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                                                                    EXHIBIT 10.5


                                  July 21, 1999


Mr. W. Flake Oakley
Executive Vice President
Colonial BancGroup, Inc.
One Commerce Street
Montgomery, AL 36104

Dear Flake:

         On behalf of SunTrust Bank, Atlanta, I am pleased to commit to a
$25,000,000 Revolving Credit facility for Colonial BancGroup, Inc. The terms and
conditions are outlined below:


BORROWER:         COLONIAL BANCGROUP, INC. ("Borrower")


BANK:             SUNTRUST BANK, ATLANTA ("Bank")


PROPOSED
COMMITMENT:       $25,000,000


FACILITY:         Revolving Credit


COLLATERAL:       Borrower will provide Bank with 100% of the Subsidiary Bank
                  Stock of Colonial Bank, Montgomery, AL

REPAYMENT:        Interest on the facility is to be paid quarterly throughout
                  the life of the loan with all principal due at maturity.

MATURITY:         July 31, 2000


INTEREST RATE:    30, 60, 90, or 120 day LIBOR + 0.85%



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FINANCIAL COVENANTS:

1.       The Borrower will maintain, and cause each of its banking subsidiaries
         to maintain, the minimum levels of regulatory capital necessary to
         maintain the regulatory capital classification of "Well Capitalized".

2.       The Borrower's consolidated net income from operations after taxes,
         less shareholder dividends, divided by interest on all holding company
         debt (including Trust Preferred Issues and Holding Company subordinated
         debt) and principal repayments on subject credit facility assuming a
         straight three year full amortization, shall not be less than 1.40x.

3.       The Borrower shall maintain a minimum consolidated Tangible Equity of
         at least $550,000,000. This figure shall include mortgage servicing
         rights.

4.       The Borrower shall maintain a minimum Consolidated Tier I Leverage
         Ratio of 6.00%.

5.       The Borrower shall maintain at all times on a consolidated basis a
         ratio of (1) the sum of (a) non-accrual loans and (b) restructured
         loans and (c) accruing loans more than 90 days past due and (d) other
         real estate owned to (2) the sum of (x) all loans and (y) other real
         estate owned, of no more than 1.25%.

6.       The Borrower shall maintain at all times on a consolidated basis a
         ratio of (1) allowance for possible loan losses to (2) the sum of (a)
         non-accrual loans and (b) restructured loans and (c) accruing loans
         more than 90 days past due, of no less than 150%.

7.       All covenants will be tested quarterly. Within 45 days after each
         calendar quarter, the Borrower will send to the Bank a letter prepared
         by its Chief Financial Officer stating that (1) the Borrower and its
         banking subsidiaries are in compliance with all terms, conditions, and
         covenants of the Agreement and the Note or specify the extent to which
         they are not in compliance and (2) listing the appropriate financial
         numbers or ratios of the Borrower or its banking subsidiaries as called
         for in the Agreement.

REPORTING REQUIREMENTS:

1.       The borrower will furnish to the Bank an annual consolidated financial
         statement, including both balance sheet and income statement of the
         Borrower; these statements will be prepared by and independent
         certified public accountant and will be accompanied by an opinion
         letter.

2.       The Borrower will furnish to the Bank a quarterly 10-Q report as well
         as a quarterly call report on all subsidiary banks.

3.       The Borrower will furnish to the Bank such information, financial or
         otherwise, regarding the condition of or operations of the Borrower or
         its banking subsidiaries, as the Bank may

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         reasonably request. This will include quarterly reports detailing the
         Borrower's 25 largest loan commitments, 25 largest non-accrual loans
         and classified assets.

REPRESENTATIONS AND WARRANTIES:

         Representations and warranties of Borrower and Subsidiaries which are
customary for the Bank and which are typical of this type of transaction.

OTHER CONDITIONS:

1.       Neither the Borrower nor any of its subsidiaries will incur, assume or
         suffer to exist, any lien upon any of its properties, now owned or here
         after acquired, expect as those incurred in the normal course of
         business. Nor will the Borrower give to any other lender a negative
         pledge on borrower's or subsidiaries' properties.

2.       The Borrower will not wind up, liquidate, or dissolve itself,
         reorganize, merge, or consolidate with or into, or convey, sell,
         assign, transfer, lease, or otherwise dispose of (whether in one
         transaction or a series of transactions) all or substantially all of
         its assets (whether now owned or here after acquired) to any entity,
         except that the Bank, in its sole discretion, may consent in writing to
         additional exceptions. This condition shall not pertain to the sale of
         a portion of Colonial Mortgage Company's assets.

3.       The Borrower will not create or assume any liability in excess of
         $20,000,000 for borrowed money with the following exceptions:

                  a)   The subject credit facility;

                  b)   Borrowings from the Federal Home Loan Bank in the
                       usual course of business;

                  c)   Any debt subordinated to this credit facility;

                  d)   Any debt related to the sale of commercial paper or
                       similar short term borrowings that arise in the
                       normal course of business; and

                  e)   Any Bank Note or Deposit Note program of any
                       subsidiary of the Borrower.

4.       Neither the Borrower nor any of its subsidiaries shall pay or declare
         any dividend on any of its stock, after the date hereof, make any other
         distribution in respect of its capital stock, or purchase or deem or
         otherwise acquire any shares of its outstanding capital stock unless
         such action has been approved as required by the necessary regulatory
         authorities, if such approval is required, and will not impair the
         Borrower's ability to perform its obligation hereunder, or otherwise
         result in any breach of this Agreement.


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THIS DOCUMENT IS FOR THE BENEFIT OF THE BORROWER ONLY AND SHOULD NOT BE RELIED
UPON OR SHARED WITH THIRD PARTIES.

         We certainly appreciate the opportunity to provide financing and look
forward to continuing our long relationship with Colonial BancGroup. If the
terms and conditions outlined in this document are acceptable, please signify
your agreement by signing below and returning the original to us.


                                      Sincerely,

                                      /s/ Chris L. Thomas
                                      ---------------------------------------
                                      Chris L. Thomas
                                      Corporate Banking Officer
                                      Financial Institutions



THE ABOVE TERMS AND CONDITIONS
Are hereby acknowledged, accepted and agreed
to this 22nd Day of July, 1999.


                                      COLONIAL BANCGROUP, INC.


                                      BY:  /s/ W. Flake Oakley
                                         ------------------------------------
                                           W. FLAKE OAKLEY
                                           EXECUTIVE VICE PRESIDENT/CFO



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