More failed banks: #77

Regulators closed five more insolvent financial institutions Friday, including Colonial Bank, the biggest to fail since IndyMac Federal Bank went under last summer.

Colonial Bank, based in Montgomery, Ala., had $25 billion in assets and roughly $20 billion in deposits. The Federal Deposit Insurance Corp. said it arranged for BB&T Corp. to take over much of Colonial's operations, including its deposits and its 346 branches in Alabama, Florida, Georgia, Nevada and Texas.

BB&T agreed to buy $22 billion of Colonial's assets, with $15 billion of that amount covered by a loss-sharing arrangement with the FDIC.

Colonial was undone by its heavy exposure to mortgage and real-estate development loans. It had been seeking federal aid through the Treasury Department's Troubled Asset Relief Program, and through private investors.

On Thursday, Bank of America Corp. sued Colonial Bank's parent company, Colonial BancGroup Inc., seeking $1 billion in cash and loans. A judge granted its request for a freeze on the assets, helping to seal Colonial's fate.

Regulators also shut down Community Bank of Nevada, with headquarters in Las Vegas; Community Bank of Arizona, based in Phoenix; Union Bank, of Gilbert, Ariz., and Dwelling House Savings and Loan Association in Pittsburgh.

The latest closings bring the total for the year to 77.

Read on.