Record Nine Month Operating Results
For the nine months ended September 30, 2006, record net operating revenues of $145.2 million increased approximately 11 percent when compared to the $130.4 million figure recorded in the comparable nine month period of 2005. Earnings exceeding $31 million for the first nine months of 2006 reflect 20 percent growth when compared to the approximate $26 million generated in last year’s first three quarters ended September 30, 2005.
On an EPS basis, Capitol Bancorp reported $1.97 and $1.89, basic and diluted, respectively, for the first nine months of 2006, both 13 percent ahead of 2005’s comparable period levels of $1.75 and $1.67, respectively. The Corporation’s strong bottom line was generated in light of Capitol Bancorp’s historical track record of producing negative operating leverage during periods of active de novo bank development. Through the first nine months of 2006, operating expenses have increased 20 percent versus last year’s comparable period, offset in part by the existing and emerging core earnings performance tied to the Corporation’s expansion.
Through the first nine months of 2006, Capitol Bancorp has added six affiliate banks in Arizona, Georgia (2), Indiana, North Carolina, and Washington, and launched Capitol Wealth Advisors, its wealth management subsidiary headquartered in Charlotte, North Carolina. Subsequently, in early October, Capitol Bancorp opened Bank of Maumee, which represents its initial entry into the state of Ohio, followed closely by the opening of its fifth Nevada bank, 1st Commerce Bank in North Las Vegas. The Corporation currently has four applications pending for de novo banks with concurrent development activity in California, Colorado, Ohio, Texas and Washington.
Balance Sheet
Capitol Bancorp’s equity-to-assets ratio of 8.5 percent at September 30, 2006, is consistent with levels reported in recent quarters and up slightly compared to the approximately 8.1 percent reported at September 30, 2005. The total capital-to-assets ratio approximated 14.1 percent at September 30, 2006, up from 13.1 percent a year ago, as total capital funds approximating $543 million represent a 20 percent year-over-year increase on the Corporation's record-level $3.9 billion consolidated balance sheet.
Capitol Bancorp’s key measures of asset quality remained steady. At September 30, 2006, the Corporation’s allowance for loan losses, as a percentage of total portfolio loans (1.37%), annualized quarterly net charge-offs, as a percentage of average portfolio loans (0.19%), and the allowance coverage ratio of nonperforming loans (151%) closely approximated recent periods. Capitol Bancorp’s record quarterly and year-to-date results were achieved as the Corporation continued to exhibit a prudent approach to asset quality management, demonstrated by a provisioning for loan losses in the respective periods that was more than two times recorded net charge-offs.
About Capitol Bancorp Limited
Capitol Bancorp Limited (NYSE: CBC) is a $3.9 billion national community bank development company, with a network of 49 separately chartered banks and bank operations in 14 states. It is the holder of the most individual bank charters in the country. Capitol Bancorp Limited identifies opportunities for the development of new community banks, raises capital for and mentors new community banks through their formative stages, and provides efficient services to its growing network of community banks. Each community bank has full local decision-making authority and is managed by an on-site president under the direction of a local board of directors, composed of business leaders from the bank’s community. Founded in 1988, Capitol Bancorp Limited has executive offices in Lansing, Michigan, and Phoenix, Arizona.
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