Nevada deposits in Colonial takeover will end up with U.S. Bank
U.S. Bank has agreed to acquire Nevada deposits from the North Carolina bank that took over Colonial Bank, banking insiders said Monday.
The deposit sale is the latest twist involving Colonial Bank, a regional institution that was based in Alabama.
Global Consumer Acquisition Corp. of New York in July agreed to buy $500 million of Colonial’s Nevada deposits, $450 million in loans and 22 branches from Colonial Bancorp.
The following month, however, state and federal regulators seized Colonial Bank, nullifying the agreement with Global Consumer. The Federal Deposit Insurance Corp. sold the deposits and loans to BB&T Corp. of Winston-Salem, N.C.
The FDIC entered into a loss-sharing agreement with BB&T for loans at Colonial, and BB&T could not sell those loans without losing federal backing for some of the potential losses. As a result, BB&T only could sell the $900 million in deposits and 22 branches that Colonial had in Nevada.
BB&T Corp. Chief Executive Kelly King told analysts that he intended to “jettison” the Nevada operations.
Global Consumer tried to negotiate a new deal for Colonial’s Nevada operations, but the New York investment company on Friday said it terminated talks with BB&T.
“We believe there are more attractive acquisition opportunities (in Nevada),” Global Consumer Chairman Jason Ader said in a statement Friday.
Cynthia Williams, a spokeswoman for BB&T, on Monday said, “We are still evaluating our options, and our strategy in Nevada has not changed.”
Williams said she didn’t know about an agreement to sell Nevada deposits to U.S. Bank.
Kenneth Ladd, western regional president for U.S. Bank, said policy prohibited him from discussing mergers and acquisitions.
Since the Aug. 14 takeover by BB&T, Colonial’s operations in Nevada have been in limbo. Annoyed customers have been withdrawing deposits, and employees were quitting, sources said.
Nevada employees were said to be openly hostile toward a BB&T representative who last week was promoting BB&T’s retirement program while rumors of the sale to U.S. Bank were circulating.
A year ago, U.S. Bank acquired 28 grocery store branches for free from Nevada State Bank.
Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.
