Friday, August 14, 2009

Another big bank is on the verge of collapse

One of the largest banks in the deep south appears to be on the verge of collapse this morning. Colonial Bank which is based in Alabama and operated by the legendary Auburn trustee Bobby Lowder is probably in its final hours of life. Yesterday a federal judge issued a restraining order on one billion dollars of Colonial Bank's assets. This morning trading on the New York Stock Exchange for this stock has been delayed according to media reports. The reason behind the impending collapse is basically the same one that has caused other banks to go under over the past year. Mr Lowder though is an iconic type figure in Alabama and by far the most influential trustee at Auburn University. In fact its often been said that he's the second most powerful University trustee in the country behind T. Boone Pickens at Oklahoma State. So this impending collapse by Mr Lowder and his bank could also deal a very serious blow to Auburn University.

Update: it happened. State regulators seized the bank this afternoon at 5 and transferred all its assets to BB&T Bank out of North Carolina. The collapse of Colonial Bank goes down as the sixth largest bank failure in the history of the country.

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