BALTIMORE, Jan. 17 /PRNewswire/ --
Provident Bankshares Corporation (Nasdaq: PBKS), the parent company of
Provident Bank, the second largest independent commercial bank headquartered
in Maryland, today reported $12.6 million in earnings and a 12% increase in
earnings per share for the quarter ending December 31, 2000. The Company's
continued revenue momentum in the Baltimore-Washington corridor resulted from
strong earnings performance in its core business operations. Earnings for the
quarter were driven by strong growth in core deposits, non-interest income and
commercial loans. Provident also continued to expand its delivery network,
widen its net interest margin and maintain asset quality.
Fourth Quarter Financial Highlights
-- Earnings per share (diluted) were $.47 for the fourth quarter, an
increase of 12% from $.42 in the fourth quarter of 1999.
-- Net income rose 9.1% to $12.6 million for the quarter
-- Non-interest income (excluding securities gains) grew 29% for the
fourth quarter, and comprised 31% of Provident's total revenue for
the quarter
-- Return on average common equity for the quarter grew to 15.4% up from
14.6% in 1999
-- Average deposits increased 5.5%, with non-interest bearing deposits up
18% for the quarter
-- Net interest margin for the quarter expanded to 3.04% from the third
quarter
2000 Financial Highlights
-- Earnings per share (diluted) for the year rose 4.4% to $1.67 from
$1.60 in 1999
-- Net income was $44.8 million for the year
-- Non-interest income (excluding securities gains) increased 9.4% for
the year, and comprised 29% of Provident's total revenues for the
year
-- Return on average common equity for the year was 14.03%
-- Average deposits increased 8.2% with non-interest bearing deposits up
15% for 2000
-- Average loans grew 4% for the year
-- Net interest margin was 3.07% for the year
Fourth Quarter Results
Provident Bankshares today reported net income for the quarter ended
December 31, 2000 of $12.6 million, or $.47 per share. Earnings per share
were up 12% over the fourth quarter of 1999. Net income for the fourth
quarter was up 9.1% from $11.5 million in 1999, and up 10.7% from
$11.4 million in the 2000 third quarter.
Return on average common equity (ROE) was 15.4% for fourth quarter 2000,
up from 14.6% in the same quarter a year ago. Return on average assets (ROA)
was .89%, down from .91% for the comparable period a year ago. ROA for the
fourth quarter showed strong improvement from the previous quarter, rising
from .81% for the 2000 third quarter.
Average assets and deposits grew in fourth quarter 2000 compared to 1999.
Average assets increased 11.3% during the quarter and average deposits
increased 5.5%. Core deposits were also up, with non-interest bearing demand
deposits up more than 18% for the fourth quarter. Average loans for the
quarter were largely unchanged from one year ago due in large part to two
consumer loan securitizations that occurred in the fourth quarter of 1999 and
the third quarter of 2000.
Average earning assets increased $515 million, or 10.5%, from the 1999
fourth quarter. This growth, particularly in commercial real estate loans to
Baltimore/Washington companies, drove tax-equivalent net interest income for
the 2000 fourth quarter up 2.4% from one year ago. Net interest margin for
the 2000 fourth quarter was 3.04%, widening from 2.98% in the 2000 third
quarter, while down from 3.27% in the comparable quarter a year ago.
Non-performing assets remained largely unchanged from the previous quarter
at $24.0 million. Regularly scheduled reviews of the Company's commercial
business and real estate lending portfolios continue to reflect a high level
of asset quality.
Non-interest income, excluding securities gains, was up $4.2 million, or
29%, for the 2000 fourth quarter. There were $641 thousand in securities
gains during the 2000 fourth quarter and no securities gains during the 1999
comparable quarter. Excluding mortgage banking income and securities gains,
non-interest income from core business operations was up $4.8 million or 36%,
for the quarter ending December 31, 2000. This increase was driven by non-
interest income from core business operations, notably deposit service fees
associated with Provident's continued growth in retail checking accounts.
Income from deposit service fees was up more than $3 million, or 33%, from one
year ago. Other non-interest income was also up $2.0 million from the
comparable 1999 quarter due to Provident's adoption of a Bank Owned Life
Insurance (BOLI) program in the second quarter of 2000. Non-interest income
(excluding securities gains) comprised 31% of Provident's total revenues for
the quarter.
Non-interest expense was up $5.2 million, or 15.3%, from the same quarter
last year due primarily to network expansion costs, the issuance of trust
preferred stock in the first quarter of 2000 and approximately $800,000 in one
time charges for the restructuring of Provident Mortgage Corporation.
Provident opened six branches in December 1999, and has increased its branch
network by an additional 15 branches during 2000. The efficiency ratio was
63.7% for the fourth quarter, up from 61.6% for the same quarter of 1999.
During the quarter, Provident repurchased 1.2 million shares of common
stock. Stockholders' equity at December 31, 2000 was $315.4 million. The
leverage ratio was 6.86% and book value per share was $12.20.
Dividend Declared
Provident Bankshares also announced today that its Board of Directors has
declared a quarterly cash dividend of $.185 per share. This quarterly cash
dividend will be paid on February 9th to stockholders of record at the close
of business on January 29th.
Management Comment
Commenting on the fourth quarter performance of Provident Bankshares,
Chairman and CEO Peter M. Martin said, "We ended the year with a strong
quarter, exceeding the consensus EPS estimate for the fourth quarter and for
the year. The successful execution of our business strategy to grow
profitable customer relationships in the Baltimore-Washington corridor brought
improved earnings performance. We continued to attract new customers, expand
our delivery network, increase deposits, enhance fee income, widen the net
interest margin and maintain asset quality.
I am particularly pleased with the performance of our core business units.
They have created performance momentum that positions us well for a successful
2001."
2000 Strategic Highlights
-- Continued the successful retail expansion strategy, adding 15 new
branches in 2000
-- Completed acquisition of Harbor Federal Bancorp
-- Opened more than 76,000 new retail checking accounts and saw average
annual revenue per account reach $188 in 2000. Expansion branches
(open less than one year) contributed 32% of the new account volume.
-- Grew Internet Banking by 950 accounts per month and ended the year
with 9% of all checking customers using Provident's Internet/PC
Banking services
-- Enhanced commercial deposit growth with non-interest bearing deposits
up 16.8% for 2000, and number of accounts up 25% for the year.
-- Continued to grow average commercial real estate loans with balances
up $105.5 million, or 31% for the year.
12 Month Results
For the twelve months ended December 31, 2000, net income totaled
$44.8 million, or $1.67 per diluted share.
Return on average common equity for the year was 14.03% down from 14.61%
for 1999. The 2000 net interest margin was 3.07%, down from 3.13% in 1999.
Return on average assets was .82% for 2000, down from .90% in 1999.
Average assets, deposits and loans grew in 2000. Average assets increased
11.6% during the year, average loans grew by 4%, and average deposits
increased 8.2% with non-interest bearing demand deposits up 14.5% for the
year. Average earning assets were up 11.2% for the year. Non-interest
income, (excluding securities gains) increased 9.4% for the year, while non-
interest expense increased 11.8% due primarily to network expansion costs and
the cost of the trust preferred stock.
As reported during the second quarter of 2000, instability in the health
care industry prompted the Company to take aggressive action regarding two
health care credits. Provident made a $13 million addition to its provision
for loan losses during the second quarter to address an anticipated write-down
of a significant portion of a $15 million non-performing health care credit
and sale of another health credit not previously classified as non-performing.
Provident sold the second credit and realized a $5 million loss which was
offset by $7.8 million in gains from securities transactions.
Provident also continued to use its stock buyback authority to enhance
shareholder value by strategically purchasing shares in the open market. The
Corporation repurchased a total of 3.2 million shares in 2000. Provident has
remaining authority to repurchase 2.3 million shares.
Provident: Well Positioned for 2001
Provident added 15 new branches in 2000, 10 in-store and five traditional.
At year-end 2000, Provident operated 98 branches -- 42 in-store and 56
traditional as well as 165 ATMs. In keeping with the Bank's expansion
strategy in the dynamic Northern Virginia market, Provident opened its Tysons
Corner, Virginia office in 2000. The office is also home to the Bank's
successful Northern Virginia Commercial Real Estate Lending operation. In
2001, Provident plans to open nine new branches.
Provident also completed its acquisition of Harbor Federal Bancorp, Inc.,
and integration of its Harbor Federal Savings Bank operations. Harbor added
roughly $253 million in total assets and builds upon the corporation's
strategy to expand into attractive, existing and contiguous markets. The
acquisition included nine offices in the City of Baltimore and the Counties of
Baltimore and Anne Arundel in Maryland. After consolidation with nearby
Provident branches, the Company will continue to operate five of these
offices. The purchase allowed Provident to add a branch in Anne Arundel
County where expansion plans were already underway with traditional and in-
store locations.
It was also a year of renewed focus on profitable core business
operations. Provident assessed the short- and long-term profitability of its
business lines and made some strategic decisions. The Bank announced during
the second quarter that it would eliminate its check cashing operation. And
in the third quarter, the indirect auto lending function was closed. In the
fourth quarter, Provident repositioned its mortgage lending business by
selling its realtor network, eliminating its wholesale operations and focusing
specifically on serving the mortgage needs of retail customers through an
outsourced loan origination process. These decisions allowed Provident to
concentrate on its profitable core lines of business.
The success of Provident's core business operations is evidenced by strong
growth in:
-- Retail Checking
During 2000, the bank opened more than 76,000 new retail checking
accounts, up 20% from 1999. Expansion branches (branches open less than one
year) contributed 32% of this new account volume. Expansion branches also
accounted for 34% of new account production for fourth quarter 2000 compared
to 27% in the third quarter 2000. Internet Banking ended the year with more
than 17,000 accounts, up from just over 5,000 accounts in December of 1999.
-- Consumer Loans
Provident's branch network generated $36.7 million in direct consumer
loans for the fourth quarter 2000. Average fourth quarter balances of
$351.8 million are $26.6 million, or 8%, higher than fourth quarter 1999.
-- Commercial and Commercial Real Estate Lending
During the year, Provident continued to generate new commercial business
in the Baltimore-Washington corridor. Average commercial real estate loans
grew $105.5 million for the year, a 31% increase over 1999. This is in
keeping with Provident's strategy to increase in-market loan production while
limiting exposure to large syndicated credits.
-- Commercial Deposits
It was a strong year for cash management revenue growth. Cash management
fees assessed increased 71% from the fourth quarter of 1999 and 58% for the
year 2000. Average commercial non-interest bearing deposits increased 3.8% in
the fourth quarter compared to the third quarter of 2000. For the year
overall, commercial non-interest bearing deposits increased 16.8% compared to
1999. Non-interest bearing checking accounts increased 25% for the year 2000.
The Outlook for 2001 and Beyond
Commenting on the future for Provident Bankshares, Chairman and CEO Peter
M. Martin added, "Last week, we announced the appointment of Gary Geisel as
President and Chief Operating Officer of the Corporation and the Bank. Jack
Novak, Dick Oppitz and CFO Dennis Starliper were also appointed Executive Vice
Presidents of the Bank. I will continue as Chairman and CEO.
This executive team, in cooperation with our other senior managers and
employees, will continue to refine and execute the Company's successful
business strategy to profitably grow in the attractive markets we serve. We
will continue to focus on maximizing shareholder value by expanding our branch
network, increasing our market share and enhancing our commercial business
operations.
We are comfortable with the consensus earnings estimate for 2001. Our
increased earnings and the improvement in our net interest margin, ROA, ROE,
and EPS from the third to fourth quarter of 2000 are evidence of Provident's
ability to begin reaching ROA of 1.0%, ROE between 16% and 18% and EPS growth
of 10% by fourth quarter 2001. Management will also continue to work
diligently to achieve an efficiency ratio of less than 60% by fourth quarter
2001."
Provident Bankshares Corporation is the holding company for Provident
Bank, the second largest independent commercial bank headquartered in
Maryland. With more than $5.5 billion in assets, Provident serves individuals
and businesses in the dynamic Baltimore-Washington corridor through a network
of 98 offices in Maryland, Northern Virginia, and southern York County, PA.
Provident Bank also offers related financial services through its wholly owned
subsidiaries. Mutual funds, annuities and insurance products are available
through Provident Investment Center and leases through Court Square Leasing
and Provident Lease Corp. Visit Provident on the web at http://www.provbank.com.
Special Note: Provident Bankshares Corporation's Fourth Quarter Earnings
Teleconference will be webcast at 10:00 a.m. on Thursday, January 18th. Log
on to http://www.provbank.com. The webcast will involve discussion of the most
recent quarter's results of operations and may include forward-looking
information, such as guidance of future results.
Statements contained in this Press Release that are not historical facts
are forward-looking statements, as the term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risks and uncertainties which could cause actual results to differ
materially from those currently anticipated due to a number of factors, which
include, but are not limited to, factors discussed in documents filed by the
Company with the Securities and Exchange Commission from time to time.
PROVIDENT BANKSHARES CORPORATION
FINANCIAL SUMMARY
(dollars in thousands, except
per share data) Three Months Ended December 31,
(tax-equivalent basis) 2000 1999 % Change
SUMMARY OF OPERATIONS
Interest Income $107,480 $95,296 12.8 %
Interest Expense 66,100 54,894 20.4
Net Interest Income 41,380 40,402 2.4
Provision for Loan Losses 3,257 3,635 (10.4)
Net Interest Income after Provision
for Loan Losses 38,123 36,767 3.7
Non-Interest Income 19,524 14,680 33.0
Non-Interest Expense 39,098 33,907 15.3
Income Before Income Taxes 18,549 17,540 5.8
Income Tax Expense 5,722 5,769 (0.8)
Less: Tax-Equivalent Adjustment 252 241 4.6
Income Before Extraordinary Item 12,575 11,530 9.1
Extraordinary Item -- Gain on Debt
Extinguishment, net - - -
Net Income $12,575 $11,530 9.1
PER SHARE
Basic -- Income Before Extraordinary $0.48 $0.43
-- Net Income 0.48 0.43
Diluted -- Income Before Extraordinary 0.47 0.42
-- Net Income 0.47 0.42
Cash Dividends Paid 0.18 0.15
Stockholders' Equity
Market Value (closing sales price as
reported on the NASDAQ Stock Market)
Common Shares Outstanding
Weighted Average Shares -- Basic 26,199,494 26,794,858
Weighted Average Shares -- Diluted 26,980,111 27,509,075
PROFITABILITY RATIOS
Return on Average Assets 0.89 % 0.91 %
Return on Average Equity 16.87 16.24
Return on Average Common Equity 15.42 14.62
Net Yield on Earning Assets (t/e basis) 3.04 3.27
CAPITAL RATIOS AT DECEMBER 31
Leverage Ratio
Risk-Based Capital Ratios:
Tier I Capital Ratio
Total Capital Ratio
ASSET QUALITY
Non-Performing Loans
Loans Past Due 90 Days or More
Allowance for Loan Losses
Net Charge-offs $2,993 $2,460 21.7 %
Non-Performing Loans to Loans
Allowance for Loan Losses to Loans
Net Charge-Offs to Average Loans 0.35 % 0.29 %
Allowance for Loan Losses to
Non-Performing Loans
AVERAGE BALANCES
Investment Securities Portfolio $2,012,444 $1,484,377 35.6 %
Loans 3,355,018 3,349,231 0.2
Earning Assets 5,410,015 4,894,540 10.5
Assets 5,629,646 5,056,536 11.3
Deposits 3,955,499 3,749,686 5.5
Stockholders' Equity 296,574 281,678 5.3
Common Equity 324,368 312,781 3.7
SELECTED FINANCIAL DATA
AT PERIOD-END
Investment Securities Portfolio
Loans
Earning Assets
Assets
Deposits
Stockholders' Equity
Common Equity
PROVIDENT BANKSHARES CORPORATION
FINANCIAL SUMMARY
(dollars in thousands, except
per share data) Twelve Months Ended December 31,
(tax-equivalent basis) 2000 1999 % Change
SUMMARY OF OPERATIONS
Interest Income $415,535 $353,341 17.6 %
Interest Expense 253,119 204,261 23.9
Net Interest Income 162,416 149,080 8.9
Provision for Loan Losses 23,877 11,570 106.4
Net Interest Income after Provision
for Loan Losses 138,539 137,510 0.7
Non-Interest Income 75,420 61,459 22.7
Non-Interest Expense 148,368 132,656 11.8
Income Before Income Taxes 65,591 66,313 (1.1)
Income Tax Expense 20,568 21,199 (3.0)
Less: Tax-Equivalent Adjustment 983 964 2.0
Income Before Extraordinary Item 44,040 44,150 (0.2)
Extraordinary Item -- Gain on Debt
Extinguishment, net 770 - -
Net Income $44,810 $44,150 1.5
PER SHARE
Basic -- Income Before Extraordinary $1.68 $1.65
-- Net Income 1.71 1.65
Diluted -- Income Before Extraordinary 1.64 1.60
-- Net Income 1.67 1.60
Cash Dividends Paid 0.674 0.568
Stockholders' Equity 12.20 10.76
Market Value (closing sales price as
reported on the NASDAQ Stock Market) 20.88 16.48
Common Shares Outstanding 25,846,974 25,531,886
Weighted Average Shares -- Basic 26,270,087 26,790,097
Weighted Average Shares -- Diluted 26,864,783 27,637,005
PROFITABILITY RATIOS
Return on Average Assets 0.82 % 0.90 %
Return on Average Equity 16.17 15.46
Return on Average Common Equity 14.03 14.61
Net Yield on Earning Assets (t/e basis) 3.07 3.13
CAPITAL RATIOS AT DECEMBER 31
Leverage Ratio 6.86 % 7.10 %
Risk-Based Capital Ratios:
Tier I Capital Ratio 9.48 9.18
Total Capital Ratio 10.48 10.20
ASSET QUALITY
Non-Performing Loans $21,385 $28,908 (26.0)%
Loans Past Due 90 Days or More 37,410 29,181 28.2
Allowance for Loan Losses 40,660 39,780 2.2
Net Charge-offs 22,451 13,029 72.3
Non-Performing Loans to Loans 0.63 % 0.91 %
Allowance for Loan Losses to Loans 1.21 1.25
Net Charge-Offs to Average Loans 0.66 0.40
Allowance for Loan Losses to
Non-Performing Loans 190.13 137.61
AVERAGE BALANCES
Investment Securities Portfolio $1,857,508 $1,371,075 35.5 %
Loans 3,395,960 3,265,502 4.0
Earning Assets 5,296,430 4,760,857 11.2
Assets 5,484,004 4,912,643 11.6
Deposits 3,866,552 3,573,310 8.2
Stockholders' Equity 277,027 285,543 (3.0)
Common Equity 319,366 302,136 5.7
SELECTED FINANCIAL DATA
AT PERIOD-END
Investment Securities Portfolio $1,876,509 $1,671,507 12.3 %
Loans 3,373,771 3,184,119 6.0
Earning Assets 5,270,901 4,887,920 7.8
Assets 5,504,548 5,094,477 8.0
Deposits 3,954,770 3,808,528 3.8
Stockholders' Equity 315,411 274,599 14.9
Common Equity 326,106 318,922 2.3
SOURCE Provident Bankshares Corporation
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http://www.prnewswire.com/comp/721938.html or fax,
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CONTACT:
Media, Lillian Kilroy, 410-277-2833, or
Investors, Ellen Grossman, 410-277-2889
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