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FDIC Seizes Colonial BancGroup

MONTGOMERY, AL-The state's second-largest bank formally becomes part of BB&T.

By Carl Cronan | Updated on August 14, 2009

MONTGOMERY, AL-Locally based Colonial BancGroup Inc. has formally been acquired by Winston-Salem, NC-based BB&T Corp. after the Federal Deposit Insurance Corp. seized Colonial on Friday. The second-biggest bank based in Alabama was declared a failure after a series of events that cast doubts on its ability to stay in business.

BB&T took over all 346 Colonial branches Saturday, along with $22 billion in assets and $20 billion in deposits, while the FDIC retained $3 billion in Colonial assets. The transaction advances BB&T efforts to expand within the Southeast.

“We’re gaining solid market shares in great markets in Alabama, Florida and Georgia,” Kelly King, BB&T chief executive, said in a prepared statement. “And it comes at minimal asset risk to BB&T because of our loss sharing agreement with the FDIC.”

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