Total nonperforming assets as a percent of net loans and other real estate 0.54 % 0.55 %
Allowance as a percent of net loans 1.14 % 1.17 %
Allowance as a percent of nonperforming assets 211 % 214 %
Allowance as a percent of nonperforming loans 256 % 269 %
Net charge-offs as a percent of average net loans (annualized basis):
Quarter to date 0.20 % 0.25 %
Year to date 0.21 % 0.21 %

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8-K Supplemental

Net Interest Margins

Net interest margins were relatively stable at 3.62% for the fourth quarter compared to 3.65% for the third quarter. Annualized loan growth of 14% between the two periods more than offset this decline and resulted in an increase of $551,000 or 1.0% growth in net interest income.

The Federal Reserve reduced the Federal funds rate 50 basis points in early January. The Company expects that this rate reduction and perhaps others to follow will have a modest (less than 10 basis points) favorable long-term impact on the Company's net interest margin.

Loan Growth

Loan growth was strong in the fourth quarter at a 14% annualized internal loan growth rate. This growth has been primarily in the Company’s Florida and Georgia markets at an annualized rate of 24%, and 17%, respectively. In addition, the Company’s mortgage warehouse lending unit ended 2000 with $376,995,000 in loans outstanding, an increase of $204,386,000 or 118% over the beginning of the year and a 27% increase over the quarter ended September 30, 2000. This unit provides short-term funding to mortgage origination companies for single-family residential mortgages, which are being sold into secondary markets. The volumes for Colonial’s warehouse lending unit are likely to increase with declining interest rates and are typically seasonal with higher volumes from April through December and lowest volumes in the first quarter of the year.

Shared National Credits

Colonial has fourteen credits with commitments (funded and unfunded) of $193 million that fall within our regulator’s definition of a “Shared National Credit” (generally defined as a total loan commitment in excess of $20 million that is shared by three or more lenders). Our largest outstanding amount to any single borrower is under $30 million with the smallest credit being

14

approximately $190,000.

Although by definition these are considered Shared National Credits, Colonial loan officers have established long-term relationships with each of these borrowers. These commitments are comprised of the following:

•   51% - commercial real estate projects located within our existing markets
 
•   16% - international credits which are comprised of unfunded short-term commitments to tier one correspondent banks
 
•   18% - mortgage warehouse lines to two large institutions (our mortgage warehouse department conducts its own audits of these borrowers)
 
•   15% - operating facilities to two large national corporations headquartered in our Florida markets

Colonial participates heavily in the management of each of the 14 relationships. Management believes that these are sound participations involving credits that fit within Colonial's lending philosophy and meet it's conservative underwriting guidelines. Furthermore, none of these credits were adversely classified in the last federal bank regulatory examination of “Shared National Credits” and these loans are currently in full compliance with all terms and agreements.

Discontinued Operations

As noted in prior quarters, in July 2000 the Company decided to exit the mortgage servicing business and discontinue the operations of Colonial Mortgage as a separate operating unit. As of December 31, 2000, all loan transfers were completed and the mortgage servicing rights have been removed from the Company’s balance sheet. In addition, the escrow and custodial deposits related to those servicing rights have been transferred out of Colonial Bank resulting in a $207 million reduction in average noninterest deposit accounts from third quarter 2000 to fourth quarter 2000. At December 31, 2000 the balance sheet of the Company includes approximately $19 million in receivables and other advances related to the various transfers of servicing. These receivable and advance balances represent the expected recoverable amounts once all documentation supporting the transferred loans is provided to the new servicer.

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The anticipated costs of providing the necessary documents have been accrued. However, due to the volume of loans transferred and the costs and complexity in providing certain documentation, the amounts recovered or costs incurred may vary from the Company’s current estimate.

Future Earnings Outlook

The January 3, 2001 reduction in the federal funds rate of 50 basis points by the Federal Reserve should have a modest benefit over the course of 2001 in the net interest margin. However, the size and timing of the reduction and the current expectation of further rate cuts may indicate greater softening of the national economy than previously perceived. Therefore, the benefit of lower rates may be somewhat offset by a potential increase in credit issues resulting from the softening economy.

The Company continues to expect the pace of loan growth to slow somewhat in 2001 to a 10% to 12% growth rate in several of the Company’s banking markets. The Company’s growth rate however may be higher due to previously discussed anticipated growth in mortgage warehouse lending.

As of December 31, credit quality remained good – however, the national economic slowdown provides some concern over the potential for increased credit losses. Currently the economic conditions in the Company’s growth markets remains strong with only slight softness occurring.

The net impact of anticipated lower rates, slower loan demand and maintenance of strong loan loss reserves currently result in earnings per share expectations to remain in the $1.10 to $1.18 range for 2001.

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SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

     
THE COLONIAL BANCGROUP, INC.
(Registrant)
 
 
 
Date: January 17, 2001 /s/ W. Flake Oakley, IV
BY: W. Flake Oakley
ITS: Chief Financial Officer

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