Capitol Bancorp Ltd. in Lansing, Mich., said Thursday that its second-quarter earnings fell 91% from a year earlier, to $623,000, because of deteriorating credit quality and higher expenses related to its continued expansion.

The $5.3 billion-asset Capitol said that its loan-loss provision nearly tripled, to $9 million, mainly due to bad construction and land development loans. Nonperforming assets rose 57.6%, to $140.7 million, and the ratio to total assets more than doubled, to 2.63%.

Capitol, which operates 64 separately chartered banks in 17 states, said it has opened a dozen banks since the second quarter of last year, causing noninterest expenses to swell 13%, to $47.8 million.

Still, its earnings of 4 cents a share beat the average estimate of analysts by a penny, according to Thomson Reuters. This likely contributed to a 17.8% rise in its stock by late Thursday, to $10.81 a share, said David B. Scharf, an analyst at First Horizon National Corp.'s FTN Midwest Securities Corp.

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