Colonial Bank taken over by the government

MONTGOMERY, AL (WBRC) - Alabama's second largest bank has just been taken over by the government.  This is the largest bank failure of 2009 and the first in Alabama in almost 25 years.

Colonial BancGroup's offices and deposits will now be run by North Carolina's BB&T Corp. BB&T will acquire deposits and branches, but will not be acquiring loans or other financial assets.

Colonial supposedly became saddled with tremendous debt after acquiring $1.7 billion in bad real estate loans.

Most customers should not be expected to be affected by the bank failure as the FDIC will insure balances up to $250,000.