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Capitol Bancorp Ltd.'s credit costs are shrinking, but its capital hole is only getting deeper. The $2.5 billion-asset company, which has dual headquarters in Phoenix and Lansing, Mich., reported on Thursday a loss of $22.8 million for the third quarter, a 56% improvement from the loss it reported a year earlier.
November 11
Capitol Bancorp's losses narrowed in 2011, but the Lansing, Mich., company remains deeply troubled as its equity deficit continues to widen.
The multi-bank holding company said Thursday that it lost $6.5 million in the fourth quarter and $45.4 million for the full year, compared to losses of $84.2 million and $225.2 million in same periods in 2010. Capitol, with $2.2 billion of assets, attributed the year-over-year improvement to sharply lower provisions for loan losses and a 68% decline in operating expenses.
A lack of capital, however, continues to raise doubts about the company's ability to survive. At Dec. 31, its equity deficit swelled to $109 million from $96 million three months earlier and $39 million in the same period in 2010. The company's equity levels have been negative since the third quarter of 2010.
Five of the company's subsidiaries were also
Capitol, which once controlled more than 60 banks throughout the country, has been aggressively selling off subsidiary banks in its effort to bolster its capital levels. In recent months it has unloaded banks in Colorado, Indiana, California and Texas and it has deals pending to sell four other banks with a combined $235 million of assets.
