Unable to raise capital from either the Treasury Department or private investors, Capital Corp. of the West finds its options have dwindled, observers say, to a government-assisted deal for its banking operations.

That was not what Richard S. Cupp had in mind in August when he signed on as the Merced, Calif., company's chief executive. Though Mr. Cupp would not comment when interviewed Thursday about the prospect of a government-assisted deal, the California banker, known for his turnarounds of ailing companies, did talk candidly about how much harder it has been to raise capital now.

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