Just a few weeks after announcing plans to sell some of its subsidiary banks, Capitol Bancorp Ltd. has its first suitor.
The $133 million-asset Foothills Bank in Yuma has agreed to pay $10.5 million in cash for Capitol's $72 million-asset Yuma Community Bank in Arizona.
Late last month Capitol said it had hired KBW Inc.'s Keefe, Bruyette & Woods Inc. to help divest some of its 53 banks. The $5.8 billion-asset company, which has dual headquarters in Lansing, Mich., and Phoenix, aims to bolster its capital, as it contends with continuing loan losses.
Though Yuma Community was not a bank on the sell list, Capitol opted to divest it anyway, Joseph D. Reid, the company's chairman and chief executive officer, said in a press release.
"We did not seek a sale of this institution, but were approached by the Foothills Bank with what we feel is a beneficial transaction for our corporation," he said. "It will allow us to prudently re-deploy capital resources into many of our demographically diverse and growth-oriented communities, while also supporting those affiliates currently facing the challenges of a volatile and uncertain economy."
Yuma is one of 10 banks that Capitol owns in Arizona, the company's second largest market after Michigan.
The Arizona banks, which hold about a fifth of the company's assets, accounted for 30% of its $232.5 million of nonperforming assets at the end of the first quarter, and Capitol is in the midst of combining four of its banks there into one.
The deal for Yuma Community is expected to close in the second half of the year.