Colonial Bank, formerly a subsidiary of Colonial Bancgroup Inc., was headquartered in Montgomery, Alabama. Colonial Bank had 346 branches in the states of Alabama, Georgia, Florida, Nevada and Texas. Colonial's assets had grown from $166 million in 1981 to $26 billion. This growth can be attributed to Colonial's focus on establishing a strong presence in diverse and growing markets. Colonial expanded from its base of Alabama to fast growing regional markets such as Florida, Georgia, Texas, and Nevada. Colonial Bank was the fifth largest commercial bank in Florida and 27th largest commercial bank in the USA. Colonial Bank was frequently the target of rumors that it would be acquired by a larger bank.
The bank ran into problems after it was revealed that it had bought $1 billion in mortgages from Taylor, Bean & Whitaker that Taylor Bean did not own in one of the biggest fraud cases in history. The CEO of Taylor, Bean & Whitaker, Lee Farkas, was put on trial and found guilty of fraud. Bobby Lowder, the CEO of Colonial Bank, was investigated and was not involved with the fraud.
Colonial disclosed its legal problems on Aug. 4, 2009, stating that federal agents had executed a search warrant at its mortgage warehouse lending offices in Orlando, Florida, and that it had been forced to sign a cease and desist order with the Federal Reserve and regulators at the end of last month in relation to its accounting practices and its recognition of losses.
On August 14, 2009, the bank failed and its 346 branches were seized by regulators. $22 billion of the bank's deposits were subsequently sold by the FDIC to BB&T Corp. The bank's failure was the largest bank failure in 2009 and the 6th largest bank ever to fail in the United States, costing the FDIC's Deposit Insurance Fund an estimated $2.8 billion. It was also the 74th bank failure of 2009.
Famous quotes containing the words colonial and/or bank:
“The North will at least preserve your flesh for you; Northerners are pale for good and all. There’s very little difference between a dead Swede and a young man who’s had a bad night. But the Colonial is full of maggots the day after he gets off the boat.”
—Louis-Ferdinand Céline (1894–1961)
“Life is a long Dardenelles, My Dear Madam, the shores whereof are bright with flowers, which we want to pluck, but the bank is too high; & so we float on & on, hoping to come to a landing-place at last—but swoop! we launch into the great sea! Yet the geographers say, even then we must not despair, because across the great sea, however desolate & vacant it may look, lie all Persia & the delicious lands roundabout Damascus.”
—Herman Melville (1819–1891)