BB&T ACQUIRES ALABAMA FINANCIAL INSTITUTION
WINSTON SALEM, N.C. — Winston Salem-based BB&T Corp. has purchased the banking operations of Montgomery, Ala.-based Colonial Bank and will convert the institution’s 354 branches in Alabama, Georgia, Florida and two other states to the BB&T brand. At the time of purchase, Colonial Bank carried $25 billion in assets and $20 billion in deposits. The bank also had plans to sell 44 branches in Texas and Nevada; BB&T has not made a decision on retaining those properties.
The acquisition was put into motion when the Alabama State Banking Department closed Colonial Bank and appointed the FDIC the institution’s receiver. BB&T will assume the deposits and $22 billion of the assets, with the Federal Deposit Insurance Corp. planning to dispose of the remainder at a later date. A loss-sharing agreement between BB&T and the FDIC will cover all loans and securities acquired in the transaction. BB&T also worked with the FDIC in the December purchase of Duluth, Ga.-based Haven Trust Bank.
The purchase of Colonial’s holdings is the largest transaction in BB&T’s history and will make the bank the fourth biggest in Alabama and the fifth biggest in Florida. “We’re gaining solid market shares in great markets,” BB&T CEO Kelly King says in a statement. “And it comes with minimal asset risk because of our loss-sharing agreement with the FDIC.”
A seamless transition, with no disruption to customers of either company, is expected. “As far as clients are concerned, it’s simply a combination of two banks,” King says.
Credit Suisse Securities, Deutsche Bank Securities and the law firm Wachtell, Lipton, Rosen & Katz advised BB&T in the acquisition. According to the FDIC, Colonial Bank is the first Alabama-based financial institution and the 74th nationwide to fail this year.
— Jon Ross