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 Stephanie Swan Director of Shareholder Services 517-372-7402 |
CAPITOL BANCORP REPORTS THIRD QUARTER RESULTS;
ANNOUNCES SPECIAL PROVISIONING TO STRENGTHEN BALANCE SHEET;
MICHIGAN STRATEGIC INITIATIVES UNDERWAY
3RD QUARTER 2008 HIGHLIGHTS
| · | Assets Exceed $5.4 Billion |
| · | Total Capital in Excess of 12% of Total Assets and Strong Support |
as Measured by Traditional Risk-Based, Leverage and Tier 1 Ratios
| · | Controlled Organic Growth at Younger Affiliates Drives Annual Expansion in Assets (17%), Loans (16%) and Deposits (17%) |
LANSING, Mich. and PHOENIX, Ariz.: October 16, 2008: Capitol Bancorp reported today a major restructure of its 13 bank Michigan operation and an aggressive initiative to meet the significantly weakened condition of the Michigan market. First, Capitol will undertake three mergers of Michigan banks, reducing the number from 13 to 9 separate banking institutions. Second, Capitol, driven by its strong balance sheet, has accelerated the identification and resolution of weakened credits held by various banks, primarily in the Michigan market.
Capitol reported a third quarter net loss of $32.5 million and assets exceeding $5.4 billion. The net loss per diluted share for the quarter was $1.90, in contrast to earnings of $0.35 per diluted share reported in the third quarter of 2007.
Capitol’s Chairman and CEO Joseph D. Reid said, “Capitol’s core capital ratios remain strong following these actions in spite of the current state of the financial markets in general. The most recently reported leverage, tier 1 and total risk-based capital ratios of 12.4%, 13.4% and 14.6%, respectively, demonstrate the strength of our balance sheet. In light of current economic conditions in Michigan, where approximately 60 percent of our nonperforming loans are situated, we have re-evaluated our potential exposure and put in place a plan to address potential troubled Michigan assets.”
Building Balance Sheet Strength
During the third quarter of 2008, Capitol continued its efforts to fortify its balance sheet in the wake of significant market turmoil and uncertainty. Reserve building at affiliate banks,
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particularly those domiciled in Michigan, served to increase the Corporation’s allowance for loan losses to approximately 2.1 percent of total portfolio loans, from the 1.4 percent level at June 30, 2008. In addition, this effort included a special $25 million provision recorded at Capitol to position the Corporation as it carefully assesses the implications and impact of declining property values. “We have increased our provisioning approximately $45 million on a linked-quarter basis to both further fortify the balance sheets at our affiliates while providing additional strength and resources at the Corporation as we manage our operations in these uncertain times,” added Chairman Reid. “We believe these efforts, coupled with recent moves to augment our already strong double-digit capital levels, will best position Capitol to both capitalize on attractive opportunities in the sector while weathering current turmoil on the economic landscape.”
Michigan Strategic Initiatives
In tandem with Capitol Bancorp’s system-wide efforts to marshal resources, preserve capital and strengthen its 17-state family network of community banks, strategic initiatives are currently being implemented within the Corporation’s Michigan footprint. These initiatives are expected to generate operational efficiencies that will aggregate approximately $3.3 million annually beginning in the fourth quarter of 2008 and a $2.5 million one-time restructuring charge has been incurred for the quarter ended September 30, 2008. In response to the difficult economic landscape that currently grips Michigan, Capitol is pursuing a plan for the continuation of separate charters in certain long-standing markets as well as the select “regionalization” of some of its affiliates to capitalize on the collective strengths of their respective operations.
The original three members of the Capitol family, together with a fourth affiliate launched more than a decade ago, will continue to operate as individually-chartered and independently-operated affiliates under the traditional Capitol Bancorp model. These organizations are Lansing-based Capitol National Bank (total assets of $225 million), Ann Arbor Commerce Bank ($365 million), Brighton Commerce Bank ($120 million) and Portage Commerce Bank ($220 million). Total assets for these four affiliates currently aggregate in excess of $900 million, or more than 50 percent of the roughly $1.7 billion of Michigan presence for Capitol. “These four affiliates reflect the optimal relationship-driven orientation of our traditional de novo development model that we expect to see materialize over an extended period of time with each of our institutions as they mature,” commented Chairman Reid. “Consequently, every effort has been made to preserve the deep roots and strong community ties cultivated by each of these organizations.” In addition, Capitol also operates seven other wholly-owned Michigan-based affiliates, with four institutions domiciled on the west side of the state, and three community banks conducting business in Southeast Michigan. Capitol also has a controlling interest in two additional minority-owned institutions, Bank of Auburn Hills and Bank of Michigan. Currently, total assets for these nine organizations are fairly evenly split between the east and west sides of the state, at approximately $400 million each. Said Reid, “We are implementing our ‘regionalization’ strategy to capitalize on operating efficiencies existent in each of the underlying franchises. In the process, we believe we will be well-positioned over the long term to create a profitable and attractive platform for other community banks that may be seeking to align with a larger, well-capitalized, resource-laden partner.”
On the west side of Michigan, Grand Haven Bank ($120 million) will combine with Muskegon Commerce Bank ($85 million), and Grand Rapids-based Kent Commerce Bank ($85 million) will merge with Paragon Bank & Trust ($100 million) in Holland. All back-office and operational activities for the four institutions will continue to be consolidated at Capitol, while
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additional formerly independent activities (i.e., credit and loan administration) will also be consolidated. The two resultant institutions will continue to operate in and service the markets of Grand Haven, Muskegon, Grand Rapids and Holland.
On Michigan’s east side, Detroit Commerce Bank ($100 million), Macomb Community Bank ($95 million) and Oakland Commerce Bank ($95 million) will merge into one entity. “Expected operating efficiencies and enhanced performance will be comparable to the efforts underway for Capitol in Western Michigan and will be commensurate with the current size and scope of these three Southeast Michigan affiliates,” commented Reid. Both of these merger transactions are subject to regulatory approval.
“Historically, our organization has focused on the development and retention of community banks in multiple markets across the United States,” commented Mr. Reid. “These strategic initiatives represent a significant step in the Corporation’s ongoing strategy of regional dispersion of Capitol’s affiliates, and directly address the challenging economic climate in the Michigan market. While these efforts do not immediately mitigate our current exposure to the struggling Michigan economy, they will serve to better harness our resources and allow us to more efficiently allocate capital within these communities. It is important to note that through the first nine months of 2008, the four wholly-owned organizations that will continue to operate under the traditional, separately-chartered and individually-managed Capitol Bancorp model generated earnings approximating $4.5 million. The remaining nine that are involved in our Michigan ‘regionalization’ efforts reported a collective loss of more than $11.0 million through the first three quarters of this year. As with all of our affiliates, our energies remain concentrated on being the provider of choice for community-based financial services that meet the needs of our customers, while delivering compelling bottom-line performance in each of our markets. Restoration of a fundamentally sound and profitable state-wide operation in Michigan is driving the implementation of these key strategic initiatives.”
Quarterly Performance
Consolidated net operating revenues decreased to approximately $48 million for the third quarter of 2008, compared to approximately $53.8 million reported for the same period in 2007. The net interest margin, reflecting continued compression in this challenging environment, was 3.3 percent in the third quarter of 2008. Net interest margin compression was affected by many factors, including recent dramatic rate cuts over the past year by the Federal Reserve, competitive market pricing on both sides of the balance sheet, the impact of elevated levels of nonperforming loans and modestly lower levels of noninterest-bearing demand deposit accounts year-over-year. Noninterest income decreased marginally year-over-year, although continued positive developments at Capitol’s expanding wealth management affiliates coupled with modestly expanding core fee income sources at its affiliate banks helped to mitigate further softening in mortgage banking revenues.
The net loss for the quarter approximated $32.5 million, compared to net income of approximately $6.0 million reported for the third quarter of 2007. The significant change in operating results was due to an aggressive restructuring of its operations in Michigan which includes a large provision for loan losses in the third quarter of 2008. The adoption of the Michigan restructure program and challenges resulting from a weakening national economy, especially felt in the Great Lakes Region, were contributing factors to the increased provision and allowance for loan losses. As Capitol continues to leverage infrastructure investments made in recent years, operating expenses increased approximately 21 percent year-over-year, tied primarily to the launching of twelve de novo banks during that same period. The net loss per
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diluted share for the third quarter of 2008 was $1.90, compared to earnings of $0.35 reported in the third quarter of 2007. The third quarter provision for loan losses increased to approximately $53.8 million versus the $7.9 million for the same period in 2007.
Nine Month Performance
Revenue exceeded $145 million for the nine months ended September 30, 2008, a decrease compared to the approximate $155 million for the year-ago period, as modest increases in consolidated noninterest income were offset by continued margin compression. The net loss per share was $1.73 for the nine months ended September 30, 2008 compared to diluted earnings per share of $1.08 reported last year. As with the Corporation’s quarterly performance, provisions for loan losses adversely impacted 2008 results.
Balance Sheet
With total capital resources in excess of $681 million at September 30, 2008, the total capital-to-asset ratio exceeded 12.5 percent, providing solid support for the Corporation’s more than $5.4 billion balance sheet.
Net charge-offs increased to 1.74 percent in the third quarter of 2008 from the 0.60 percent reported in the second quarter of 2008 and 0.45 percent reported for the corresponding period of 2007. The ratio of nonperforming assets to total assets was approximately 3.4 percent at September 30, 2008 compared to 2.6 percent reported at June 30, 2008. The allowance coverage ratio of nonperforming loans increased from 67 percent at June 30, 2008 to approximately 77 percent at September 30, 2008, while the allowance for loan losses increased to 2.09 percent of portfolio loans at September 30, 2008 from 1.4 percent at June 30, 2008. This reserve building, which equated to nearly 3 times charge-offs in the recent quarter, and more than 2 times charge-offs through the first nine months of 2008, should better position the Corporation in these uncertain times. The Corporation remains disciplined in its approach to portfolio review and analysis and, as a result, the increased third quarter provision for loan losses and resulting allowance for loan losses will aid in the resolution of weakened credits held by various banks, primarily in the Michigan market.
About Capitol Bancorp Limited
Capitol Bancorp Limited (NYSE: CBC) is a $5.4 billion national community bank development company, with a network of 64 separately chartered banks with operations in 17 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 | Nine Months Ended | |||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||||||
| Condensed statements of operations: | ||||||||||||||||||||
| Interest income | $ | 75,496 | $ | 85,036 | $ | 231,136 | $ | 244,129 | ||||||||||||
| Interest expense | 34,457 | 38,368 | 105,970 | 107,238 | ||||||||||||||||
| Net interest income | 41,039 | 46,668 | 125,166 | 136,891 | ||||||||||||||||
| Provision for loan losses | 53,810 | 7,890 | 71,787 | 15,812 | ||||||||||||||||
| Noninterest income | 6,951 | 7,111 | 19,993 | 18,539 | ||||||||||||||||
| Noninterest expense | 53,792 | 44,474 | 146,385 | 128,511 | ||||||||||||||||
| Income (loss) before income taxes | (53,227 | ) | 6,560 | (55,109 | ) | 23,239 | ||||||||||||||
| Net income (loss) | $ | (32,495 | ) | $ | 5,974 | $ | (29,681 | ) | $ | 18,543 | ||||||||||
| Per share data: | ||||||||||||||||||||
| Net income (loss) - basic | $ | (1.90 | ) | $ | 0.35 | $ | (1.73 | ) | $ | 1.10 | ||||||||||
| Net income (loss) - diluted | (1.90 | ) | 0.35 | (1.73 | ) | 1.08 | ||||||||||||||
| Book value at end of period | 20.37 | 22.56 | 20.37 | 22.56 | ||||||||||||||||
| Common stock closing price at end of period | $ | 19.49 | $ | 24.83 | $ | 19.49 | $ | 24.83 | ||||||||||||
| Common shares outstanding at end of period | 17,337,000 | 17,310,000 | 17,337,000 | 17,310,000 | ||||||||||||||||
| Number of shares used to compute: | ||||||||||||||||||||
| Basic earnings per share | 17,145,000 | 17,096,000 | 17,144,000 | 16,919,000 | ||||||||||||||||
| Diluted earnings per share | 17,145,000 | 17,198,000 | 17,144,000 | 17,196,000 | ||||||||||||||||
| 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | ||||||||||||||||
| 2008 | 2008 | 2008 | 2007 | 2007 | ||||||||||||||||
| Condensed statements of financial position: | ||||||||||||||||||||
| Total assets | $ | 5,427,347 | $ | 5,340,400 | $ | 5,066,683 | $ | 4,901,763 | $ | 4,654,012 | ||||||||||
| Portfolio loans | 4,662,772 | 4,564,522 | 4,467,628 | 4,314,701 | 4,030,384 | |||||||||||||||
| Deposits | 4,283,561 | 4,157,634 | 3,945,754 | 3,844,745 | 3,673,950 | |||||||||||||||
| Stockholders' equity | 353,108 | 385,965 | 387,433 | 389,145 | 390,466 | |||||||||||||||
| Total capital | $ | 681,154 | $ | 707,232 | $ | 708,111 | $ | 701,473 | $ | 689,643 | ||||||||||
| Key performance ratios: | ||||||||||||||||||||
| Return on average assets | -- | 0.05 | % | 0.18 | % | 0.28 | % | 0.53 | % | |||||||||||
| Return on average equity | -- | 0.64 | % | 2.25 | % | 3.48 | % | 6.15 | % | |||||||||||
| Net interest margin | 3.30 | % | 3.50 | % | 3.62 | % | 4.17 | % | 4.42 | % | ||||||||||
| Efficiency ratio | 112.09 | % | 98.19 | % | 92.38 | % | 91.23 | % | 82.70 | % | ||||||||||
| Asset quality ratios: | ||||||||||||||||||||
| Allowance for loan losses / portfolio loans | 2.09 | % | 1.40 | % | 1.38 | % | 1.35 | % | 1.31 | % | ||||||||||
| Total nonperforming loans / portfolio loans | 2.73 | % | 2.10 | % | 1.99 | % | 1.68 | % | 1.31 | % | ||||||||||
| Total nonperforming assets / total assets | 3.43 | % | 2.63 | % | 2.20 | % | 1.82 | % | 1.42 | % | ||||||||||
| Net charge-offs (annualized) / average portfolio loans | 1.74 | % | 0.60 | % | 0.49 | % | 0.41 | % | 0.45 | % | ||||||||||
| Allowance for loan losses / nonperforming loans | 76.78 | % | 66.77 | % | 69.41 | % | 80.03 | % | 100.21 | % | ||||||||||
| Capital ratios: | ||||||||||||||||||||
| Stockholders' equity / total assets | 6.51 | % | 7.23 | % | 7.65 | % | 7.94 | % | 8.39 | % | ||||||||||
| Total capital / total assets | 12.55 | % | 13.24 | % | 13.98 | % | 14.31 | % | 14.82 | % | ||||||||||
| 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 results of operations, financial position, asset quality |
| and other supplemental data. |
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| CAPITOL BANCORP LIMITED | |||||||||||||||
| Condensed Consolidated Statements of Income (Unaudited) | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||
| 2008 | 2007 | 2008 | 2007 | ||||||||||||
| INTEREST INCOME: | |||||||||||||||
| Portfolio loans (including fees) | $ | 73,328 | $ | 81,117 | $ | 224,897 | $ | 231,819 | |||||||
| Loans held for sale | 145 | 429 | 681 | 1,765 | |||||||||||
| Taxable investment securities | 154 | 188 | 389 | 589 | |||||||||||
| Federal funds sold | 1,259 | 2,916 | 3,480 | 8,569 | |||||||||||
| Other | 610 | 386 | 1,689 | 1,387 | |||||||||||
| Total interest income | 75,496 | 85,036 | 231,136 | 244,129 | |||||||||||
| INTEREST EXPENSE: | |||||||||||||||
| Deposits | 27,149 | 32,359 | 84,826 | 90,955 | |||||||||||
| Debt obligations and other | 7,308 | 6,009 | 21,144 | 16,283 | |||||||||||
| Total interest expense | 34,457 | 38,368 | 105,970 | 107,238 | |||||||||||
| Net interest income | 41,039 | 46,668 | 125,166 | 136,891 | |||||||||||
| PROVISION FOR LOAN LOSSES | 53,810 | 7,890 | 71,787 | 15,812 | |||||||||||
| Net interest income after provision | |||||||||||||||
| for loan losses | (12,771 | ) | 38,778 | 53,379 | 121,079 | ||||||||||
| NONINTEREST INCOME: | |||||||||||||||
| Service charges on deposit accounts | 1,526 | 1,232 | 4,316 | 3,524 | |||||||||||
| Trust and wealth-management revenue | 1,791 | 1,371 | 4,999 | 3,525 | |||||||||||
| Fees from origination of non-portfolio residential | |||||||||||||||
| mortgage loans | 926 | 1,142 | 2,910 | 3,754 | |||||||||||
| Gain on sales of government-guaranteed loans | 608 | 946 | 1,831 | 2,296 | |||||||||||
| Gain on sales of other non-portfolio commercial loans | 207 | - | 867 | - | |||||||||||
| Realized gains on sale of investment securities | |||||||||||||||
| available for sale | 5 | - | 50 | - | |||||||||||
| Other | 1,888 | 2,420 | 5,020 | 5,440 | |||||||||||
| Total noninterest income | 6,951 | 7,111 | 19,993 | 18,539 | |||||||||||
| NONINTEREST EXPENSE: | �� | ||||||||||||||
| Salaries and employee benefits | 29,319 | 27,816 | 82,597 | 80,325 | |||||||||||
| Occupancy | 4,968 | 3,831 | 13,872 | 10,880 | |||||||||||
| Equipment rent, depreciation and maintenance | 3,821 | 2,239 | 9,695 | 7,471 | |||||||||||
| Other | 15,684 | 10,588 | 40,221 | 29,835 | |||||||||||
| Total noninterest expense | 53,792 | 44,474 | 146,385 | 128,511 | |||||||||||
| Income (loss) before income taxes (benefit) and | |||||||||||||||
| minority interest | (59,612 | ) | 1,415 | (73,013 | ) | 11,107 | |||||||||
| Income taxes (benefit) | (20,732 | ) | 586 | (25,428 | ) | 4,696 | |||||||||
| Income (loss) before minority interest | (38,880 | ) | 829 | (47,585 | ) | 6,411 | |||||||||
| Minority interest in net losses of consolidated | |||||||||||||||
| subsidiaries | 6,385 | 5,145 | 17,904 | 12,132 | |||||||||||
| NET INCOME (LOSS) | $ | (32,495 | ) | $ | 5,974 | $ | (29,681 | ) | $ | 18,543 | |||||
| NET INCOME (LOSS) PER SHARE: | |||||||||||||||
| Basic | $ | (1.90 | ) | $ | 0.35 | $ | (1.73 | ) | $ | 1.10 | |||||
| Diluted | $ | (1.90 | ) | $ | 0.35 | $ | (1.73 | ) | $ | 1.08 | |||||
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| CAPITOL BANCORP LIMITED | |||||||||
| Condensed Consolidated Balance Sheets | |||||||||
| (in thousands, except share data) | |||||||||
| (Unaudited) | |||||||||
| September 30 | December 31 | ||||||||
| 2008 | 2007 | ||||||||
| ASSETS | |||||||||
| Cash and due from banks | $ | 216,245 | $ | 196,083 | |||||
| Money market and interest-bearing deposits | 41,338 | 26,924 | |||||||
| Federal funds sold | 233,760 | 129,365 | |||||||
| Cash and cash equivalents | 491,343 | 352,372 | |||||||
| Loans held for sale | 7,334 | 16,419 | |||||||
| Investment securities: | |||||||||
| Available for sale, carried at market value | 18,085 | 14,119 | |||||||
| Held for long-term investment, carried at | |||||||||
| amortized cost which approximates market value | 32,091 | 25,478 | |||||||
| Total investment securities | 50,176 | 39,597 | |||||||
| Portfolio loans: | |||||||||
| Loans secured by real estate: | |||||||||
| Commercial | 2,074,254 | 1,917,113 | |||||||
| Residential (including multi-family) | 851,509 | 698,960 | |||||||
| Construction, land development and other land | 813,420 | 852,595 | |||||||
| Total loans secured by real estate | 3,739,183 | 3,468,668 | |||||||
| Commercial and other business-purpose loans | 832,669 | 768,473 | |||||||
| Consumer | 58,122 | 48,041 | |||||||
| Other | 32,298 | 29,519 | |||||||
| Total portfolio loans | 4,662,272 | 4,314,701 | |||||||
| Less allowance for loan losses | (97,585 | ) | (58,124 | ) | |||||
| Net portfolio loans | 4,564,687 | 4,256,577 | |||||||
| Premises and equipment | 60,000 | 60,031 | |||||||
| Accrued interest income | 18,387 | 19,417 | |||||||
| Goodwill and other intangibles | 73,428 | 72,722 | |||||||
| Other assets | 161,992 | 84,628 | |||||||
| TOTAL ASSETS | $ | 5,427,347 | $ | 4,901,763 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| LIABILITIES: | |||||||||
| Deposits: | |||||||||
| Noninterest-bearing | $ | 647,994 | $ | 671,688 | |||||
| Interest-bearing | 3,635,567 | 3,173,057 | |||||||
| Total deposits | 4,283,561 | 3,844,745 | |||||||
| Debt obligations: | |||||||||
| Notes payable and short-term borrowings | 432,536 | 320,384 | |||||||
| Subordinated debentures | 167,342 | 156,130 | |||||||
| Total debt obligations | 599,878 | 476,514 | |||||||
| Accrued interest on deposits and other liabilities | 30,096 | 35,161 | |||||||
| Total liabilities | 4,913,535 | 4,356,420 | |||||||
| MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES | 160,704 | 156,198 | |||||||
| STOCKHOLDERS' EQUITY: | |||||||||
| Common stock, no par value, 50,000,000 shares authorized; | |||||||||
| issued and outstanding: 2008 - 17,337,308 shares | |||||||||
| 2007 - 17,316,568 shares | 273,644 | 272,208 | |||||||
| Retained earnings | 80,047 | 117,520 | |||||||
| Undistributed common stock held by employee- | |||||||||
| benefit trust | (580 | ) | (586 | ) | |||||
| Market value adjustment (net of tax effect) for | |||||||||
| investment securities available for sale (accumulated | |||||||||
| other comprehensive income/loss) | (3 | ) | 3 | ||||||
| Total stockholders' equity | 353,108 | 389,145 | |||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 5,427,347 | $ | 4,901,763 | |||||
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CAPITOL BANCORP LIMITED
Allowance for Loan Losses and Asset Quality Data
ALLOWANCE FOR LOAN LOSSES ACTIVITY (in thousands):
| Periods Ended September 30 | ||||||||||||||||
| Three Month Period | Nine Month Period | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Allowance for loan losses at beginning of period | $ | 63,904 | $ | 49,349 | $ | 58,124 | $ | 45,414 | ||||||||
| Loans charged-off: | ||||||||||||||||
| Loans secured by real estate: | ||||||||||||||||
| Commercial | (2,186 | ) | (843 | ) | (5,630 | ) | (1,139 | ) | ||||||||
| Residential (including multi-family) | (2,428 | ) | (1,496 | ) | (5,590 | ) | (2,189 | ) | ||||||||
Construction, land development and other land | (12,128 | ) | (329 | ) | (15,248 | ) | (645 | ) | ||||||||
Total loans secured by real estate | (16,742 | ) | (2,668 | ) | (26,468 | ) | (3,973 | ) | ||||||||
| Commercial and other business-purpose loans | (3,753 | ) | (1,849 | ) | (8,051 | ) | (5,038 | ) | ||||||||
| Consumer | (73 | ) | (105 | ) | (262 | ) | (316 | ) | ||||||||
| Other | (34 | ) | ||||||||||||||
| Total charge-offs | (20,568 | ) | (4,622 | ) | (34,815 | ) | (9,327 | ) | ||||||||
| Recoveries: | ||||||||||||||||
| Loans secured by real estate: | ||||||||||||||||
| Commercial | 181 | 2 | 899 | 68 | ||||||||||||
| Residential (including multi-family) | 130 | 35 | 590 | 163 | ||||||||||||
Construction, land development and other land | 17 | 2 | 240 | 16 | ||||||||||||
Total loans secured by real estate | 328 | 39 | 1,729 | 247 | ||||||||||||
| Commercial and other business-purpose loans | 102 | 119 | 686 | 550 | ||||||||||||
| Consumer | 9 | 76 | 74 | 148 | ||||||||||||
| Other | 7 | |||||||||||||||
| Total recoveries | 439 | 234 | 2,489 | 952 | ||||||||||||
| Net charge-offs | (20,129 | ) | (4,388 | ) | (32,326 | ) | (8,375 | ) | ||||||||
| Additions to allowance charged to expense | 53,810 | 7,890 | 71,787 | 15,812 | ||||||||||||
| Allowance for loan losses at September 30 | $ | 97,585 | $ | 52,851 | $ | 97,585 | $ | 52,851 | ||||||||
Average total portfolio loans for period ended September 30 | $ | 4,617,153 | $ | 3,908,625 | $ | 4,521,165 | $ | 3,726,654 | ||||||||
Ratio of net charge-offs (annualized) to average portfolio loans outstanding | 1.74 | % | 0.45 | % | 0.95 | % | 0.30 | % | ||||||||
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CAPITOL BANCORP LIMITED
Selected Supplemental Data
ASSET QUALITY (in thousands):
September 30 2008 | June 30 2008 | March 31 2008 | December 31 2007 | ||||||||||||
| Nonaccrual loans: | |||||||||||||||
| Loans secured by real estate: | |||||||||||||||
| Commercial | $ | 26,954 | $ | 23,379 | $ | 21,497 | $ | 19,016 | |||||||
| Residential (including multi-family) | 27,543 | 17,293 | 17,094 | 13,381 | |||||||||||
Construction, land development and other land | 57,864 | 40,790 | 36,704 | 29,756 | |||||||||||
| Total loans secured by real estate | 112,361 | 81,462 | 75,295 | 62,153 | |||||||||||
| Commercial and other business-purpose loans | 10,144 | 8,716 | 7,833 | 5,782 | |||||||||||
| Consumer | 296 | 137 | 86 | 66 | |||||||||||
| Other | 17 | 18 | -- | 84 | |||||||||||
| Total nonaccrual loans | 122,818 | 90,333 | 83,214 | 68,085 | |||||||||||
Past due (>90 days) loans and accruing interest: | |||||||||||||||
| Loans secured by real estate: | |||||||||||||||
| Commercial | 1,434 | -- | 503 | 113 | |||||||||||
| Residential (including multi-family) | 931 | 1,409 | 3,407 | 1,116 | |||||||||||
Construction, land development and other land | 211 | 3,613 | 214 | 2,531 | |||||||||||
| Total loans secured by real estate | 2,576 | 5,022 | 4,124 | 3,760 | |||||||||||
| Commercial and other business-purpose loans | 1,560 | 346 | 1,477 | 714 | |||||||||||
| Consumer | 144 | 10 | 23 | 66 | |||||||||||
| Other | -- | -- | -- | 5 | |||||||||||
| Total past due loans | 4,280 | 5,378 | 5,624 | 4,545 | |||||||||||
| Total nonperforming loans | $ | 127,098 | $ | 95,711 | $ | 88,838 | $ | 72,630 | |||||||
Real estate owned and other repossessed assets | 59,090 | 44,991 | 22,601 | 16,680 | |||||||||||
| Total nonperforming assets | $ | 186,188 | $ | 140,702 | $ | 111,439 | $ | 89,310 | |||||||
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CAPITOL BANCORP LIMITED
Selected Supplemental Data
EPS COMPUTATION COMPONENTS (in thousands):
| Periods Ended September 30 | |||||||||||||||
| Three Month Period | Nine Month Period | ||||||||||||||
| 2008 | 2007 | 2008 | 2007 | ||||||||||||
| Numerator—net income (loss) for the period | $ | (32,495 | ) | $ | 5,974 | $ | (29,681 | ) | $ | 18,543 | |||||
| Denominator: | |||||||||||||||
Weighted average number of shares outstanding, excluding unvested restricted shares (denominator for basic earnings per share) | 17,145 | 17,096 | 17,144 | 16,919 | |||||||||||
| Effect of dilutive securities: | |||||||||||||||
| Unvested restricted shares | -- | -- | -- | 11 | |||||||||||
| Stock options | -- | 102 | -- | 266 | |||||||||||
| Total effect of dilutive securities | -- | 102 | -- | 277 | |||||||||||
| Denominator for diluted earnings per share— | |||||||||||||||
Weighted average number of shares and potential dilution | 17,145 | 17,198 | 17,144 | 17,196 | |||||||||||
Number of antidilutive stock options excluded from diluted earnings per share computation | 2,389 | 1,650 | 2,389 | 368 | |||||||||||
AVERAGE BALANCES (in thousands):
| Periods Ended September 30 | |||||||||||||||
| Three Month Period | Nine Month Period | ||||||||||||||
| 2008 | 2007 | 2008 | 2007 | ||||||||||||
| Portfolio loans | $ | 4,617,153 | $ | 3,908,625 | $ | 4,521,165 | $ | 3,726,654 | |||||||
| Earning assets | 4,971,600 | 4,219,128 | 4,809,042 | 4,027,031 | |||||||||||
| Total assets | 5,379,283 | 4,550,011 | 5,182,329 | 4,339,710 | |||||||||||
| Deposits | 4,212,518 | 3,617,570 | 4,044,868 | 3,459,872 | |||||||||||
| Stockholders’ equity | 375,914 | 388,804 | 383,251 | 381,482 | |||||||||||
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Capitol Bancorp’s National Network of Community Banks
| Arizona Region: | |
| Arrowhead Community Bank | Glendale, Arizona |
| Asian Bank of Arizona | Phoenix, Arizona |
| Bank of Tucson | Tucson, Arizona |
| Camelback Community Bank | Phoenix, Arizona |
| Colonia Bank | Phoenix, Arizona |
| Mesa Bank | Mesa, Arizona |
| Southern Arizona Community Bank | Tucson, Arizona |
| 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 Feather River | Yuba City, California |
| Bank of San Francisco | San Francisco, California |
| Bank of Santa Barbara | Santa Barbara, California |
| Napa Community Bank | Napa, California |
| Point Loma Community Bank | San Diego, California |
| Sunrise Bank of San Diego | San Diego, California |
| Sunrise Community Bank | Palm Desert, 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: | |
| Ann Arbor Commerce Bank | Ann Arbor, Michigan |
| Bank of Auburn Hills | Auburn Hills, Michigan |
| 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: | |
| Adams Dairy Bank | Blue Springs, Missouri |
| Bank of Belleville | Belleville, Illinois |
| Community Bank of Lincoln | Lincoln, Nebraska |
| 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 |
| Black Mountain Community Bank | Henderson, Nevada |
| Desert Community Bank | Las Vegas, Nevada |
| Red Rock Community Bank | Las Vegas, Nevada |
Northeast Region: | |
| USNY Bank | Geneva, New York |
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| Capitol’s National Network of Community Banks – Continued | |
Northwest Region: | |
| Bank of Bellevue | Bellevue, Washington |
| Bank of Everett | Everett, Washington |
| Bank of Tacoma | Tacoma, Washington |
| High Desert Bank | Bend, Oregon |
| Issaquah Community Bank | Issaquah, Washington |
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 |
| Pisgah Community Bank | Asheville, North Carolina |
| Sunrise Bank of Atlanta | Atlanta, Georgia |
| Texas Region: | |
| Bank of Fort Bend | Sugar Land, Texas |
| Bank of Las Colinas | Irving, Texas |
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