Troubles appear to be winding down to an end for Montgomery, Ala.-based Colonial Bank after it agreed to an order to cease and desist and then saw its mortgage warehouse lending facility come under close inspection by federal agents. The Alabama State Banking Department on Friday closed Colonial Bank, which the Federal Deposit Insurance Corp. (FDIC) estimates will cost $2.8bn to its deposit insurance fund, HousingWire first covered this weekend. Winston-Salem, N.C.-based Branch Bank and Trust (BBT) assumes all of Colonial’s deposits and approximately $22bn of its’s $25bn in assets. BB&T also enters a loss-sharing agreement with the FDIC on $15bn of the assets. "The past 18 months have been a very trying period in the financial services arena," said FDIC chairman Sheila Bair in a statement on the receivership. "Today, after protecting almost $300 billion in deposits since the current financial crisis began, the FDIC's guarantee is as certain as ever. Our industry funded reserves have covered all losses to date. In fact, losses from today's failures are lower than had been projected." With the acquisition, BB&T adds 354 banking offices in Alabama, Florida, Georgia, Texas and Nevada. It marks the largest acquisition in BB&T's 137-year history and vaulted the firm to the eighth largest financial holding company in the US based on deposits.  The firm said in a corporate statement the acquisition "comes with minimal asset risk to BB&T because of [the] loss sharing agreement with the FDIC." BB&T said it would not assume any obligations of the holding company, Colonial BancGroup (CNB). As a result, Fitch Ratings said it anticipates parent company Colonial BancGroup to file for bankruptcy. The ratings agency also conducted sweeping downgrades among Colonial BancGroup's and Colonial Bank's long- and short-term issuer default ratings to single-D from single-C, on news of the receivership. The deal shelves BB&T's plans to sell 22 Texas branches and 22 Nevada branches. Company officials said a time frame for that sale would be announced at a later date. The government-assisted deal also marks the end of a months-long failure, since regulators in July ordered a cease-and-desist on the capital, liquidity and loan loss allowance issues at Colonial BancGroup. The firm acknowledged loan losses in its portfolio were greater than estimated or expected, leading to a liquidity crisis that also affected the firm’s ability to raise additional capital and close on a pending agreement with investors led by now-suspended FHA lender Taylor, Bean & Whitaker Mortgage Corp. (TBW). Then, in early August, Colonial Bank confirmed it was complying with an investigation of its mortgage warehouse lending facilities at the same time another investigation led to the US Department of Housing and Urban Development and Ginnie Mae suspending TBW. Write to Diana Golobay. Disclaimer: The author held no relevant investments when this story was published.