UPDATE 1-Colonial BancGroup posts Q1 loss

* Q1 loss $0.86 vs. EPS $0.16 last year

* Provision for loan losses $257 mln vs. $35.5 mln last year

* Says not in compliance with Tier I Leverage ratio May 4 (Reuters) - Colonial BancGroup Inc (CNB.N) fell to a quarterly loss as it set aside more money for loan losses and said it is not in compliance with certain regulatory requirements.

The bank had entered into an informal memorandum of understanding (MoU) with regulators late last year to boost its capital ratios by March 31.

As of March 31, Colonial BancGroup's estimated Tier 1 Leverage Ratio was 5.02 percent and its estimated Total Risk-Based Capital Ratio stood at 11.56 percent.

For the first quarter, the company reported a net loss of $168.4 million, or 86 cents per share. In the same quarter last year, the company posted net income of $30.1 million, or 16 cents per share.

Excluding net goodwill impairment charges, the operating loss was $142 million, or 74 cents per share, for the latest quarter.

Analysts, on average, were expecting the company to post a loss before items of 56 cents, according to Reuters Estimates.

For the quarter ended March 31, the provision for loan losses was $257.2 million. In the same quarter last year, the company set aside $35.5 million for loan losses.