BB&T in Winston-Salem, N.C., has terminated its loss-share agreement with the Federal Deposit Insurance Corp. tied to the 2009 failure of Colonial Bank.
The $222 billion-asset BB&T said in a press release that its bank paid the FDIC $230 million in cash to exit the pact. The move also eliminates all assets and liabilities tied to an indemnification that created a $210 million net liability in the second quarter.
Also, the termination eliminates a gain-sharing provision on $943 million of securities.
BB&T said it will record a pretax expense of about $20 million in the third quarter, though the move should have "a positive impact to future earnings."
BB&T during the second quarter reported $1.7 billion in assets acquired from the FDIC, including $482 million of loans and $22 million of other assets that were still subject to loss-sharing provisions. BB&T will continue to own related loans, securities and other assets.
"The acquisition of Colonial was a tremendously successful transaction and has far outperformed our initial expectations," Daryl Bible, BB&T's chief financial officer, said in the release.
