Capitol Bancorp's (CBCRQ) deal to sell a struggling New Mexico subsidiary has fallen through.
Capitol, in Lansing, Mich., had
Weststar, also in Albuquerque, had applied to regulators to become a bank holding company, and it planned to make its mortgage operations a wholly owned subsidiary of Sunrise, Wiechert told American Banker.
But the companies failed to get the Federal Deposit Insurance Corp. to lift a cease-and-desist order related to Sunrise before the closing deadline. The
"It became apparent that some of the contractual agreements we wanted to see prior to the closing, especially the lifting of the cease-and-desist, were not going to happen, so we decided to look for another target," Wiechert said.
Weststar withdrew its application for holding company status on March 20, according to the Federal Reserve Board's website.
In February, Capitol injected $1 million into Sunrise to raise its Tier 1 capital ratio to 4% and prevent its seizure by regulators, Capitol said in an annual report. In November, New Mexico regulators warned that Sunrise
Capitol had $1.7 billion in assets and 12 bank subsidiaries as of the end of 2012, according to data from the FDIC. Capitol has been seeking to
The termination of the deal was