LANSING, Mich. and PHOENIX, Nov. 15,
2010 /PRNewswire-FirstCall/ --
- Ten Affiliate Bank Sales Completed Thus Far in 2010; Twelve
Divestitures Cumulatively
- Bank Divestiture Activities Continue with Five Transactions
Pending
- Six Regional Consolidations Completed
- Total Assets of $4.2 Billion
A $47.7 million pretax loss from
continuing operations was incurred in the most recent quarter,
compared to 2009's comparable period amount of $56.4 million, continuing the recent trend of
modestly-contracting losses compared to 2010's first quarter
(pretax loss of $61.7 million) and
2010's second quarter (pretax loss of $55.0
million). A net loss attributable to Capitol Bancorp
was incurred for the third quarter of 2010 of approximately
$40.8 million ($1.91 per share), compared to a net loss of
$41.0 million ($1.98 per share) for the preceding quarter and a
net loss of $82.7 million
($4.75 per share) for the third
quarter of 2009. The third quarter performance reflected a
$66 million valuation allowance
related to deferred tax assets.
Consolidated assets declined 20 percent year-over-year to
$4.2 billion at September 30, 2010 from the $5.3 billion reported at September 30, 2009, as a result of bank
divestitures and balance-sheet deleveraging strategies. From
these efforts, total portfolio loans approximated $3.3 billion at September
30, 2010, an approximate 13 percent decline over the past
twelve months inclusive of the effect of recent bank divestitures.
Total deposits reflected an approximate 7 percent
year-over-year decline to approximately $3.8
billion from nearly $4.1
billion reported at September 30,
2009. The more modest comparable period contraction in
deposits is a function of the Corporation's continuing focus on
core funding sources through its deleveraging emphasis and changes
resulting from recent bank divestitures. Reflective of this
core funding focus is the continued modest expansion of
noninterest-bearing deposits as a percentage of total deposits, to
17.1 percent at September 30, 2010,
from 16.3 percent at June 30, 2010
and 15.1 percent at year-end 2009.
Capitol's Chairman and CEO Joseph D.
Reid said, "Our efforts are concentrated on challenges
presented by the weakened economy in several markets in our
multi-state network. We continue to focus on building
balance-sheet strength and improving corporate-wide liquidity
through a strategy of regional consolidations and selective bank
divestitures in an effort to improve operational efficiencies and
provide risk management oversight. We remain focused on
accessing sources to strengthen our capital ratios, which have
continued to deteriorate."
"We are cautiously encouraged by both redeployment of capital
resources via our divestiture efforts and preliminary signs of
recent positive trends in asset quality. Total nonperforming
assets, although remaining elevated, and after six consecutive
quarters reflecting a slowing trend in aggregate growth, declined a
modest 3 percent during the three months ended September 30, 2010. Net loan charge-offs,
which also continue to be elevated, reflected another quarter of
active management and resolution-oriented focus, while the
year-to-date provision for loan losses continued to exceed
charge-offs through the interim periods of 2010. The
allowance for loan losses approximated 4.58 percent of portfolio
loans at September 30, 2010, a
material increase from the 3.57 percent level at the beginning of
2010 and a significant increase during these difficult times from
the approximate 3.01 percent level a year ago," added Mr. Reid.
"Combining the aggregate quarter-end level of nonperforming
assets with net charge-offs for each of the past seven quarters,
the rate of increase continued its slowing trend and ultimately
posted a modest decline in the most recent quarter: from a 34.1
percent increase in the first quarter of 2009, to a 13.1 percent
increase in 2009's second quarter, a 12.3 percent increase for the
quarter ended September 30, 2009, a
8.7 percent increase for the final quarter of 2009, to a 2.9
percent increase in 2010's first quarter, a 2.2 percent increase
for the quarter ended June 30, 2010
and a modest 1.5 percent decrease for the three months ended
September 30, 2010. In
addition, pretax, preprovision results, before costs associated
with foreclosed properties and other real estate owned, were
positive for the third consecutive quarter. Costs associated
with foreclosed properties and other real estate owned remained
elevated, significantly impacting operating results."
"Finally, our affiliate divestiture activities resulted in the
sale of ten institutions to date in 2010, eliminating nearly
$755 million of assets (three of
these divestitures, encompassing approximately $240 million of assets, were consummated after
September 30, 2010, and,
consequently, their totals are reflected in the accompanying
financial data). There are five additional transactions
pending encompassing an additional $445
million of assets as we aggressively seek to reallocate
capital and further deleverage the balance sheet. Beyond the
approximate $1.2 billion of assets
these efforts represent, there are ongoing discussions with our
advisors on additional fronts in both the divestiture and
capital-reallocation arenas as we recognize and address the
deterioration that has occurred in capital. We expect to
communicate additional developments as they arise as all strategic
alternatives and prospective sources of support are being actively
explored."
Affiliate Bank Divestitures and Regional Bank
Consolidations
Capitol previously announced plans to sell its controlling
interests in several affiliate banks. In October, Capitol
completed the sale of its interests in three Colorado-based affiliates: Fort Collins
Commerce Bank, Larimer Bank of
Commerce and Loveland Bank of
Commerce. These three transactions consisted of approximately
$240 million of assets and resulted
in the generation of about $15
million of proceeds for reinvestment in bank affiliates.
Capitol also announced agreements to sell its interests in
1st Commerce Bank in Nevada and
Evansville Commerce Bank in Indiana. Those transactions, in addition
to three other pending transactions involving affiliates in
Arizona and Texas, reflect five divestitures awaiting
regulatory approvals (and other contingencies) and represent an
additional $445 million of assets and
the opportunity to reallocate nearly $40
million of capital to other banks within the Capitol Bancorp
network. The five pending divestitures are anticipated to be
completed later this year or early 2011.
Several regional charter consolidations occurred earlier in 2010
and in the fourth quarter of 2009 in Arizona, California, Georgia, Indiana, Michigan, Nevada and Washington, resulting in the elimination of 20
charters. To date, the regional consolidation effort has
resulted in the consolidation of 27 charters into seven
geographically-concentrated banks. Preliminary results at the
merged institutions are actively monitored with the expectation of
meeting targeted efficiency objectives, although implementation
costs and restructuring expenses associated with these mergers may
delay full recognition of projected cost savings and efficiencies.
Mr. Reid further stated, "These bank divestitures and regional
consolidations address several key strategic initiatives of
deleveraging our consolidated balance sheet and enabling the
reallocation of equity capital to other affiliates still challenged
by current economic conditions."
Quarterly Performance
In the third quarter of 2010, consolidated net operating
revenues from continuing operations increased modestly to
approximately $38.2 million from
$36.9 million for the corresponding
period of 2009 as increases in fee income sources helped offset the
revenue implications of a shrinking balance sheet. Ongoing
margin pressures consistent with a low interest-rate environment,
and adversely impacted by elevated levels of nonperforming assets,
resulted in a 2.2 percent decline in net interest income.
Capitol's efforts to maximize core deposit funding sources,
as referenced earlier, helped mitigate some of this margin
pressure. The net interest margin of 3.01 percent for the
months ended September 30, 2010,
while relatively static with last year's comparable period at 3.00
percent, reflected a notable 13 basis point increase when compared
to the 2.88 percent reported on a linked-quarter basis. Cash
and cash equivalents approximated $814
million, or 19 percent of the Corporation's consolidated
total assets at September 30, 2010
reflecting the Corporation's continued focus on enterprise-wide
liquidity. Other noninterest income approximated $6.9 million, compared to approximately
$4.9 million in the comparable 2009
period.
The Corporation continues to emphasize the reduction of
operating expenses. Noninterest expenses, although reflecting
notable declines in "controllable" salary costs and core operating
expenses, increased year-over-year to approximately $51.8 million in the quarter ended September 30, 2010. Costs associated with
foreclosed properties and other real estate owned (which
approximated $14.6 million in the
third quarter of 2010 versus $9.6
million in the corresponding 2009 period) increased
significantly, while FDIC insurance premiums and other regulatory
fees increased from approximately $3.5
million in 2009's third quarter to $3.7 million in the most recent three-month
period. Combined, these two expense areas increased to
approximately $18.4 million in the
current quarter, a substantial increase from the combined
approximate $13 million level during
the corresponding period of 2009.
The third quarter 2010 provision for loan losses decreased to
nearly $34.2 million from
$44.6 million in the preceding
quarter, compared to $44.5 million
for the corresponding period of 2009. During the third
quarter of 2010, net loan charge-offs approximated $40.9 million, a significant increase from 2009's
corresponding level of nearly $29.0
million although generally consistent with the first two
quarters ($41.8 million and
$33.4 million, respectively) 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 continued high level of
the provision for loan losses were major reasons for the net loss
in the 2010 period.
Nine-Month Performance
Net operating revenues were approximately $111.4 million for the nine months ended
September 30, 2010, a 1.4 percent
increase compared to $109.9 million
for the year-ago period. Core operating revenues, net of
non-core gains on loan and securities sales coupled with a gain on
debt extinguishment, declined approximately 18.6 percent due to the
impact of sizable deleveraging of the balance sheet resulting from
sales of bank subsidiaries and further driven by margin compression
and general softness across all major revenue components. The
provision for loan losses of $126.9
million for the nine-month period of 2010 was a significant
increase from the $109.4 million for
the comparable 2009 period and exceeded net charge-offs. The
net loss per share for the nine months ended September 30, 2010 was $6.54, versus $6.93
reported for the corresponding period in 2009.
Balance Sheet
With total capital resources of $245.2
million at September 30, 2010,
the total capital-to-asset ratio was 5.79 percent.
Divestiture efforts and ongoing balance sheet deleveraging
are focused on strengthening consolidated capital ratios but, as of
September 30, 2010, the consolidated
leverage, Tier 1 and total risk-based regulatory capital ratios
were 0.67 percent, 0.94 percent and 1.89 percent, respectively.
Consequently, the Corporation continues to be classified as
"undercapitalized." As of September
30, 2010, Capitol has a $169.3
million valuation allowance related to deferred tax assets,
which can only be utilized upon a return to significant core
profitability.
Net loan charge-offs of 4.89 percent of average loans
(annualized) for the third quarter of 2010 were a dramatic increase
from the 2.77 percent in the corresponding period of 2009 as the
Corporation continued to aggressively pursue problem asset
resolution. The ratio of nonperforming loans to total
portfolio loans was 10.46 percent at September 30, 2010 compared to 9.93 percent
reported at June 30, 2010 and 6.68
percent at September 30, 2009.
The ratio of total nonperforming assets to total assets
increased to 10.59 percent at September 30,
2010 from 9.86 percent reported at June 30, 2010 and 7.50 percent at September 30, 2009.
The continuing increase in nonperforming assets ratio is
attributable to borrower stress and delinquency, coupled with
limited markets for the sale of real estate, especially in the
states of Arizona, Michigan and Nevada, hindering the disposition of such
assets. While recent activity reflected some encouragement in
the declining level of nonperforming loans in both the Arizona
Region (a $7 million decline
linked-quarter) and Nevada Region (a $13
million decline in nonperforming loans linked-quarter), both
regions continue to reflect materially elevated levels of
nonperforming assets. However, the modest declines in
nonperforming loans experienced in both Arizona and Nevada was partially offset by continued
deterioration in the Great Lakes Region, particularly in
Michigan. The coverage ratio
of the allowance for loan losses in relation to nonperforming loans
approximated 44 percent at September 30,
2010, relatively consistent with levels reported in recent
quarters, while the allowance for loan losses as a percentage of
portfolio loans increased materially year-over-year, from 3.01
percent to 4.58 percent at September 30,
2010, while provisions for loan losses continued to exceed
the significant level of net charge-off activity during the interim
periods of 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 14 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
|
|
|
|
Nine Months
Ended
|
|
|
|
|
September
30
|
|
|
|
September
30
|
|
|
|
|
2010
|
|
2009
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
Condensed results of
operations:
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
$
48,409
|
|
$
56,320
|
|
|
|
$
147,278
|
|
$
172,766
|
|
|
Interest expense
|
17,125
|
|
24,341
|
|
|
|
54,579
|
|
77,957
|
|
|
|
Net interest income
|
31,284
|
|
31,979
|
|
|
|
92,699
|
|
94,809
|
|
|
Provision for loan
losses
|
34,160
|
|
44,482
|
|
|
|
126,918
|
|
109,402
|
|
|
Noninterest income
|
6,898
|
|
4,874
|
|
|
|
18,658
|
|
15,055
|
|
|
Noninterest expense
|
51,757
|
|
48,757
|
|
|
|
149,149
|
|
137,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
before income tax benefit
|
(47,735)
|
|
(56,386)
|
|
|
|
(164,710)
|
|
(136,750)
|
|
|
Income (loss) from discontinued
operations
|
2,272
|
|
(5,293)
|
|
|
|
9,074
|
|
(4,964)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Capitol
Bancorp Limited
|
$
(40,761)
|
|
$
(82,689)
|
|
|
|
$ (129,646)
|
|
$ (119,667)
|
|
|
Net loss per common share
attributable to Capitol
|
|
|
|
|
|
|
|
|
|
|
|
Bancorp Limited
|
$
(1.91)
|
|
$
(4.75)
|
|
|
|
$
(6.54)
|
|
$
(6.93)
|
|
|
Book value per common share at
end of period
|
1.96
|
|
13.50
|
|
|
|
1.96
|
|
13.50
|
|
|
Common stock closing price at
end of period
|
$
1.13
|
|
$
2.61
|
|
|
|
$
1.13
|
|
$
2.61
|
|
|
Common shares outstanding at end
of period
|
21,623,000
|
|
17,510,000
|
|
|
|
21,623,000
|
|
17,510,000
|
|
|
Number of common shares used to
compute net loss per share
|
21,300,000
|
|
17,398,000
|
|
|
|
19,810,000
|
|
17,269,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd
Quarter
|
|
2nd
Quarter
|
|
1st
Quarter
|
|
4th
Quarter
|
|
3rd
Quarter
|
|
|
|
|
2010
|
|
2010
|
|
2010
|
|
2009
|
|
2009
|
|
|
Condensed summary of financial
position:
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$ 4,237,588
|
|
$ 4,748,695
|
|
$ 5,064,936
|
|
$ 5,131,940
|
|
$ 5,322,613
|
|
|
Portfolio loans(1)
|
3,251,942
|
|
3,399,814
|
|
3,442,355
|
|
3,579,000
|
|
3,721,146
|
|
|
Deposits(1)
|
3,796,548
|
|
3,959,172
|
|
3,969,476
|
|
3,942,379
|
|
4,068,081
|
|
|
Capitol Bancorp Limited
stockholders' equity
|
47,372
|
|
88,297
|
|
117,167
|
|
161,335
|
|
236,385
|
|
|
Total capital
|
$
245,234
|
|
$
304,104
|
|
$
342,858
|
|
$
401,047
|
|
$
482,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key performance
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
|
3.01%
|
|
2.88%
|
|
3.03%
|
|
3.04%
|
|
3.00%
|
|
|
Efficiency ratio
|
135.55%
|
|
127.03%
|
|
126.75%
|
|
179.40%
|
|
117.09%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses /
portfolio loans
|
4.58%
|
|
4.44%
|
|
3.90%
|
|
3.57%
|
|
3.01%
|
|
|
Total nonperforming loans /
portfolio loans
|
10.46%
|
|
9.93%
|
|
8.80%
|
|
7.60%
|
|
6.68%
|
|
|
Total nonperforming assets /
total assets
|
10.59%
|
|
9.86%
|
|
8.97%
|
|
8.17%
|
|
7.50%
|
|
|
Net charge-offs (annualized) /
average portfolio loans
|
4.89%
|
|
3.64%
|
|
4.25%
|
|
5.68%
|
|
2.77%
|
|
|
Allowance for loan losses /
nonperforming loans
|
43.74%
|
|
44.67%
|
|
44.31%
|
|
47.04%
|
|
45.14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Capitol Bancorp Limited
stockholders' equity / total assets
|
1.12%
|
|
1.86%
|
|
2.31%
|
|
3.14%
|
|
4.44%
|
|
|
Total capital / total
assets
|
5.79%
|
|
6.40%
|
|
6.77%
|
|
7.81%
|
|
9.06%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes amounts
related to operations discontinued in 2010 for dates prior to
September 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 September 30
|
|
Nine Months
Ended September 30
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
INTEREST
INCOME:
|
|
|
|
|
|
|
|
|
|
Portfolio loans (including
fees)
|
$ 47,527
|
|
$ 55,640
|
|
$ 144,781
|
|
$ 170,792
|
|
|
Loans held for
sale
|
72
|
|
136
|
|
194
|
|
515
|
|
|
Taxable investment
securities
|
126
|
|
89
|
|
437
|
|
262
|
|
|
Federal funds
sold
|
2
|
|
16
|
|
10
|
|
53
|
|
|
Other
|
682
|
|
439
|
|
1,856
|
|
1,144
|
|
|
Total interest income
|
48,409
|
|
56,320
|
|
147,278
|
|
172,766
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE:
|
|
|
|
|
|
|
|
|
|
Deposits
|
13,027
|
|
18,585
|
|
41,648
|
|
60,640
|
|
|
Debt obligations and
other
|
4,098
|
|
5,756
|
|
12,931
|
|
17,317
|
|
|
Total interest expense
|
17,125
|
|
24,341
|
|
54,579
|
|
77,957
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
31,284
|
|
31,979
|
|
92,699
|
|
94,809
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR LOAN
LOSSES
|
34,160
|
|
44,482
|
|
126,918
|
|
109,402
|
|
|
Net interest income deficiency after provision for loan
losses
|
(2,876)
|
|
(12,503)
|
|
(34,219)
|
|
(14,593)
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST
INCOME:
|
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts
|
1,071
|
|
1,339
|
|
3,225
|
|
3,922
|
|
|
Trust and
wealth-management revenue
|
960
|
|
1,288
|
|
3,282
|
|
3,811
|
|
|
Fees from origination of
non-portfolio residential mortgage loans
|
617
|
|
624
|
|
1,427
|
|
2,402
|
|
|
Gain on sale of
government-guaranteed loans
|
901
|
|
643
|
|
1,508
|
|
919
|
|
|
Realized gain (loss) on
sale of investment securities available for sale
|
(4)
|
|
41
|
|
10
|
|
42
|
|
|
Gain on debt
extinguishment
|
|
|
|
|
1,255
|
|
|
|
|
Other
|
3,353
|
|
939
|
|
7,951
|
|
3,959
|
|
|
Total noninterest income
|
6,898
|
|
4,874
|
|
18,658
|
|
15,055
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST
EXPENSE:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
18,989
|
|
20,705
|
|
57,871
|
|
68,343
|
|
|
Occupancy
|
4,103
|
|
4,187
|
|
12,592
|
|
12,613
|
|
|
Equipment rent,
depreciation and maintenance
|
2,369
|
|
2,765
|
|
7,987
|
|
8,806
|
|
|
Costs associated with
foreclosed properties and other real estate owned
|
14,645
|
|
9,577
|
|
35,386
|
|
17,916
|
|
|
FDIC insurance premiums
and other regulatory fees
|
3,733
|
|
3,455
|
|
12,136
|
|
9,964
|
|
|
Other
|
7,918
|
|
8,068
|
|
23,177
|
|
19,570
|
|
|
Total noninterest expense
|
51,757
|
|
48,757
|
|
149,149
|
|
137,212
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
(47,735)
|
|
(56,386)
|
|
(164,710)
|
|
(136,750)
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes (benefit)
|
56
|
|
66,436
|
|
(4,258)
|
|
37,268
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
(47,791)
|
|
(122,822)
|
|
(160,452)
|
|
(174,018)
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations of bank subsidiaries sold
|
268
|
|
(206)
|
|
854
|
|
467
|
|
|
Gain on sale of bank
subsidiaries
|
3,296
|
|
1,187
|
|
13,379
|
|
1,187
|
|
|
Less income tax
expense
|
1,292
|
|
6,274
|
|
5,159
|
|
6,618
|
|
|
Income (loss) from discontinued operations
|
2,272
|
|
(5,293)
|
|
9,074
|
|
(4,964)
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
(45,519)
|
|
(128,115)
|
|
(151,378)
|
|
(178,982)
|
|
|
|
|
|
|
|
|
|
|
|
Net losses attributable to
noncontrolling interests in consolidated
subsidiaries
|
4,758
|
|
45,426
|
|
21,732
|
|
59,315
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO CAPITOL BANCORP LIMITED
|
$ (40,761)
|
|
$ (82,689)
|
|
$ (129,646)
|
|
$ (119,667)
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE ATTRIBUTABLE
TO
CAPITOL BANCORP LIMITED (basic and diluted)
|
$
(1.91)
|
|
$
(4.75)
|
|
$
(6.54)
|
|
$
(6.93)
|
|
|
|
|
|
|
|
|
|
|
CAPITOL
BANCORP LIMITED
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
(in
thousands, except share and per-share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
September
30
|
|
December
31
|
|
|
|
|
2010
|
|
2009
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
86,917
|
|
$
69,190
|
|
|
Money market and
interest-bearing deposits
|
725,141
|
|
657,846
|
|
|
Federal funds sold
|
|
1,455
|
|
4,863
|
|
|
|
Cash and cash equivalents
|
813,513
|
|
731,899
|
|
|
Loans held for sale
|
|
7,736
|
|
11,119
|
|
|
Investment
securities:
|
|
|
|
|
|
|
Available for sale,
carried at fair value
|
27,253
|
|
39,776
|
|
|
Held for long-term
investment, carried at
|
|
|
|
|
|
amortized cost
which approximates fair value
|
3,422
|
|
5,791
|
|
|
|
Total investment securities
|
30,675
|
|
45,567
|
|
|
Federal Home Loan Bank and
Federal Reserve
|
|
|
|
|
|
Bank stock (carried on the
basis of cost)
|
22,020
|
|
21,646
|
|
|
Portfolio loans:
|
|
|
|
|
|
|
|
Loans secured by real
estate:
|
|
|
|
|
|
|
Commercial
|
|
|
1,699,958
|
|
1,812,387
|
|
|
Residential
(including multi-family)
|
648,507
|
|
679,847
|
|
|
Construction, land development and other land
|
357,587
|
|
444,420
|
|
|
|
Total loans secured by real
estate
|
2,706,052
|
|
2,936,654
|
|
|
Commercial and other
business-purpose loans
|
488,300
|
|
580,524
|
|
|
Consumer
|
|
|
32,308
|
|
37,336
|
|
|
Other
|
|
|
25,282
|
|
24,486
|
|
|
|
Total portfolio loans
|
3,251,942
|
|
3,579,000
|
|
|
Less allowance for loan
losses
|
(148,777)
|
|
(136,184)
|
|
|
|
Net portfolio loans
|
3,103,165
|
|
3,442,816
|
|
|
Premises and
equipment
|
|
42,281
|
|
44,779
|
|
|
Accrued interest
income
|
|
11,582
|
|
13,893
|
|
|
Goodwill
|
|
|
66,105
|
|
66,126
|
|
|
Other real estate
owned
|
|
108,424
|
|
111,102
|
|
|
Recoverable income taxes
|
|
1,825
|
|
43,763
|
|
|
Other assets
|
|
|
30,262
|
|
39,099
|
|
|
Assets of discontinued
operations
|
--
|
|
560,131
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$ 4,237,588
|
|
$ 5,131,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
Noninterest-bearing
|
|
$
648,416
|
|
$
577,858
|
|
|
Interest-bearing
|
|
3,148,132
|
|
3,364,521
|
|
|
|
Total deposits
|
3,796,548
|
|
3,942,379
|
|
|
Debt obligations:
|
|
|
|
|
|
|
|
Notes payable and
short-term borrowings
|
144,282
|
|
243,747
|
|
|
Subordinated
debentures
|
|
167,550
|
|
167,441
|
|
|
|
Total debt obligations
|
311,832
|
|
411,188
|
|
|
Accrued interest on deposits and
other liabilities
|
51,524
|
|
43,162
|
|
|
Liabilities of discontinued
operations
|
--
|
|
501,605
|
|
|
|
Total liabilities
|
4,159,904
|
|
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 - 21,623,056
shares
|
|
|
|
|
|
2009 - 17,545,631
shares
|
288,031
|
|
277,707
|
|
|
Retained-earnings deficit
|
|
(245,397)
|
|
(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)
|
198
|
|
(63)
|
|
|
Total Capitol Bancorp
Limited stockholders' equity
|
47,372
|
|
161,335
|
|
|
Noncontrolling interests in
consolidated subsidiaries
|
30,312
|
|
72,271
|
|
|
|
Total equity
|
77,684
|
|
233,606
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY
|
$ 4,237,588
|
|
$ 5,131,940
|
|
|
|
|
|
|
|
|
CAPITOL
BANCORP LIMITED
Allowance
for Loan Losses Activity
|
|
|
|
|
ALLOWANCE
FOR LOAN LOSSES ACTIVITY (in
thousands):
|
|
|
|
|
|
Periods
Ended September 30
|
|
|
|
Three Month
Period
|
|
Nine Month
Period
|
|
|
|
2010
|
|
2009(1)
|
|
2010
|
|
2009(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses at
beginning of period
|
|
$
155,468
|
|
$
102,535
|
|
$
136,184
|
|
$
82,666
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses of
previously-deconsolidated
bank subsidiary
|
|
|
|
|
|
1,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans charged-off:
|
|
|
|
|
|
|
|
|
|
|
Loans secured by real
estate:
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
(21,556)
|
|
(5,757)
|
|
(47,747)
|
|
(11,367)
|
|
|
Residential
(including multi-family)
|
|
(9,193)
|
|
(5,026)
|
|
(28,165)
|
|
(19,869)
|
|
|
Construction, land development
and other land
|
|
(6,268)
|
|
(11,239)
|
|
(28,887)
|
|
(24,586)
|
|
|
Total loans
secured by real estate
|
|
(37,017)
|
|
(22,022)
|
|
(104,799)
|
|
(55,822)
|
|
|
Commercial and other
business-purpose loans
|
|
(6,950)
|
|
(7,149)
|
|
(20,706)
|
|
(19,164)
|
|
|
Consumer
|
|
(875)
|
|
(430)
|
|
(1,295)
|
|
(972)
|
|
|
Other
|
|
--
|
|
(34)
|
|
--
|
|
(34)
|
|
|
Total
charge-offs
|
|
(44,842)
|
|
(29,635)
|
|
(126,800)
|
|
(75,992)
|
|
|
Recoveries:
|
|
|
|
|
|
|
|
|
|
|
Loans secured by real
estate:
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
754
|
|
29
|
|
1,495
|
|
151
|
|
|
Residential
(including multi-family)
|
|
1,043
|
|
51
|
|
1,666
|
|
252
|
|
|
Construction, land development
and other land
|
|
1,743
|
|
385
|
|
5,349
|
|
506
|
|
|
Total loans
secured by real estate
|
|
3,540
|
|
465
|
|
8,510
|
|
909
|
|
|
Commercial and other
business-purpose loans
|
|
423
|
|
161
|
|
2,100
|
|
994
|
|
|
Consumer
|
|
28
|
|
88
|
|
96
|
|
117
|
|
|
Total
recoveries
|
|
3,991
|
|
714
|
|
10,706
|
|
2,020
|
|
|
Net
charge-offs
|
|
(40,851)
|
|
(28,921)
|
|
(116,094)
|
|
(73,972)
|
|
|
Additions to allowance charged
to expense (provision
for loan
losses)
|
|
34,160
|
|
44,482
|
|
126,918
|
|
109,402
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan losses at end of period
|
|
$
148,777
|
|
$
118,096
|
|
$
148,777
|
|
$
118,096
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total portfolio loans
for the period
|
|
$
3,338,447
|
|
$
3,797,021
|
|
$
3,439,705
|
|
$
3,911,639
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of net charge-offs
(annualized) to average
portfolio loans
outstanding
|
|
4.89%
|
|
3.05%
|
|
4.50%
|
|
2.52%
|
|
|
|
|
(1)
Excludes amounts related to
operations discontinued in 2010.
|
|
|
|
|
|
|
|
|
|
|
|
CAPITOL
BANCORP LIMITED
Asset
Quality Data
|
|
|
|
|
ASSET
QUALITY (in
thousands):
|
|
|
|
|
|
September
30
2010
|
|
June
30
2010(1)
|
|
March
31
2010(1)
|
|
December
31
2009(1)
|
|
|
Nonaccrual loans:
|
|
|
|
|
|
|
|
|
|
|
Loans secured by real
estate:
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
161,371
|
|
$
161,996
|
|
$
151,615
|
|
$
129,401
|
|
|
Residential
(including multi-family)
|
|
65,480
|
|
57,095
|
|
63,356
|
|
55,347
|
|
|
Construction, land development
and other land
|
|
78,697
|
|
92,053
|
|
80,161
|
|
81,261
|
|
|
Total loans secured by
real estate
|
|
305,548
|
|
311,144
|
|
295,132
|
|
266,009
|
|
|
Commercial and other
business-purpose loans
|
|
30,065
|
|
30,494
|
|
27,102
|
|
23,063
|
|
|
Consumer
|
|
725
|
|
1,463
|
|
495
|
|
335
|
|
|
Total nonaccrual
loans
|
|
336,338
|
|
343,101
|
|
322,729
|
|
289,407
|
|
|
|
|
|
|
|
|
|
|
|
|
Past due (greater than or equal
to 90 days) loans and accruing
interest:
|
|
|
|
|
|
|
|
|
|
|
Loans secured by real
estate:
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
2,523
|
|
5,544
|
|
5,796
|
|
6,234
|
|
|
Residential
(including multi-family)
|
|
855
|
|
2,508
|
|
768
|
|
228
|
|
|
Construction, land development
and other land
|
|
18
|
|
2,113
|
|
3,035
|
|
3,713
|
|
|
Total loans secured by
real estate
|
|
3,396
|
|
10,165
|
|
9,599
|
|
10,175
|
|
|
Commercial and other
business-purpose loans
|
|
387
|
|
1,344
|
|
2,101
|
|
1,546
|
|
|
Consumer
|
|
38
|
|
32
|
|
12
|
|
534
|
|
|
Total past due
loans
|
|
3,821
|
|
11,541
|
|
11,712
|
|
12,255
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
loans
|
|
$
340,159
|
|
$
354,642
|
|
$
334,441
|
|
$
301,662
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate owned and
other
repossessed
assets
|
|
108,425
|
|
108,633
|
|
109,702
|
|
111,167
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
assets
|
|
$
448,584
|
|
$
463,275
|
|
$
444,143
|
|
$
412,829
|
|
|
|
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(1) Excludes
amounts related to operations discontinued in 2010.
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CAPITOL
BANCORP LIMITED
Selected
Supplemental Data
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EPS COMPUTATION
COMPONENTS (in
thousands):
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Periods
Ended September 30
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Three Month
Period
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Nine Month
Period
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2010
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2009
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2010
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2009
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Numerator—net loss attributable
to Capitol Bancorp
Limited for the
period
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$
(40,761)
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$
(82,689)
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$
(129,646)
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$
(119,667)
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Denominator:
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Weighted average number of
common shares
outstanding, excluding
unvested restricted shares
of common stock
(denominator for basic and
diluted earnings per
share)
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21,300
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17,398
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19,810
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17,269
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Number of antidilutive stock
options excluded
from diluted net loss per
share computation
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1,922
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2,375
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1,922
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2,375
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Number of antidilutive unvested
restricted
shares excluded from
diluted net loss
per share
computation
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318
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109
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318
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109
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Number of antidilutive warrants
excluded
from diluted net loss per
share computation
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76
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76
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76
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76
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AVERAGE BALANCES (in
thousands):
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Periods
Ended September 30
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Three Month
Period
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Nine Month
Period
|
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2010
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2009
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2010
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2009
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Portfolio loans
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$
3,338,447
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$
3,797,021
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$
3,439,705
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$
3,911,639
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Earning assets
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4,163,225
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4,527,974
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4,247,299
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4,536,078
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Total assets
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4,524,205
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5,730,665
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4,829,078
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5,722,755
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Deposits
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3,899,835
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4,051,104
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3,942,541
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4,038,323
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Capitol Bancorp Limited
stockholders' equity
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72,792
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313,260
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112,103
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329,869
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Capitol Bancorp's National
Network of Community Banks
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Arizona Region:
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Bank of Tucson
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Tucson, Arizona
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Central Arizona
Bank
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Casa Grande, Arizona
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Southern Arizona Community
Bank
|
Tucson, Arizona
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Sunrise Bank of
Albuquerque
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Albuquerque, New
Mexico
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Sunrise Bank of
Arizona
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Phoenix, Arizona
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California
Region:
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Bank of Feather
River
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Yuba City, California
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Sunrise Bank
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San Diego, California
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Colorado Region:
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Mountain View Bank of
Commerce
|
Westminster, Colorado
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Great Lakes
Region:
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Bank of Maumee
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Maumee, Ohio
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Bank of
Michigan
|
Farmington Hills,
Michigan
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Capitol National
Bank
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Lansing, Michigan
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Evansville Commerce
Bank
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Evansville, Indiana
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Indiana Community
Bank
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Goshen, Indiana
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Michigan Commerce
Bank
|
Ann Arbor, Michigan
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Midwest Region:
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Summit Bank of Kansas
City
|
Lee's Summit,
Missouri
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Nevada Region:
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1st Commerce
Bank
|
North Las Vegas,
Nevada
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Bank of Las
Vegas
|
Las Vegas, Nevada
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Northwest Region:
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Bank of the Northwest
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Bellevue, Washington
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High Desert Bank
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Bend, Oregon
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Southeast Region:
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Community Bank of
Rowan
|
Salisbury, North
Carolina
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First Carolina State
Bank
|
Rocky Mount, North
Carolina
|
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Pisgah Community
Bank
|
Asheville, North
Carolina
|
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Sunrise Bank
|
Valdosta, Georgia
|
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Texas Region:
|
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Bank of Fort
Bend
|
Sugar Land, Texas
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Bank of Las
Colinas
|
Irving, Texas
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SOURCE Capitol Bancorp Limited