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 FOURTH QUARTER EARNINGS
YEAR-END 2008 HIGHLIGHTS
· Assets Increase 15% Year-over-Year
· Total Deposits Increase Approximately 17%
· Capitol Reports Further Consolidation of Affiliate Banks in Michigan
4TH QUARTER 2008 HIGHLIGHTS
· | Assets Exceed $5.6 Billion |
· | Solid Linked-Quarter Growth in Assets (17%) and Deposits (20%) |
· | Total Capital in Excess of 12% of Total Assets and Strong Support |
as Measured by Traditional Risk-Based, Leverage and Tier 1 Ratios
LANSING, Mich. and PHOENIX, Ariz.: January 29, 2009: Capitol reported earnings for the fourth quarter of 2008 of $1.1 million amidst an ongoing focus to build balance sheet strength, as total assets exceed $5.6 billion. Net income per diluted share for the quarter was $0.06, compared to $0.20 per diluted share reported for the fourth quarter of 2007.
Capitol reported a net loss for the year ended December 31, 2008 of $28.6 million ($1.67 per share), compared to earnings of $21.9 million ($1.27 per diluted share) reported for 2007. Consolidated assets increased 15 percent to $5.7 billion at December 31, 2008 from $4.9 billion at the beginning of the year, or approximately 16.8 percent on a linked-quarter basis, annualized.
Capitol’s Chairman and CEO Joseph D. Reid said, “Following an unprecedented and volatile 2008, Capitol’s management has taken significant steps to address the effects of the nation’s weakened economy. We remain committed to preserving the long-term health and financial strength of the Corporation, as our traditional development-oriented strategic focus has shifted toward emphasis on balance sheet strength and preservation of capital. Capitol, and each of its 64 affiliate banks, remain well-capitalized despite the difficulties and challenges present in the economic landscape of our country. Our core capital ratios continue to display the strength of our balance sheet, with leverage (10.4%), tier 1 (12.1%) and total risk-based (13.8%) capital ratios on a preliminary basis continuing to maintain their strong double digit percentage levels at year-end. At this time, management efforts continue to focus on matters within our control, such as preserving our capital resources, improving our processes and operating efficiencies,
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prudently managing our credits and adjusting operations in response to negative economic circumstances.”
These efforts have been incorporated in multiple corporate initiatives: during 2008, $57 million in capital was raised through private placement offerings; new de novo charter development has been suspended; the dividend was reduced to augment the preservation of capital; reserves have been built during the course of 2008 to a level approximating 2 percent of the loan portfolio; and the unique challenges facing the Corporation’s Michigan franchise are being proactively addressed.
In support of the long-term geographic diversification strategy of the Corporation, 80 percent of Capitol’s affiliate bank charters were held outside of the state of Michigan at year-end. Diversification continued in 2008 with the opening of four affiliate banks: Adams Dairy Bank located in Blue Springs, Missouri, Mountain View Bank of Commerce, located in Westminster, Colorado, Colonia Bank, located in Phoenix, Arizona and Pisgah Community Bank, located in Asheville, North Carolina, while earlier announced plans to consolidate the Corporation’s Michigan-based affiliates continue into 2009.
Changes have also been implemented by management to reduce expenses and enhance efficiencies. The corporate operating budget has been streamlined, and little or no growth is expected in 2009, coupled with a directive that Capitol’s more mature affiliates focus on efficiency initiatives while younger affiliates selectively capture quality organic growth in their communities. Additionally, Capitol’s executive management group elected to take a voluntary 10 percent salary reduction, eliminated any potential 2008 bonuses, and has not budgeted for any salary increases or bonuses in 2009. Each of these efforts will serve to support the financial stability of Capitol should additional economic difficulties arise in 2009.
Consolidation of Banks
In response to the challenges of the Michigan economy, and in an effort to increase operational efficiencies, as well as enhance credit and operational risk management, Capitol has filed an application to merge nine of its Michigan affiliate banks. Pending regulatory approval, Ann Arbor Commerce Bank, Brighton Commerce Bank, Detroit Commerce Bank, Grand Haven Bank, Kent Commerce Bank, Macomb Community Bank, Muskegon Commerce Bank, Oakland Commerce Bank and Portage Commerce Bank will merge and operate under one charter.
Chairman Reid stated, “This is the next stage in a series of strategic actions to realign our resources, ensure the requisite continued support of these operations, and capitalize on the collective strengths of our Michigan affiliates and their respective markets.”
The centralization of bank operations began during the third quarter of 2008. This process will continue throughout 2009, allowing Capitol to more efficiently allocate capital and resources within these banks’ communities.
“These strategic initiatives are part of our long-term strategy to restore the Michigan banks to fundamentally sound and profitable operations, as the historically cyclical challenges that have characterized the Michigan economy are clearly more secular in nature this time. We believe this will position us for long-term opportunities 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,” added Reid.
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Quarterly Performance
In the fourth quarter of 2008, consolidated net operating revenues decreased to $45 million, a decrease of 13.6 percent compared to $52 million reported for the same period in 2007. The net interest margin, reflecting continued compression in this challenging environment, was 2.98 percent in the fourth 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, the impact of elevated levels of nonperforming loans, competitive market pricing on both sides of the balance sheet, modestly lower levels of noninterest-bearing demand deposit accounts year-over-year and targeted corporate-level financings during the year designed to augment capital resources. Noninterest income increased approximately 10 percent year-over-year, as continued development at Capitol’s expanding wealth management affiliate (despite a decline in the current quarter attributable to the turmoil in the equity markets), coupled with modestly expanding core fee income sources at its affiliate banks, helped to mitigate further softening in mortgage banking revenues. Operating-efficiency initiatives and expense-control directives implemented last quarter contributed to an approximate 8 percent decline year-over-year, and an 18 percent linked-quarter decline in the Corporation’s noninterest expense totals.
Net income for the fourth quarter of 2008 was $1.1 million, compared to $3.4 million reported for the fourth quarter of 2007. Net income per diluted share for the fourth quarter of 2008 was $0.06, compared to $0.20 per diluted share reported in the fourth quarter of 2007. The fourth quarter provision for loan losses increased to $10.7 million versus $9.5 million for the corresponding period in 2007. The provision decreased significantly from the provision recorded in the third quarter of 2008, which had included a special provision in anticipation of future loan charge-offs. During the fourth quarter of 2008, net loan charge-offs increased as expected, to $15.2 million or 1.3 percent of average portfolio loans.
Year-End Results
Net operating revenue exceeded $190 million for the year ended December 31, 2008, a decrease compared to $208 million for the year-ago period, as a modest 8 percent increase in consolidated noninterest income was offset by continued margin compression. The net loss per share was $1.67 for the year ended December 31, 2008, compared to diluted earnings per share of $1.27 reported for 2007. A more subdued increase in operating expenses, approximating 8 percent year-over-year, reflecting the early stages of recently enacted cost-control measures, coupled with revenue pressures and a more than three-fold increase in reserve provisioning tied to asset quality challenges, were the primary contributors to Capitol’s net loss for the year. The provision for loan losses in excess of $82 million for the year ended 2008 resulted from significant loan losses experienced during the 2008 recessionary environment, especially in Michigan and Arizona, coupled with significant reserve building.
Balance Sheet
With total capital resources in excess of $680 million at year-end 2008, the total capital-to-asset ratio exceeded 12 percent, providing solid support for the Corporation’s more than $5.6 billion balance sheet.
Net charge-offs decreased to 1.30 percent in the fourth quarter of 2008 from 1.74 percent reported in the third quarter of 2008, and increased from 0.41 percent reported for the corresponding period of 2007. The ratio of nonperforming assets to total assets was 4.2 percent at December 31, 2008 compared to 3.4 percent reported at September 30, 2008. The continued growth rate in nonperforming assets is attributable to borrower stress and nonperformance coupled with the virtually nonexistent market for the resale of real estate, which hinders the
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disposition of such assets. The allowance coverage ratio of nonperforming loans decreased from approximately 77 percent at September 30, 2008 to approximately 55 percent at year-end 2008, while the allowance for loan losses decreased to 1.96 percent of portfolio loans at December 31, 2008 from 2.09 percent at September 30, 2008. For the full year, Capitol recorded loan loss provisions approximating $82.5 million, or more than 1.7 times the $47.6 million of net charge-offs recognized during the course of 2008. The Corporation remains disciplined in its approach to portfolio review and analysis and, as a result, building and maintaining an elevated reserve 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 $5.7 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. 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 | |||||||||||||||||||
December 31 | December 31 | |||||||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||||||
Condensed results of operations: | ||||||||||||||||||||
Interest income | $ | 73,179 | $ | 86,310 | $ | 304,315 | $ | 330,439 | ||||||||||||
Interest expense | 34,496 | 39,924 | 140,466 | 147,162 | ||||||||||||||||
Net interest income | 38,683 | 46,386 | 163,849 | 183,277 | ||||||||||||||||
Provision for loan losses | 10,705 | 9,528 | 82,492 | 25,340 | ||||||||||||||||
Noninterest income | 6,439 | 5,842 | 26,432 | 24,381 | ||||||||||||||||
Noninterest expense | 44,003 | 47,649 | 190,388 | 176,160 | ||||||||||||||||
Income (loss) before income taxes | (3,646 | ) | 1,522 | (58,755 | ) | 24,761 | ||||||||||||||
Net income (loss) | $ | 1,074 | $ | 3,394 | $ | (28,607 | ) | $ | 21,937 | |||||||||||
Per share data: | ||||||||||||||||||||
Net income (loss) - basic | $ | 0.06 | $ | 0.20 | $ | (1.67 | ) | $ | 1.29 | |||||||||||
Net income (loss) - diluted | 0.06 | 0.20 | (1.67 | ) | 1.27 | |||||||||||||||
Book value at end of period | 20.46 | 22.47 | 20.46 | 22.47 | ||||||||||||||||
Common stock closing price at end of period | $ | 7.80 | $ | 20.12 | $ | 7.80 | $ | 20.12 | ||||||||||||
Common shares outstanding at end of period | 17,294,000 | 17,317,000 | 17,294,000 | 17,317,000 | ||||||||||||||||
Number of shares used to compute: | ||||||||||||||||||||
Basic earnings (loss) per share | 17,157,000 | 17,109,000 | 17,147,000 | 16,967,000 | ||||||||||||||||
Diluted earnings (loss) per share | 17,194,000 | 17,201,000 | 17,147,000 | 17,216,000 | ||||||||||||||||
4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | ||||||||||||||||
2008 | 2008 | 2008 | 2008 | 2007 | ||||||||||||||||
Condensed summary of financial position: | ||||||||||||||||||||
Total assets | $ | 5,654,836 | $ | 5,427,347 | $ | 5,340,400 | $ | 5,066,683 | $ | 4,901,763 | ||||||||||
Portfolio loans | 4,735,229 | 4,662,772 | 4,564,522 | 4,467,628 | 4,314,701 | |||||||||||||||
Deposits | 4,497,612 | 4,283,561 | 4,157,634 | 3,945,754 | 3,844,745 | |||||||||||||||
Stockholders' equity | 353,848 | 353,108 | 385,965 | 387,433 | 389,145 | |||||||||||||||
Total capital | $ | 680,361 | $ | 681,154 | $ | 707,232 | $ | 708,111 | $ | 701,473 | ||||||||||
Key performance ratios: | ||||||||||||||||||||
Return on average assets | 0.08 | % | -- | 0.05 | % | 0.18 | % | 0.28 | % | |||||||||||
Return on average equity | 1.23 | % | -- | 0.64 | % | 2.25 | % | 3.48 | % | |||||||||||
Net interest margin | 2.98 | % | 3.30 | % | 3.50 | % | 3.62 | % | 4.17 | % | ||||||||||
Efficiency ratio | 97.52 | % | 112.09 | % | 98.19 | % | 92.38 | % | 91.23 | % | ||||||||||
Asset quality ratios: | ||||||||||||||||||||
Allowance for loan losses / portfolio loans | 1.96 | % | 2.09 | % | 1.40 | % | 1.38 | % | 1.35 | % | ||||||||||
Total nonperforming loans / portfolio loans | 3.59 | % | 2.73 | % | 2.10 | % | 1.99 | % | 1.68 | % | ||||||||||
Total nonperforming assets / total assets | 4.20 | % | 3.43 | % | 2.63 | % | 2.20 | % | 1.82 | % | ||||||||||
Net charge-offs (annualized) / average portfolio loans | 1.30 | % | 1.74 | % | 0.60 | % | 0.49 | % | 0.41 | % | ||||||||||
Allowance for loan losses / nonperforming loans | 54.66 | % | 76.78 | % | 66.77 | % | 69.41 | % | 80.03 | % | ||||||||||
Capital ratios: | ||||||||||||||||||||
Stockholders' equity / total assets | 6.26 | % | 6.51 | % | 7.23 | % | 7.65 | % | 7.94 | % | ||||||||||
Total capital / total assets | 12.03 | % | 12.55 | % | 13.24 | % | 13.98 | % | 14.31 | % |
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.
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CAPITOL BANCORP LIMITED | ||||||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Three Months Ended December 31 | Year Ended December 31 | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
INTEREST INCOME: | ||||||||||||||||
Portfolio loans (including fees) | $ | 71,792 | $ | 82,981 | $ | 296,689 | $ | 314,800 | ||||||||
Loans held for sale | 93 | 368 | 774 | 2,133 | ||||||||||||
Taxable investment securities | 182 | 184 | 571 | 773 | ||||||||||||
Federal funds sold | 342 | 2,118 | 3,822 | 10,687 | ||||||||||||
Other | 770 | 659 | 2,459 | 2,046 | ||||||||||||
Total interest income | 73,179 | 86,310 | 304,315 | 330,439 | ||||||||||||
INTEREST EXPENSE: | ||||||||||||||||
Deposits | 27,544 | 33,205 | 112,370 | 124,160 | ||||||||||||
Debt obligations and other | 6,952 | 6,719 | 28,096 | 23,002 | ||||||||||||
Total interest expense | 34,496 | 39,924 | 140,466 | 147,162 | ||||||||||||
Net interest income | 38,683 | 46,386 | 163,849 | 183,277 | ||||||||||||
PROVISION FOR LOAN LOSSES | 10,705 | 9,528 | 82,492 | 25,340 | ||||||||||||
Net interest income after provision | ||||||||||||||||
for loan losses | 27,978 | 36,858 | 81,357 | 157,937 | ||||||||||||
NONINTEREST INCOME: | ||||||||||||||||
Service charges on deposit accounts | 1,565 | 1,263 | 5,881 | 4,787 | ||||||||||||
Trust and wealth-management revenue | 1,183 | 1,624 | 6,182 | 5,149 | ||||||||||||
Fees from origination of non-portfolio residential | ||||||||||||||||
mortgage loans | 732 | 728 | 3,642 | 4,482 | ||||||||||||
Gain on sales of government-guaranteed loans | 229 | 437 | 2,060 | 2,733 | ||||||||||||
Gain on sales of other non-portfolio commercial loans | 191 | 244 | 1,058 | 1,244 | ||||||||||||
Realized gains (losses) on sale of investment securities | ||||||||||||||||
available for sale | - | (2 | ) | 50 | (2 | ) | ||||||||||
Other | 2,539 | 1,548 | 7,559 | 5,988 | ||||||||||||
Total noninterest income | 6,439 | 5,842 | 26,432 | 24,381 | ||||||||||||
NONINTEREST EXPENSE: | ||||||||||||||||
Salaries and employee benefits | 26,105 | 26,238 | 108,702 | 106,563 | ||||||||||||
Occupancy | 4,776 | 4,199 | 18,648 | 15,079 | ||||||||||||
Equipment rent, depreciation and maintenance | 2,666 | 2,551 | 12,361 | 10,022 | ||||||||||||
Other | 10,456 | 14,661 | 50,677 | 44,496 | ||||||||||||
Total noninterest expense | 44,003 | 47,649 | 190,388 | 176,160 | ||||||||||||
Income (loss) before income taxes (benefit) and | ||||||||||||||||
minority interest | (9,586 | ) | (4,949 | ) | (82,599 | ) | 6,158 | |||||||||
Income taxes (benefit) | (4,720 | ) | (1,872 | ) | (30,148 | ) | 2,824 | |||||||||
Income (loss) before minority interest | (4,866 | ) | (3,077 | ) | (52,451 | ) | 3,334 | |||||||||
Minority interest in net losses of consolidated | ||||||||||||||||
subsidiaries | 5,940 | 6,471 | 23,844 | 18,603 | ||||||||||||
NET INCOME (LOSS) | $ | 1,074 | $ | 3,394 | $ | (28,607 | ) | $ | 21,937 | |||||||
NET INCOME (LOSS) PER SHARE: | ||||||||||||||||
Basic | $ | 0.06 | $ | 0.20 | $ | (1.67 | ) | $ | 1.29 | |||||||
Diluted | $ | 0.06 | $ | 0.20 | $ | (1.67 | ) | $ | 1.27 |
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CAPITOL BANCORP LIMITED | |||||||||
Condensed Consolidated Balance Sheets | |||||||||
(in thousands, except share data) | |||||||||
December 31 | |||||||||
(Unaudited) | |||||||||
2008 | 2007 | ||||||||
ASSETS | |||||||||
Cash and due from banks | $ | 136,499 | $ | 196,083 | |||||
Money market and interest-bearing deposits | 391,836 | 26,924 | |||||||
Federal funds sold | 96,031 | 129,365 | |||||||
Cash and cash equivalents | 624,366 | 352,372 | |||||||
Loans held for sale | 10,474 | 16,419 | |||||||
Investment securities: | |||||||||
Available for sale, carried at market value | 15,584 | 14,119 | |||||||
Held for long-term investment, carried at | |||||||||
amortized cost which approximates market value | 32,856 | 25,478 | |||||||
Total investment securities | 48,440 | 39,597 | |||||||
Portfolio loans: | |||||||||
Loans secured by real estate: | |||||||||
Commercial | 2,115,515 | 1,917,113 | |||||||
Residential (including multi-family) | 879,754 | 698,960 | |||||||
Construction, land development and other land | 797,486 | 852,595 | |||||||
Total loans secured by real estate | 3,792,755 | 3,468,668 | |||||||
Commercial and other business-purpose loans | 845,593 | 768,473 | |||||||
Consumer | 61,340 | 48,041 | |||||||
Other | 35,541 | 29,519 | |||||||
Total portfolio loans | 4,735,229 | 4,314,701 | |||||||
Less allowance for loan losses | (93,040 | ) | (58,124 | ) | |||||
Net portfolio loans | 4,642,189 | 4,256,577 | |||||||
Premises and equipment | 59,249 | 60,031 | |||||||
Accrued interest income | 18,871 | 19,417 | |||||||
Goodwill and other intangibles | 72,342 | 72,722 | |||||||
Other assets | 178,905 | 84,628 | |||||||
TOTAL ASSETS | $ | 5,654,836 | $ | 4,901,763 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
LIABILITIES: | |||||||||
Deposits: | |||||||||
Noninterest-bearing | $ | 700,786 | $ | 671,688 | |||||
Interest-bearing | 3,796,826 | 3,173,057 | |||||||
Total deposits | 4,497,612 | 3,844,745 | |||||||
Debt obligations: | |||||||||
Notes payable and short-term borrowings | 446,925 | 320,384 | |||||||
Subordinated debentures | 167,293 | 156,130 | |||||||
Total debt obligations | 614,218 | 476,514 | |||||||
Accrued interest on deposits and other liabilities | 29,938 | 35,161 | |||||||
Total liabilities | 5,141,768 | 4,356,420 | |||||||
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES | 159,220 | 156,198 | |||||||
STOCKHOLDERS' EQUITY: | |||||||||
Common stock, no par value, 50,000,000 shares authorized; | |||||||||
issued and outstanding: 2008 - 17,293,908 shares | |||||||||
2007 - 17,316,568 shares | 274,018 | 272,208 | |||||||
Retained earnings | 80,255 | 117,520 | |||||||
Undistributed common stock held by employee- | |||||||||
benefit trust | (569 | ) | (586 | ) | |||||
Market value adjustment (net of tax effect) for | |||||||||
investment securities available for sale (accumulated | |||||||||
other comprehensive income) | 144 | 3 | |||||||
Total stockholders' equity | 353,848 | 389,145 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 5,654,836 | $ | 4,901,763 |
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CAPITOL BANCORP LIMITED
Allowance for Loan Losses Activity
ALLOWANCE FOR LOAN LOSSES ACTIVITY (in thousands):
Periods Ended December 31 | ||||||||||||||||
Three Month Period | Year Ended | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Allowance for loan losses at beginning of period | $ | 97,585 | $ | 52,851 | $ | 58,124 | $ | 45,414 | ||||||||
Loans charged-off: | ||||||||||||||||
Loans secured by real estate: | ||||||||||||||||
Commercial | (3,794 | ) | (1,963 | ) | (9,217 | ) | (3,102 | ) | ||||||||
Residential (including multi-family) | (3,350 | ) | (1,076 | ) | (8,942 | ) | (3,265 | ) | ||||||||
Construction, land development and other land | (5,214 | ) | (547 | ) | (20,668 | ) | (1,192 | ) | ||||||||
Total loans secured by real estate | (12,358 | ) | (3,586 | ) | (38,827 | ) | (7,559 | ) | ||||||||
Commercial and other business-purpose loans | (3,066 | ) | (1,219 | ) | (11,116 | ) | (6,257 | ) | ||||||||
Consumer | (199 | ) | (87 | ) | (461 | ) | (403 | ) | ||||||||
Other | (10 | ) | -- | (43 | ) | -- | ||||||||||
Total charge-offs | (15,633 | ) | (4,892 | ) | (50,447 | ) | (14,219 | ) | ||||||||
Recoveries: | ||||||||||||||||
Loans secured by real estate: | ||||||||||||||||
Commercial | 87 | 2 | 986 | 70 | ||||||||||||
Residential (including multi-family) | 59 | 62 | 648 | 226 | ||||||||||||
Construction, land development and other land | 102 | 4 | 342 | 20 | ||||||||||||
Total loans secured by real estate | 248 | 68 | 1,976 | 316 | ||||||||||||
Commercial and other business-purpose loans | 112 | 551 | 798 | 1,101 | ||||||||||||
Consumer | 23 | 17 | 97 | 165 | ||||||||||||
Other | -- | 1 | -- | 7 | ||||||||||||
Total recoveries | 383 | 637 | 2,871 | 1,589 | ||||||||||||
Net charge-offs | (15,250 | ) | (4,255 | ) | (47,576 | ) | (12,630 | ) | ||||||||
Additions to allowance charged to expense | 10,705 | 9,528 | 82,492 | 25,340 | ||||||||||||
Allowance for loan losses at December 31 | $ | 93,040 | $ | 58,124 | $ | 93,040 | $ | 58,124 | ||||||||
Average total portfolio loans for period ended December 31 | $ | 4,701,336 | $ | 4,172,669 | $ | 4,621,247 | $ | 3,840,526 | ||||||||
Ratio of net charge-offs (annualized) to average portfolio loans outstanding | 1.30 | % | 0.41 | % | 1.03 | % | 0.33 | % |
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CAPITOL BANCORP LIMITED
Asset Quality Data
ASSET QUALITY (in thousands):
December 31 2008 | September 30 2008 | June 30 2008 | March 31 2008 | ||||||||||||
Nonaccrual loans: | |||||||||||||||
Loans secured by real estate: | |||||||||||||||
Commercial | $ | 39,892 | $ | 26,954 | $ | 23,379 | $ | 21,497 | |||||||
Residential (including multi-family) | 35,675 | 27,543 | 17,293 | 17,094 | |||||||||||
Construction, land development and other land | 72,996 | 57,864 | 40,790 | 36,704 | |||||||||||
Total loans secured by real estate | 148,563 | 112,361 | 81,462 | 75,295 | |||||||||||
Commercial and other business-purpose loans | 16,283 | 10,144 | 8,716 | 7,833 | |||||||||||
Consumer | 190 | 296 | 137 | 86 | |||||||||||
Other | -- | 17 | 18 | -- | |||||||||||
Total nonaccrual loans | 165,036 | 122,818 | 90,333 | 83,214 | |||||||||||
Past due (>90 days) loans and accruing interest: | |||||||||||||||
Loans secured by real estate: | |||||||||||||||
Commercial | 1,623 | 1,434 | -- | 503 | |||||||||||
Residential (including multi-family) | 365 | 931 | 1,409 | 3,407 | |||||||||||
Construction, land development and other land | 2,293 | 211 | 3,613 | 214 | |||||||||||
Total loans secured by real estate | 4,281 | 2,576 | 5,022 | 4,124 | |||||||||||
Commercial and other business-purpose loans | 747 | 1,560 | 346 | 1,477 | |||||||||||
Consumer | 146 | 144 | 10 | 23 | |||||||||||
Other | -- | -- | -- | -- | |||||||||||
Total past due loans | 5,174 | 4,280 | 5,378 | 5,624 | |||||||||||
Total nonperforming loans | $ | 170,210 | $ | 127,098 | $ | 95,711 | $ | 88,838 | |||||||
Real estate owned and other repossessed assets | 67,449 | 59,090 | 44,991 | 22,601 | |||||||||||
Total nonperforming assets | $ | 237,659 | $ | 186,188 | $ | 140,702 | $ | 111,439 |
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CAPITOL BANCORP LIMITED
Selected Supplemental Data
EPS COMPUTATION COMPONENTS (in thousands):
Periods Ended December 31 | |||||||||||||||
Three Month Period | Year Ended | ||||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||||
Numerator—net income (loss) for the period | $ | 1,074 | $ | 3,394 | $ | (28,607 | ) | $ | 21,937 | ||||||
Denominator: | |||||||||||||||
Weighted average number of shares outstanding, excluding unvested restricted shares (denominator for basic earnings per share) | 17,157 | 17,109 | 17,147 | 16,967 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Unvested restricted shares | 37 | 57 | -- | 70 | |||||||||||
Stock options | -- | 35 | -- | 179 | |||||||||||
Total effect of dilutive securities | 37 | 92 | -- | 249 | |||||||||||
Denominator for diluted earnings per share— | |||||||||||||||
Weighted average number of shares and potential dilution | 17,194 | 17,201 | 17,147 | 17,216 | |||||||||||
Number of antidilutive stock options excluded from diluted earnings per share computation | 2,374 | 2,120 | 2,371 | 1,063 |
AVERAGE BALANCES (in thousands):
Periods Ended December 31 | |||||||||||||||
Three Month Period | Year Ended | ||||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||||
Portfolio loans | $ | 4,701,336 | $ | 4,172,669 | $ | 4,621,247 | $ | 3,840,526 | |||||||
Earning assets | 5,198,807 | 4,445,084 | 5,024,152 | 4,133,488 | |||||||||||
Total assets | 5,551,803 | 4,786,463 | 5,372,138 | 4,452,995 | |||||||||||
Deposits | 4,414,295 | 3,774,592 | 4,217,345 | 3,540,241 | |||||||||||
Stockholders’ equity | 349,728 | 390,475 | 371,025 | 383,558 |
Page 10 of 12
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 |
Central Arizona Bank | Casa Grande, 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 |
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 |
Page 11 of 12
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 |
Page 12 of 12