LANSING, Mich. and PHOENIX, Aug. 16
/PRNewswire-FirstCall/ --
- Bank Divestiture Activities Continue with Ten Transactions
Pending
- Six Regional Consolidations Completed
- Total Assets of $4.7 Billion
- Four Affiliate Bank Sales Completed This Year; Six Divestitures
Total
A net loss attributable to Capitol Bancorp was incurred for the
second quarter of 2010 of $41 million
or $1.98 per share, compared to a net
loss of $47.9 million or $2.75 per share for the first quarter of 2010 and
a net loss of $16.3 million or
$0.95 per share reported for the
second quarter of 2009.
Consolidated assets declined 17 percent year-over-year to
$4.7 billion at June 30, 2010 from the $5.7 billion reported for the second quarter of
2009, as a result of bank sales and related implementation of the
capital preservation and balance-sheet deleveraging strategies.
Consistent with these efforts, total portfolio loans were
$3.6 billion at June 30, 2010, a 21 percent decline over the past
twelve months inclusive of the effect of recent bank sales.
Total deposits reflected an approximate 11 percent annualized
decline to approximately $4.2 billion
from the $4.4 billion reported at the
beginning of 2010, while noninterest-bearing deposits approximated
16.3 percent of total deposits at June 30,
2010 versus 15.1 percent of total deposits at the beginning
of 2010, as the Corporation continued to focus on core funding
sources throughout the deleveraging process and as a result of
recent bank sales.
Capitol's Chairman and CEO Joseph D.
Reid said, "We remain focused on a myriad of issues
presented by both an uncertain and struggling economy in multiple
markets of our franchise. Building balance sheet strength and
improving liquidity, while reallocating capital resources to those
affiliates currently facing more difficult operating challenges,
are being addressed via our strategy of regional consolidations and
bank divestitures. These initiatives also serve to enhance
affiliate-level and system-wide operating efficiencies through the
elimination of operating costs targeted by the regional
consolidations. Equity levels have diminished significantly
in recent quarters as we work through the loan portfolio issues and
related operating losses that arise in a severely weakened economy.
We continue to concentrate our efforts on these multiple
deleveraging avenues while pursuing access to additional internal
and external sources of capital."
"We are cautiously encouraged by both redeployment of capital
resources via our divestiture efforts and recent positive trends
and developments in asset quality. Growth in nonperforming
assets, although continuing to remain elevated, reflects another
quarter demonstrating a substantially slowing trend. Net loan
charge-offs, elevated from historical levels, declined materially
on a linked-quarter basis while the most recent quarterly provision
for loan losses again exceeded charge-offs. The June 30, 2010 allowance for loan losses
approximating 4.44 percent of portfolio loans represents a material
increase from the 3.57 percent level we reported at the beginning
of 2010, and a significant increase during these difficult times
from the approximate 2.5 percent level we posted a year ago," added
Mr. Reid.
"Combining the aggregate quarter-end level of nonperforming
assets with net charge-offs for each of the past six quarters, the
rate of increase has continued its slowing trend: from 34.1
percent in the first quarter of 2009, to 13.1 percent in 2009's
second quarter, to 12.3 percent for the quarter ended September 30, 2009, to 11.2 percent for the final
quarter of 2009, to 3.7 percent in 2010's first quarter, and most
recently to 2.8 percent for the three months ended June 30, 2010. In addition, pretax,
pre-provision results, before costs associated with foreclosed
properties and other real estate owned, were positive for the
second consecutive quarter. Costs associated with foreclosed
properties and other real estate owned declined significantly on a
linked-quarter basis, after decreasing dramatically from the fourth
quarter of 2009 compared to 2010's first quarter. We also
remain cautiously optimistic as to the potential recovery of the
$154.7 million valuation allowance
for deferred tax assets once we are able to demonstrate a
sustainable return to core profitability."
"Finally, our affiliate divestiture program has resulted in the
sale of six institutions to date in 2010, eliminating $500 million of assets, and we currently have ten
transactions pending encompassing an additional $700 million of assets as we aggressively seek to
reallocate capital, deleveraging the balance sheet. Above and
beyond the approximate $1.2 billion
of assets these efforts represent, there are ongoing discussions on
additional fronts in both the divestiture and capital-reallocation
arenas as we recognize and address the deterioration that has
occurred in our once-robust capital support levels. We expect
to communicate additional developments as they arise and
solidify."
Capital Initiatives
In addition to the completed divestitures and regional
consolidations, capital-raising initiatives have included the
commencement of an offer to exchange shares of Capitol's common
stock for any and all of its outstanding 10.50 percent
trust-preferred securities of Capitol Trust XII. That offer
("proposed exchange"), which commenced in late May 2010, has been extended to August 31, 2010. The proposed exchange is
contingent upon receipt of consents from a majority in aggregate
liquidation amount of all outstanding 8.50 percent cumulative
trust-preferred securities of Capitol Trust I to approve proposed
amendments to certain provisions of the Indenture and Guarantee
Agreement pursuant to which the trust-preferred securities of
Capitol Trust I were originally issued.
Mr. Reid stated, "This pending exchange offer provides an
opportunity to strengthen Tier 1 common and tangible common equity
ratios, while also reducing interest expense associated with the
debt securities. We have been encouraged by the initial
response to this initiative, with approximately 16 percent of
publicly-traded shares of this instrument indicating a desire to
participate in the pending exchange offer and we continue to
explore other opportunities to create core tangible common equity."
Affiliate Bank Divestitures and Regional Bank
Consolidations
Capitol previously announced intentions to sell its controlling
interests in several affiliate banks. Sale of Capitol's
interests in Bank of Belleville
and Napa Community Bank, completed during April 2010, involved $228
million of assets while garnering more than $25 million of proceeds for reinvestment in bank
affiliates. In June 2010,
Capitol completed the sale of Beachwood,
Ohio based Ohio Commerce Bank and at the end of July, the
sale of Community Bank of Lincoln
in Lincoln, Nebraska was
completed. Those two sales involved approximately
$130 million of assets. In the
second quarter of 2010, Capitol announced that it had entered into
a collective stock redemption transaction with three Colorado affiliates: Fort Collins Commerce
Bank, Larimer Bank of Commerce and
Loveland Bank of Commerce.
Capitol also announced agreements to sell Bank of
San Francisco in California, and Bank of Fort Bend in Sugar
Land, Texas. Those transactions, in addition to five
other pending transactions involving affiliates in Colorado, Missouri, New
York, North Carolina and
Texas, reflect ten divestitures
awaiting regulatory approvals (and other contingencies) and
represent an additional $700 million
of assets and estimated proceeds in excess of $50 million. The ten pending divestitures,
with book-value multiples at a premium to tangible equity, are
anticipated to be completed in 2010.
Subsequent to June 30, 2010,
Capitol completed a regional consolidation of three Georgia-based banks into what operates today
as Sunrise Bank. That regional consolidation follows similar
charter consolidations that have occurred earlier in 2010 and in
the fourth quarter of 2009 in Arizona, California, Indiana, Michigan, Nevada and Washington, resulting in the cumulative
elimination of 20 charters. To date, the regional
consolidation effort has resulted in the consolidation of 27
charters into six distinct, geographically-concentrated operating
entities. Preliminary results at the five largest regional
consolidations are being actively monitored with the expectation of
meeting targeted efficiency objectives, but implementation costs
and restructuring expenses associated with consolidation activity
can serve to delay full recognition of the projected cost savings
and efficiencies expected with each consolidation.
Mr. Reid further stated, "These bank sales and regional
consolidations have provided the Corporation with capital
redeployment flexibility to support our ongoing strategic
initiatives to enhance balance sheet strength, while also serving
our primary objective to assist those affiliates adversely affected
by the current difficult economy. We continue to assess
additional initiatives to drive operational efficiencies and
strengthen risk management oversight within our footprint, without
compromising the community-based orientation and operating
integrity of the affiliate system."
Quarterly Performance (as adjusted for discontinued
operations)
In the second quarter of 2010, after adjusting for discontinued
operations, consolidated net operating revenues decreased 10.4
percent to $38.3 million from the
approximate $42.8 million reported
for the corresponding period of 2009. Net interest margin
compression, fueled in large part by elevated levels of
nonperforming assets, resulted in an 8.8 percent decline in net
interest income. A concerted effort to focus on core deposit
funding sources, as referenced earlier, helped mitigate some of the
margin pressure. The net interest margin declined to 2.88
percent compared to 2009's second quarter margin of 3.02 percent
and 3.03 percent in the first quarter of 2010. Cash and cash
equivalents totaled approximately $925
million, or 19 percent of the Corporation's consolidated
total assets at June 30, 2010.
Other noninterest income totaled $5.4
million, a nearly 19 percent decrease compared to
approximately $6.7 million in the
comparable 2009 period.
The Corporation continues to emphasize the reduction of
operating expenses through salary and staffing reductions,
operational efficiencies and tight controls on other overhead.
Salaries and employee benefit costs declined nearly 13 percent
year-over-year and approximately 2.6 percent (10.4 percent
annualized) on a linked-quarter basis. Noninterest, or
operating, expenses increased year-over-year to $48.7 million in the quarter ended June 30, 2010. While costs associated with
foreclosed properties and other real estate owned (which totaled
$8.9 million in the second quarter of
2010 versus approximately $4.2
million in the corresponding 2009 period) increased
significantly, but declined encouragingly on a 2010 linked-quarter
basis ($3.2 million), FDIC insurance
premiums and other regulatory fees decreased from $5.0 million in 2009's second quarter to
approximately $4.2 million in the
most recent three-month period. Combined, these two
expense areas increased to approximately $13.1 million in the current quarter,
representing a substantial increase from the combined approximate
$9.2 million level during the
corresponding period of 2009, more than offsetting the
aforementioned $2.9 million decline
in compensation-related expenses. On a linked-quarter basis,
total operating expenses declined 8.4 percent from $53.2 million in 2010's first quarter to the
$48.7 million in the subsequent
quarter. Again, adjusting for real estate owned-related and
regulatory-related costs, linked quarter operating expenses still
declined approximately 3.5 percent, or 14 percent annualized.
The second quarter 2010 provision for loan losses decreased to
$44.6 million, a reduction from the
$49.0 million recorded in the
preceding quarter, and increased from the $32.5 million for the corresponding period of
2009. During the second quarter of 2010, net loan charge-offs
totaled $33.4 million, a significant
increase from 2009's corresponding level of $18.3 million, but a reduction from the
$41.8 million recorded in the first
quarter of 2010, as the Corporation continues to aggressively
manage its nonperforming loans.
Adverse bank performance in the Arizona, Great Lakes and Nevada regions and the increased provision for
loan losses were major reasons for the consolidated net loss.
Six-Month Performance
Net operating revenues were $78.9
million for the six months ended June
30, 2010, a 2.3 percent decrease compared to the approximate
$80.8 million for the year-ago
period, buffeted by the aforementioned gains on sales of affiliates
recorded in the recent quarter. Core operating revenues, net
of divestiture gains, declined 14.6 percent due to the impact of
sizable deleveraging of the balance sheet resulting from bank
sales, and further driven by margin compression and general
softness across all major revenue components. The provision
for loan losses of $93.6 million for
the first six months of 2010 was an increase from the $66.1 million for the comparable 2009 period.
The net loss per share for the first half of 2010 was
$4.67, versus the $2.15 reported for the corresponding period in
2009.
Balance Sheet
With total capital resources of approximately $304.1 million at June 30,
2010, the total capital-to-asset ratio was 6.40 percent.
Divestiture efforts and ongoing balance sheet deleveraging
should serve to help strengthen consolidated capital ratios, but as
of June 30, 2010 the consolidated
leverage, Tier 1 and total risk-based regulatory capital ratios
were 2.39 percent, 3.19 percent and 6.38 percent, respectively.
Consequently, the Corporation continues to be classified as
"undercapitalized."
Net loan charge-offs of 3.64 percent of average loans
(annualized) for the second quarter of 2010 decreased significantly
from the 4.25 percent reported for the first quarter of 2010, but
increased dramatically from the 1.64 percent reported for the
corresponding period of 2009 as the Corporation continued to
aggressively seek problem asset resolution. The ratio of
nonperforming loans to total portfolio loans was 9.93 percent at
June 30, 2010 compared to 8.80
percent reported at March 31, 2010
and 5.70 percent for the same period in 2009. The ratio of
total nonperforming assets to total assets increased to 9.86
percent at June 30, 2010 from 8.97
percent reported at March 31, 2010
and 6.37 percent at June 30, 2009.
The continuing increase in nonperforming assets is
attributable to borrower stress and delinquency, coupled with a
minimal market for sale of real estate, especially in the states of
Arizona, Michigan and Nevada, hindering the disposition of such
assets. The coverage ratio of the allowance for loan losses
in relation to nonperforming loans approximated 45 percent at
June 30, 2010, consistent with levels
recorded in recent quarters, while the allowance for loan losses as
a percentage of portfolio loans increased materially
year-over-year, from 2.50 percent to 4.44 percent at June 30, 2010, as provisions for loan losses
continued to exceed the significant level of net charge-off
activity during 2010.
About Capitol Bancorp Limited
Capitol Bancorp Limited (NYSE: CBC) is a national community
banking company, with a network of separately chartered banks with
operations in 15 states. Founded in 1988, the Corporation has
executive offices in Lansing,
Michigan, and Phoenix,
Arizona.
CAPITOL BANCORP
LIMITED
|
|
SUMMARY OF SELECTED FINANCIAL
DATA
|
|
(in thousands, except share and
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months Ended
|
|
|
|
|
June 30
|
|
June 30
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
Condensed results of
operations:
|
|
|
|
|
|
|
|
|
|
Interest income
|
$
51,634
|
|
$
63,692
|
|
$
105,487
|
|
$
126,787
|
|
|
Interest expense
|
18,714
|
|
27,585
|
|
39,013
|
|
57,375
|
|
|
|
Net interest income
|
32,920
|
|
36,107
|
|
66,474
|
|
69,412
|
|
|
Provision for loan
losses
|
44,600
|
|
32,511
|
|
93,641
|
|
66,125
|
|
|
Noninterest income
|
5,427
|
|
6,685
|
|
12,436
|
|
11,363
|
|
|
Noninterest expense
|
48,711
|
|
46,725
|
|
101,917
|
|
95,294
|
|
|
Loss from continuing operations
before income
|
|
|
|
|
|
|
|
|
|
tax benefit
|
(54,964)
|
|
(36,444)
|
|
(116,648)
|
|
(80,644)
|
|
|
Income from discontinued
operations
|
6,799
|
|
114
|
|
6,721
|
|
547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Capitol
Bancorp Limited
|
$
(41,003)
|
|
$
(16,304)
|
|
$
(88,885)
|
|
$
(36,978)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share
attributable to Capitol Bancorp Limited
|
$
(1.98)
|
|
$
(0.95)
|
|
$
(4.67)
|
|
$
(2.15)
|
|
|
Book value per common share at
end of period
|
3.89
|
|
18.36
|
|
3.89
|
|
18.36
|
|
|
Common stock closing price at
end of period
|
$
1.27
|
|
$
2.65
|
|
$
1.27
|
|
$
2.65
|
|
|
Common shares outstanding at end
of period
|
21,414,000
|
|
17,517,000
|
|
21,414,000
|
|
17,517,000
|
|
|
Number of common shares used to
compute
|
|
|
|
|
|
|
|
|
|
net loss per share
|
20,684,000
|
|
17,244,000
|
|
19,052,000
|
|
17,203,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd Quarter
|
|
1st Quarter
|
|
4th Quarter
|
|
3rd Quarter
|
|
2nd Quarter
|
|
|
|
|
2010
|
|
2010
|
|
2009
|
|
2009
|
|
2009
|
|
Condensed summary of financial
position:
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$ 4,748,695
|
|
$ 5,064,936
|
|
$ 5,131,940
|
|
$ 5,322,613
|
|
$ 5,723,540
|
|
|
Portfolio loans(1)
|
3,617,364
|
|
3,657,769
|
|
3,792,355
|
|
3,929,070
|
|
4,215,999
|
|
|
Deposits(1)
|
4,183,217
|
|
4,188,835
|
|
4,148,438
|
|
4,258,613
|
|
4,362,618
|
|
|
Capitol Bancorp Limited
stockholders' equity
|
88,297
|
|
117,167
|
|
161,335
|
|
236,385
|
|
318,977
|
|
|
Total capital
|
$
304,104
|
|
$
342,858
|
|
$
401,047
|
|
$
482,455
|
|
$
629,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key performance
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
|
2.88%
|
|
3.03%
|
|
3.04%
|
|
3.00%
|
|
3.02%
|
|
|
Efficiency ratio
|
127.03%
|
|
126.75%
|
|
179.40%
|
|
117.09%
|
|
105.43%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses /
portfolio loans
|
4.44%
|
|
3.90%
|
|
3.57%
|
|
3.01%
|
|
2.50%
|
|
|
Total nonperforming loans /
portfolio loans
|
9.93%
|
|
8.80%
|
|
7.60%
|
|
6.68%
|
|
5.70%
|
|
|
Total nonperforming assets /
total assets
|
9.86%
|
|
8.97%
|
|
8.17%
|
|
7.50%
|
|
6.37%
|
|
|
Net charge-offs (annualized) /
average portfolio loans
|
3.64%
|
|
4.25%
|
|
5.68%
|
|
2.77%
|
|
1.64%
|
|
|
Allowance for loan losses /
nonperforming loans
|
44.67%
|
|
44.31%
|
|
47.04%
|
|
45.14%
|
|
43.77%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Capitol Bancorp Limited
stockholders' equity / total assets
|
1.86%
|
|
2.31%
|
|
3.14%
|
|
4.44%
|
|
5.57%
|
|
|
Total capital / total
assets
|
6.40%
|
|
6.77%
|
|
7.81%
|
|
9.06%
|
|
10.99%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes amounts
related to operations discontinued in 2010 for dates prior to June
30, 2010.
|
|
|
|
|
|
Forward-Looking
Statements
|
|
This press release contains
certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995.
Forward-looking statements include expressions such as
"expect," "intend," "believe," "estimate," "may," "will,"
"anticipate" and "should" and similar expressions also identify
forward-looking statements which are not necessarily statements of
belief as to the expected outcomes of future events. Actual
results could materially differ from those presented due to a
variety of internal and external factors. Actual results
could materially differ from those contained in, or implied by,
such statements. Capitol Bancorp Limited undertakes no
obligation to release revisions to these forward-looking statements
or reflect events or circumstances after the date of this
release.
|
|
|
|
Supplemental analyses
follow providing additional detail regarding Capitol's results of
operations, financial position, asset quality
|
|
and other supplemental
data.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITOL BANCORP
LIMITED
|
|
Condensed Consolidated
Statements of Operations (Unaudited)
|
|
(in thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30
|
|
Six Months Ended June
30
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
INTEREST
INCOME:
|
|
|
|
|
|
|
|
|
Portfolio loans (including
fees)
|
$ 50,793
|
|
$ 62,672
|
|
$ 103,775
|
|
$ 125,190
|
|
Loans held for
sale
|
64
|
|
285
|
|
127
|
|
478
|
|
Taxable investment
securities
|
85
|
|
150
|
|
311
|
|
302
|
|
Federal funds
sold
|
3
|
|
23
|
|
10
|
|
56
|
|
Other
|
689
|
|
562
|
|
1,264
|
|
761
|
|
Total
interest income
|
51,634
|
|
63,692
|
|
105,487
|
|
126,787
|
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE:
|
|
|
|
|
|
|
|
|
Deposits
|
14,404
|
|
21,759
|
|
29,916
|
|
45,339
|
|
Debt obligations and
other
|
4,310
|
|
5,826
|
|
9,097
|
|
12,036
|
|
Total
interest expense
|
18,714
|
|
27,585
|
|
39,013
|
|
57,375
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
32,920
|
|
36,107
|
|
66,474
|
|
69,412
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR LOAN
LOSSES
|
44,600
|
|
32,511
|
|
93,641
|
|
66,125
|
|
Net interest
income (deficiency) after
|
|
|
|
|
|
|
|
|
provision
for loan losses
|
(11,680)
|
|
3,596
|
|
(27,167)
|
|
3,287
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST
INCOME:
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts
|
1,130
|
|
1,366
|
|
2,284
|
|
2,732
|
|
Trust and
wealth-management revenue
|
1,170
|
|
1,135
|
|
2,322
|
|
2,523
|
|
Fees from origination of
non-portfolio residential
|
|
|
|
|
|
|
|
|
mortgage loans
|
430
|
|
1,409
|
|
844
|
|
2,273
|
|
Gain on sales of
government-guaranteed loans
|
476
|
|
405
|
|
774
|
|
645
|
|
Gain on debt
extinguishment
|
|
|
|
|
1,255
|
|
|
|
Realized gains on sale of
investment securities available
|
|
|
|
|
|
|
|
|
for sale
|
|
|
|
|
14
|
|
1
|
|
Other
|
2,221
|
|
2,370
|
|
4,943
|
|
3,189
|
|
Total
noninterest income
|
5,427
|
|
6,685
|
|
12,436
|
|
11,363
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST
EXPENSE:
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
20,089
|
|
23,019
|
|
40,720
|
|
50,574
|
|
Occupancy
|
4,565
|
|
4,492
|
|
8,954
|
|
9,038
|
|
Equipment rent,
depreciation and maintenance
|
2,930
|
|
3,070
|
|
5,858
|
|
6,374
|
|
Costs associated with
foreclosed properties and other
|
|
|
|
|
|
|
|
|
real estate
owned
|
8,905
|
|
4,152
|
|
20,752
|
|
8,370
|
|
FDIC insurance premiums
and other regulatory fees
|
4,187
|
|
5,021
|
|
8,645
|
|
6,987
|
|
Other
|
8,035
|
|
6,971
|
|
16,988
|
|
13,951
|
|
Total
noninterest expense
|
48,711
|
|
46,725
|
|
101,917
|
|
95,294
|
|
|
|
|
|
|
|
|
|
|
Loss before
income tax benefit
|
(54,964)
|
|
(36,444)
|
|
(116,648)
|
|
(80,644)
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
(4,246)
|
|
(13,370)
|
|
(4,068)
|
|
(29,230)
|
|
|
|
|
|
|
|
|
|
|
Loss from
continuing operations
|
(50,718)
|
|
(23,074)
|
|
(112,580)
|
|
(51,414)
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
Income from operations of
bank subsidiaries sold
|
403
|
|
202
|
|
259
|
|
953
|
|
Gain on sales of bank
subsidiaries
|
10,083
|
|
|
|
10,083
|
|
|
|
Less income tax
expense
|
3,687
|
|
88
|
|
3,621
|
|
406
|
|
Income from
discontinued operations
|
6,799
|
|
114
|
|
6,721
|
|
547
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
(43,919)
|
|
(22,960)
|
|
(105,859)
|
|
(50,867)
|
|
|
|
|
|
|
|
|
|
|
Net losses attributable to
noncontrolling interests in
|
|
|
|
|
|
|
|
|
consolidated
subsidiaries
|
2,916
|
|
6,656
|
|
16,974
|
|
13,889
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
ATTRIBUTABLE TO CAPITOL BANCORP
|
|
|
|
|
|
|
|
|
LIMITED
|
$ (41,003)
|
|
$ (16,304)
|
|
$ (88,885)
|
|
$ (36,978)
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE
ATTRIBUTABLE TO
|
|
|
|
|
|
|
|
|
CAPITOL BANCORP LIMITED
(basic and diluted)
|
$
(1.98)
|
|
$
(0.95)
|
|
$
(4.67)
|
|
$
(2.15)
|
|
|
|
|
|
|
|
|
|
CAPITOL BANCORP
LIMITED
|
|
Condensed Consolidated Balance
Sheets
|
|
(in thousands, except share and
per-share data)
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
June 30
|
|
December 31
|
|
|
2010
|
|
2009
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
$
103,324
|
|
$
76,187
|
|
Money market and
interest-bearing deposits
|
811,619
|
|
683,887
|
|
Federal funds sold
|
9,695
|
|
11,005
|
|
Cash and cash
equivalents
|
924,638
|
|
771,079
|
|
Loans held for sale
|
5,931
|
|
11,621
|
|
Investment
securities:
|
|
|
|
|
Available for sale,
carried at fair value
|
23,960
|
|
39,776
|
|
Held for long-term
investment, carried at
|
|
|
|
|
amortized cost which
approximates fair value
|
3,334
|
|
5,891
|
|
Total investment securities
|
27,294
|
|
45,667
|
|
Federal Home Loan Bank and
Federal Reserve
|
|
|
|
|
Bank stock (at
cost)
|
24,021
|
|
23,215
|
|
Portfolio loans:
|
|
|
|
|
Loans secured by real
estate:
|
|
|
|
|
Commercial
|
1,825,943
|
|
1,884,309
|
|
Residential
(including multi-family)
|
720,938
|
|
727,816
|
|
Construction, land
development and other land
|
420,318
|
|
471,121
|
|
Total loans secured by real
estate
|
2,967,199
|
|
3,083,246
|
|
Commercial and other
business-purpose loans
|
578,056
|
|
633,276
|
|
Consumer
|
38,777
|
|
42,691
|
|
Other
|
33,332
|
|
33,142
|
|
Total portfolio loans
|
3,617,364
|
|
3,792,355
|
|
Less allowance for loan
losses
|
(160,482)
|
|
(140,323)
|
|
Net portfolio loans
|
3,456,882
|
|
3,652,032
|
|
Premises and
equipment
|
46,290
|
|
47,017
|
|
Accrued interest
income
|
13,074
|
|
14,709
|
|
Goodwill
|
66,099
|
|
66,126
|
|
Other real estate
owned
|
108,715
|
|
111,102
|
|
Recoverable income taxes
|
43,248
|
|
43,763
|
|
Other assets
|
32,503
|
|
42,059
|
|
Assets of discontinued
operations
|
|
|
303,550
|
|
|
|
|
|
|
TOTAL
ASSETS
|
$ 4,748,695
|
|
$ 5,131,940
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
Deposits:
|
|
|
|
|
Noninterest-bearing
|
$
682,736
|
|
$
624,721
|
|
Interest-bearing
|
3,500,481
|
|
3,523,717
|
|
Total deposits
|
4,183,217
|
|
4,148,438
|
|
Debt obligations:
|
|
|
|
|
Notes payable and
short-term borrowings
|
214,983
|
|
267,659
|
|
Subordinated
debentures
|
167,514
|
|
167,441
|
|
Total debt
obligations
|
382,497
|
|
435,100
|
|
Accrued interest on deposits and
other liabilities
|
46,391
|
|
43,524
|
|
Liabilities of discontinued
operations
|
|
|
271,272
|
|
Total liabilities
|
4,612,105
|
|
4,898,334
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
Capitol Bancorp Limited
stockholders' equity:
|
|
|
|
|
Preferred stock (Series
A), 700,000 shares authorized
|
|
|
|
|
($100 liquidation
preference per share); 50,980 shares
|
|
|
|
|
issued and outstanding in
2010 (none in 2009)
|
5,098
|
|
|
|
Preferred stock (for
potential future issuance),
|
|
|
|
|
19,300,000 shares
authorized; none issued and outstanding
|
--
|
|
--
|
|
Common stock, no par
value, 50,000,000 shares authorized;
|
|
|
|
|
issued and outstanding:
2010 - 21,414,352 shares
|
|
|
|
|
2009 - 17,545,631 shares
|
288,186
|
|
277,707
|
|
Retained-earnings deficit
|
(204,636)
|
|
(115,751)
|
|
Undistributed common stock
held by employee-
|
|
|
|
|
benefit trust
|
(558)
|
|
(558)
|
|
Fair value adjustment (net
of tax effect) for
|
|
|
|
|
investment securities
available for sale (accumulated
|
|
|
|
|
other comprehensive
income)
|
207
|
|
(63)
|
|
Total Capitol Bancorp Limited stockholders'
equity
|
88,297
|
|
161,335
|
|
Noncontrolling interests in
consolidated subsidiaries
|
48,293
|
|
72,271
|
|
Total equity
|
136,590
|
|
233,606
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND EQUITY
|
$ 4,748,695
|
|
$ 5,131,940
|
|
|
|
|
|
CAPITOL BANCORP
LIMITED
Allowance for Loan Losses
Activity
|
|
ALLOWANCE FOR LOAN LOSSES
ACTIVITY (in
thousands):
|
|
|
|
Periods Ended June 30
|
|
|
|
Three Month Period
|
|
Six Month Period
|
|
|
|
2010
|
|
2009(1)
|
|
2010
|
|
2009(1)
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses at
beginning of period
|
|
$
147,526
|
|
$
94,150
|
|
$
140,323
|
|
$
87,636
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses of
previously-deconsolidated
bank subsidiary
|
|
1,769
|
|
|
|
1,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans charged-off:
|
|
|
|
|
|
|
|
|
|
Loans secured by
real estate:
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
(15,603)
|
|
(2,052)
|
|
(26,191)
|
|
(5,625)
|
|
Residential
(including multi-family)
|
|
(6,800)
|
|
(6,994)
|
|
(18,972)
|
|
(14,897)
|
|
Construction, land development and other land
|
|
(8,742)
|
|
(5,372)
|
|
(22,624)
|
|
(13,479)
|
|
Total
loans secured by real estate
|
|
(31,145)
|
|
(14,418)
|
|
(67,787)
|
|
(34,001)
|
|
Commercial and
other business-purpose loans
|
|
(6,220)
|
|
(4,121)
|
|
(13,756)
|
|
(12,174)
|
|
Consumer
|
|
(265)
|
|
(250)
|
|
(426)
|
|
(542)
|
|
Other
|
|
(1)
|
|
(1)
|
|
(1)
|
|
(1)
|
|
Total
charge-offs
|
|
(37,631)
|
|
(18,790)
|
|
(81,970)
|
|
(46,718)
|
|
Recoveries:
|
|
|
|
|
|
|
|
|
|
Loans secured by
real estate:
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
384
|
|
20
|
|
742
|
|
122
|
|
Residential
(including multi-family)
|
|
514
|
|
154
|
|
622
|
|
201
|
|
Construction, land development and other land
|
|
2,284
|
|
2
|
|
3,605
|
|
121
|
|
Total
loans secured by real estate
|
|
3,182
|
|
176
|
|
4,969
|
|
444
|
|
Commercial and
other business-purpose loans
|
|
987
|
|
289
|
|
1,682
|
|
833
|
|
Consumer
|
|
49
|
|
14
|
|
68
|
|
29
|
|
Other
|
|
--
|
|
--
|
|
--
|
|
1
|
|
Total
recoveries
|
|
4,218
|
|
479
|
|
6,719
|
|
1,307
|
|
Net
charge-offs
|
|
(33,413)
|
|
(18,311)
|
|
(75,251)
|
|
(45,411)
|
|
Additions to allowance charged
to expense
|
|
44,600
|
|
32,511
|
|
93,641
|
|
66,125
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan losses at end of period
|
|
$
160,482
|
|
$
108,350
|
|
$
160,482
|
|
$
108,350
|
|
|
|
|
|
|
|
|
|
|
|
Average total portfolio loans
for the period
|
|
$ 3,672,751
|
|
$ 4,334,687
|
|
$ 3,611,204
|
|
$ 4,315,798
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of net charge-offs
(annualized) to average
portfolio loans
outstanding
|
|
3.64%
|
|
1.69%
|
|
4.17%
|
|
2.10%
|
|
|
|
(1) Excludes amounts
related to operations discontinued in 2010.
|
|
|
|
|
|
|
|
|
|
|
CAPITOL BANCORP
LIMITED
Asset Quality
Data
|
|
ASSET QUALITY
(in
thousands):
|
|
|
|
June 30
2010
|
|
March 31
2010(1)
|
|
December 31
2009(1)
|
|
Nonaccrual loans:
|
|
|
|
|
|
|
|
Loans
secured by real estate:
|
|
|
|
|
|
|
|
Commercial
|
|
$
163,759
|
|
$
152,495
|
|
$
130,281
|
|
Residential (including
multi-family)
|
|
57,195
|
|
63,457
|
|
55,347
|
|
Construction, land development
and other land
|
|
94,133
|
|
81,139
|
|
82,239
|
|
Total loans secured by real
estate
|
|
315,087
|
|
297,091
|
|
267,867
|
|
Commercial
and other business-purpose loans
|
|
31,165
|
|
27,102
|
|
23,063
|
|
Consumer
|
|
1,481
|
|
518
|
|
380
|
|
Total nonaccrual
loans
|
|
347,733
|
|
324,711
|
|
291,310
|
|
|
|
|
|
|
|
|
|
Past due (greater than or equal
to 90 days) loans and accruing interest:
|
|
|
|
|
|
|
|
Loans
secured by real estate:
|
|
|
|
|
|
|
|
Commercial
|
|
5,544
|
|
5,796
|
|
6,234
|
|
Residential (including
multi-family)
|
|
2,508
|
|
768
|
|
228
|
|
Construction, land development
and other land
|
|
2,113
|
|
3,035
|
|
3,713
|
|
Total loans secured by real
estate
|
|
10,165
|
|
9,599
|
|
10,175
|
|
Commercial
and other business-purpose loans
|
|
1,344
|
|
2,101
|
|
1,546
|
|
Consumer
|
|
32
|
|
12
|
|
534
|
|
Total past due loans
|
|
11,541
|
|
11,712
|
|
12,255
|
|
|
|
|
|
|
|
|
|
Total nonperforming
loans
|
|
$
359,274
|
|
$
336,423
|
|
$
303,565
|
|
|
|
|
|
|
|
|
|
Real estate owned and
other
repossessed assets
|
|
108,815
|
|
109,719
|
|
111,167
|
|
|
|
|
|
|
|
|
|
Total nonperforming
assets
|
|
$
468,089
|
|
$
446,142
|
|
$
414,732
|
|
|
|
(1) Excludes amounts
related to operations discontinued in 2010.
|
|
|
|
|
|
|
|
|
CAPITOL BANCORP
LIMITED
Selected Supplemental
Data
|
|
EPS COMPUTATION
COMPONENTS (in
thousands):
|
|
|
Periods Ended June 30
|
|
|
Three Month Period
|
|
Six Month Period
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Numerator—net loss attributable
to Capitol Bancorp
Limited for the
period
|
$
(41,003)
|
|
$
(16,304)
|
|
$
(88,885)
|
|
$
(36,978)
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding,
excluding unvested restricted
shares
(denominator for basic and
diluted earnings
per share)
|
20,684
|
|
17,244
|
|
19,052
|
|
17,203
|
|
|
|
|
|
|
|
|
|
|
Number of antidilutive stock
options excluded
from diluted net loss per share
computation
|
2,304
|
|
2,428
|
|
2,304
|
|
2,428
|
|
|
|
|
|
|
|
|
|
|
Number of antidilutive unvested
restricted
shares excluded from diluted net
loss
per share computation
|
126
|
|
123
|
|
126
|
|
123
|
|
|
|
|
|
|
|
|
|
|
Number of antidilutive warrants
excluded
from diluted net loss per share
computation
|
76
|
|
76
|
|
76
|
|
76
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE BALANCES
(in thousands):
|
|
|
|
|
Periods Ended June 30
|
|
|
Three Month Period
|
|
Six Month Period
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Portfolio loans
|
$ 3,672,751
|
|
$ 4,334,687
|
|
$ 3,611,204
|
|
$ 4,315,798
|
|
Earning assets
|
4,602,742
|
|
5,382,603
|
|
4,730,267
|
|
5,347,703
|
|
Total assets
|
4,856,144
|
|
5,756,390
|
|
4,991,807
|
|
5,718,720
|
|
Deposits
|
4,263,632
|
|
4,696,428
|
|
4,352,157
|
|
4,627,644
|
|
Capitol Bancorp Limited
stockholders' equity
|
111,231
|
|
330,977
|
|
131,165
|
|
338,176
|
|
|
|
|
|
|
|
|
|
|
|
Capitol Bancorp's National
Network of Community Banks
|
|
|
|
|
Arizona Region:
|
|
|
Bank of Tucson
|
Tucson, Arizona
|
|
Central Arizona Bank
|
Casa Grande, Arizona
|
|
Southern Arizona Community
Bank
|
Tucson, Arizona
|
|
Sunrise Bank of
Albuquerque
|
Albuquerque, New
Mexico
|
|
Sunrise Bank of
Arizona
|
Phoenix, Arizona
|
|
|
|
|
California
Region:
|
|
|
Bank of Feather River
|
Yuba City, California
|
|
Bank of San Francisco
|
San Francisco,
California
|
|
Sunrise Bank
|
San Diego, California
|
|
|
|
|
Colorado Region:
|
|
|
Fort Collins Commerce
Bank
|
Fort Collins,
Colorado
|
|
Larimer Bank of
Commerce
|
Fort Collins,
Colorado
|
|
Loveland Bank of
Commerce
|
Loveland, Colorado
|
|
Mountain View Bank of
Commerce
|
Westminster, Colorado
|
|
|
|
|
Great Lakes
Region:
|
|
|
Bank of Maumee
|
Maumee, Ohio
|
|
Bank of Michigan
|
Farmington Hills,
Michigan
|
|
Capitol National Bank
|
Lansing, Michigan
|
|
Evansville Commerce
Bank
|
Evansville, Indiana
|
|
Indiana Community
Bank
|
Goshen, Indiana
|
|
Michigan Commerce
Bank
|
Ann Arbor, Michigan
|
|
|
|
|
Midwest Region:
|
|
|
Adams Dairy Bank
|
Blue Springs,
Missouri
|
|
Summit Bank of Kansas
City
|
Lee's Summit,
Missouri
|
|
|
|
|
Nevada Region:
|
|
|
1st Commerce Bank
|
North Las Vegas,
Nevada
|
|
Bank of Las Vegas
|
Las Vegas, Nevada
|
|
|
|
|
Northeast Region:
|
|
|
USNY Bank
|
Geneva, New York
|
|
|
|
|
Northwest Region:
|
|
|
Bank of the Northwest
|
Bellevue, Washington
|
|
High Desert Bank
|
Bend, Oregon
|
|
|
|
|
Southeast Region:
|
|
|
Community Bank of
Rowan
|
Salisbury, North
Carolina
|
|
First Carolina State
Bank
|
Rocky Mount, North
Carolina
|
|
Pisgah Community Bank
|
Asheville, North
Carolina
|
|
Sunrise Bank
|
Valdosta, Georgia
|
|
|
|
|
Texas Region:
|
|
|
Bank of Fort Bend
|
Sugar Land, Texas
|
|
Bank of Las Colinas
|
Irving, Texas
|
|
|
|
|
|
|
|
|
SOURCE Capitol Bancorp Limited
Copyright . 16 PR Newswire