June 4 (Bloomberg) -- Billionaire Thomas Barrack’s Colony Capital LLC and Stephen Ross’s Related Cos. have indicated they may seek to buy the assets of Corus Bankshares Inc., the Chicago lender facing a regulatory deadline to boost capital, people with knowledge of the matter said.

Corus, whose Florida condominium lending helped push it to the brink of seizure, hired Bank of America Corp. to solicit capital this month or sell the entire firm to avert a shutdown, people familiar with the matter said. Investors may offer to buy the lender while it’s still in business or purchase its assets out of receivership, said the people, who requested anonymity because the process isn’t public.

Private-equity firms invested more than $1 billion in U.S. banks last month after financial firms worldwide racked up almost $1.5 trillion in writedowns and credit losses in the past two years. A post-seizure sale of Corus’s assets could resemble the May 21 purchase of BankUnited Financial Corp. by buyout firms including Blackstone Group LP and Carlyle Group.

“Private investors seem to be thinking that the free-fall in the banking system has stopped and now is the time to get in,” said Steven Kaplan, a professor at the University of Chicago Booth School of Business. “With the regulators apparently willing to offer enough protection, we should be seeing a lot more deals.”

Colony’s RTC Past

Messages left for Corus interim Chief Executive Officer Randy Curtis weren’t returned. The bank’s shares have declined 92 percent in the past year. Corus rose 6 cents to 43 cents a share at 4 p.m. in Nasdaq Stock Market composite trading.

Representatives from Bank of America, Colony and Related declined to comment. David Barr, spokesman for the Federal Deposit Insurance Corp., which supervised the BankUnited sale, also declined to comment.

Colony, which has invested more than $39 billion since Barrack founded the firm in 1991, bought assets from the Resolution Trust Corp., the U.S. agency that disposed of failed lenders after the collapse of the savings-and-loan industry in the 1980s. More recent investments include the Savoy Group, which it bought with Blackstone in 1998, and the Meadowlands Xanadu Project in New Jersey.

Related, the developer of New York’s Time Warner Center, could increase its presence in Florida by buying Corus’s assets, which included more than $1 billion of Florida condominium loans as of March 31, according to a Securities and Exchange Commission filing on May 18. Related, founded in 1972 by Miami Dolphins owner Ross, 69, has more than 10,000 Florida residential units under development, according to its Web site.

Nonperforming Assets Surge

Federal regulators found that Corus was undercapitalized and may place the bank into receivership if it fails to satisfy capital requirements, according to the May filing. Its nonperforming assets more than quadrupled to $2.5 billion as of March 31, the filing showed. It had reserves of $338.6 million and reported a first-quarter loss of $285 million.

The bank, incorporated in 1958, said in April that Robert Glickman, the chief executive officer since 1984, and Chairman Joseph Glickman were leaving. Corus had a $5.4 billion commercial real estate loan portfolio, including $997 million to condominiums in Miami and southeast Florida, as of March 31.

Condominium prices in the Miami area slumped 39 percent at the end of the first quarter compared with a year earlier, the fifth-largest decline for a U.S. metropolitan area, according to the National Association of Realtors.

Fort Lauderdale Project

Corus was named last month in a lawsuit, along with developers including Donald Trump, by buyers seeking to rescind purchase agreements after construction was delayed in a condominium hotel project in Fort Lauderdale, Florida. Corus, the main construction lender to the project known as Trump International Hotel & Tower, must raise at least $390 million by June 18 or face receivership, according to the complaint.

Corus had about 170,000 retail accounts as of March 31 holding more than $7 billion, with about 99 percent of the external deposits covered by federal insurance, according to the May filing. Regulators ordered the bank to curb the rates it pays depositors because of its weakened health, the filing said.

The federal deposit insurance fund, generated by fees paid by banks, fell to $13 billion in the first quarter from $17.3 billion in the previous quarter, and failures in the quarter cost the fund $2.2 billion, the FDIC said. The FDIC imposed an emergency fee to raise $5.6 billion to rebuild the fund, with more assessments possible this year. The agency forecasts failures will cost $70 billion through 2013.

Last month, two Illinois banks with combined assets of almost $1 billion were closed by regulators, pushing the number of failed U.S. lenders to 36 this year amid the longest recession since the 1930s.

The FDIC classified 305 banks as “problem” in the first quarter, the highest total in 15 years and a 21 percent increase from the 252 in the preceding three-month period, according to a May 27 report.

To contact the reporters on this story: Jason Kelly in New York at jkelly14@bloomberg.net; Jonathan Keehner in New York at jkeehner@bloomberg.net.

Last Updated: June 4, 2009 16:36 EDT