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A court deadline this week and the failure of two of Capitol's banks last week have added to the Lansing, Mich., company's increasingly tense bankruptcy.
May 13 -
Regulators on Friday seized two banks owned by the $1.6 billion-asset company. The failures could tangle the Lansing, Mich., company in what the Federal Deposit Insurance Corp. calls the cross-guarantee liability, meaning that the agency has the ability to charge Capitol's nine surviving banks with the cost of the failures.
May 10
State regulators seized a third bank unit of Capitol Bancorp., $31.6 million-asset Central Arizona Bank in Scottsdale, Ariz, in a rare Tuesday failure.
The Federal Deposit Insurance Corp. entered into an agreement with Western State Bank in Devils Lake, N.D. to buy the bank's assets and assume its $30.8 million in deposits.
The FDIC estimated that the cost to the Deposit Insurance Fund will be $8.6 million.
Regulators seized Capitol's Pisgah Community Bank unit in Asheville, N.C., and Sunrise Bank in Valdosta, Ga. on Friday. Those failures are expected to cost the DIF $26 million.
Following the failure of Central Arizona, the company is left with eight bank units. Regulators have the ability to charge the surviving banks for the deposit fund hits of their failed brethren.
