8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 21, 2005

CAPITOL BANCORP LTD.

(Exact name of registrant as specified in its charter)

Michigan
(State or other jurisdiction
of incorporation) 001-31708
(Commission File No.) 38-2761672
(IRS Employer
Identification No.)

Capitol Bancorp Center
200 Washington Square North, Lansing, Michigan 48933
(Address of Principal Executive Offices) (Zip Code)

(517) 487-6555
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Press Release dated April 21, 2005

Item 2.02. Results of Operations and Financial Condition.

     On April 21, 2005, Capitol Bancorp Ltd. issued a press release announcing first quarter 2005 earnings. A copy of this press release is attached as Exhibit 99.1 to this Item 2.02.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CAPITOL BANCORP LTD.                          (Registrant)
Date: April 21, 2005	/s/ Joseph D. Reid
	Joseph D. Reid
	Chief Executive Officer

2

INDEX TO EXHIBITS

Exhibit No.	Description of Exhibit
99.1	Press Release dated April 21, 2005.

3

EX-99.1

EXHIBIT 99.1

	Capitol Bancorp Center 200 Washington Square North Lansing, MI 48933 2777 East Camelback Road Suite 375 Phoenix, AZ 85016
	www.capitolbancorp.com

Analyst Contact:	Michael M. Moran
	Chief of Capital Markets
	877-884-5662
Media Contact:	Joal Redmond
	Corporate Communications
	602-977-3797

CAPITOL BANCORP REPORTS RECORD EARNINGS

LANSING, Mich., and PHOENIX, Ariz.: April 21, 2005: Today, Capitol Bancorp Limited (NYSE:CBC) reported record first quarter 2005 earnings, exceeding $8 million for the first time in the Corporation’s history. Earnings per share (EPS) of $0.55 and $0.52 on a basic and diluted basis, reflect more than 70 percent increases when compared to last year’s $0.32 and $0.30, respectively, and matched the record performance reported by Capitol Bancorp in the fourth quarter of 2004. Total assets exceeded $3.2 billion at March 31, 2005, representing a solid 16 percent increase on an annualized basis from the beginning of the year. Total portfolio loans approximated $2.8 billion, increasing nearly 18 percent when compared to the $2.3 billion reported at March 31, 2004. Total deposits surpassed $2.6 billion, reflecting a 15 percent increase on an annualized basis, demonstrating Capitol Bancorp’s ongoing development of core funding sources as its younger affiliate banks cultivate and build upon business relationships in their local communities.

Capitol Bancorp’s Chairman and CEO Joseph D. Reid cited geographic development and commensurate balance sheet growth as key drivers fueling the Corporation’s strong first quarter performance. “We are pleased with the results of this quarter,” said Reid. “We have maintained a steady margin in a volatile interest rate environment and believe the strong first quarter performance is a testament to the prudent and disciplined execution of our de novo development model.”

Reid added that total capital, exceeding $400 million at March 31, 2005, will further support Capitol Bancorp’s planned strategic expansion. During the first quarter, Capitol Bancorp opened its 33rd affiliate institution, Bank of Michigan, and subsequently announced it had acquired a majority interest in a community bank in Georgia, bringing its affiliate network to 34 community banks. Currently, Capitol Bancorp has applications pending for additional de novo community banks in California, Colorado, Michigan and Washington.

Record Quarterly Earnings Performance

Consolidated earnings reached another record level for Capitol Bancorp at more than $8 million, up 81.5 percent compared to the $4.4 million recorded in the first quarter of 2004. Net

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operating revenues also reached record levels, increasing approximately 17.5 percent to $40.4 million as compared to the $34.4 million reported in the same period in 2004, more than offsetting a 12 percent increase in operating expenses tied to Capitol Bancorp’s expanding national community bank development efforts. This positive operating leverage, even with a 6 percent expansion in the Corporation’s outstanding share count to nearly 15 million common shares, resulted in a dramatic increase in Capitol Bancorp’s quarterly EPS when compared to the first quarter of 2004. Last year’s opening quarter was materially impacted by strategic initiatives designed to strengthen the Corporation’s balance sheet and asset quality position, setting the stage for a more than 73 percent increase in the comparative period’s diluted EPS. On a linked quarter basis, Capitol Bancorp’s diluted EPS of $0.52 in the first quarter mirrored the record performance recorded in 2004’s closing quarter.

Balance Sheet

Capitol Bancorp’s equity-to-asset ratio exceeded 8 percent at March 31, 2005 as compared to 7.8 percent at March 31, 2004. The total capital-to-asset ratio remained strong at 12.5 percent, as total capital funds exceeded $400 million on the Corporation’s record-level $3.2 billion consolidated balance sheet.

Total nonperforming loans and nonperforming assets both declined on an aggregate basis from year-end 2004. The continued focus on asset quality management, when coupled with ongoing growth in Capitol Bancorp’s consolidated loan portfolio, resulted in a meaningful improvement in the Corporation’s key asset quality measures, as both the nonperforming loans-to-portfolio loans ratio and the nonperforming assets-to-total assets ratio dropped below the 1 percent threshold. The Corporation’s allowance coverage ratio of nonperforming loans approximated 155 percent at March 31, 2005, compared to 132 percent at the beginning of the year. The Corporation’s allowance for loan losses (as a percentage of total portfolio loans) at March 31, 2005 was 1.37 percent, reduced in concert with asset quality improvements and consistent with the relative level of 1.4 percent maintained during the course of 2004. Consolidated net charge-offs also reflected improvement, measuring 0.27 percent for the current quarter versus the 0.31 percent reported in the first quarter of 2004 and the 0.39 percent recorded on a linked quarter basis.

###

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CAPITOL BANCORP LIMITED
SUMMARY OF SELECTED FINANCIAL DATA
(in thousands, except share and per share data)

	Three Months Ended				Year Ended
	March 31				December 31
	2005		2004		2004		2003
Condensed statements of operations:
Interest income	$	49,921	$	41,449	$	179,089	$	164,416
Interest expense		14,118		11,219		47,496		49,490
Net interest income		35,803		30,230		131,593		114,926
Provision for loan losses		2,023		3,508		12,708		9,861
Noninterest income		4,573		4,138		19,252		20,087
Noninterest expense		26,474		23,564		97,787		86,952
Income before income taxes		12,575		7,306		41,415		37,415
Net income	$	8,015	$	4,416	$	26,716	$	23,380
Per share data:
Net income — basic	$	0.55	$	0.32	$	1.88	$	1.86
Net income — diluted		0.52		0.30		1.79		1.77
Book value at end of period		17.33		15.82		17.00		15.60
Common stock closing price at end of period	$	30.25	$	27.10	$	35.22	$	28.40
Common shares outstanding at end of period		14,921,000		14,093,000		14,829,000		14,028,000
Number of shares used to compute:
Basic earnings per share		14,648,000		13,795,000		14,183,000		12,602,000
Diluted earnings per share		15,413,000		14,632,000		14,891,000		13,175,000

	1st Quarter			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
	2005			2004			2004			2004			2004
Condensed statements of financial position:
Total assets	$	3,215,193		$	3,091,418		$	3,058,425		$	2,991,830		$	2,867,800
Portfolio loans		2,759,444			2,692,904			2,608,701			2,511,505			2,346,978
Deposits		2,604,864			2,510,072			2,517,104			2,470,365			2,375,851
Stockholders’ equity		258,638			252,159			246,010			237,786			222,916
Total capital	$	402,806		$	392,524		$	386,590		$	377,053		$	365,316
Key performance ratios:
Return on average assets		1.02	%		1.03	%		0.98	%		0.94	%		0.64	%
Return on average equity		12.55	%		12.55	%		12.26	%		11.91	%		7.97	%
Net interest margin		4.90	%		4.95	%		4.87	%		4.73	%		4.71	%
Efficiency ratio		65.57	%		64.75	%		61.78	%		64.61	%		68.56	%
Asset quality ratios:
Allowance for loan losses / portfolio loans		1.37	%		1.40	%		1.42	%		1.40	%		1.41	%
Total nonperforming loans / portfolio loans		0.88	%		1.06	%		1.10	%		1.06	%		0.94	%
Total nonperforming assets / total assets		0.93	%		1.05	%		1.06	%		1.00	%		1.01	%
Net charge-offs (annualized) / average portfolio loans		0.27	%		0.39	%		0.26	%		0.20	%		0.31	%
Allowance for loan losses / nonperforming loans		154.58	%		131.97	%		128.57	%		132.59	%		149.37	%
Capital ratios:
Stockholders’ equity / total assets		8.04	%		8.16	%		8.04	%		7.95	%		7.77	%
Total capital / total assets		12.53	%		12.70	%		12.64	%		12.60	%		12.74	%

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include expressions such as “expects”, “intends”, “believes” and “should” which are not necessarily statements of belief as to the expected outcomes of future events. Actual results could materially differ from those presented due to a variety of internal and external factors. Actual results could materially differ from those contained in, or implied by, such statements. Capitol Bancorp Limited undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.

Supplemental analyses follow providing additional detail regarding Capitol’s results of operations, financial position, asset quality and other supplemental data.

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CAPITOL BANCORP LIMITED
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)

	Three Months Ended March 31
	2005		2004
INTEREST INCOME:
Portfolio loans (including fees)	$	48,237	$	40,030
Loans held for resale		637		423
Taxable investment securities		235		530
Federal funds sold		621		292
Other		191		174
Total interest income		49,921		41,449
INTEREST EXPENSE:
Deposits		10,571		8,790
Debt obligations and other		3,547		2,429
Total interest expense		14,118		11,219
Net interest income		35,803		30,230
PROVISION FOR LOAN LOSSES		2,023		3,508
Net interest income after provision for loan losses		33,780		26,722
NONINTEREST INCOME:
Service charges on deposit accounts		1,011		1,083
Trust fee income		605		881
Fees from origination of non-portfolio residential mortgage loans		1,265		1,272
Gain (loss) on sale of investment securities available for sale		1		(444	)
Other		1,691		1,346
Total noninterest income		4,573		4,138
NONINTEREST EXPENSE:
Salaries and employee benefits		17,217		15,387
Occupancy		2,300		2,133
Equipment rent, depreciation and maintenance		1,439		1,367
Other		5,518		4,677
Total noninterest expense		26,474		23,564
Income before income taxes and minority interest		11,879		7,296
Income taxes		4,560		2,890
Income before minority interest		7,319		4,406
Minority interest in net loss of consolidated subsidiaries		696		10
NET INCOME	$	8,015	$	4,416
NET INCOME PER SHARE
Basic	$	0.55	$	0.32
Diluted	$	0.52	$	0.30

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CAPITOL BANCORP LIMITED
Condensed Consolidated Balance Sheets
(in thousands, except share data)

	(Unaudited)
	March 31			December 31
	2005			2004
ASSETS
Cash and due from banks	$	161,052		$	123,969
Money market and interest-bearing deposits		13,273			10,745
Federal funds sold		115,114			96,390
Cash and cash equivalents		289,439			231,104
Loans held for resale		34,846			43,143
Investment securities:
Available for sale, carried at market value		28,807			28,172
Held for long-term investment, carried at amortized cost which approximates market value		15,327			14,191
Total investment securities		44,134			42,363
Portfolio loans:
Commercial		2,516,999			2,444,492
Real estate mortgage		171,728			177,204
Installment		70,717			71,208
Total portfolio loans		2,759,444			2,692,904
Less allowance for loan losses		(37,725	)		(37,572	)
Net portfolio loans		2,721,719			2,655,332
Premises and equipment		32,600			32,661
Accrued interest income		11,229			10,447
Goodwill and other intangibles		41,804			41,943
Other assets		39,422			34,425
TOTAL ASSETS	$	3,215,193		$	3,091,418
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	529,673		$	503,902
Interest-bearing		2,075,191			2,006,170
Total deposits		2,604,864			2,510,072
Debt obligations:
Notes payable and short-term borrowings		187,142			172,534
Subordinated debentures		100,869			100,845
Total debt obligations		288,011			273,379
Accrued interest on deposits and other liabilities		20,381			16,288
Total liabilities		2,913,256			2,799,739
Minority interests in consolidated subsidiaries		43,299			39,520
STOCKHOLDERS’ EQUITY:
Common stock, no par value, 25,000,000 shares authorized; issued and outstanding:		197,113			196,271
Retained earnings		65,960			60,476
Market value adjustment (net of tax effect) for investment securities available for sale (accumulated other comprehensive income)		(188	)		(36	)
		262,885			256,711
Less unearned compensation regarding restricted stock and other		(4,247	)		(4,552	)
Total stockholders’ equity		258,638			252,159
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,215,193		$	3,091,418

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CAPITOL BANCORP LIMITED
Allowance for Loan Losses and Asset Quality Data

     ALLOWANCE FOR LOAN LOSSES ACTIVITY (in thousands):

	2005			2004
Allowance for loan losses at January 1	$	37,572		$	31,404
Loans charged-off:
Commercial		(2,071	)		(1,942	)
Real estate mortgage		—			(2	)
Installment		(252	)		(55	)
Total charge-offs		(2,323	)		(1,999	)
Recoveries:
Commercial		410			191
Real estate mortgage		—			—
Installment		43			15
Total recoveries		453			206
Net charge-offs		(1,870	)		(1,793	)
Additions to allowance charged to expense		2,023			3,508
Allowance for loan losses at March 31	$	37,725		$	33,119
Average total portfolio loans for period ended March 31	$	2,726,965		$	2,302,115
Ratio of net charge-offs (annualized) to average portfolio loans outstanding		0.27	%		0.31	%

ASSET QUALITY (in thousands):

	March 31		Dec 31
	2005		2004
Nonaccrual loans:
Commercial	$	16,886	$	20,618
Real estate		1,149		2,396
Installment		749		195
Total nonaccrual loans		18,784		23,209
Past due (³90 days) loans:
Commercial		4,372		3,529
Real estate		692		1,382
Installment		557		351
Total past due loans		5,621		5,262
Total nonperforming loans	$	24,405	$	28,471
Real estate owned and other repossessed assets		5,626		3,907
Total nonperforming assets	$	30,031	$	32,378

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CAPITOL BANCORP LIMITED
Selected Supplement Data

EPS COMPUTATION COMPONENTS:

	Three Months Ended
	March 31
	2005		2004
Numerator—net income for the period	$	8,015,000	$	4,416,000
Denominator:
Weighted average number of common shares outstanding, excluding unvested shares of restricted common stock (denominator for basic earnings per share)		14,648,473		13,795,195
Weighted average number of unvested shares of restricted common stock outstanding		215,489		267,226
Effect of other dilutive securities—stock options		549,430		569,121
Denominator for diluted net income per share — Weighted average number of common shares and potential dilution		15,413,392		14,631,542
Number of antidilutive stock options excluded from diluted earnings per share computation		206,042		—

AVERAGE BALANCES (in thousands):

	Three Months Ended
	March 31
	2005		2004
Portfolio loans	$	2,726,965	$	2,302,115
Earning assets		2,919,989		2,567,296
Total assets		3,139,039		2,780,437
Deposits		2,542,356		2,311,287
Stockholders’ equity		255,363		221,496

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About Capitol Bancorp Limited

Capitol Bancorp Limited is a $3.2 billion community bank development company, with 34 individual bank charters and bank operations in nine states. Capitol Bancorp Limited identifies opportunities for the development of new community banks, raises capital, mentors a community bank through its formative stages and manages its investments in its community banks. Each community bank has full local decision-making authority and is managed by an on-site president under the direction of a local board of directors composed of business leaders from the bank’s community. Capitol Bancorp Limited was founded in 1988 and has headquarters in Lansing, Michigan and Phoenix, Arizona.

Eastern Regions
Great Lakes Region:
Ann Arbor Commerce Bank	Ann Arbor, Michigan
Bank of Michigan	Farmington Hills, Michigan
Brighton Commerce Bank	Brighton, Michigan
Capitol National Bank	Lansing, Michigan
Elkhart Community Bank	Elkhart, Indiana
Goshen Community Bank	Goshen, Indiana
Detroit Commerce Bank	Detroit, Michigan
Grand Haven Bank	Grand Haven, Michigan
Kent Commerce Bank	Grand Rapids, Michigan
Macomb Community Bank	Clinton Township, Michigan
Muskegon Commerce Bank	Muskegon, Michigan
Oakland Commerce Bank	Farmington Hills, Michigan
Paragon Bank & Trust	Holland, Michigan
Portage Commerce Bank	Portage, Michigan
Southeast Region:
Peoples State Bank	Jeffersonville, Georgia
Sunrise Bank of Atlanta — LPO	Atlanta, Georgia
First Carolina State Bank	Rocky Mount, North Carolina
Western Regions
Southwest Region:
Arrowhead Community Bank	Glendale, Arizona
Bank of Las Vegas	Las Vegas, Nevada
Bank of Tucson	Tucson, Arizona
Black Mountain Community Bank	Henderson, Nevada
Camelback Community Bank	Phoenix, Arizona
Desert Community Bank	Las Vegas, Nevada
East Valley Community Bank	Chandler, Arizona
Mesa Bank	Mesa, Arizona
Red Rock Community Bank	Las Vegas, Nevada
Southern Arizona Community Bank	Tucson, Arizona
Sunrise Bank — Dallas LPO	Dallas, Texas
Sunrise Bank — Houston LPO	Houston, Texas
Sunrise Bank of Albuquerque	Albuquerque, New Mexico
Sunrise Bank of Arizona	Phoenix, Arizona
Valley First Community Bank	Scottsdale, Arizona
Yuma Community Bank	Yuma, Arizona
California Region:
Bank of Escondido	Escondido, California
Napa Community Bank	Napa, California
Point Loma Community Bank	Point Loma, California
Sunrise Bank of San Diego	San Diego, California

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