July 22, 2009 (FinancialWire) — Capitol Bancorp Ltd. (NYSE: CBC), (Current Market Cap: $5.96 Mil.) said that its board has approved a plan to spin-off the company’s Michigan Commerce Bancorp Ltd. subsidiary as an independent publicly-traded bank holding company.

When the spin-off is completed, Capitol will continue to be a company with national banking operations and MCBL will be a separate publicly-traded bank holding company consisting of the substantial majority of Capitol’s prior Michigan-based banks.

Under the plan, MCBL will be led by president John C. Smythe, who has served as president and CEO of Michigan Commerce Bank since March 2009. Each company will have its own board of directors and senior management team.

Capitol said that the spin-off will allow the companies to lower overall expenses by reducing the level of management personnel that is currently required to oversee geographically diverse multi-bank operations and will allow each company to design equity-based compensation programs targeted to its own performance.

Capitol also believes that the transition of MCBL to an independent company will provide MCBL with greater access to capital resources.

As of March 31, MCBL posted total assets of $1.3 billion, and if the spin-off had occurred on that date, total assets of Capitol would have been roughly $4.4 billion.

Lansing, Michigan-based Capitol Bancorp has a network of separately chartered banks in 17 states.

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