Regulators have shut down Colonial BancGroup Inc. CNB-N , a big lender in real estate development that buckled under the collapse of the market. It was the biggest U.S. bank to fail this year, with about $25-billion in assets.

The Federal Deposit Insurance Corp. was appointed receiver of Montgomery, Ala.-based Colonial. The agency approved the sale of Colonial’s $20-billion in deposits and about $22-billion of its assets to BB&T Corp. The failed bank’s 346 branches in Alabama, Florida, Georgia, Nevada and Texas will reopen at the normal times starting on Saturday as offices of BB&T, the FDIC said.

BB&T, based in Winston-Salem, N.C., operates throughout the Southeast and is considered among the nation’s stronger regional banks.

The failure of Colonial is expected to cost the deposit insurance fund an estimated $2.8-billion.

The bank was a major lender to developers in Florida and Nevada and was hit hard by the collapse of the real estate market in those states.

Colonial BancGroup shut by regulators – The Globe and Mail

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