Uh-oh:
Colonial Bank Fails, Acquired by BB&T

Colonial Bank was shut down late Friday, the fifth largest bank to fail in U.S. history and the largest financial institution closed by regulators since Washington Mutual last fall.

The Alabama Banking Department took over Colonial Bank, a subsidiary of Colonial BancGroup, and appointed the Federal Deposit Insurance Corp. receiver. The FDIC then sold all of the institution’s deposits and branches to BB&T Corp. .

Colonial’s failure came after regulators shut down Dwelling House Savings and Loan Association of Pittsburgh, whose sole branch and all of its deposits were acquired by PNC Financial Services Group

Just so you know, this is a real bad thing to have go happen, especially after the MSM has announced that the recession is over and has been patting the Messiah on the back. Cant blame Bush for this one, with a straight face that is.

There are likely to be a lot of ripple effects from this. Colonial did a lot of lending in a lot of very complicated participation and down stream deals. Don’t be surprised to see other banks fold next week.

Bernanke has to be in the fetal position on a floor somewhere whimpering and calling for Mama.