BBT Buys Colonial in FDIC Assisted Deal

Colonial becomes biggest bank failure of 2009 - MarketWatch

This year, 74 banks have failed ... as a lingering recession and surging unemployment leaves the industry nursing heavy loan losses. More than 1,000 banks may fail during the next three to five years, RBC Capital Markets estimated in February....


The FDIC estimated Friday that the Colonial deal will cost its Deposit Insurance Fund about $2.8 billion. The regulator recently imposed a one-time assessment on banks to top the fund up. However, the surge in bank failures has increased concern about the fund, despite the fact that the FDIC can borrow hundreds of billions of dollars from the Treasury Department if it needs to.

BB&T, with more than $150 billion in assets, is seen by some analysts as a beneficiary of bank failures. Many closures have happened in the Southeast of the U.S., where BB&T is a dominant player.

BBT's stock jumped 9.4%