Colonial Bank taken over, including Las Vegas branches

By Las Vegas Sun Staff (contact)

Published Friday, Aug. 14, 2009 | 3:59 p.m.

Updated Friday, Aug. 14, 2009 | 6:05 p.m.

Colonial Bank, which has several branches in the Las Vegas area, has been closed by the Alabama State Banking Department and the Federal Deposit Insurance Corp. has taken over as receiver.

The FDIC said that to protect the depositors, the FDIC entered into a purchase and assumption agreement with Branch Banking and Trust (BB&T), Winston-Salem, N.C., to assume all of the deposits of Alabama-based Colonial Bank.

Colonial Bank's 346 branches in Alabama, Florida, Georgia, Nevada and Texas will reopen under normal business hours beginning Saturday and operate as branches of BB&T, the FDIC said.

It hasn't been determined whether an investment group will be able to continue with a plan to buy the 22 Nevada branches from Colonial. BB&T said Friday it will make a decision on those branches at a later date.

Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-405-8739. The phone number will be operational this evening until 7 p.m. Vegas time; on Saturday from 7:00 a.m. to 4:00 p.m.; on Sunday from 10 a.m. to 4 p.m.; and thereafter from 6:00 a.m. to 6:00 p.m.. Interested parties can also visit the FDIC's Web site.

As of 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 said the acquisition, BB&T's largest in its 137-year history, creates the nation's eighth largest financial holding company by deposits.

"Today's announcement represents an exciting growth opportunity for BB&T," said BB&T Chief Executive Officer Kelly King. "We're gaining solid market shares in great markets in Alabama, Florida and Georgia. And it comes with minimal asset risk to BB&T because of our loss sharing agreement with the FDIC."

Excluded from the deal are assets and liabilities the FDIC determines are related to fraudulent or criminal activities. BB&T is indemnified by the FDIC for any liabilities not expressly assumed in the transaction, including those related to fraudulent, criminal or inappropriate activities of Colonial, BB&T said.

Colonial last week said the U.S. Department of Justice is investigating its mortgage origination business, as well as related possible accounting irregularities.