As part of its effort to increase capital ratios, Capitol Bancorp Ltd., with dual headquarters in Lansing, Mich., and Phoenix, said Friday that it had agreed to sell its 1st Commerce Bank subsidiary in North Las Vegas to a law firm.
A group of investors led by Nevada attorney Jason A. Awad agreed to acquire the $45 million-asset bank. The price of the deal was not disclosed.
The group plans to recapitalize the bank, which was undercapitalized, with a total risk-based capital ratio of 6.93% as of June 30.
"1st Commerce Bank, which was launched in late 2006, was almost immediately impacted by the early stages of the national recession and subsequent banking crisis, in its efforts to gain traction in its local market," Joseph D. Reid, chairman and chief executive of the $4.7 billion-asset Capitol, said in the announcement.
The transaction follows seven consolidations completed since Capitol Bancorp announced a restructuring in March 2009 in order to raise its capital ratios.
The company was undercapitalized, with a consolidated total risk-based capital ratio of 6.38% on June 30.
In an Oct. 1 letter to shareholders, Reid said Capitol had consolidated 34 affiliate charters into seven operating banks.
The 1st Commerce deal is expected to close by early 2011.
