Colonial BancGroup Inc., the Alabama lender facing a criminal probe, had its banking operations closed by regulators and taken over by BB&T Corp. in the biggest failure since Washington Mutual Inc. collapsed last year. Regulators also shut two companies in Arizona, one in Las Vegas and one in Pittsburgh on Friday, pushing the tally of failed banks this year to 77. Branches and deposits of Colonial Bank, ranked second in its home state, were turned over to BB&T in a deal brokered by the Federal Deposit Insurance Corp., the regulator said in a statement. The failure of Montgomery-based Colonial followed a Florida expansion that left the company with more than US$1.7B in soured real-estate loans. Regulators are closing banks at the fastest pace in 17 years. The Sept. 25 seizure of Seattle-based Washington Mutual was the biggest bank failure in U.S. history; its branches and assets were sold to JPMorgan Chase & Co. Colonial is the 6th biggest. BB&T will not assume any assets or liabilities “related to fraudulent, criminal or inappropriate activities of Colonial. BB&T also will not take assets or liabilities related to Taylor Bean and Whitaker Mortgage Corp., the Florida-based lender that stopped making loans this month after being suspended by US agencies and Freddie Mac. Colonial provided financing for Taylor Bean and dozens of smaller mortgage firms.
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