<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended December 31, 1997 or
( ) TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 33-24728C
CAPITOL BANCORP LTD.
(Exact name of registrant as specified in its Charter)
MICHIGAN 38-2761672
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
ONE BUSINESS & TRADE CENTER
200 WASHINGTON SQUARE NORTH
LANSING, MICHIGAN 48933
(Address of principal executive offices)
Registrant's telephone number, including area code: (517) 487-6555
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE
(Title of class)
8.50% CUMULATIVE TRUST PREFERRED SECURITIES, $10 LIQUIDATION AMOUNT
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports); and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO __
Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. (X)
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked price of
stock, as of a specified date within 60 days prior to the date of filing:
$103,114,174 as of February 17, 1998
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of the latest practicable date : 5,201,380 as of
February 17, 1998
DOCUMENTS INCORPORATED BY REFERENCE
See Cross-Reference Sheet
<PAGE> 2
CAPITOL BANCORP LTD
Form 10-K
Fiscal Year Ended: December 31, 1997
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
ITEM OF FORM 10-K INCORPORATION BY REFERENCE FROM:
- ----------------- --------------------------------
PART I
<S> <C>
Item 1, Business Pages 24-26, 33, 35, and 40-41,
Annual Report
Item 2, Properties Pages 3-12, 15-16 and 36, Annual Report
Page 13, Proxy Statement
PART II
Item 5, Market for Registrant's Pages 17-18, 37-39 and 45, Annual Report
Common Equity and
Related Stockholder Matters
Item 6, Selected Financial Data Page 17, Annual Report
Item 7, Management's Discussion Pages 19-27, Annual Report
and Analysis of Financial
Condition and Results of
Operations
Item 8, Financial Statements and Pages 28-44 and 17, Annual Report
Supplementary Data
PART III
Item 10, Directors and Executive Pages 4-7, Proxy Statement, and
Officers of Registrant Pages 1 and 45, Annual Report
Item 11, Executive Compensation Pages 8-12, Proxy Statement
Item 12, Security Ownership of Pages 3-6 and 9, Proxy Statement
Certain Beneficial
Owners and Management
Item 13, Certain Relationships Pages 13-14, Proxy Statement
and Related Transactions
PART IV
Item 14, Exhibits, Financial Statement Pages 28-44, Annual Report
Schedules and Reports on
Form 8-K
</TABLE>
KEY:
"Annual Report" means the 1997 Annual Report of the Registrant
provided to Stockholders and the Commission
pursuant to Rule 14a-3(b).
"Proxy Statement" means the Proxy Statement of the Registrant on
Schedule 14A to be filed pursuant to Rule 14a-101.
It is expected that the Proxy Statement will be
filed within 120 days after the end of the fiscal
year covered by this Form 10-K.
Note: The page number references herein are based on the paper version of the
Annual Report and Proxy Statement. Accordingly, those page number references may
differ from the electronically filed versions of those documents.
-2-
<PAGE> 3
CAPITOL BANCORP LTD.
1997 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I
ITEM 1. Business............................................................................................. 4
ITEM 2. Properties........................................................................................... 14
ITEM 3. Legal Proceedings.................................................................................... 14
ITEM 4. Submission of Matters to a Vote of Security Holders.................................................. 14
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters................................ 15
ITEM 6. Selected Financial Data.............................................................................. 15
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations................ 15
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk........................................... 15
ITEM 8. Financial Statements and Supplementary Data.......................................................... 15
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure................. 15
PART III
ITEM 10. Directors and Executive Officers of the Registrant................................................... 16
ITEM 11. Executive Compensation................................................................................ 16
ITEM 12. Security Ownership of Certain Beneficial Owners and Management........................................ 16
ITEM 13. Certain Relationships and Related Transactions........................................................ 16
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K....................................... 17
</TABLE>
-3-
<PAGE> 4
PART I
Item 1, Business.
a. General development of business:
Incorporated by reference from Page 33, Annual Report, under the caption
"Note A--Significant Accounting Policies" and the subcaption thereunder, "Nature
of Operations, Basis of Presentation and Principles of Consolidation" and Page
35, Annual Report under the caption "Note B--Changes in Consolidated Group".
b. Financial information about industry segments:
The Corporation and its subsidiaries are engaged in a single business
activity--banking.
c. Narrative description of business:
Incorporated by reference from Page 33, Annual Report, under the caption
"Note A--Significant Accounting Policies" and the subcaption thereunder, "Nature
of Operations, Basis of Presentation and Principles of Consolidation" and Page
35, Annual Report, under the caption "Note B--Changes in Consolidated Group" and
Pages 24-26, Annual Report, under the caption "Trends Affecting Operations".
Incorporated by reference from Pages 40 and 41, Annual Report, under the caption
"Note O -- Dividend Limitations of Subsidiaries and Other Capital Requirements".
At December 31, 1997, the Corporation and its subsidiaries employed 191 full
time equivalent employees.
Effective November 25, 1997, the Registrant formed Capitol Trust I a
Delaware statutory business trust ("Capitol Trust I"). Capitol Trust I's
business and affairs are conducted by its property trustee, a Delaware trustee,
and three individual administrative trustees who are employees and officers of
the Registrant. Capitol Trust I exists for the sole purpose of issuing and
selling its preferred securities and common securities, using the proceeds from
the sale of those securities to acquire subordinated debentures issued by the
Registrant and certain related services. On December 19, 1997, Capitol Trust I
sold its preferred and common securities and acquired the Registrant's
subordinated debentures. As a result, the sole assets of Capitol Trust I are the
subordinated debentures of the Registrant.
The following tables (Tables A to G, inclusive), present certain
statistical information regarding the Corporation's business.
-4-
<PAGE> 5
DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY (TABLE A)
CAPITOL BANCORP LTD.
Net interest income, the primary component of earnings, represents the
difference between interest income on interest-earning assets and interest
expense on interest-bearing liabilities. Net interest income depends upon the
volume of interest-earning assets and interest-bearing liabilities and the
rates earned or paid on them. This table sets forth the daily average balances
for the major asset and liability categories and the actual related interest
income and expense (in thousands) and average yield/cost for the years ended
December 31, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
Year Ended December 31
1997 1996
------------------------------------ -----------------------------------
Interest (1) Interest (1)
Average Income/ Average Average Income/ Average
Balance Expense Yield/Cost Balance Expense Yield/Cost
------------------------------------ -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investment securities:
U.S. Treasury and government agencies $56,604 $3,516 6.21% $39,549 $2,234 5.65%
States and political subdivisions (2) 239 14 5.86% 207 18 8.70%
Other 2,342 211 9.01% 2,510 372 14.82%
Interest-bearing deposits with banks 1,158 19 1.64% 474 42 8.86%
Federal funds sold 50,948 2,805 5.51% 32,318 1,541 4.77%
Loans held for resale 7,122 536 7.53% 10,737 818 7.62%
Portfolio loans (3) 425,664 42,448 9.97% 318,491 31,454 9.88%
----------- ---------- --------- ---------- ---------- ---------
Total Interest-Earning
Assets/Interest Income 544,077 49,549 9.11% 404,286 36,479 9.02%
Allowance for loan losses (deduct) (5,294) (4,095)
Cash and due from banks 19,159 14,149
Mortgage servicing rights, net
Premises and equipment, net 6,045 3,188
Other assets 15,828 12,734
----------- ----------
Total Assets $579,815 $430,262
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits:
Savings deposits $38,496 $1,544 4.01% $35,288 $1,384 3.92%
Time deposits under $100,000 200,108 12,187 6.09% 160,502 9,555 5.95%
Time deposits of $100,000 or more 104,501 6,257 5.99% 66,106 3,935 5.95%
Other interest-bearing deposits 110,395 4,111 3.72% 69,818 2,418 3.46%
Debt obligations 9,003 753 8.36% 8,625 496 5.75%
Other 12
----------- ---------- --------- ---------- ---------- ---------
Total Interest-Bearing
Liabilities/Interest Expense 462,503 24,852 5.37% 340,339 17,800 5.23%
Noninterest-bearing demand deposits 62,166 44,727
Accrued interest on deposits and
other liabilities 4,421 4,166
Capitol Trust I preferred securities 822
Minority interest in consolidated subsidiaries 8,047 2,439
Stockholders' equity 41,856 38,591
----------- ----------
Total Liabilities and
Stockholders' Equity $579,815 $430,262
=========== ---------- ========== ----------
Net Interest Income $24,697 $18,679
========== ==========
Interest Rate Spread (4) 3.74% 3.79%
========= =========
Net Yield on Interest-Earning Assets (5) 4.54% 4.62%
========= =========
Ratio of Average Interest-Earning
Assets to Interest-Bearing Liabilities 1.18x 1.19x
=========== ==========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31
1995
-------------------------------------
Interest (1)
Average Income/ Average
Balance Expense Yield/Cost
-------------------------------------
<S> <C> <C> <C>
ASSETS
Investment securities:
U.S. Treasury and government agencies $35,136 $2,016 5.74%
States and political subdivisions (2) 271 10 3.69%
Other 2,752 208 7.56%
Interest-bearing deposits with banks 339 10 2.95%
Federal funds sold 24,758 1,453 5.87%
Loans held for resale 4,605 300 6.51%
Portfolio loans (3) 264,919 25,916 9.78%
----------- ---------- ---------
Total Interest-Earning
Assets/Interest Income 332,780 29,913 8.99%
Allowance for loan losses (deduct) (3,441)
Cash and due from banks 10,960
Mortgage servicing rights, net 459
Premises and equipment, net 2,500
Other assets 10,290
-----------
Total Assets $353,548
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits:
Savings deposits $32,684 $1,248 3.82%
Time deposits under $100,000 129,698 7,700 5.94%
Time deposits of $100,000 or more 54,096 3,316 6.13%
Other interest-bearing deposits 60,649 2,297 3.79%
Debt obligations 7,193 492 6.84%
Other 26
----------- ---------- ---------
Total Interest-Bearing
Liabilities/Interest Expense 284,320 15,079 5.30%
Noninterest-bearing demand deposits 36,868
Accrued interest on deposits and
other liabilities 2,969
Capitol Trust I preferred securities
Minority interest in consolidated subsidiaries 261
Stockholders' equity 29,130
-----------
Total Liabilities and
Stockholders' Equity $353,548
=========== ----------
Net Interest Income $14,834
==========
Interest Rate Spread (4) 3.69%
=========
Net Yield on Interest-Earning Assets (5) 4.46%
=========
Ratio of Average Interest-Earning
Assets to Interest-Bearing Liabilities 1.17x
===========
</TABLE>
(1) Average yield/cost is determined by dividing the actual interest
income/expense by the daily average balance of the asset or liability
category.
(2) Tax equivalent yield.
(3) Average balance of loans includes non-accrual loans.
(4) Interest rate spread represents the average yield on interest-earning
assets less the average cost of interest-bearing liabilities.
(5) Net yield is based on net interest income as a percentage of average total
interest-earning assets.
-5-
<PAGE> 6
CHANGES IN NET INTEREST INCOME (TABLE B)
CAPITOL BANCORP LTD.
The following table summarizes the extent to which changes in interest rates
and changes in the volume of interest-earning assets and interest-bearing
liabilities have affected the Corporation's net interest income during the
periods indicated. The change in interest attributable to volume is calculated
by multiplying the annual change in volume by the prior year's rate. The
change in interest attributable to rate is calculated by multiplying the annual
change in rate by the current year's average balance. Any variance
attributable jointly to volume and rate changes has been allocated to each
category based on the percentage of each to the total change in both
categories.
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------------------------
1997 compared to 1996 1996 compared to 1995
---------------------------- ---------------------------
Volume Rate Net Total Volume Rate Net Total
------- -------- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) In Interest Income:
Investment securities:
U.S. Treasury and government agencies $965 $317 $1,282 $253 ($35) $218
States and political subdivisions 3 (7) (4) (2) 10 8
Other (25) (136) (161) (18) 182 164
Interest-bearing deposits with banks 61 (84) (23) 4 28 32
Federal funds sold 888 376 1,264 444 (356) 88
Loans held for resale (276) (6) (282) 399 119 518
Portfolio loans 10,589 405 10,994 5,239 299 5,538
------- ------- --------- ------- ------- ---------
Total 12,205 865 13,070 6,319 247 6,566
Increase (Decrease) In Interest Expense
On Deposits:
Savings 126 34 160 99 37 136
Time deposits under $100,000 2,352 280 2,632 1,830 25 1,855
Time deposits of $100,000 or more 2,280 42 2,322 736 (117) 619
Other interest-bearing deposits 1,406 287 1,693 348 (227) 121
Debt obligations 22 235 257 98 (94) 4
Other (12) (12) (14) (14)
------- ------- --------- ------- ------- ---------
Total 6,174 878 7,052 3,097 (376) 2,721
======= ======= ========= ======= ======= =========
Increase (Decrease) in Net
Interest Income $6,031 ($13) $6,018 $3,222 $623 $3,845
======= ======= ========= ======= ======= =========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------
1995 compared to 1994
-----------------------------
Volume Rate Net Total
-------- ------- ----------
<S> <C> <C> <C>
Increase (Decrease) In Interest Income:
Investment securities:
U.S. Treasury and government agencies $640 $98 $738
States and political subdivisions
Other (42) 4 (38)
Interest-bearing deposits with banks (6) (6) (12)
Federal funds sold 368 406 774
Loans held for resale (178) 120 (58)
Portfolio loans 5,651 1,378 7,029
-------- ------- ----------
Total 6,433 2,000 8,433
Increase (Decrease) In Interest Expense
On Deposits:
Savings (38) 196 158
Time deposits under $100,000 1,948 1,309 3,257
Time deposits of $100,000 or more 1,209 735 1,944
Other interest-bearing deposits 66 351 417
Debt obligations 17 (42) (25)
Other (69) (69)
-------- ------- ----------
Total 3,133 2,549 5,682
======== ======= ==========
Increase (Decrease) in Net
Interest Income $3,300 ($549) $2,751
======== ======= ==========
</TABLE>
-6-
<PAGE> 7
INVESTMENT PORTFOLIO (TABLE C)
CAPITOL BANCORP LTD.
The following table sets forth the amortized cost and market value of
investment securities as of December 31, 1997, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
December 31
-----------------------------------------------------------------------------
1997 1996 1995
--------------------- ---------------------- ----------------------
Amortized Market Amortized Market Amortized Market
Cost Value Cost Value Cost Value
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury and government agencies $60,430 $60,649 $46,162 $46,221 $32,846 $33,559
States and political subdivisions 1,610 1,603 100 100 250 250
Other:
Corporate bonds 301 300 739 737
Federal Reserve Bank stock 116 116 116 116 116 116
Federal Home Loan Bank Stock 1,073 1,073 984 984 664 664
Corporate stock (1) 1,028 1,028 1,003 1,003 1,003 1,003
------- ------- ------- ------- ------- -------
Total Other Securities 2,217 2,217 2,404 2,403 2,522 2,520
------- ------- ------- ------- ------- -------
Total Investments $64,257 $64,469 $48,666 $48,724 $35,618 $36,329
======= ======= ======= ======= ======= =======
</TABLE>
(1) Consists primarily of investment in the common stock of Access BIDCO,
Incorporated.
The following table sets forth the amortized cost, relative maturities and
weighted average yields of investment securities at December 31, 1997 (in
thousands):
<TABLE>
<CAPTION>
U.S. Treasury and States and Political Other
Government Agencies Subdivisions Securities
------------------------- ---------------------- -----------------------
Weighted Weighted Weighted Total
Amortized Average Amortized Average Amortized Average Carrying
Cost Yield Cost Yield Cost Yield Amount
---------- --------- ----------- --------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Maturity:
Due in one year or less $20,445 5.93% $20,445
Due after one year but within
five years 36,561 6.08% $1,009 4.30% 37,570
Due after five years but within
ten years 3,403 6.75% 3,403
Due after ten years 21 8.26% 601 5.65% 622
Without stated maturities $2,217 * 2,217
------- ------ ------ -------
Total $60,430 $1,610 $2,217 $64,257
======= ====== ====== =======
</TABLE>
* Investment securities which do not have stated maturities (corporate stock,
Federal Reserve Bank and Federal Home Loan Bank stock) do not have stated
yields or rates of return and such rates of return vary from time to time.
Following is a summary of average maturities of investment securities
(exclusive of securities without stated maturities) at December 31, 1997:
<TABLE>
<S> <C> <C>
U.S. Treasury securities 1 year 5 months
U.S. Agencies 2 years 4 months
States and Political subdivisions 10 years 11 months
</TABLE>
-7-
<PAGE> 8
LOAN PORTFOLIO AND SUMMARY OF OTHER REAL ESTATE OWNED (TABLE D)
CAPITOL BANCORP LTD.
Portfolio Loans outstanding as of the end of each period are shown in the
following table according to type of loan (in thousands):
<TABLE>
<CAPTION>
December 31
--------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------------ ------------------ ------------------- ------------------ -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial - real estate $262,157 52.14% $180,310 50.42% $140,462 49.55% $99,330 41.12% $74,142 43.23%
Commercial - other 133,781 26.61% 103,151 28.84% 81,699 28.82% 83,391 34.52% 51,513 30.03%
-------- -------- --------- -------- --------- -------- --------- -------- ---------- --------
Total Commercial Loans 395,938 78.75% 283,461 79.26% 222,161 78.37% 182,721 75.63% 125,655 73.26%
Real estate mortgage 66,630 13.25% 53,712 15.02% 48,954 17.27% 47,260 19.56% 34,743 20.26%
Installment 40,187 7.99% 20,450 5.72% 12,356 4.36% 11,602 4.80% 11,116 6.48%
-------- -------- --------- -------- --------- -------- --------- -------- ---------- --------
Total Portfolio Loans $502,755 100.00% $357,623 100.00% $283,471 100.00% $241,583 100.00% $171,514 100.00%
======== ======== ========= ======== ========= ======== ========= ======== ========== ========
</TABLE>
The following table presents (in thousands) the remaining maturity of portfolio
loans outstanding at December 31, 1997 according to scheduled repayments of
principal. The amounts due after one year are classified according to
sensitivity to changes in interest rates.
Aggregate maturities of portfolio loan balances which are due:
<TABLE>
<CAPTION>
Fixed Variable
Rate Rate Total
----------- ------------- -----------
<S> <C> <C> <C>
In one year or less $121,388 $163,282 $284,670
After one year but within five years 201,973 5,149 207,122
After five years 3,735 4,540 8,275
Non-accrual loans (all of which are classified as variable rate) 2,688 2,688
----------- ------------- -----------
Total $327,096 $175,659 $502,755
=========== ============= ===========
</TABLE>
The following summarizes, in general, the Corporation's various loan
classifications:
Commercial - Real Estate
Comprised of a broad mix of business use and multi-family housing
properties, including office, retail, warehouse and light industrial uses.
A typical loan size approximates $500,000, and at December 31, 1997,
approximately 15% of such properties were owner-occupied.
Commercial - Other
Includes a range of business credit products, current asset lines of
credit and equipment term loans. These products bear higher inherent
economic risk than other types of lending activities. A typical loan
size approximates $250,000, and multiple account relationships serve
to reduce such risks.
Real Estate
Includes single family residential loans held for permanent
portfolio, and home equity lines of credit. Risks are nominal, borne
out by loss experience, housing economic data and loan-to-value
percentages.
Installment
Includes a broad range of consumer credit products, secured by
automobiles, boats, etc., with typical consumer credit risks.
All loans are subject to underwriting procedures commensurate with the loan
size, nature of collateral, industry trends, risks and experience factors.
Appropriate collateral is required for most loans, as is documented evidence of
debt repayment sources.
-8-
<PAGE> 9
TABLE D, CONTINUED
CAPITOL BANCORP LTD.
The aggregate amount of non-performing portfolio loans is set forth in the
following table. Non-performing loans comprise (a) loans accounted for on a
non-accrual basis, and (b) loans contractually past due 90 days or more as to
principal and interest payments (but not included in non-accrual loans in (a)
above) and consist primarily of commercial real estate loans. Non-performing
portfolio loans include all loans for which, based on the Corporation's loan
rating system, management has concerns. Loans are placed in non-accrual status
when, in management's opinion, there is a reasonable probability of not
collecting 100% of future principal and interest payments. In addition,
certain loans, although current based on the Corporation's rating criteria, are
placed in non-accrual status. Generally, loans are placed in non-accrual
status when they become 90 days delinquent; however, management may elect to
continue the accrual of interest in certain circumstances. When interest
accruals are discontinued, interest previously accrued (but unpaid) is
reversed. If nonperforming loans (including loans in nonaccrual status) had
performed in accordance with their contractual terms during the year,
additional interest income of $196,000 would have been recorded in 1997.
Interest income recognized on loans in non-accrual status in 1997 operations
approximated $62,000. At December 31, 1997, there were no material amounts of
loans which were restructured or otherwise renegotiated as a concession to
troubled borrowers.
<TABLE>
<CAPTION>
December 31
------------------------------------------------------------
1997 1996 1995 1994 1993
--------- -------- -------- -------- ---------
Non-performing Loans: (in thousands)
<S> <C> <C> <C> <C> <C>
Non-accrual loans: Commercial $2,570 $928 $438 $1,121 $628
Real Estate 59 107 115 156 1,442
Installment 59 22 28 43 8
--------- -------- -------- -------- ---------
Total Non-accrual Loans 2,688 1,057 581 1,320 2,078
Past due loans: Commercial 897 1,009 379 146 447
Real Estate 401 549 299 424 68
Installment 25 84 82 40 104
--------- -------- -------- -------- ---------
Total Past Due Loans 1,323 1,642 760 610 619
--------- -------- -------- -------- ---------
Total Non-performing Loans $4,011 $2,699 $1,341 $1,930 $2,697
========= ======== ======== ======== =========
Nonperforming Loans as a Percentage
of Total Portfolio Loans 0.80% 0.75% 0.47% 0.80% 1.57%
========= ======== ======== ======== =========
Nonperforming Loans as a Percentage
of Total Assets 0.58% 0.55% 0.35% 0.61% 1.06%
========= ======== ======== ======== =========
Allowance for Loan Losses as a
Percentage of Non-performing Loans 155.30% 169.62% 274.94% 166.84% 92.70%
========= ======== ======== ======== =========
</TABLE>
The table below summarizes activity in other real estate owned, including
transfers to and from the loan portfolio and subsequent payments on or sales of
the property, for each period (in thousands):
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------------------------
1997 1996 1995 1994 1993
--------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Other real estate owned at January 1 $313 $972 $1,255 $1,364 $1,159
Properties acquired in restructure
of loans or in lieu of foreclosure 1,635 1,658 712
Properties sold (128) (520) (1,714) (1,455) (290)
Payments received from borrowers or
tenants, credited to carrying amount (10) (47) (300) (164)
Other changes, net (10) (92) (204) (12) (53)
--------- -------- -------- -------- ---------
Other Real Estate Owned at December 31 $165 $313 $972 $1,255 $1,364
========= ======== ======== ======== =========
Other Real Estate Owned Reserve at January 1 $0 $0 $64 $0 $0
Net Charge-offs 64 64
--------- -------- -------- -------- ---------
Other Real Estate Owned Reserve at December 31 $0 $0 $0 $64 $0
========= ======== ======== ======== =========
</TABLE>
Other real estate owned is valued at the lower of fair value or cost at the
date of transfer/acquisition. Management performs a periodic analysis of
estimated fair values to determine potential impairment of other real estate
owned.
-9-
<PAGE> 10
SUMMARY OF LOAN LOSS EXPERIENCE (TABLE E)
CAPITOL BANCORP LTD.
The table below summarizes portfolio loan balances, daily average loan
balances, changes in the allowance for possible loan losses arising from loans
charged-off and recoveries on loans previously charged-off, by loan category,
and additions to the allowance for possible loan losses through provisions
charged to expense, as of the end of each period.
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- ------- ------- -------
(in thousands)
<S> <C> <C> <C> <C>
Allowance for loan losses at January 1 $4,578 $3,687 $3,220 $2,500 $2,319
Allowance of acquired bank 515
Loans charged-off:
Commercial 551 308 547 339 369
Real estate 117 35 9 24
Installment 49 94 47 36 122
-------- ------- ------ ------- -------
Total Charge-offs 717 437 594 384 515
Recoveries:
Commercial 288 119 178 106 73
Real estate 18 8 3 3 2
Installment 13 5 41 7 23
-------- ------- ------ ------- -------
Total Recoveries 319 132 222 116 98
-------- ------- ------ ------- -------
Net Charge-offs 398 305 372 268 417
Additions to allowance charged to expense 2,049 1,196 839 473 598
-------- ------- ------- ------- -------
Allowance for Loan Losses at December 31 $6,229 $4,578 $3,687 $3,220 $2,500
======== ======= ======= ======= =======
Total Portfolio Loans Outstanding at December 31 $502,755 $357,623 $283,471 $241,583 $171,514
======== ======= ======= ======= =======
Ratio of Allowance for Loan Losses to
Portfolio Loans Outstanding 1.24% 1.28% 1.30% 1.33% 1.46%
======== ======= ======= ======= =======
Average Total Portfolio Loans For the Year $425,664 $318,491 $264,919 $203,924 $164,229
======== ======= ======= ======= =======
Ratio of Net Charge-offs to Average
Portfolio Loans Outstanding 0.09% 0.10% 0.14% 0.13% 0.25%
======== ======= ======= ======= =======
</TABLE>
-10-
<PAGE> 11
TABLE E, CONTINUED
CAPITOL BANCORP LTD.
The allowance for loan losses has been established as a general allowance for
future losses on the loan portfolio. For internal purposes, management
allocates the allowance to all loan classifications. The amounts allocated in
the following table, which includes all loans for which, based on the
Corporation's loan rating system, management has concerns, should not be
interpreted as an indication of future charge-offs and the amounts allocated
are not intended to reflect the amount that may be available for future losses
since the allowance is a general allowance.
<TABLE>
<CAPTION>
December 31
----------------------------------------------------
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
(in thousands)
<S> <C> <C> <C> <C> <C>
Commercial $2,875 $2,281 $1,726 $1,831 $1,260
Real estate mortgage 103 67 67 55 92
Installment 185 100 57 61 76
Unallocated 3,066 2,130 1,837 1,273 1,072
--------- --------- --------- --------- ---------
Total Allowance for Loan Losses $6,229 $4,578 $3,687 $3,220 $2,500
========= ========= ========= ========= =========
Total Portfolio Loans Outstanding $502,755 $357,623 $283,471 $241,583 $171,514
========= ========= ========= ========= =========
Percent of Allowance to Portfolio Loans Outstanding 1.24% 1.28% 1.30% 1.33% 1.46%
========= ========= ========= ========= =========
</TABLE>
In addition to the Corporation's allowance for loan losses, certain commercial
loans participate in a loan program sponsored by the State of Michigan. Under
that program, the governmental unit shares loss exposure on such loans by
funding reserves which are placed as deposits at the banks. Loans
participating in this program and related reserves approximated $18,719,000 and
$1,788,000, respectively, at December 31, 1997. Such reserve amounts are
separate and excluded from the allowance for loan losses.
-11-
<PAGE> 12
AVERAGE DEPOSITS (TABLE F)
CAPITOL BANCORP LTD.
The following table presents the average balances of deposits (in thousands)
and the average rates of interest paid for the years ended December 31, 1997,
1996 and 1995:
<TABLE>
<CAPTION>
December 31
------------------------------------------------------------------
1997 1996 1995
-------------------- -------------------- --------------------
Average Average Average
Balance Rate Balance Rate Balance Rate
------- --------- ------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Noninterest-bearing demand deposits $ 62,166 $ 44,727 $ 36,868
Savings deposits 38,496 4.01% 35,288 3.92% 32,684 3.82%
Time deposits under $100,000 200,108 6.09% 160,502 5.95% 129,698 5.94%
Time deposits of $100,000 or more 104,501 5.99% 66,106 5.95% 54,096 6.13%
Other interest-bearing deposits 110,395 3.72% 69,818 3.46% 60,649 3.79%
-------- -------- --------
Total Deposits $515,666 $376,441 $313,995
======== ======== ========
</TABLE>
The following table sets forth the amount of time certificates of deposit
issued in amounts of $100,000 or more, by time remaining until maturity, which
were outstanding at December 31, 1997 (in thousands):
<TABLE>
<S> <C>
Three months or less $ 55,766
Three months to twelve months 67,967
Over 12 months 16,205
--------
$139,938
========
</TABLE>
-12-
<PAGE> 13
FINANCIAL RATIOS (TABLE G)
CAPITOL BANCORP LTD.
The following table shows the ratio of net income to average stockholders'
equity, average total assets and certain other ratios for the years ended
December 31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
Net Income as a percent of:
Average stockholders' equity 13.28% 12.01% 10.55%
Average total assets 0.96% 1.08% 0.87%
Average stockholders' equity as
a percent of average total assets 7.22% 8.97% 8.24%
Dividend payout ratio (cash dividends per share as a
percentage of net income per share) (1):
Basic 33.03% 29.41% 30.26%
Diluted 34.29% 30.30% 30.67%
</TABLE>
(1) As adjusted to reflect the Corporation's 1997 stock dividend as if it had
occurred at the beginning of the periods presented.
-13-
<PAGE> 14
Item 2, Properties.
Substantially all of the Corporation's office locations are leased. All of
the Corporation's banks each operate from a single location, except Capitol
National Bank (which has one branch location in Okemos, Michigan). The addresses
of each bank's main office are stated on pages 3-12 and 15-16, Annual Report,
which are incorporated herein by reference.
Each of the bank subsidiaries' facilities are generally small (i.e., less
than 10,000 square feet), first floor offices with convenient access to parking.
Some of the banks have drive-up customer service. The bank locations are
typically located in or near high traffic centers of commerce in their
respective communities. Customer service is enhanced through utilization of ATMs
to process some customer-initiated transactions and the banks also make
available a courier service to pick up transactions at customers' locations.
The principal offices of the Corporation are located within the same
building as Capitol National Bank in Lansing, Michigan. Those headquarters
include administrative, operations and executive staff and the Corporation's
data center.
Sun Community Bancorp Limited (a second-tier 51%-owned bank holding company
headquartered in Arizona) shares office space with its subsidiaries, Bank of
Tucson (for the accounting function) and Valley First Community Bank (as to
operations and data processing).
Certain of the office locations are leased from related parties.
Incorporated by reference from Page 36, Annual Report, under the caption "Note
E--Premises and Equipment" and Page 13, sixth paragraph under the caption
"Certain Relationships and Related Transactions".
Management believes the Corporation's and the banks' offices to be in good
and adequate condition and adequately covered by insurance.
Item 3, Legal Proceedings.
As of December 31, 1997 there were no material pending legal proceedings to
which the Corporation or its subsidiaries is a party or to which any of its
property was subject, except for proceedings which arise in the ordinary course
of business. In the opinion of management, pending legal proceedings will not
have a material effect on the consolidated financial position or results of
operations of the Corporation.
Item 4, Submission of Matters to a Vote of Security Holders.
During the fourth quarter of 1997, no matters were submitted to a vote by
security holders.
-14-
<PAGE> 15
PART II
Item 5, Market for Common Equity and Related Stockholder Matters.
A. Market Information:
Incorporated by reference from Page 18, Annual Report, under
the caption "Information Regarding the Corporation's Common Stock",
Pages 38-39, Annual Report, under the caption "Note K--Common Stock,
Warrants and Stock Options" and page 45 (inside back cover), Annual
Report, under the caption "Shareholder Information".
B. Holders:
Incorporated by reference from first sentence of third
paragraph on Page 18, Annual Report, under the caption "Information
Regarding the Corporation's Common Stock".
C. Dividends:
Incorporated by reference from Page 17, Annual Report, under
the caption "Quarterly Results of Operations" and subcaption "Cash
dividends paid per share", Pages 40 and 41, Annual Report, under the
caption "Note O -- Dividend Limitations of Subsidiaries and Other
Capital Requirements" and the second full paragraph commencing on Page
37, Annual Report, under the caption "Note I--Debt Obligations".
Item 6, Selected Financial Data.
Incorporated by reference from page 17, Annual Report, under the caption
"Selected Consolidated Financial Data" under the column heading "As of and for
the Year Ended December 31, 1997, 1996, 1995, 1994, and 1993".
Item 7, Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Incorporated by reference from pages 19-27, Annual Report.
Item 7A, Quantitative and Qualitative Disclosures About Market Risk.
Incorporated by reference from pages 24-26, Annual Report, under the caption
"Trends Affecting Operations".
Item 8, Financial Statements and Supplementary Data.
See Item 13 (under subcaption "A. Exhibits") of this Form 10-K for specific
description of financial statements incorporated by reference from Annual
Report.
Incorporated by reference from page 17, Annual Report, under the caption
"Quarterly Results of Operations".
Item 9, Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.
None.
-15-
<PAGE> 16
PART III
Item 10, Directors and Executive Officers of the Registrant
Incorporated by reference from Pages 4-6 Proxy Statement, under the
caption "Election of Directors" and Page 45 (inside back cover), Annual Report,
under the caption "Officers of the Corporation".
Item 11, Executive Compensation.
Incorporated by reference from Pages 8-12, Proxy Statement; Page 7,
Proxy Statement, the second paragraph under the caption "Meetings of the Board
of Directors" and page 13, Proxy Statement, the first five paragraphs under the
caption "Certain Relationships and Related Transactions".
Item 12, Security Ownership of Certain Beneficial Owners and Management.
Incorporated by reference from Page 3, Proxy Statement, under the
caption "Voting Securities and Principal Holders Thereof", Pages 4-6, Proxy
Statement, under the caption "Election of Directors" and Page 9, Proxy
Statement, under the captions "Employee Stock Ownership Plan" and "Employee
Retirement 401(k) Plan".
Item 13, Certain Relationships and Related Transactions.
Incorporated by reference from Pages 13-14, Proxy Statement, under the
caption "Certain Relationships and Related Transactions".
-16-
<PAGE> 17
PART IV
Item 14, Exhibits, Financial Statement Schedules and Reports on Form 8-K.
A. Exhibits:
The following consolidated financial statements of Capitol
Bancorp Ltd. and Subsidiaries and report of independent auditors
included on pages 28-44 of the Annual Report of the registrant to its
stockholders for the year ended December 31, 1997, are incorporated by
reference in Item 7:
Independent auditors' report.
Consolidated balance sheets--December 31, 1997 and 1996.
Consolidated statements of income--Years ended December 31,
1997, 1996 and 1995.
Consolidated statements of changes in stockholders'
equity--Years ended December 31, 1997, 1996 and 1995.
Consolidated statements of cash flows--Years ended December
31, 1997, 1996 and 1995.
Notes to consolidated financial statements.
All financial statements and schedules have been incorporated
by reference from the Annual Report or are included in Management's
Discussion and Analysis of Financial Condition and Results of
Operations. No schedules are included here because they are either not
required, not applicable or the required information is contained
elsewhere.
B. Reports on Form 8-K:
During the fourth quarter of 1997, no reports on Form 8-K were filed
by the Registrant.
-17-
<PAGE> 18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CAPITOL BANCORP LTD.
Registrant
By: \s\Joseph D. Reid By: \s\ Lee W. Hendrickson
------------------------------ --------------------------
Joseph D. Reid Lee W. Hendrickson
Chairman, President and Vice President and
Chief Executive Officer Chief Financial Officer
(Principal Financial and
Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant as
Directors of the Corporation on February 5, 1998.
<TABLE>
<S> <C>
\s\ Joseph D. Reid \s\ Robert C. Carr
- ----------------------------------------- ------------------------------------------
Joseph D. Reid, Chairman, President, Robert C. Carr, Executive Vice President,
Chief Executive Officer and Director Treasurer and Director
\s\ David O'Leary \s\ Louis G. Allen
- ----------------------------------------- ------------------------------------------
David O'Leary, Secretary and Director Louis G. Allen, Director
\s\ Paul R. Ballard \s\ David L. Becker
- ----------------------------------------- ------------------------------------------
Paul R. Ballard, Executive David L. Becker, Director
Vice President and Director
\s\ Douglas E. Crist \s\ Richard G. Dorner
- ----------------------------------------- ------------------------------------------
Douglas E. Crist, Director Richard G. Dorner, Director
\s\ Gary A. Falkenberg
- ----------------------------------------- ------------------------------------------
Gary A. Falkenberg, Director Joel I. Ferguson, Director
\s\ Kathleen A. Gaskin \s\ H. Nicholas Genova
- ----------------------------------------- ------------------------------------------
Kathleen A. Gaskin, Director H. Nicholas Genova, Director
\s\ L. Douglas Johns \s\ Michael L. Kasten
- ----------------------------------------- ------------------------------------------
L. Douglas Johns, Director Michael L. Kasten, Director
\s\ James R. Kaye \s\ Leonard Maas
- ----------------------------------------- ------------------------------------------
James R. Kaye, Director Leonard Maas, Director
\s\ Lyle W. Miller
- -----------------------------------------
Lyle W. Miller, Director
</TABLE>
- 18 -
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE NUMBER OR
INCORPORATED BY
EXHIBIT NO. DESCRIPTION REFERENCE FROM:
- ----------- ----------- ----------------
<S> <C> <C> <C>
3 Articles of Incorporation and
Bylaws (1)
4 Instruments Defining the Rights
of Security Holders:
(a) Common Stock Certificate (1)
(b) Indenture dated December 18, 1997 (15)
(c) Subordinated Debenture (15)
(d) Amended and Restated Trust Agreement
dated December 18, 1997 (15)
(e) Preferred Security Certificate dated
December 18, 1997 (15)
(f) Preferred Securities Guarantee Agreement
of Capitol Trust I dated December 18, 1997 (15)
(g) Agreement as to Expenses and Liabilities
of Capitol Trust I (15)
10 Material Contracts:
(a) Joseph D. Reid Employment
Agreement (as amended effective
January 1, 1989) (2)
(b) Profit Sharing/401(K) Plan
(as amended and restated April 1, 1995)
(c) Lease Agreement with Business &
Trade Center, Ltd. (11)
(d) Employee Stock Ownership Plan
(as amended and restated February
10, 1994) (12)
(e) Employment Agreements with
Robert C. Carr, John C. Smythe,
and Charles J. McDonald (2)
(f) Executive Supplemental Income
Agreements with Robert C. Carr,
Paul R. Ballard, Richard G. Dorner,
James R. Kaye, Scott G. Kling,
John D. Groothuis, David K. Powers,
John C. Smythe and Charles J.
McDonald (13)
(g) Amendment to Employment Agreement
of Joseph D. Reid, dated October
2, 1989 (3)
(h) Consolidation Agreement between
the Corporation and Portage
Commerce Bank (4)
</TABLE>
-19-
<PAGE> 20
<TABLE>
<CAPTION>
PAGE NUMBER OR
INCORPORATED BY
EXHIBIT NO. DESCRIPTION REFERENCE FROM:
<S> <C> <C> <C>
10 Material Contracts--continued:
(i) Amendment to Employment Agreement
of Joseph D. Reid, dated
January 30, 1990 (5)
(j) Employment Agreements with
Paul R. Ballard and Richard G.
Dorner (6)
(k) Employment Agreement with
David K. Powers (7)
(l) Definitive Exchange Agreement and
Closing Memorandum between the
Registrant and United Savings
Bank, FSB (8)
(m) Employment Agreement with James
R. Kaye (9)
(n) Definitive Exchange Agreement
between the Registrant and
Financial Center Corporation (10)
13 Annual Report to Security Holders (16)
21 Subsidiaries of the Registrant
23 Consent of BDO Seidman, LLP
27 Financial Data Schedule
</TABLE>
KEY:
(1) Form S-18, Reg. No. 33-24728C, filed September 15, 1988.
(2) Form S-1, Reg. No. 33-30492, filed August 14, 1989.
(3) Amendment No. 1 to Form S-1, Reg. No. 33-31323, filed November 20, 1989.
(4) Form S-1, Reg. No. 33-31323, filed September 29, 1989
(5) Originally filed as exhibit to Form 10-K for year ended December 31, 1989,
filed March 30, 1990; refiled as exhibit to Form 10-KSB for year ended
December 31, 1995, filed March 14, 1996, due to time limit for
incorporation by reference pursuant to Regulation SB Item 10(f).
(6) Originally filed as exhibit to Form 10-K for year ended December 31, 1990,
filed March 6, 1991; refiled as exhibit to Form 10-KSB for year ended
December 31, 1995, filed March 14, 1996, due to time limit for
incorporation by reference pursuant to Regulation SB Item 10(f).
(7) Form 10-K for year ended December 31, 1991, filed February 28, 1992.
(8) Form 8-K dated July 15, 1992, as amended under Form 8 on September 14,
1992.
-20-
<PAGE> 21
KEY - CONTINUED:
(9) Form 10-KSB for year ended December 31, 1992, filed February 25, 1993.
(10) Form S-4, Reg. No. 33-73474, filed December 27, 1993.
(11) Form 10-KSB for year ended December 31, 1993, filed March 14, 1994.
(12) Form 10-KSB for year ended December 31, 1994, filed March 15, 1995.
(13) Form 10-KSB for the year ended December 31, 1995, filed March 14, 1996.
(14) Form 10-KSB for the year ended December 31, 1996, filed March 21, 1997
(15) Part Effective Amendment No. 1 to Form S-3, Reg. No. 333-41215 and
333-41215-01 filed February 9, 1998.
(16) Proxy statement of Registrant in Schedule 14A to be filed pursuant to Rule
14a-101.
-21-
<PAGE> 1
EXHIBIT 21--SUBSIDIARIES OF THE REGISTRANT
CAPITOL BANCORP LTD.
DECEMBER 31, 1997
<TABLE>
<CAPTION>
STATE OR OTHER
JURISDICTION
NAME OF SUBSIDIARY OF INCORPORATION
- ------------------ ----------------
<S> <C>
Consolidated Subsidiaries:
Capitol National Bank United States (national bank)
Portage Commerce Bank Michigan
Ann Arbor Commerce Bank Michigan
Oakland Commerce Bank Michigan
Grand Haven Bank (85% owned) Michigan
Paragon Bank & Trust Michigan
Macomb Community Bank (51% owned) Michigan
Brighton Commerce Bank (59% owned) Michigan
Muskegon Commerce Bank (51% owned) Michigan
Sun Community Bancorp Limited (51% owned) Arizona
Bank of Tucson
(100% owned by Sun Community Bancorp Limited) Arizona
Valley First Community Bank
(51% owned by Sun Community Bancorp Limited) Arizona
Capitol Trust I Delaware
Unconsolidated Subsidiary:
Amera Mortgage Corporation, Inc. Michigan
(49% owned equity method investee)
Inactive subsidiaries:
MCI, Inc. Michigan
(wholly-owned subsidiary of
Oakland Commerce Bank)
Financial Center Corporation Michigan
C.B. Services, Inc. Michigan
</TABLE>
The following summarizes regulatory agencies of the registrant and its
subsidiaries:
The Corporation's state-chartered banks located in Michigan are regulated by the
Financial Institutions Bureau of the Michigan Department of Commerce. Capitol
National Bank, as a national bank, is regulated by the Office of the Comptroller
of the Currency. Bank of Tucson and Valley First Community Bank are regulated by
the Arizona Corporation Division. Each of the banking subsidiaries, as
federally-insured depository institutions, are also regulated by the Federal
Deposit Insurance Corporation. As a bank holding company, Capitol Bancorp Ltd.
is regulated by the Federal Reserve Board which also regulates its nonbanking
subsidiaries. Sun Community Bancorp Limited is regulated by the Federal Reserve
Board. In addition to the bank regulatory agencies, the registrant and its
subsidiaries are subject to regulation by other state and federal agencies.
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Capitol Bancorp Ltd.
Lansing, Michigan
We hereby consent to the incorporation by reference and use of our report dated
January 31, 1998, which appears on page 28 of Capitol Bancorp Ltd.'s Annual
Report to shareholders for the year ended December 31, 1997, in that
corporation's previously filed Form S-3 Registration Statement No. 33-71774 for
its Shareholder Investment Program.
BDO SEIDMAN, LLP
s/BDO Seidman, LLP
March 24, 1998
Grand Rapids, Michigan
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 29,860
<INT-BEARING-DEPOSITS> 260
<FED-FUNDS-SOLD> 62,650
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 64,470
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 514,180
<ALLOWANCE> 6,229
<TOTAL-ASSETS> 690,556
<DEPOSITS> 604,407
<SHORT-TERM> 0
<LIABILITIES-OTHER> 5,971
<LONG-TERM> 0
24,126
0
<COMMON> 50,313
<OTHER-SE> (4,410)
<TOTAL-LIABILITIES-AND-EQUITY> 690,556
<INTEREST-LOAN> 42,984
<INTEREST-INVEST> 3,727
<INTEREST-OTHER> 2,838
<INTEREST-TOTAL> 49,549
<INTEREST-DEPOSIT> 24,099
<INTEREST-EXPENSE> 24,852
<INTEREST-INCOME-NET> 24,697
<LOAN-LOSSES> 2,049
<SECURITIES-GAINS> 69
<EXPENSE-OTHER> 16,361
<INCOME-PRETAX> 8,444
<INCOME-PRE-EXTRAORDINARY> 5,557
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,557
<EPS-PRIMARY> 1.09
<EPS-DILUTED> 1.05
<YIELD-ACTUAL> 9.11
<LOANS-NON> 2,688
<LOANS-PAST> 1,323
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,578
<CHARGE-OFFS> 718
<RECOVERIES> 320
<ALLOWANCE-CLOSE> 6,229
<ALLOWANCE-DOMESTIC> 6,229
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 3,066
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JAN-01-1997
<CASH> 22443
<INT-BEARING-DEPOSITS> 145
<FED-FUNDS-SOLD> 59450
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 62357
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 471371
<ALLOWANCE> 5758
<TOTAL-ASSETS> 633826
<DEPOSITS> 563308
<SHORT-TERM> 3000
<LIABILITIES-OTHER> 5047
<LONG-TERM> 8825
0
0
<COMMON> 36818
<OTHER-SE> 7011
<TOTAL-LIABILITIES-AND-EQUITY> 633826
<INTEREST-LOAN> 30703
<INTEREST-INVEST> 4740
<INTEREST-OTHER> 8
<INTEREST-TOTAL> 35451
<INTEREST-DEPOSIT> 17165
<INTEREST-EXPENSE> 17633
<INTEREST-INCOME-NET> 17818
<LOAN-LOSSES> 1442
<SECURITIES-GAINS> 30
<EXPENSE-OTHER> 11915
<INCOME-PRETAX> 6163
<INCOME-PRE-EXTRAORDINARY> 4058
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4058
<EPS-PRIMARY> .79
<EPS-DILUTED> .79
<YIELD-ACTUAL> 0
<LOANS-NON> 2465
<LOANS-PAST> 1364
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4578
<CHARGE-OFFS> 567
<RECOVERIES> 305
<ALLOWANCE-CLOSE> 5758
<ALLOWANCE-DOMESTIC> 5758
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2819
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 21425
<INT-BEARING-DEPOSITS> 155
<FED-FUNDS-SOLD> 40250
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 61737
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 431277
<ALLOWANCE> 5347
<TOTAL-ASSETS> 572837
<DEPOSITS> 504147
<SHORT-TERM> 3000
<LIABILITIES-OTHER> 5367
<LONG-TERM> 7625
0
0
<COMMON> 36832
<OTHER-SE> 5852
<TOTAL-LIABILITIES-AND-EQUITY> 572837
<INTEREST-LOAN> 19393
<INTEREST-INVEST> 3015
<INTEREST-OTHER> 4
<INTEREST-TOTAL> 22412
<INTEREST-DEPOSIT> 10819
<INTEREST-EXPENSE> 10951
<INTEREST-INCOME-NET> 11461
<LOAN-LOSSES> 966
<SECURITIES-GAINS> 17
<EXPENSE-OTHER> 7816
<INCOME-PRETAX> 3885
<INCOME-PRE-EXTRAORDINARY> 2582
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2582
<EPS-PRIMARY> .51
<EPS-DILUTED> .51
<YIELD-ACTUAL> 0
<LOANS-NON> 1556
<LOANS-PAST> 1845
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4578
<CHARGE-OFFS> 464
<RECOVERIES> 267
<ALLOWANCE-CLOSE> 5347
<ALLOWANCE-DOMESTIC> 5347
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2699
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 21643
<INT-BEARING-DEPOSITS> 55
<FED-FUNDS-SOLD> 54800
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 52910
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 395860
<ALLOWANCE> 4956
<TOTAL-ASSETS> 540879
<DEPOSITS> 480738
<SHORT-TERM> 3000
<LIABILITIES-OTHER> 4808
<LONG-TERM> 5550
0
0
<COMMON> 35346
<OTHER-SE> 5772
<TOTAL-LIABILITIES-AND-EQUITY> 540879
<INTEREST-LOAN> 9144
<INTEREST-INVEST> 1390
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 10534
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