Colonial Bank Failure | Colonial Bancgroup | Colonial Bank Collapse | BB&T Corp | Colonial Bank goes Down
Colonial Bank Failure | Colonial Bancgroup | Colonial Bank Collapse | BB&T Corp | Colonial Bank goes Down
San Francisco – Colonial BancGroup Inc. became the largest bank failure this year Friday after the Federal Deposit Insurance Corporation seized the struggling Alabama-based lender and sold it to BB&T Corp. This failure is considered to be the sixth-largest bank failure in U.S. history.
BB&T will purchase about $22 billion of Colonial’s total assets of $25 billion. The FDIC said it will hold on to the rest – about $3 billion worth – and will try to sell them later.
The FDIC and BB&T also entered into a $15 billion loss-share agreement, which significantly limits the risk for BB&T when it comes to bad loans. Under such an agreement, the FDIC shares losses on loans that an acquirer deems too risky.
The acquisition of Colonial, BB&T’s largest in its 137-year history, creates the nation’s eight-largest financial holding company by deposits. It also moves BB&T to the No. 4 market share in Alabama.
Colonial Bank is the 74th FDIC-insured institution to fail in the nation this year, and the first in Alabama.
More than 1,000 banks may fail during the next three to five years, RBC Capital Markets estimated in February.
Source Courtesy From - DPA - ANI - earthtimes.org -
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