Still struggling with rising loan losses, Capitol Bancorp Ltd. is now looking to sell some of its 53 banks.
The $5.8 billion-asset company — which reported a larger-than-expected first-quarter loss this month — said late Thursday that it had hired KBW Inc.'s Keefe, Bruyette & Woods Inc. to help evaluate opportunities for divesting affiliates.
Joseph D. Reid, Capitol's chairman and chief executive, said in a press release that the company already has several offers to analyze. He gave no further details.
Capitol, which has dual headquarters in Lansing, Mich., and Phoenix, lately has been consolidating banks in both states to improve its efficiency. When completed, the consolidation would reduce the number of charters it has by 11, to 53. Even this was a sharp change in strategy for a company that used to open banks at a fast clip and once aimed to get to 100 in all.
Capitol reported April 17 that it swung to a first-quarter loss of $15.7 million, or 91 cents a share, from a profit of $2.2 million, or 13 cents a share, a year earlier.
On average, analysts had forecast a loss of 34 cents for the quarter, according to Thomson Reuters.
Reflecting higher chargeoffs and nonperformers, its provision for loan losses rose sharply, to $28.2 million. The ratio of nonperforming assets to the total increased to 5.53% at March 31, from 4.20% in the fourth quarter and 2.20% a year earlier.
