Capitol Bancorp Ltd. has struck a deal to sell yet another one of its bank units.
On Thursday, the troubled $3.2 billion-asset company announced that an affiliate of AmericanWest Bank in Spokane, Wash., would purchase all of the shares of the $146 million-asset Bank of the Northwest in Bellevue, Wash., for $17 million in cash.
Capitol is the majority owner of Bank of the Northwest. In February 2010, Capitol merged its Bank of Bellevue, Bank of Everett, Bank of Tacoma and Issaquah Community Bank to create the four-branch Bank of the Northwest as part of its ongoing nationwide effort to preserve capital by selling or consolidating its network of small community banks across the country. Despite its efforts, Capitol, which has dual headquarters in Lansing, Mich. and Phoenix, remains on shaky financial footing as several of its banks have been deemed critically undercapitalized by regulators.
Under terms of the deal, Bank of the Northwest would be acquired by a newly formed affiliate of AmericanWest's owner, SKBHC Holdings LLC, and merged into the $1.6 billion-asset AmericanWest. The deal is expected to close in the third quarter.
AmericanWest narrowly escaped failure last year when its holding company declared bankruptcy and the bank was sold to SKBHC.