Regulators seize Colonial BancGroup
Alabama-based Colonial BancGroup, which has 22 branches and $850 million in deposits in Nevada, was seized Friday by regulators and its deposits taken over by BB&T, a giant Southeast bank.
Rumors of the takeover already were raising concerns that the seizure could derail the acquisition of Colonial Bank's operations in Nevada.
Global Consumer Acquisition Corp., a New York company led by former casino analyst Jason Ader, last month announced plans to buy Colonial's Nevada deposits and some of its assets. Global said it would also acquire 1st Commerce Bank of North Las Vegas. Global plans to merge the two banks under the 1st Commerce charter and name.
That deal was pending when news services started reporting Friday that regulators were preparing to seize Colonial and that BB&T of Winston-Salem, N.C., would take over Colonial's deposits and branches.
The bank and its branches will reopen today under the new name.
"I do not believe it will have any effect on the Global transaction in Nevada," said Mark Daigle, chief executive of Colonial Bank's operations in Nevada.
"I would expect they would want to move forward with the Global transaction," he added.
Jason Ader of Global Consumer, who would be chairman and CEO of the holding company for the merged 1st Commerce Bank, said he could not comment Friday.
BB&T has no bank branches in the West.
A competitor speaking anonymously agreed with Daigle, saying BB&T would not be interested in a banking operation so distant from its other operations.
Nevada with its struggling economy has no interest for outside bankers generally, the competitor said.
The competitor added: "While the Nevada operations probably didn't contribute significantly to Colonial's failure, they were well known for doing high-risk loans with brokered deposits."
Brokered deposits are generally sold to investors through stock brokers, and bankers consider them "hot money," because the investors have no relationship with the bank and will move their money quickly if they can get higher rates elsewhere.
Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.
