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."
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