LANSING, Mich. and PHOENIX, Aug. 16 /PRNewswire-FirstCall/ --
-- Bank Divestiture Activities Continue with Ten Transactions Pending -- Six Regional Consolidations Completed -- Total Assets of $4.7 Billion -- Four Affiliate Bank Sales Completed This Year; Six Divestitures Total
A net loss attributable to Capitol Bancorp was incurred for the second quarter of 2010 of $41 million or $1.98 per share, compared to a net loss of $47.9 million or $2.75 per share for the first quarter of 2010 and a net loss of $16.3 million or $0.95 per share reported for the second quarter of 2009.
Consolidated assets declined 17 percent year-over-year to $4.7 billion at June 30, 2010 from the $5.7 billion reported for the second quarter of 2009, as a result of bank sales and related implementation of the capital preservation and balance-sheet deleveraging strategies. Consistent with these efforts, total portfolio loans were $3.6 billion at June 30, 2010, a 21 percent decline over the past twelve months inclusive of the effect of recent bank sales. Total deposits reflected an approximate 11 percent annualized decline to approximately $4.2 billion from the $4.4 billion reported at the beginning of 2010, while noninterest-bearing deposits approximated 16.3 percent of total deposits at June 30, 2010 versus 15.1 percent of total deposits at the beginning of 2010, as the Corporation continued to focus on core funding sources throughout the deleveraging process and as a result of recent bank sales.
Capitol's Chairman and CEO Joseph D. Reid said, "We remain focused on a myriad of issues presented by both an uncertain and struggling economy in multiple markets of our franchise. Building balance sheet strength and improving liquidity, while reallocating capital resources to those affiliates currently facing more difficult operating challenges, are being addressed via our strategy of regional consolidations and bank divestitures. These initiatives also serve to enhance affiliate-level and system-wide operating efficiencies through the elimination of operating costs targeted by the regional consolidations. Equity levels have diminished significantly in recent quarters as we work through the loan portfolio issues and related operating losses that arise in a severely weakened economy. We continue to concentrate our efforts on these multiple deleveraging avenues while pursuing access to additional internal and external sources of capital."
"We are cautiously encouraged by both redeployment of capital resources via our divestiture efforts and recent positive trends and developments in asset quality. Growth in nonperforming assets, although continuing to remain elevated, reflects another quarter demonstrating a substantially slowing trend. Net loan charge-offs, elevated from historical levels, declined materially on a linked-quarter basis while the most recent quarterly provision for loan losses again exceeded charge-offs. The June 30, 2010 allowance for loan losses approximating 4.44 percent of portfolio loans represents a material increase from the 3.57 percent level we reported at the beginning of 2010, and a significant increase during these difficult times from the approximate 2.5 percent level we posted a year ago," added Mr. Reid.
"Combining the aggregate quarter-end level of nonperforming assets with net charge-offs for each of the past six quarters, the rate of increase has continued its slowing trend: from 34.1 percent in the first quarter of 2009, to 13.1 percent in 2009's second quarter, to 12.3 percent for the quarter ended September 30, 2009, to 11.2 percent for the final quarter of 2009, to 3.7 percent in 2010's first quarter, and most recently to 2.8 percent for the three months ended June 30, 2010. In addition, pretax, pre-provision results, before costs associated with foreclosed properties and other real estate owned, were positive for the second consecutive quarter. Costs associated with foreclosed properties and other real estate owned declined significantly on a linked-quarter basis, after decreasing dramatically from the fourth quarter of 2009 compared to 2010's first quarter. We also remain cautiously optimistic as to the potential recovery of the $154.7 million valuation allowance for deferred tax assets once we are able to demonstrate a sustainable return to core profitability."
"Finally, our affiliate divestiture program has resulted in the sale of six institutions to date in 2010, eliminating $500 million of assets, and we currently have ten transactions pending encompassing an additional $700 million of assets as we aggressively seek to reallocate capital, deleveraging the balance sheet. Above and beyond the approximate $1.2 billion of assets these efforts represent, there are ongoing discussions on additional fronts in both the divestiture and capital-reallocation arenas as we recognize and address the deterioration that has occurred in our once-robust capital support levels. We expect to communicate additional developments as they arise and solidify."
Capital Initiatives
In addition to the completed divestitures and regional consolidations, capital-raising initiatives have included the commencement of an offer to exchange shares of Capitol's common stock for any and all of its outstanding 10.50 percent trust-preferred securities of Capitol Trust XII. That offer ("proposed exchange"), which commenced in late May 2010, has been extended to August 31, 2010. The proposed exchange is contingent upon receipt of consents from a majority in aggregate liquidation amount of all outstanding 8.50 percent cumulative trust-preferred securities of Capitol Trust I to approve proposed amendments to certain provisions of the Indenture and Guarantee Agreement pursuant to which the trust-preferred securities of Capitol Trust I were originally issued.
Mr. Reid stated, "This pending exchange offer provides an opportunity to strengthen Tier 1 common and tangible common equity ratios, while also reducing interest expense associated with the debt securities. We have been encouraged by the initial response to this initiative, with approximately 16 percent of publicly-traded shares of this instrument indicating a desire to participate in the pending exchange offer and we continue to explore other opportunities to create core tangible common equity."
Affiliate Bank Divestitures and Regional Bank Consolidations
Capitol previously announced intentions to sell its controlling interests in several affiliate banks. Sale of Capitol's interests in Bank of Belleville and Napa Community Bank, completed during April 2010, involved $228 million of assets while garnering more than $25 million of proceeds for reinvestment in bank affiliates. In June 2010, Capitol completed the sale of Beachwood, Ohio based Ohio Commerce Bank and at the end of July, the sale of Community Bank of Lincoln in Lincoln, Nebraska was completed. Those two sales involved approximately $130 million of assets. In the second quarter of 2010, Capitol announced that it had entered into a collective stock redemption transaction with three Colorado affiliates: Fort Collins Commerce Bank, Larimer Bank of Commerce and Loveland Bank of Commerce. Capitol also announced agreements to sell Bank of San Francisco in California, and Bank of Fort Bend in Sugar Land, Texas. Those transactions, in addition to five other pending transactions involving affiliates in Colorado, Missouri, New York, North Carolina and Texas, reflect ten divestitures awaiting regulatory approvals (and other contingencies) and represent an additional $700 million of assets and estimated proceeds in excess of $50 million. The ten pending divestitures, with book-value multiples at a premium to tangible equity, are anticipated to be completed in 2010.
Subsequent to June 30, 2010, Capitol completed a regional consolidation of three Georgia-based banks into what operates today as Sunrise Bank. That regional consolidation follows similar charter consolidations that have occurred earlier in 2010 and in the fourth quarter of 2009 in Arizona, California, Indiana, Michigan, Nevada and Washington, resulting in the cumulative elimination of 20 charters. To date, the regional consolidation effort has resulted in the consolidation of 27 charters into six distinct, geographically-concentrated operating entities. Preliminary results at the five largest regional consolidations are being actively monitored with the expectation of meeting targeted efficiency objectives, but implementation costs and restructuring expenses associated with consolidation activity can serve to delay full recognition of the projected cost savings and efficiencies expected with each consolidation.
Mr. Reid further stated, "These bank sales and regional consolidations have provided the Corporation with capital redeployment flexibility to support our ongoing strategic initiatives to enhance balance sheet strength, while also serving our primary objective to assist those affiliates adversely affected by the current difficult economy. We continue to assess additional initiatives to drive operational efficiencies and strengthen risk management oversight within our footprint, without compromising the community-based orientation and operating integrity of the affiliate system."
Quarterly Performance (as adjusted for discontinued operations)
In the second quarter of 2010, after adjusting for discontinued operations, consolidated net operating revenues decreased 10.4 percent to $38.3 million from the approximate $42.8 million reported for the corresponding period of 2009. Net interest margin compression, fueled in large part by elevated levels of nonperforming assets, resulted in an 8.8 percent decline in net interest income. A concerted effort to focus on core deposit funding sources, as referenced earlier, helped mitigate some of the margin pressure. The net interest margin declined to 2.88 percent compared to 2009's second quarter margin of 3.02 percent and 3.03 percent in the first quarter of 2010. Cash and cash equivalents totaled approximately $925 million, or 19 percent of the Corporation's consolidated total assets at June 30, 2010. Other noninterest income totaled $5.4 million, a nearly 19 percent decrease compared to approximately $6.7 million in the comparable 2009 period.
The Corporation continues to emphasize the reduction of operating expenses through salary and staffing reductions, operational efficiencies and tight controls on other overhead. Salaries and employee benefit costs declined nearly 13 percent year-over-year and approximately 2.6 percent (10.4 percent annualized) on a linked-quarter basis. Noninterest, or operating, expenses increased year-over-year to $48.7 million in the quarter ended June 30, 2010. While costs associated with foreclosed properties and other real estate owned (which totaled $8.9 million in the second quarter of 2010 versus approximately $4.2 million in the corresponding 2009 period) increased significantly, but declined encouragingly on a 2010 linked-quarter basis ($3.2 million), FDIC insurance premiums and other regulatory fees decreased from $5.0 million in 2009's second quarter to approximately $4.2 million in the most recent three-month period. Combined, these two expense areas increased to approximately $13.1 million in the current quarter, representing a substantial increase from the combined approximate $9.2 million level during the corresponding period of 2009, more than offsetting the aforementioned $2.9 million decline in compensation-related expenses. On a linked-quarter basis, total operating expenses declined 8.4 percent from $53.2 million in 2010's first quarter to the $48.7 million in the subsequent quarter. Again, adjusting for real estate owned-related and regulatory-related costs, linked quarter operating expenses still declined approximately 3.5 percent, or 14 percent annualized.
The second quarter 2010 provision for loan losses decreased to $44.6 million, a reduction from the $49.0 million recorded in the preceding quarter, and increased from the $32.5 million for the corresponding period of 2009. During the second quarter of 2010, net loan charge-offs totaled $33.4 million, a significant increase from 2009's corresponding level of $18.3 million, but a reduction from the $41.8 million recorded in the first quarter 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 increased provision for loan losses were major reasons for the consolidated net loss.
Six-Month Performance
Net operating revenues were $78.9 million for the six months ended June 30, 2010, a 2.3 percent decrease compared to the approximate $80.8 million for the year-ago period, buffeted by the aforementioned gains on sales of affiliates recorded in the recent quarter. Core operating revenues, net of divestiture gains, declined 14.6 percent due to the impact of sizable deleveraging of the balance sheet resulting from bank sales, and further driven by margin compression and general softness across all major revenue components. The provision for loan losses of $93.6 million for the first six months of 2010 was an increase from the $66.1 million for the comparable 2009 period. The net loss per share for the first half of 2010 was $4.67, versus the $2.15 reported for the corresponding period in 2009.
Balance Sheet
With total capital resources of approximately $304.1 million at June 30, 2010, the total capital-to-asset ratio was 6.40 percent. Divestiture efforts and ongoing balance sheet deleveraging should serve to help strengthen consolidated capital ratios, but as of June 30, 2010 the consolidated leverage, Tier 1 and total risk-based regulatory capital ratios were 2.39 percent, 3.19 percent and 6.38 percent, respectively. Consequently, the Corporation continues to be classified as "undercapitalized."
Net loan charge-offs of 3.64 percent of average loans (annualized) for the second quarter of 2010 decreased significantly from the 4.25 percent reported for the first quarter of 2010, but increased dramatically from the 1.64 percent reported for the corresponding period of 2009 as the Corporation continued to aggressively seek problem asset resolution. The ratio of nonperforming loans to total portfolio loans was 9.93 percent at June 30, 2010 compared to 8.80 percent reported at March 31, 2010 and 5.70 percent for the same period in 2009. The ratio of total nonperforming assets to total assets increased to 9.86 percent at June 30, 2010 from 8.97 percent reported at March 31, 2010 and 6.37 percent at June 30, 2009. The continuing increase in nonperforming assets is attributable to borrower stress and delinquency, coupled with a minimal market for sale of real estate, especially in the states of Arizona, Michigan and Nevada, hindering the disposition of such assets. The coverage ratio of the allowance for loan losses in relation to nonperforming loans approximated 45 percent at June 30, 2010, consistent with levels recorded in recent quarters, while the allowance for loan losses as a percentage of portfolio loans increased materially year-over-year, from 2.50 percent to 4.44 percent at June 30, 2010, as provisions for loan losses continued to exceed the significant level of net charge-off activity during 2010.
About Capitol Bancorp Limited
Capitol Bancorp Limited is a national community banking company, with a network of separately chartered banks with operations in 15 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 Six Months Ended June 30 June 30 ------- ------- 2010 2009 2010 2009 ---- ---- ---- ---- Condensed results of operations: Interest income $51,634 $63,692 $105,487 $126,787 Interest expense 18,714 27,585 39,013 57,375 ------ ------ ------ ------ Net interest income 32,920 36,107 66,474 69,412 Provision for loan losses 44,600 32,511 93,641 66,125 Noninterest income 5,427 6,685 12,436 11,363 Noninterest expense 48,711 46,725 101,917 95,294 Loss from continuing operations before income tax benefit (54,964) (36,444) (116,648) (80,644) Income from discontinued operations 6,799 114 6,721 547 Net loss attributable to Capitol Bancorp Limited $(41,003) $(16,304) $(88,885) $(36,978) ======== ======== ======== ======== Net loss per common share attributable to Capitol Bancorp Limited $(1.98) $(0.95) $(4.67) $(2.15) Book value per common share at end of period 3.89 18.36 3.89 18.36 Common stock closing price at end of period $1.27 $2.65 $1.27 $2.65 Common shares outstanding at end of period 21,414,000 17,517,000 21,414,000 17,517,000 Number of common shares used to compute net loss per share 20,684,000 17,244,000 19,052,000 17,203,000 2nd 1st Quarter Quarter 2010 2010 ---- ---- Condensed summary of financial position: Total assets $4,748,695 $5,064,936 Portfolio loans(1) 3,617,364 3,657,769 Deposits(1) 4,183,217 4,188,835 Capitol Bancorp Limited stockholders' equity 88,297 117,167 Total capital $304,104 $342,858 Key performance ratios: Net interest margin 2.88% 3.03% Efficiency ratio 127.03% 126.75% Asset quality ratios: Allowance for loan losses / portfolio loans 4.44% 3.90% Total nonperforming loans / portfolio loans 9.93% 8.80% Total nonperforming assets / total assets 9.86% 8.97% Net charge-offs (annualized) /average portfolio loans 3.64% 4.25% Allowance for loan losses / nonperforming loans 44.67% 44.31% Capital ratios: Capitol Bancorp Limited stockholders' equity /total assets 1.86% 2.31% Total capital / total assets 6.40% 6.77% 4th 3rd 2nd Quarter Quarter Quarter 2009 2009 2009 ---- ---- ---- Condensed summary of financial position: Total assets $5,131,940 $5,322,613 $5,723,540 Portfolio loans(1) 3,792,355 3,929,070 4,215,999 Deposits(1) 4,148,438 4,258,613 4,362,618 Capitol Bancorp Limited stockholders' equity 161,335 236,385 318,977 Total capital $401,047 $482,455 $629,266 Key performance ratios: Net interest margin 3.04% 3.00% 3.02% Efficiency ratio 179.40% 117.09% 105.43% Asset quality ratios: Allowance for loan losses / portfolio loans 3.57% 3.01% 2.50% Total nonperforming loans / portfolio loans 7.60% 6.68% 5.70% Total nonperforming assets / total assets 8.17% 7.50% 6.37% Net charge-offs (annualized) /average portfolio loans 5.68% 2.77% 1.64% Allowance for loan losses / nonperforming loans 47.04% 45.14% 43.77% Capital ratios: Capitol Bancorp Limited stockholders' equity /total assets 3.14% 4.44% 5.57% Total capital / total assets 7.81% 9.06% 10.99% (1) Excludes amounts related to operations discontinued in 2010 for dates prior to June 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 Six Months Ended June 30 June 30 ------------------ ---------------- 2010 2009 2010 2009 ---- ---- ---- ---- INTEREST INCOME: Portfolio loans (including fees) $50,793 $62,672 $103,775 $125,190 Loans held for sale 64 285 127 478 Taxable investment securities 85 150 311 302 Federal funds sold 3 23 10 56 Other 689 562 1,264 761 --- --- ----- --- Total interest income 51,634 63,692 105,487 126,787 INTEREST EXPENSE: Deposits 14,404 21,759 29,916 45,339 Debt obligations and other 4,310 5,826 9,097 12,036 ----- ----- ----- ------ Total interest expense 18,714 27,585 39,013 57,375 ------ ------ ------ ------ Net interest income 32,920 36,107 66,474 69,412 PROVISION FOR LOAN LOSSES 44,600 32,511 93,641 66,125 ------ ------ ------ ------ Net interest income (deficiency) after provision for loan losses (11,680) 3,596 (27,167) 3,287 NONINTEREST INCOME: Service charges on deposit accounts 1,130 1,366 2,284 2,732 Trust and wealth- management revenue 1,170 1,135 2,322 2,523 Fees from origination of non-portfolio residential mortgage loans 430 1,409 844 2,273 Gain on sales of government- guaranteed loans 476 405 774 645 Gain on debt extinguishment 1,255 Realized gains on sale of investment securities available for sale 14 1 Other 2,221 2,370 4,943 3,189 ----- ----- ----- ----- Total noninterest income 5,427 6,685 12,436 11,363 NONINTEREST EXPENSE: Salaries and employee benefits 20,089 23,019 40,720 50,574 Occupancy 4,565 4,492 8,954 9,038 Equipment rent, depreciation and maintenance 2,930 3,070 5,858 6,374 Costs associated with foreclosed properties and other real estate owned 8,905 4,152 20,752 8,370 FDIC insurance premiums and other regulatory fees 4,187 5,021 8,645 6,987 Other 8,035 6,971 16,988 13,951 ----- ----- ------ ------ Total noninterest expense 48,711 46,725 101,917 95,294 ------ ------ ------- ------ Loss before income tax benefit (54,964) (36,444) (116,648) (80,644) Income tax benefit (4,246) (13,370) (4,068) (29,230) ------ ------- ------ ------- Loss from continuing operations (50,718) (23,074) (112,580) (51,414) Discontinued operations: Income from operations of bank subsidiaries sold 403 202 259 953 Gain on sales of bank subsidiaries 10,083 10,083 Less income tax expense 3,687 88 3,621 406 ----- --- ----- --- Income from discontinued operations 6,799 114 6,721 547 ----- --- ----- --- NET LOSS (43,919) (22,960) (105,859) (50,867) Net losses attributable to noncontrolling interests in consolidated subsidiaries 2,916 6,656 16,974 13,889 ----- ----- ------ ------ NET LOSS ATTRIBUTABLE TO CAPITOL BANCORP LIMITED $(41,003) $(16,304) $(88,885) $(36,978) ======== ======== ======== ======== NET LOSS PER COMMON SHARE ATTRIBUTABLE TO CAPITOL BANCORP LIMITED (basic and diluted) $(1.98) $(0.95) $(4.67) $(2.15) ====== ====== ====== ====== CAPITOL BANCORP LIMITED Condensed Consolidated Balance Sheets (in thousands, except share and per-share data) (Unaudited) December June 30 31 2010 2009 ---- ---- ASSETS ------ Cash and due from banks $103,324 $76,187 Money market and interest- bearing deposits 811,619 683,887 Federal funds sold 9,695 11,005 ----- ------ Cash and cash equivalents 924,638 771,079 Loans held for sale 5,931 11,621 Investment securities: Available for sale, carried at fair value 23,960 39,776 Held for long- term investment, carried at amortized cost which approximates fair value 3,334 5,891 ----- ----- Total investment securities 27,294 45,667 Federal Home Loan Bank and Federal Reserve Bank stock (at cost) 24,021 23,215 Portfolio loans: Loans secured by real estate: Commercial 1,825,943 1,884,309 Residential (including multi- family) 720,938 727,816 Construction, land development and other land 420,318 471,121 ------- ------- Total loans secured by real estate 2,967,199 3,083,246 Commercial and other business- purpose loans 578,056 633,276 Consumer 38,777 42,691 Other 33,332 33,142 ------ ------ Total portfolio loans 3,617,364 3,792,355 Less allowance for loan losses (160,482) (140,323) -------- -------- Net portfolio loans 3,456,882 3,652,032 Premises and equipment 46,290 47,017 Accrued interest income 13,074 14,709 Goodwill 66,099 66,126 Other real estate owned 108,715 111,102 Recoverable income taxes 43,248 43,763 Other assets 32,503 42,059 Assets of discontinued operations 303,550 ------- TOTAL ASSETS $4,748,695 $5,131,940 ========== ========== LIABILITIES AND EQUITY ----------- LIABILITIES: Deposits: Noninterest- bearing $682,736 $624,721 Interest- bearing 3,500,481 3,523,717 --------- --------- Total deposits 4,183,217 4,148,438 Debt obligations: Notes payable and short- term borrowings 214,983 267,659 Subordinated debentures 167,514 167,441 ------- ------- Total debt obligations 382,497 435,100 Accrued interest on deposits and other liabilities 46,391 43,524 Liabilities of discontinued operations 271,272 ------- Total liabilities 4,612,105 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 - 21,414,352 shares 2009 - 17,545,631 shares 288,186 277,707 Retained- earnings deficit (204,636) (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) 207 (63) --- --- Total Capitol Bancorp Limited stockholders' equity 88,297 161,335 Noncontrolling interests in consolidated subsidiaries 48,293 72,271 ------ ------ Total equity 136,590 233,606 ------- ------- TOTAL LIABILITIES AND EQUITY $4,748,695 $5,131,940 ========== ========== CAPITOL BANCORP LIMITED Allowance for Loan Losses Activity ALLOWANCE FOR LOAN LOSSES ACTIVITY (in thousands): Periods Ended June 30 --------------------- Three Month Period Six Month Period ------------------ ---------------- 2010 2009(1) 2010 2009(1) ---- ---- Allowance for loan losses at beginning of period $147,526 $94,150 $140,323 $87,636 Allowance for loan losses of previously- deconsolidated bank subsidiary 1,769 1,769 Loans charged- off: Loans secured by real estate: Commercial (15,603) (2,052) (26,191) (5,625) Residential (including multi-family) (6,800) (6,994) (18,972) (14,897) Construction, land development and other land (8,742) (5,372) (22,624) (13,479) ------ ------ ------- ------- Total loans secured by real estate (31,145) (14,418) (67,787) (34,001) Commercial and other business- purpose loans (6,220) (4,121) (13,756) (12,174) Consumer (265) (250) (426) (542) Other (1) (1) (1) (1) --- Total charge- offs (37,631) (18,790) (81,970) (46,718) Recoveries: Loans secured by real estate: Commercial 384 20 742 122 Residential (including multi-family) 514 154 622 201 Construction, land development and other land 2,284 2 3,605 121 ----- --- ----- --- Total loans secured by real estate 3,182 176 4,969 444 Commercial and other business- purpose loans 987 289 1,682 833 Consumer 49 14 68 29 Other -- -- -- 1 --- --- --- --- Total recoveries 4,218 479 6,719 1,307 ----- --- ----- ----- Net charge-offs (33,413) (18,311) (75,251) (45,411) Additions to allowance charged to expense 44,600 32,511 93,641 66,125 Allowance for loan losses at end of period $160,482 $108,350 $160,482 $108,350 ======== ======== ======== ======== Average total portfolio loans for the period $3,672,751 $4,334,687 $3,611,204 $4,315,798 ========== ========== ========== ========== Ratio of net charge-offs (annualized) to average portfolio loans outstanding 3.64% 1.69% 4.17% 2.10% ==== ==== ==== ==== (1) Excludes amounts related to operations discontinued in 2010. CAPITOL BANCORP LIMITED Asset Quality Data ASSET QUALITY (in thousands): December June 30 March 31 31 ------- 2010(1) 2009(1) 2010 ---- Nonaccrual loans: Loans secured by real estate: Commercial $163,759 $152,495 $130,281 Residential (including multi- family) 57,195 63,457 55,347 Construction, land development and other land 94,133 81,139 82,239 ------ ------ ------ Total loans secured by real estate 315,087 297,091 267,867 Commercial and other business- purpose loans 31,165 27,102 23,063 Consumer 1,481 518 380 ----- --- Total nonaccrual loans 347,733 324,711 291,310 Past due (greater than or equal to 90 days) loans and accruing interest: Loans secured by real estate: Commercial 5,544 5,796 6,234 Residential (including multi- family) 2,508 768 228 Construction, land development and other land 2,113 3,035 3,713 ----- ----- ----- Total loans secured by real estate 10,165 9,599 10,175 Commercial and other business- purpose loans 1,344 2,101 1,546 Consumer 32 12 534 --- --- Total past due loans 11,541 11,712 12,255 ------ ------ ------ Total nonperforming loans $359,274 $336,423 $303,565 ======== ======== ======== Real estate owned and other repossessed assets 108,815 109,719 111,167 Total nonperforming assets $468,089 $446,142 $414,732 ======== ======== ======== (1) Excludes amounts related to operations discontinued in 2010. CAPITOL BANCORP LIMITED Selected Supplemental Data EPS COMPUTATION COMPONENTS (in thousands): Periods Ended June 30 --------------------- Three Month Period Six Month Period ------------------ 2010 2009 2010 2009 ---- ---- Numerator-net loss attributable to Capitol Bancorp Limited for the period $(41,003) $(16,304) $(88,885) $(36,978) ======== ======== ======== ======== Denominator: Weighted average number of shares outstanding, excluding unvested restricted shares (denominator for basic and diluted earnings per share) 20,684 17,244 19,052 17,203 Number of antidilutive stock options excluded from diluted net loss per share computation 2,304 2,428 2,304 2,428 Number of antidilutive unvested restricted shares excluded from diluted net loss per share computation 126 123 126 123 Number of antidilutive warrants excluded from diluted net loss per share computation 76 76 76 76 AVERAGE BALANCES (in thousands): Periods Ended June 30 --------------------- Three Month Period Six Month Period ------------------ 2010 2009 2010 2009 ---- ---- Portfolio loans $3,672,751 $4,334,687 $3,611,204 $4,315,798 Earning assets 4,602,742 5,382,603 4,730,267 5,347,703 Total assets 4,856,144 5,756,390 4,991,807 5,718,720 Deposits 4,263,632 4,696,428 4,352,157 4,627,644 Capitol Bancorp Limited stockholders' equity 111,231 330,977 131,165 338,176 Capitol Bancorp's National Network of Community Banks Arizona Region: Bank of Tucson Tucson, Arizona Casa Grande, Central Arizona Bank Arizona Southern Arizona Community Bank Tucson, Arizona Albuquerque, New Sunrise Bank of Albuquerque Mexico Sunrise Bank of Arizona Phoenix, Arizona California Region: Yuba City, Bank of Feather River California San Francisco, Bank of San Francisco California San Diego, Sunrise Bank California Colorado Region: Fort Collins, Fort Collins Commerce Bank Colorado Fort Collins, Larimer Bank of Commerce Colorado Loveland Bank of Commerce Loveland, Colorado Mountain View Bank of Westminster, Commerce Colorado Great Lakes Region: Bank of Maumee Maumee, Ohio Farmington Hills, Bank of Michigan Michigan Capitol National Bank Lansing, Michigan Evansville Commerce Bank Evansville, Indiana Indiana Community Bank Goshen, Indiana Michigan Commerce Bank Ann Arbor, Michigan Midwest Region: Blue Springs, Adams Dairy Bank Missouri Lee's Summit, Summit Bank of Kansas City Missouri Nevada Region: North Las Vegas, 1st Commerce Bank Nevada Bank of Las Vegas Las Vegas, Nevada Northeast Region: USNY Bank Geneva, New York Northwest Region: Bellevue, Bank of the Northwest Washington High Desert Bank Bend, Oregon Southeast Region: Salisbury, North Community Bank of Rowan Carolina Rocky Mount, North First Carolina State Bank Carolina Asheville, North Pisgah Community Bank Carolina Sunrise Bank Valdosta, Georgia Texas Region: Bank of Fort Bend Sugar Land, Texas Bank of Las Colinas Irving, Texas
Capitol Bancorp Limited
CONTACT: Analyst Contact: Michael M. Moran, Chief of Capital Markets,
+1-877-884-5662; Media Contact: Stephanie Swan, Director of Shareholder
Services, +1-517-372-7402
Web Site: http://www.capitolbancorp.com/
