* Agents serve two TARP-related search warrants in Florida
* Colonial Bank says one executed at its office in Orlando
* Shares of parent company Colonial BancGroup Inc plunge (Adds details, comment, bullet points, byline)
By Jane Sutton
MIAMI, Aug 3 (Reuters) - Federal agents working with the U.S. Treasury's Troubled Asset Relief Program (TARP) executed search warrants at two Florida banks on Monday and Colonial Bank CNB.N said one of them was its office in Orlando.
A spokeswoman for the Alabama-based bank told Reuters a warrant had been served at the bank's Orlando location but could not say what was the target of the warrants.
"The bank is cooperating," Colonial Senior Vice President Merrie Tolbert told Reuters by telephone. "Colonial continues to operate as usual. This search warrant has no impact on our day-to-day retail and commercial banking operations."
A spokeswoman with the office of the Special Inspector General for the Troubled Asset Relief Program, which buys assets from troubled financial institutions to stabilize the banking industry, would only say that its agents executed two search warrants in Florida on Monday.
"Due to the nature of the ongoing investigation we cannot provide any further information," the agency said in a news release.
FBI agents joined the search but declined to comment.
Tolbert could not confirm local media reports that the second warrant was executed at a bank branch in the central Florida town of Ocala.
Shares of parent company Colonial BancGroup Inc plunged 18 percent on Monday after it had said on Friday that a key $300 million investment from Taylor, Bean & Whitaker Mortgage Co had fallen through, raising doubts about its survival.
Colonial BancGroup, which last month was issued a cease-and-desist order by the regulators, said it was exploring strategic capital alternatives, including a sale or merger of the company.
The shares have lost more than 90 percent of their value in the past year.
Colonial BancGroup operates 355 branches in Florida, Alabama, Georgia, Nevada and Texas and has more than $25 billion in assets. Its failure would be the largest this year. (Editing by Pascal Fletcher and Maureen Bavdek)