In its fifth-largest bank failures in the US history, Colonial BancGroup Inc., Montgomery, Alabama, was seized by regulators on Friday.
Branch Banking and Trust (BB&T), Winston-Salem, North Carolina, will assume all of the Deposits of Colonial Bank.
Four other banks also went under on Friday, the largest of which was Las Vegas-based Community Bank of Nevada, which had total assets of $1.5 billion. The others were two smaller institutions in Arizona and one in Pittsburgh.
That brought the total number of bank failures for the year to 77.
The Federal Deposit Insurance Corporation (FDIC) estimates that the failure of Colonial bank will cost the Deposit Insurance Fund DIF $2.8 billion.
As on June 30, 2009, Colonial Bank had total assets of $25 billion and total deposits of approximately $20 billion. BB&T will purchase approximately $22 billion in assets of Colonial Bank. The FDIC will retain the remaining assets for later disposition.
BB&T will gain 90 of Colonial's branches across Alabama. The company will also pick up 204 branches in Florida. Colonial also had branches in Texas and Nevada.
The FDIC and BB&T entered into a loss-share transaction on approximately $15 billion of Colonial Bank's assets. BB&T will share in the losses on the asset pools covered under the loss-share agreement.