Economy Today : Colonial Bank will be bought by BB&T

CNN reports: Colonial Bank is on the "brink of collapse", a federal judge said, ruling in favor of Bank of America in a suit seeking to bar Colonial from liquidating or transferring $1 billion in assets. Colonial Bank is owned by Montgomery, Ala.-based parent Colonial BancGroup.

Through an agreement with the FDIC, Colonial Bank will be acquired by BB&T Bank. Previously, a federal judge said Colonial Bank was on the brink of collapse.

Trouble has been brewing recently for Colonial. Its mortgage lending division has been the focus of a federal investigation and last month, it released a statement suggesting the bank wouldn't be able to last much longer.

Colonial Bank has 355 branches in five states-- Alabama, Florida, Georgia, Nevada and Texas.

Here are more updates: BB&T buys Colonial bank; 4 other banks fail

Troubled Colonial BancGroup will be bought by rival BB&T Friday, the government said after state regulators closed the bank whose assets had been frozen by a federal judge.

The Montgomery, Ala., bank, which has 346 branches spread across Florida, Alabama, Georgia, Nevada, and Texas, is the sixth largest bank failure in U.S. history and by far the largest failure of 2009.

With $25 billion in assets and $20 billion in deposits, Colonial is 100 times larger than the typical bank to have failed this year.

BB&T (BBT, Fortune 500) will buy $22 billion of Colonial's assets, as well as its deposits and branches, leaving the remaining assets in the hands of the Federal Deposit Insurance Corp.

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