The Alabama Banking Department took over Colonial Bank at 5 p.m. today, saying it had appointed the

FDIC

(Federal Deposit Insurance Corp.) as receiver of the bank effective immediately.

BB&T Corp. of North Carolina will acquire Colonial through an agreement with the FDIC.

All deposit accounts of Colonial have been transferred to BB&T and are available immediately.

Colonial was Alabama's second-largest bank, with more than $25 billion in assets and 346 branches across Alabama, Florida, Georgia, Nevada and Texas.

The bank has been struggling for months, and there's been a rapid-fire progression of bad news in recent days.

On top of five consecutive quarterly losses totaling $1.6 billion, Colonial also is facing regulatory and criminal investigations, as well as a $1 billion-plus lawsuit filed by Bank of America Corp. this week.



BB&T, meanwhile, has shown strength during the past year's financial crisis. Regarded as a regional power, the company has assets valued at more than $152 billion and banking operations in North Carolina, South Carolina, Virginia, West Virginia, Kentucky, Georgia, Maryland, Tennessee, Florida, Indiana and Washington D.C.



BB&T also has a small presence in Alabama, but the acquisition of Colonial will give it extensive operations in the state. Such a move is among the best possible outcomes for Colonial's troubles, since many of its operations could stay intact, industry observers have noted.



BB&T has about 29,000 employees, while Colonial's workforce stands at more than 4,500.



Auburn University trustee and football booster Bobby Lowder founded Colonial in 1981 with the acquisition of a single Birmingham bank and $161 million in assets. Its growth was bolstered by more than 60 acquisitions over the years.



But Lowder quit as CEO this year after shares fell 92 percent amid plummeting losses on construction and real-estate loans made in Florida and Las Vegas just before the housing market meltdown in 2006.



Meanwhile, the Justice Department is conducting a fraud probe at one of Colonial's division, a Florida mortgage operation. The bank on Tuesday said it will miss a deadline to file a second-quarter financial report with the Securitieis and Exchange Commission amid irregularities uncovered during that investigation that are related to more than one year's audited financial statements.



In addition, the SEC is investigating Colonial's accounting for loan loss reserves and the bank's disclosures about participation the Troubled Asset Relief Program.



In its lawsuit, Bank of America claims Colonial is holding more than $1 billion in cash and loans as a custodian for Ocala Funding Inc.

The number of branches was corrected at 8:18 p.m. to 346.