Bobby Lowder used to be considered the most powerful booster in college football. On Friday, it was announced that Colonial Bank — the bank Lowder founded in 1981 — had its assets frozen by a federal judge and was closed by the Alabama Banking Department.
Rival BB&T will acquire Colonial through an agreement with the Federal Deposit Insurance Corporation.
Lowder announced in May that he was stepping down as CEO of Colonial, but he remains an Auburn University trustee. He will step down from that post in 2011.
Lowder had a heavy hand in the hiring and firing of Auburn football coaches. Paul Finebaum of the Mobile Press-Register detailed Lowder's involvement in a June 2 column:
"Lowder gave Pat Dye the latitude to lead Auburn out of the depths of despair and the support needed, which Dye turned into four SEC titles and four straight wins over Alabama. Lowder also made the decision to replace Dye and was the one to personally deliver the news late one night, in his Montgomery bank office.
"Lowder hired Terry Bowden, someone he had gotten to know when his daughter worked for him at Samford. In spite of torrents of negativity, Lowder realized early in Bowden's tenure despite 20 straight wins that the young coach was not mature enough for the job, evidenced by the precipitous collapse in 1998.
"By the time of Bowden's ugly departure, Lowder already had his man picked out in Tommy Tuberville. The two had met secretly a year earlier at Lowder's house for breakfast.
"A familiar pattern developed a few years into Tuberville's tenure. Tuberville had remained loyal to his original coordinators and Lowder wanted a change following the disappointing 2001 season. Ironically, the two men brought in were Bob Petrino to run the offense and Gene Chizik to run the defense. Petrino left after a year to become the head coach at Louisville but Lowder was smitten by him.
"In 2003, when Auburn, the preseason No. 1 in some magazines, stumbled out of the gate with an 0-2 record and was only 6-5 heading into the Iron Bowl, Lowder and the school president had seen enough. Following a 31-7 loss at LSU and a 26-7 beating at Georgia, the decision was made. Tuberville would be fired and Petrino hired.
"Then, the Jetgate controversy erupted and Lowder was blamed, in part, because the Colonial Bank corporate plane was used for the Petrino interview."
Some Auburn fans will never forget Lowder for Jetgate, and after it his influence on the athletic department was never the same.
Now there are other problems tied to his failed bank. According to the Birmingham News: "The Justice Department is conducting a fraud probe at one of Colonial's division, a Florida mortgage operation. The bank on Tuesday said it will miss a deadline to file a second-quarter financial report with the Securities and Exchange Commission amid irregularities uncovered during that investigation that are related to more than one year's audited financial statements.
"In addition, the SEC is investigating Colonial's accounting for loan loss reserves and the bank's disclosures about participation in the Troubled Asset Relief Program. In its lawsuit, Bank of America claims Colonial is holding more than $1 billion in cash and loans as a custodian for Ocala Funding Inc."
Thanks to Greg.