BB&T Corp. and the Federal Deposit Insurance Corp. have reached an agreement to take over Colonial BancGroup in Alabama the Wall Street Journal and Bloomberg reported citing anonymous sources.
Colonial is Alabama's second-largest bank with $26.4 billion in assets and 355 branches in Florida, Alabama, Georgia, Nevada and Texas.
The troubled bank has built up more than $1.7 billion in bad real estate loans from its expansion into Florida, where home and commercial property prices have plummeted. Its takeover would mark the FDIC's 74th this year and its third biggest since the financial crisis began.
The takeover would make BB&T the ninth-biggest U.S. bank by assets, moving it from 11th ahead of Capital One Financial Corp. and SunTrust Banks Inc. The North Carolina based bank currently has $152.4 billion in assets, is considered one of the strongest regional banks following the impact of the financial crisis.
Bank failures to date in 2009 have cost the FDIC $17 billion.
The reports have yet to be officially confirmed.