Alabama State Regulators Can't Figure Out WTF to Do About Colonial Bank and Neither Can I
This tells me two things:
The FDIC Sheriff is in town and there may be some truth to the BB&T rumor after all. I still don't buy that BB&T actually wants to take on this disaster but as we learned from Fedgate, a little "encouragement" can go a long way to accomplish a reluctant corporate coupling.
The Birmingham News:
A meeting of the Alabama State Banking Board that was to be held Wednesday regarding the future of Montgomery-based Colonial BancGroup has been canceled.
The board met on Monday, said Elizabeth Bressler, general counsel for the Alabama State Banking Department. Under Alabama law, she said she could not comment on what happened at that meeting or whether it involved Colonial.
The state's second-largest bank, with more than $25 billion in assets, shocked investors and customers Friday when it announced that the state banking department might recommend on Wednesday that the Federal Deposit Insurance Corp. seize the bank, after five consecutive quarterly losses totaling $1.6 billion.
Putting this into perspective (I know how much you love when I do that, dear reader), Colonial would be the largest bank failure of 2009 and the fifth largest bank failure of all time. Come on, we're talking about Continental Illinois, WaMu, et al, so that should give you an idea of why this is such a huge deal (to say the least).
And what's this? A Colonial lawsuit? For Christ's sake, what is up with this mess?!
Law Offices of Howard G. Smith announces that it is investigating potential claims against The Colonial BancGroup, Inc. ("Colonial BancGroup" or the "Company") (NYSE:CNB) concerning whether the Colonial BancGroup 401(K) Savings Plan (the "Plan") imprudently invested in Colonial BancGroup stock and whether the Plan's administrators breached their fiduciary duties to the Plan's participants in violation of the Employee Retirement Income Security Act of 1974, as amended (ERISA).Breech of fiduciary duty huh? Perhaps Colonial should have consulted with LandAmerica on that one to find out what not to do. Good luck with that one, CNB.
The investigation concerns whether Colonial BancGroup and other administrators of the Plan failed to prudently and loyally manage the Plan's investments in Colonial BancGroup stock by continuing to offer Company stock when the stock was no longer a prudent investment for participants' retirement savings.
Catch up on the mess:
More FBI Raids: First Colonial Bank, Now Taylor, Bean & Whitaker Taken Down by SIGTARP
Colonial Bank Raided by Feds, TARP Cops
Will Deutsche Bank Have to Confess its Colonial/TBW Sins to Father Barofsky?
The Transparency Buzz, More Fun with SIGTARP, and Please Please Don't Blame the Accounting
Colonial Bank: Can an Insolvent FDIC Take One More Hit?
Colonial BancGroup + BB&T = Love Forever? Or a Sick FDIC Threesome?
Which brings us to today.
Stay away, BB&T! It's a toxic clusterfuck of unawesomeness that promises to get exponentially more radioactive as time drags on.