BBampT To Take Over Colonial Bank 2009: Brian Bandell

BBampT to take over Colonial Bank

Brian Bandell Colonial Bank was seized by the Alabama State Banking Department Friday afternoon and its deposits and branches were given to BB&T Corp.
through the Federal Deposit Insurance Corp. The failure of the $25 billion-asset bank from Montgomery, Ala. is the largest financial institution to collapse this year. The FDIC estimated that it would cost its insurance fund $2.8 billion. Thats less than the $4.9 billion projected cost of Coral Gables-based BankUnited FSB, which failed in May with $12.8 billion in assets. Losses from today’s failures are lower than had been projected, FDIC Chairman Sheila C. Bair stated in a press release. I commend our staff for their excellent work in assuring once again a smooth transition for bank customers with these resolutions. BB&T will assume $22 billion of Colonial Banks $25 billion in assets. A loss-sharing agreement with the FDIC covers about $15 billion of those acquired assets. Word of the takeover leaked out early in the day and shares of BB&T (NYSE: BBT) rose $2.43 to $28.23. All Colonial Bank deposits are available to customers through offices and checking accounts. BB&T will integrate its branches into the 346 branches of Colonial Bank, which operates in Alabama, Florida, Georgia, Nevada and Texas. No deposits were lost in the transaction.
The failure of any bank is regrettable but with close coordination and communication by state bank regulators and the FDIC we have achieved a successful outcome to what could have been a tumultuous event, stated Linda Charity, acting commissioner of the Florida Office of Financial Regulation, in a press release. Bottom line is Florida depositor funds are safe and it will be business as usual for all Colonial Bank depositors on Monday because of a strong and effective state bank regulatory system.

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