Capitol Bancorp Ltd. said Monday that it has a stock redemption agreement with USNY Bank to sell its 51% interest in the $64 million-asset bank.
Joseph D. Reid, the chairman and chief executive of the company with headquarters in Phoenix and Lansing, Mich., said the sale of its stake in USNY in Geneva, N.Y., furthers Capitol's plan to strengthen its consolidated equity and core capital ratios, which have been affected by credit losses during the past two years.
"It has been rewarding to work with president and CEO Mike Briggs and the USNY Bank team to organize and develop the bank," Reid said in the press release. "We welcome the opportunity to enable the bank to retain its independence and acquire additional local ownership."
The deal is expected to close this year. Its price was not disclosed.
This is the 13th divestiture deal announced by the $5.2 billion-asset Capitol since April 2009.
At that time it had hired KBW Inc.'s Keefe, Bruyette & Woods Inc. to help realign its network of banks in order to boost capital and cut expenses. Many of the announced deals have been priced at about 1.5 times tangible book value.
Since hiring the investment banking firm, the company also has merged or is in the process of merging banks in Arizona, California, Michigan, Nevada and Washington.