Capitol Bancorp Ltd. of Lansing, Mich., is making another run at an Asian-American bank.
The $3.5 billion-asset company, which tried to buy a small one in Seattle in 2004, has filed for permission to buy a controlling stake in Asian Bank of Arizona, now being organized in Phoenix.
Asian Bank of Arizona would be its first to focus on Asian-Americans, but Capitol executives clearly hope it will not be the last.
Chairman and chief executive Joseph D. Reid said last week in a presentation at the Midwest Super-Community Banking Conference in Chicago that if Asian Bank does well "it could be the precursor to several others."
Asian Bank will be "a strongly ethnic bank," he said.
Capitol controls or owns outright 42 community banks, but only a few of them have ties to minority groups. One, the $85 million-asset Detroit Commerce Bank, is run by and targets African-Americans. Capitol's $31 million-asset Bank of Michigan, which was founded last year in Farmington Hills, focuses on Chaldeans, a group from the Arab world.
Michael M. Moran, Capitol's chief of capital markets, said it does not weigh geographic or ethnic considerations in considering prospective banking partners - but he also confirmed that it has applied to the Federal Reserve Bank of Chicago for permission to form a new bank holding company, Asian American Financial Services Inc.
"We view the holding company as giving us operating flexibility if other opportunities come up," he said Tuesday.
Kenneth S. James covers Capitol for First Horizon National Corp.'s FTN Midwest Securities in Nashville. He said the deal will raise Capitol's profile in the Asian-American banking community and make further ventures of the kind more likely.
But it is impossible to predict when the next will come, because personalities play a major role in Capitol's operation, Mr. James said. "Everything they do is based on the talent they are able to attract."
Mr. Moran said Asian Bank's president, Les Gin, worked for Wells Fargo & Co. before deciding to start a bank. Capitol decided to back it because it considers him and the board and management team he assembled "very strong," he said.
"We were very impressed by them and feel comfortable doing business with them," Mr. Moran said.
American Banker's efforts to reach Mr. Gin were unsuccessful.
Capitol expects Asian Bank to begin operation in the second quarter, in Phoenix's Chinese Cultural Center. It is one of seven banks the company expects to start by midyear or soon after. Last year it opened nine, and this year it so far one: Community Bank of Rowan in Salisbury, N.C.
In January 2004, Capitol said it had agreed to pay $17 million for the $136 million-asset AEA Bancshares Inc. of Seattle, which concentrates on Asians and other minority groups. But Capitol backed out seven months later after AEA was hit with a cease-and-desist order that faulted management, board oversight, and asset quality.
