Colonial Bank (United States) Background and Regulatory Closure

Colonial Bank, founded in 1968, was a US-based bank that operated in the southeastern region.

Colonial Bank was a subsidiary of Colonial BancGroup, Inc., a bank holding company.

Colonial Bank's headquarters was located in Montgomery, Alabama.

The bank had a significant presence in the region, with over 350 branches across the southeastern United States.

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Colonial Bank was founded in 1974 in Montgomery, Alabama as Southland Bancorporation.

The company changed its name to The Colonial BancGroup, Inc. in 1981, marking a significant shift in its identity.

Colonial Bank was established in 1981 as part of Colonial BancGroup's relocation to Montgomery from Mobile. This move was a strategic decision that would shape the bank's future.

The bank's principal activity was to supervise and coordinate the business of its subsidiaries, providing them with capital and services. This approach allowed Colonial Bank to expand its reach and influence.

Colonial Bank had interests in several residential and commercial real estate developments located in the southeastern United States, as well as two in the central Texas area. This diversification of assets helped the bank to grow and stabilize its income.

At the end of the fourth quarter of 2008, Colonial Bancgroup had a Texas ratio of 53.4%, up from a figure of 25% in the first quarter of 2008. This significant increase in the Texas ratio highlighted the bank's financial struggles during this period.

Colonial Bank became an aggressive buyer of other Alabama banks in the 1980s, acquiring several smaller banks to expand its operations. By 1985, the bank had $750 million in assets and operated in all major metropolitan areas of the state.

Colonial Bank debuted in Georgia and Florida simultaneously in 1996 after purchasing several smaller banks in these states. This marked a significant expansion of the bank's operations into new markets.

If you or your company provided a service or product to Colonial Bank before August 14, 2009, and haven't been paid, you may be entitled to a claim against the bank.

Claims against failed financial institutions occur when bills sent to the institution remain unpaid at the time of failure. You can contact the FDIC as Receiver for Colonial Bank to file a claim.

The FDIC has since withdrawn a previous determination that all non-deposit claims had no value, due to potential recoveries from pending litigation. This means that there's a theoretical possibility for recoveries to result in payment on non-deposit claims.

You should file your claim on or before November 19, 2009, to be considered.

If you or your company provided a service or product to Colonial Bank after August 14, 2009, and haven't been paid, you should follow your normal billing procedures and provide an invoice as instructed.

Claims against failed financial institutions can be complex and time-sensitive. If you or your company provided a service or product, leased space, furniture, or equipment to Colonial Bank prior to August 14, 2009, and haven't been paid, you may be entitled to a claim against the bank.

You can contact the FDIC as Receiver for Colonial Bank at 1601 N. Bryan Street, Dallas, TX 75201-3430, or call (888) 206-4662. There are time limits for filing a claim, and your claim must be filed on or before November 19, 2009.

As a shareholder of Colonial Bank, you should not contact or file a claim with the Receiver. Instead, you can contact Colonial BancGroup, Inc. directly for information at 1-334-676-5151.

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Dividends are a crucial part of the claims process, as they can significantly impact the amount of money you receive.

A dividend is a payment made by an insurance company to policyholders when a claim is settled.

Dividends are usually calculated as a percentage of the claim amount and can be paid out in addition to the face value of the policy.

In some cases, dividends can be paid out before the face value of the policy, but this is less common.

The dividend payment process typically involves the insurance company sending a check or direct deposit to the policyholder's address on file.

Policyholders can also choose to have their dividend payments deposited directly into their bank account.

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Colonial Bank had a significant presence in the banking industry, operating in several states across the United States. It was founded in 1955.

Colonial Bank's growth was marked by its expansion into new markets, including the state of Mississippi, where it established a strong presence. The bank's services were well-received by local communities.

In 2009, Colonial Bank was seized by regulators due to failing assets and a lack of liquidity, marking a significant turning point in the bank's history.

The demise of Colonial Bank was a shocking turn of events.

The bank's problems began in the late 2000s after it was revealed that it had bought over $1 billion in mortgages from Taylor, Bean & Whitaker that Taylor Bean did not own.

This led to a massive fraud case, with the CEO of Taylor, Bean & Whitaker, Lee Farkas, being put on trial and found guilty of fraud.

Bobby Lowder, the CEO of Colonial Bank, was investigated and found not involved with the fraud.

A former senior vice president of Colonial Bank, Catherine Kissick, and her co-conspirators, including Lee Farkas, engaged in a scheme to defraud various entities and individuals.

They covered up overdrafts in Taylor, Bean & Whitaker's master bank account at Colonial Bank by sweeping overnight money from one account to another.

Later, they resorted to selling mortgage loans to Colonial Bank that did not exist or had already been sold to other investors.

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Kissick admitted to knowing that the bank had paid Taylor, Bean & Whitaker for worthless assets.

As a result, false information was entered on Colonial Bank's books and records, making it appear that the bank owned legitimate pools of mortgage loans.

The fraud caused Colonial BancGroup to file false financial data with the SEC, including overstated assets for mortgage loans that had little to no value.

Colonial Bank disclosed its legal problems on August 4, 2009, and its 346 branches were seized by regulators on August 14, 2009.

The bank's failure was the largest in 2009 and the sixth-largest in US history, costing the FDIC's Deposit Insurance Fund an estimated $2.8 billion.

The Taylor, Bean & Whitaker Mortgage fraud was a massive scheme that lasted from 2002 to 2009. It involved the fraudulent sale of fake mortgages worth $400 million to Colonial Bank.

Catherine Kissick, a senior vice president at Colonial Bank, was at the center of the scandal, along with Lee Farkas, the chairman of Taylor, Bean & Whitaker. They and their co-conspirators defrauded various entities, including Colonial Bank, the Troubled Asset Relief Program, and the investing public.

The scheme began with Taylor, Bean & Whitaker running overdrafts in its master bank account at Colonial Bank, starting in 2002. Kissick and Farkas covered up the overdrafts by sweeping money from one account to another and then through the fictitious sale of mortgage loans to Colonial Bank, dubbed "Plan B."

The conspirators sent mortgage data to Colonial Bank for loans that didn't exist or had already been sold to other investors. As a result, Colonial Bank paid Taylor, Bean & Whitaker for worthless assets, and false information was entered on Colonial Bank's books and records.

The fraud caused Colonial BancGroup to file materially false financial data with the SEC, overstating its assets in mortgage loans that had little to no value. The total cost of the fraud to Colonial was over $1.9 billion.

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Colonial Bank was acquired by BB&T in 2009, a move that marked the end of the bank's independent operations.

The acquisition was a result of the bank's struggles during the financial crisis, which led to significant losses and a decline in its stock value.

Colonial Bank's assets were transferred to BB&T, with the acquiring bank assuming all liabilities and obligations of the acquired bank.

This acquisition was a significant event in the banking industry, highlighting the challenges faced by banks during the financial crisis.

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The BB&T acquisition was a massive deal, one that raised eyebrows due to its own lack of transparency. BB&T acquired SunTrust Bank in a $28 billion deal, creating the sixth-largest bank in the US.

The acquisition was ironic because BB&T had previously been a vocal advocate for stricter banking regulations. BB&T's own website even boasted about the bank's commitment to "operating with integrity and transparency."

However, the acquisition was not without its controversies. BB&T had to pay a $60 million fine to regulators for failing to disclose its relationship with a troubled bank.

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Colonial BancGroup's disclosure of its legal problems marked a significant turning point in its history. On August 4, 2009, the company revealed that federal agents had executed a search warrant at its mortgage warehouse lending offices in Orlando, Florida.

The company's accounting practices and loss recognition were under scrutiny, leading to a cease and desist order from the Federal Reserve and regulators. This move was a major blow to Colonial BancGroup's reputation and financial stability.

The biggest bank failure of 2009 was Colonial BancGroup, which filed for Chapter 11 bankruptcy on August 25. The bankruptcy case, "In re Colonial BancGroup Inc, U.S. Bankruptcy Court, Middle District of Alabama (Montgomery), No. 09-32303", was a long and complex process.

BB&T acquired Colonial's branches and deposits in a deal with the FDIC on August 14, 2009, marking the end of Colonial BancGroup's independent operations. This acquisition was a significant development in the company's downfall.

If you're located in Montgomery, AL, Colonial Bank is the bank that's been in the news lately.

Colonial Bank has a press release that outlines the reasons behind its failure.

The bank was acquired by another financial institution, but if you're a loan customer, you'll want to know about the possible claims against the failed institution.

You can find more information on the priority of claims in the relevant section.

If you're a depositor, be aware that you won't receive any email notifications to claim or unlock your account.

Here are some key steps to take:

The FDIC has a guide for borrowers that can help you understand the process of a bank failure.