EXHIBIT 99.1
| Capitol Bancorp Center 200 Washington Square North Lansing, MI 48933 2777 East Camelback Road Suite 375 Phoenix, AZ 85016 www.capitolbancorp.com |
Analyst Contact: Media Contact: | Michael M. Moran Chief of Capital Markets 877-884-5662 Joal Redmond Corporate Communications 602-977-3797 |
CAPITOL BANCORP REPORTS FIRST QUARTER RESULTS AND CONTINUED
EFFORTS FOR NATIONAL GROWTH AND DIVERSIFICATION
1st QUARTER 2007 HIGHLIGHTS
| · | Assets Reach Record $4.3 Billion |
| · | Two New Banks Opened; 6 De Novo Applications currently pending |
LANSING, Mich. and PHOENIX, Ariz.: April 20, 2007: Capitol Bancorp Limited (NYSE: CBC) today reported first quarter 2007 net income approximating $6.3 million compared to $10 million in the first quarter of 2006. Basic and diluted earnings per share (EPS) were $0.38 and $0.36, respectively, compared to $0.64 and $0.61 for the first quarter of 2006. With annualized growth of 19 percent in the first three months of 2007, consolidated assets approximated $4.3 billion at March 31, 2007, compared to $3.6 billion a year ago. Total portfolio loans exceeded $3.6 billion, increasing 18 percent when compared to the approximate $3.1 billion reported at March 31, 2006. Total deposits neared $3.4 billion, reflecting a 16 percent increase on an annualized basis. Capitol Bancorp Chairman and CEO Joseph D. Reid said, “We were disappointed with the first quarter earnings result which was influenced by the challenges in the Great Lakes Region.”
In the first quarter of 2007, Capitol Bancorp opened de novo community banks in Tacoma, Washington and Palm Desert, California. Additionally, six applications for new banks are pending approval in Colorado, New York, Oregon, Washington and California.
“Despite the first quarter earnings setback,” Reid said, “we remain focused on national growth. A year ago, we had 42 individually chartered banks; today we have 51, and are on track to address de novo opportunities with additional community bank openings scheduled for 2007. To meet the needs of our growth strategy, we have enhanced our infrastructure with the hiring of a new Chief Information Officer and Chief Technology Officer, as well as through the creation of a new position, Chief of Bank Performance. Additionally, nine risk management positions have been added since the third quarter of 2006. To fund our operations and support our growth, we
have added an additional $55 million in capital, bringing our capital base to a healthy $662 million of which some $382 million is stockholders’ equity.”
Quarterly Performance
Consolidated net operating revenues grew 8 percent to $50.3 million for the first quarter of 2007 compared with $46.5 million for the first quarter of 2006. Net income for the quarter approximated $6.3 million, down from $10 million reported in the first quarter of 2006. Diluted earnings per share (EPS) of $0.36 were down from $0.61 reported in the first quarter of 2006, a result of a number of factors including increased loan loss provisioning, a 7 percent growth in the Corporation’s outstanding share count, and lack of earnings support from some of the Great Lakes Region banks.
“In light of the ongoing economic pressure in the Great Lakes Region, particularly in Michigan, we have increased our provision for loan losses by approximately $1.5 million,” said Reid. “While this directly impacted our earnings stream, we believe it to be a prudent action so that we are able to manage through this regional downturn while continuing with our geographic diversification.”
Balance Sheet
The Corporation’s equity to asset ratio was 8.98 percent at March 31, 2007, compared with 8.56 percent at March 31, 2006. The total capital to asset ratio was 15.55 percent at March 31, 2007, up from 13.77 percent a year ago as total capital exceeded $661 million. In March the Corporation announced a capital raising initiative that added $55 million to the funds available to facilitate de novo growth and address expansion opportunities.
The ratio of nonperforming assets to total assets percent remained steady from the previous quarter at 1.08 percent while net charge-offs decreased slightly to 0.26 percent from 0.38 percent reported in the previous quarter.
About Capitol Bancorp Limited
Capitol Bancorp Limited (NYSE: CBC) is a $4.3 billion national community bank development company, with a network of more than 50 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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CAPITOL BANCORP LIMITED |
SUMMARY OF SELECTED FINANCIAL DATA |
(in thousands, except share and per share data) |
| | | | | | | | | | | | |
| | | Three Months Ended | | | | Year Ended | |
| | | March 31 | | | | December 31 | |
| | | 2007 | | 2006 | | | | 2006 | | 2005 | |
| | | | | | | | | | | | |
Condensed statements of operations: | | | | | | | | | | | | | | | | |
| Interest income | | $ | 77,839 | | $ | 63,097 | | | | | $ | 279,353 | | $ | 224,439 | |
| Interest expense | | | 33,158 | | | 21,744 | | | | | | 105,586 | | | 67,579 | |
| Net interest income | | | 44,681 | | | 41,353 | | | | | | 173,767 | | | 156,860 | |
| Provision for loan losses | | | 3,932 | | | 2,456 | | | | | | 12,156 | | | 10,960 | |
| Noninterest income | | | 5,585 | | | 5,110 | | | | | | 21,532 | | | 21,048 | |
| Noninterest expense | | | 41,823 | | | 31,832 | | | | | | 137,804 | | | 117,289 | |
| Income before income taxes | | | 8,035 | | | 14,334 | | | | | | 57,854 | | | 55,157 | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 6,271 | | $ | 9,953 | | | | | $ | 42,391 | | $ | 35,925 | |
| | | | | | | | | | | | | | | | | |
Per share data: | | | | | | | | | | | | | | | | |
| Net income - basic | | $ | 0.38 | | $ | 0.64 | | | | | $ | 2.69 | | $ | 2.42 | |
| Net income - diluted | | | 0.36 | | | 0.61 | | | | | | 2.57 | | | 2.34 | |
| Book value at end of period | | | 22.37 | | | 19.53 | | | | | | 21.73 | | | 19.13 | |
| Common stock closing price at end of period | | $ | 36.85 | | $ | 46.75 | | | | | $ | 46.20 | | $ | 37.44 | |
| Common shares outstanding at end of period | | | 17,075,000 | | | 15,897,000 | | | | | | 16,656,000 | | | 15,776,000 | |
| Number of shares used to compute: | | | | | | | | | | | | | | | | |
| Basic earnings per share | | | 16,695,000 | | | 15,642,000 | | | | | | 15,772,000 | | | 14,867,000 | |
| Diluted earnings per share | | | 17,318,000 | | | 16,392,000 | | | | | | 16,481,000 | | | 15,365,000 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | 1st Quarter | | | 4th Quarter | | | 3rd Quarter | | | 2nd Quarter | | | 1st Quarter | |
| | | | 2007 | | | 2006 | | | 2006 | | | 2006 | | | 2006 | |
Condensed statements of financial position: | | | | | | | | | | | | | | | | |
| Total assets | | $ | 4,254,526 | | $ | 4,065,816 | | $ | 3,855,633 | | $ | 3,722,642 | | $ | 3,627,124 | |
| Portfolio loans | | | 3,620,981 | | | 3,488,678 | | | 3,307,222 | | | 3,196,209 | | | 3,069,600 | |
| Deposits | | | 3,392,035 | | | 3,258,485 | | | 3,114,206 | | | 2,987,606 | | | 2,938,348 | |
| Stockholders' equity | | | 381,992 | | | 361,879 | | | 327,791 | | | 318,308 | | | 310,419 | |
| Total capital | | $ | 661,650 | | $ | 589,426 | | $ | 542,734 | | $ | 535,898 | | $ | 499,334 | |
| | | | | | | | | | | | | | | | | |
Key performance ratios: | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.61 | % | | 1.16 | % | | 1.14 | % | | 1.13 | % | | 1.13 | % |
| Return on average equity | | | 6.74 | % | | 13.30 | % | | 13.36 | % | | 13.03 | % | | 13.12 | % |
| Net interest margin | | | 4.67 | % | | 4.82 | % | | 5.08 | % | | 5.17 | % | | 5.06 | % |
| Efficiency ratio | | | 83.20 | % | | 70.30 | % | | 68.77 | % | | 74.58 | % | | 68.51 | % |
| | | | | | | | | | | | | | | | | |
Asset quality ratios: | | | | | | | | | | | | | | | | |
| Allowance for loan losses / portfolio loans | | | 1.30 | % | | 1.30 | % | | 1.37 | % | | 1.36 | % | | 1.36 | % |
| Total nonperforming loans / portfolio loans | | | 1.02 | % | | 0.98 | % | | 0.90 | % | | 0.87 | % | | 0.87 | % |
| Total nonperforming assets / total assets | | | 1.08 | % | | 1.08 | % | | 0.99 | % | | 0.91 | % | | 0.88 | % |
| Net charge-offs (annualized) / average portfolio loans | | | 0.26 | % | | 0.38 | % | | 0.19 | % | | 0.14 | % | | 0.19 | % |
| Allowance for loan losses / nonperforming loans | | | 128.00 | % | | 132.50 | % | | 151.05 | % | | 156.12 | % | | 156.33 | % |
| | | | | | | | | | | | | | | | | |
Capital ratios: | | | | | | | | | | | | | | | | |
| Stockholders' equity / total assets | | | 8.98 | % | | 8.90 | % | | 8.50 | % | | 8.55 | % | | 8.56 | % |
| Total capital / total assets | | | 15.55 | % | | 14.50 | % | | 14.08 | % | | 14.40 | % | | 13.77 | % |
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 "expects," "intends," "believes" and "should" 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 financial position, results of operations, asset quality and other supplemental data.
CAPITOL BANCORP LIMITED |
Condensed Consolidated Statements of Income (Unaudited) |
| (in thousands, except per share data) |
| | | | | |
| | | Three Months Ended March 31 |
| | | 2007 | | 2006 |
INTEREST INCOME: | | | | |
| Portfolio loans (including fees) | | $ | 73,524 | | $ | 60,143 |
| Loans held for sale | | | 946 | | | 523 |
| Taxable investment securities | | | 208 | | | 263 |
| Federal funds sold | | | 2,544 | | | 1,818 |
| Other | | | 617 | | | 350 |
| Total interest income | | | 77,839 | | | 63,097 |
| | | | | | | |
INTEREST EXPENSE: | | | | | | |
| Deposits | | | 28,329 | | | 17,782 |
| Debt obligations and other | | | 4,829 | | | 3,962 |
| Total interest expense | | | 33,158 | | | 21,744 |
| | | | | | | |
| Net interest income | | | 44,681 | | | 41,353 |
| | | | | | | |
PROVISION FOR LOAN LOSSES | | | 3,932 | | | 2,456 |
Net interest income after provision for loan losses | | | 40,749 | | | 38,897 |
| | | | | | | |
NONINTEREST INCOME: | | | | | | |
| Service charges on deposit accounts | | | 1,105 | | | 1,031 |
| Trust and wealth-management revenue | | | 1,037 | | | 867 |
| Fees from origination of non-portfolio residential mortgage loans | | | 1,307 | | | 1,289 |
| Other | | | 2,136 | | | 1,923 |
| Total noninterest income | | | 5,585 | | | 5,110 |
| | | | | | | |
NONINTEREST EXPENSE: | | | | | | |
| Salaries and employee benefits | | | 26,072 | | | 21,550 |
| Occupancy | | | 3,497 | | | 2,678 |
| Equipment rent, depreciation and maintenance | | | 2,642 | | | 1,966 |
| Other | | | 9,612 | | | 5,638 |
| Total noninterest expense | | | 41,823 | | | 31,832 |
| | | | | | | |
| Income before income taxes and minority interest | | | 4,511 | | | 12,175 |
| | | | | | | |
| Income taxes | | | 1,764 | | | 4,381 |
| Income before minority interest | | | 2,747 | | | 7,794 |
| | | | | | | |
| Minority interest in net losses of consolidated subsidiaries | | | 3,524 | | | 2,159 |
| | | | | | | |
NET INCOME | | $ | 6,271 | | $ | 9,953 |
| | | | | | | |
NET INCOME PER SHARE | | | | | | |
| Basic | | $ | 0.38 | | $ | 0.64 |
| | | | | | | |
| Diluted | | $ | 0.36 | | $ | 0.61 |
CAPITOL BANCORP LIMITED |
Condensed Consolidated Balance Sheets |
| (in thousands, except share data) |
| | | | | | |
| | | (Unaudited) | | | |
| | | March 31 | | December 31 | |
| | | 2007 | | 2006 | |
ASSETS | | | | | |
| | | | | | |
| Cash and due from banks | | $ | 135,538 | | $ | 169,753 | |
| Money market and interest-bearing deposits | | | 19,730 | | | 37,204 | |
| Federal funds sold | | | 252,363 | | | 141,913 | |
| Cash and cash equivalents | | | 407,631 | | | 348,870 | |
| Loans held for sale | | | 27,862 | | | 34,593 | |
| Investment securities: | | | | | | | |
| Available for sale, carried at market value | | | 15,980 | | | 18,904 | |
Held for long-term investment, carried at amortized cost which approximates market value | | | 22,696 | | | 21,749 | |
| Total investment securities | | | 38,676 | | | 40,653 | |
| Portfolio loans: | | | | | | | |
| Commercial | | | 3,238,411 | | | 3,103,125 | |
| Real estate mortgage | | | 247,371 | | | 259,604 | |
| Installment | | | 135,199 | | | 125,949 | |
| Total portfolio loans | | | 3,620,981 | | | 3,488,678 | |
| Less allowance for loan losses | | | (47,052 | ) | | (45,414 | ) |
| Net portfolio loans | | | 3,573,929 | | | 3,443,264 | |
| Premises and equipment | | | 55,312 | | | 54,295 | |
| Accrued interest income | | | 17,466 | | | 17,524 | |
| Goodwill and other intangibles | | | 70,590 | | | 62,215 | |
| Other assets | | | 63,060 | | | 64,402 | |
| | | | | | | | |
TOTAL ASSETS | | $ | 4,254,526 | | $ | 4,065,816 | |
| | | | | | | | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | |
| | | | | | | | |
| LIABILITIES: | | | | | | | |
| Deposits: | | | | | | | |
| Noninterest-bearing | | $ | 615,644 | | $ | 651,253 | |
| Interest-bearing | | | 2,776,391 | | | 2,607,232 | |
| Total deposits | | | 3,392,035 | | | 3,258,485 | |
| Debt obligations: | | | | | | | |
| Notes payable and short-term borrowings | | | 173,000 | | | 191,154 | |
| Subordinated debentures | | | 156,058 | | | 101,035 | |
| Total debt obligations | | | 329,058 | | | 292,189 | |
| Accrued interest on deposits and other liabilities | | | 27,841 | | | 26,751 | |
| Total liabilities | | | 3,748,934 | | | 3,577,425 | |
| | | | | | | | |
| MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES | | | 123,600 | | | 126,512 | |
| | | | | | | | |
| STOCKHOLDERS' EQUITY: | | | | | | | |
Common stock, no par value, 50,000,000 shares authorized; issued and outstanding: 2007 - 17,074,605 shares 2006 - 16,656,481 shares | | | 267,304 | | | 249,244 | |
| Retained earnings | | | 114,789 | | | 112,779 | |
Market value adjustment (net of tax effect) for investment securities available for sale (accumulated other comprehensive income/loss) | | | (101 | ) | | (144 | ) |
| Total stockholders' equity | | | 381,992 | | | 361,879 | |
| | | | | | | | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 4,254,526 | | $ | 4,065,816 | |
CAPITOL BANCORP LIMITED
Allowance for Loan Losses and Asset Quality Data
ALLOWANCE FOR LOAN LOSSES ACTIVITY (in thousands):
| | | 2007 | | 2006 | |
| Allowance for loan losses at January 1 | | $ | 45,414 | | $ | 40,559 | |
| | | | | | | | |
| Loans charged-off: | | | | | | | |
| Commercial | | | (2,444 | ) | | (1,718 | ) |
| Real estate mortgage | | | -- | | | (25 | ) |
| Installment | | | (193 | ) | | (112 | ) |
| Total charge-offs | | | (2,637 | ) | | (1,855 | ) |
| Recoveries: | | | | | | | |
| Commercial | | | 242 | | | 353 | |
| Real estate mortgage | | | 1 | | | 1 | |
| Installment | | | 100 | | | 86 | |
| Total recoveries | | | 343 | | | 440 | |
| Net charge-offs | | | (2,294 | ) | | (1,415 | ) |
| Additions to allowance charged to expense | | | 3,932 | | | 2,456 | |
| | | | | | | | |
| Allowance for loan losses at March 31 | | $ | 47,052 | | $ | 41,600 | |
| | | | | | | | |
| Average total portfolio loans for period ended March 31 | | $ | 3,555,432 | | $ | 3,010,849 | |
| | | | | | | | |
Ratio of net charge-offs (annualized) to average portfolio loans outstanding | | | 0.26 | % | | 0.19 | % |
ASSET QUALITY (in thousands):
| | | March 31 | | Dec 31 |
| | | 2007 | | 2006 |
| Nonaccrual loans: | | |
| Commercial | | $ | 27,764 | | $ | 25,219 |
| Real estate mortgage | | | 3,225 | | | 3,609 |
| Installment | | | 1,003 | | | 898 |
| T Total nonaccrual loans | | | 31,992 | | | 29,726 |
| | | | | | | |
Past due (>90 days) loans: | | | | | | |
| Commercial | | | 4,376 | | | 3,860 |
| Real estate mortgage | | | 314 | | | 523 |
| Installment | | | 77 | | | 165 |
| Total past due loans | | | 4,767 | | | 4,548 |
| | | | | | | |
| Total nonperforming loans | | $ | 36,759 | | $ | 34,274 |
| | | | | | | |
| Real estate owned and other repossessed assets | | | 9,114 | | | 9,478 |
| | | | | | | |
| Total nonperforming assets | | $ | 45,873 | | $ | 43,752 |
CAPITOL BANCORP LIMITED
Selected Supplemental Data
EPS COMPUTATION COMPONENTS (in thousands):
| | | Three Months Ended March 31 |
| | | 2007 | | 2006 |
| | | | | |
| Numerator—net income for the period | | $ | 6,271 | | $ | 9,953 |
| | | | | | | |
| Denominator: | | | | | | |
Weighted average number of shares outstanding, excluding unvested restricted shares (denominator for basic earnings per share) | | | 16,695 | | | 15,642 |
| | | | | | | |
| Effect of dilutive securities: | | | | | | |
| Unvested restricted shares | | | 51 | | | 61 |
| Stock options | | | 572 | | | 689 |
| Total effect of dilutive securities | | | 623 | | | 750 |
| Denominator for diluted earnings per share— | | | | | | |
Weighted average number of shares and potential dilution | | | 17,318 | | | 16,392 |
| | | | | | | |
Number of antidilutive stock options excluded from diluted earnings per share computation | | | -- | | | -- |
AVERAGE BALANCES (in thousands):
| | | Three Months Ended March 31 |
| | | 2007 | | 2006 |
| | | | | |
| Portfolio loans | | $ | 3,555,432 | | $ | 3,010,849 |
| Earning assets | | | 3,828,582 | | | 3,267,324 |
| Total assets | | | 4,144,124 | | | 3,513,485 |
| Deposits | | | 3,317,872 | | | 2,826,398 |
| Stockholders’ equity | | | 372,250 | | | 303,507 |
Capitol Bancorp’s National Network of Community Banks
Eastern Regions | |
Great Lakes Region: | |
Ann Arbor Commerce Bank | Ann Arbor, Michigan |
Bank of Auburn Hills | Auburn Hills, Michigan |
Bank of Belleville | Belleville, Illinois |
Bank of Maumee | Maumee, Ohio |
Bank of Michigan | Farmington Hills, Michigan |
Brighton Commerce Bank | Brighton, Michigan |
Capitol National Bank | Lansing, Michigan |
Detroit Commerce Bank | Detroit, Michigan |
Elkhart Community Bank | Elkhart, Indiana |
Evansville Commerce Bank | Evansville, Indiana |
Goshen Community Bank | Goshen, Indiana |
Grand Haven Bank | Grand Haven, Michigan |
Kent Commerce Bank | Grand Rapids, Michigan |
Macomb Community Bank | Clinton Township, Michigan |
Muskegon Commerce Bank | Muskegon, Michigan |
Oakland Commerce Bank | Farmington Hills, Michigan |
Ohio Commerce Bank | Beachwood, Ohio |
Paragon Bank & Trust | Holland, Michigan |
Portage Commerce Bank | Portage, Michigan |
| | |
Midwest Region: | |
Summit Bank of Kansas City | Lee’s Summit, Missouri |
| | |
Southeast Region: | |
Bank of Valdosta | Valdosta, Georgia |
Community Bank of Rowan | Salisbury, North Carolina |
First Carolina State Bank | Rocky Mount, North Carolina |
Peoples State Bank | Jeffersonville, Georgia |
Sunrise Bank of Atlanta | Atlanta, Georgia |
| | |
Western Regions | |
Southwest Region: | |
1st Commerce Bank | Las Vegas, Nevada |
Arrowhead Community Bank | Glendale, Arizona |
Asian Bank of Arizona | Phoenix, Arizona |
Bank of Las Vegas | Las Vegas, Nevada |
Bank of Tucson | Tucson, Arizona |
Black Mountain Community Bank | Henderson, Nevada |
Camelback Community Bank | Phoenix, Arizona |
Desert Community Bank | Las Vegas, Nevada |
Fort Collins Commerce Bank | Fort Collins, Colorado |
Mesa Bank | Mesa, Arizona |
Red Rock Community Bank | Las Vegas, Nevada |
Southern Arizona Community Bank | Tucson, Arizona |
Sunrise Bank - Dallas LPO | Dallas, Texas |
Sunrise Bank - Houston LPO | Houston, Texas |
Sunrise Bank of Albuquerque | Albuquerque, New Mexico |
Sunrise Bank of Arizona | Phoenix, Arizona |
Valley First Community Bank | Scottsdale, Arizona |
Yuma Community Bank | Yuma, Arizona |
| | |
California Region: | |
Bank of Escondido | Escondido, California |
Bank of San Francisco | San Francisco, California |
Bank of Santa Barbara | Santa Barbara, California |
Napa Community Bank | Napa, California |
Point Loma Community Bank | Point Loma, California |
Sunrise Bank of San Diego | San Diego, California |
Sunrise Community Bank | Palm Desert, California |
| | |
Northwest Region: | |
Bank of Bellevue | Bellevue, Washington |
Bank of Everett | Everett, Washington |
Bank of Tacoma | Tacoma, Washington |
