Biggest US bank failure this year

Colonial BancGroup has become the biggest US bank to collapse this year.

BB&T is taking over Colonial BancGroup deposits and assets

Colonial, a property lender based in Montgomery, Alabama, had about $25bn of assets, said the US regulator, the Federal Deposit Insurance Corp (FDIC).

The agency approved the sale of Colonial's $20bn in deposits to BB&T, a North Carolina-based bank. BB&T will also buy $22bn of Colonial's assets.

The collapse is expected to cost the FDIC about $2.8bn. The total number of bank failures is now over 70 in 2009.

The FDIC also entered into a loss-sharing agreement on about $15bn of Colonial's assets with BB&T, the regulator said.