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Colonial BancGroup shut down

August 15, 2009|Times Wire Reports

Regulators have shut down Colonial BancGroup Inc., a big lender in real estate development that buckled under the collapse of the market.

It is the biggest U.S. bank to fail this year, with about $25 billion in assets.

The Federal Deposit Insurance Corp. was appointed receiver of Montgomery, Ala.-based Colonial.

The agency approved the sale of Colonial's $20 billion in deposits and about $22 billion of its assets to BB&T Corp.

The failed bank has 346 branches in Alabama, Florida, Georgia, Nevada and Texas.

The failure of Colonial is expected to cost the deposit insurance fund an estimated $2.8 billion.

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