MONTGOMERY, Ala. -- Colonial BancGroup said it has signed a definitive agreement to acquire Auburn Federal.

Auburn's board agreed to an offer of $ 17 a share in Colonial BancGroup class A common stock. The transaction requires approval by two-thirds of Auburn stockholders, as well as by the Office of Thrift Supervision, Federal Deposit Insurance Corp., Federal Reserve Board, and Alabama State Banking Department.

Colonial has $1.7 billion in assets and 73 offices. Auburn has $32 million and a single office in Auburn, Ala.

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