Colonial BancGroup and 4 other banks closed; total bank failures this year rise to 77!


With bank regulators closing US' third-largest state-chartered bank, the Montgomery, Alabama-based Colonial BancGroup Inc, and four other banks, in Arizona, Nevada and Pennsylvania, the total number of federally-insured banks to have failed thus far this year has risen to a monstrous 77!

Other than Colonial - the largest bank to fail this year, with $20 billion deposits and $25 billion assets -, the other banks that have been shuttered include: Phoenix-based Community Bank of Arizona; Gilbert, Arizona-based Union Bank; Las Vegas-based Community Bank of Nevada; Pittsburg-based Dwelling House Savings and Loan Association.

The Federal Deposit Insurance Corp. (FDIC) has been appointed receiver of the recently-closed banks.

However, with the FDIC having approved the sale of Colonial's deposits and assets to the Winston-Salem, N. C.-based BB&T Corp., its 346 branches in Alabama, Florida, Georgia, Nevada and Texas will, Saturday morning onwards, reopen as offices of BB&T.

About the other failed banks, FDIC specified that part of deposits and assets of Community Bank of Arizona and Union Bank will be assumed by Oklahama City-based MidFirst Bank; and part of Dwelling House's deposits and assets will be assumed by Pittsburgh-based PNC Financial Services Group - with the remaining deposits and assets to be retained by FDIC for eventual sale.

For Community Bank of Nevada, FDIC has established a temporary government bank, giving depositors nearly 30 days to open accounts at other financial institutions.