Colonial BancGroup became subject to the fifth-largest takeover of a U.S. bank, and the year's largest bank failure Friday, Aug. 14. It was seized by the Federal Deposit Insurance Corporation and sold to BB&T Corp.
Auburn trustee Robert E. Lowder was Colonial's CEO until his retirement in May 2009.
As of June, Colonial had $25 billion in assets, topping the year's second-largest failure of Florida-based BankUnited Financial, which had over $12 billion in assets.
Friday's seizures of Colonial and Pennsylvania-based Dwelling House Savings and Loan Association bring the tally of banks seized by the FDIC this year up to 69.
While BB&T has agreed to buy almost all of Colonial's assets, the FDIC has said it will hold on to about $3 billion worth to try to sell later, according to marketwatch.com.
This money may eventually go toward paying back the roughly $2.8 billion that was depleted from the FDIC's Deposit Insurance Fund during the takeover. The DIF is used to guarantee bank customer deposits in case of bank failure, and insures them up to $250,000.
Colonial BancGroup is not alone in its dissolution. Seventy-four banks have failed this year, and RBC Capital Markets has projected as many as 1,000 more banks may fail during the next three to five years, says marketwatch.com.
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