Year of Strong Growth in Challenging Environment
BALTIMORE, Jan. 18 /PRNewswire-FirstCall/ -- Provident Bankshares
Corporation (Nasdaq: PBKS), the parent company of Provident Bank, reported
$70.0 million in net income, or $2.12 per diluted share, for 2006, compared
to $73.0 million in net income, or $2.17 per diluted share, for 2005. For
the fourth quarter of 2006, the Company reported $11.3 million, or $0.34
per diluted share, which included a $5.0 million, or $0.15 per diluted
share, non-recurring charge associated with a securities and debt reduction
transaction. Excluding the effects of this non-recurring charge, the Bank's
net income would have been $75.0 million, or $2.27 per diluted share, for
2006.
Consistent execution by all lines of business produced growth in loans,
deposits and fee income in 2006. The Company produced higher quality
earnings and improvement in the net interest margin in a challenging
banking environment. In addition, credit conditions were ideal and
contributed to a continued decline in net charge-off rates.
"I believe we demonstrated the perseverance to stay focused on our key
strategies in a challenging 2006," said Chairman and CEO Gary N. Geisel.
"We made the right decisions to strengthen our position as the right size
bank in the market."
2006 Highlights
Results of full year 2006 compared to 2005:
* Net interest margin increased to 3.64% from 3.52%
* Average consumer home equity loans increased $157.0 million, or 20%
* Average residential construction loans increased $185.4 million, or 56%
* Average total loans increased $148.4 million, or 4%
* Average total customer deposits increased $28 million, or 1%
* Service charge income increased 6% to $94 million
* Net charge-offs as a percentage of average loans improved to 0.12% from
0.15%
* Non-performing loans declined by $5.9 million, or 23%
* Allowance to non-performing loans remained strong at 229.15%
2006 Full Year Results
Total average deposits have increased by $142.9 million, or 4%. Growth
in money market accounts and certificates of deposit offset expected
declines in demand deposit accounts and savings as customers shifted
deposit balances to products with higher return and less liquidity due to
the current interest rate environment.
Total average loans grew by $148.4 million, or 4%, with excellent
growth in the Bank's key portfolios - home equity by 20%, commercial real
estate by 16%, and commercial business by 5%.
"The Bank's culture has been shifting from a product focus to one based
on customer relationships," said Geisel, "and strong business line results
for 2006 speak to the success of this approach."
Loan growth has been funded in part by reductions in the Bank's
investment portfolio and originated and acquired loan portfolio. In 2006,
average investments were reduced by 7%, or $148.0 million, and acquired
loans declined by 32%, or $155.3 million. In addition, short and long-term
debt was reduced by 10% in aggregate, or $180 million.
Deposit service charges, commissions and loan fees increased by $6.6
million, or 7%, in 2006. Credit quality continues to be excellent; net
charge-offs as a percentage of total average loans declined to 0.12% in
2006, compared to 0.15% in 2005.
Fourth Quarter 2006
Provident Bankshares reported net income of $11.3 million, or $0.34 per
diluted share, for the fourth quarter of 2006, compared to net income of
$19.0 million and $0.57 per diluted share in the same period a year ago. In
a move designed to mitigate the effects of the flat yield curve and to
better position the bank for future performance, the Company on December 1,
2006 announced the sale of $183 million of mortgage-backed securities. This
sale resulted in a charge to fourth quarter 2006 earnings of $5.0 million,
or $0.15 per share.
The Company expects incremental benefits in net interest margin, return
on assets, return on equity and earnings per share in 2007, with these
improvements continuing into the future.
Additional measures to counter the effects of the difficult operating
environment were announced by the Bank on December 1, 2006. Short-term cost
savings measures are being implemented, and outside professional resources
have completed the initial stages of a review of all lines of business and
internal operating processes in order to achieve improved efficiencies.
This comprehensive program is anticipated to result in additional revenue
and reduced expenses as early as the third quarter of 2007.
Outlook for the Future
"We have taken the necessary steps to meet this demanding environment,
which most in the industry believe will extend well into 2007," said
Geisel. "I look forward to updating our shareholders, customers and
employees on our progress with our revenue and expense initiatives during
the year. I believe that we are well-positioned for future success, and I
anticipate earnings for 2007 to be within the range of analysts'
estimates."
Dividend Declared
Provident Bankshares announced today that its Board of Directors has
declared an increased quarterly cash dividend of $0.305 per share. This is
the fifty-third consecutive quarterly dividend increase. The quarterly cash
dividend will be paid on February 9, 2007 to stockholders of record at the
close of business on January 29, 2007.
Share Repurchase Authorized
The Company today announced that the Company's Board of Directors has
approved the repurchase of up to 5% of the Company's outstanding common
stock, or approximately 1.6 million shares. The program will commence
immediately. Repurchases, which will be conducted through open market
purchases or privately negotiated transactions, will be made from time to
time depending on market conditions and other factors.
Annual Meeting Announced
Provident Bankshares announced today that the Corporation's annual
meeting of stockholders will be held on May 16, 2007.
About Provident Bankshares Corporation
Provident Bankshares Corporation is the holding company for Provident
Bank, currently the second largest independent commercial bank
headquartered in Maryland. With $6.3 billion in assets, Provident serves
individuals and businesses in the key metropolitan areas of Baltimore,
Washington and Richmond through a network of 155 offices in Maryland,
Virginia, and southern York County, PA. Provident Bank also offers related
financial services through wholly owned subsidiaries. Securities brokerage,
investment management and related insurance services 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.
Webcast Information
Provident Bankshares Corporation's fourth quarter earnings
teleconference will be webcast at 10 a.m. ET on Thursday, January 18, 2007.
The conference call will include a discussion of the Company's fourth
quarter 2006 results of operations and may include forward-looking
information. The conference call will be simultaneously webcast at
http://www.provbank.com and archived through February 1, 2007. To listen to
the conference call, please go to the Company's website to register,
download and install any necessary software. When in the Company's website,
follow these links:
* About Provident
* Investor Relations
* Upcoming Events
* Provident Bankshares Corporation Fourth Quarter 2006 Results
Audio Webcast
An audio replay of the teleconference will be available through
February 1, 2007 by dialing 1-888-286-8010, passcode 22798103; the
international dial-in number is 617-801-6888.
Forward-looking Statements
This press release, as well as other written communications made from
time to time by Provident Bankshares Corporation and its subsidiaries (the
"Company") and oral communications made from time to time by authorized
officers of the Company, may contain statements relating to the future
results of the Company (including certain projections and business trends)
that are considered "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995 (the "PSLRA"). Such
forward-looking statements may be identified by the use of such words as
"believe," "expect," "anticipate," "should," "planned," "estimated,"
"intend" and "potential." Examples of forward-looking statements include,
but are not limited to, possible or assumed estimates with respect to the
financial condition, expected or anticipated revenue, and results of
operations and business of the Company, including earnings growth, revenue
growth in retail banking, lending and other areas; origination volume in
the Company's consumer, commercial and other lending businesses; asset
quality and levels of non-performing assets; current and future capital
management programs; non-interest income levels, including fees from
services and product sales; tangible capital generation; market share;
expense levels; and other business operations and strategies. For these
statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the PSLRA. No forward-looking
statement can be guaranteed, and actual results may differ from those
projected. The Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information, future
events or otherwise. Forward-looking statements in this release should be
evaluated together with the uncertainties that affect the Company's
business, particularly those mentioned under the headings "Forward-Looking
Statements" and "Item 1A. Risk Factors" in the Company's Form 10-K for the
year ended December 31, 2005, and its reports on Forms 10-Q and 8-K, which
the Company incorporates by reference.
In the event that any non-GAAP financial information is described in
any written communication, including this press release, or in our
teleconference, please refer to the supplemental financial tables included
with this release and on our website for the GAAP reconciliation of this
information.
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
FINANCIAL SUMMARY
(dollars in thousands, except per
share data) Three Months Ended
December 31,
2006 2005 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $49,280 $50,508 (2.4)%
Provision for loan losses 1,877 400 369.3
Non-interest income 22,414 28,544 (21.5)
Net gains (losses) (7,542) 478 -
Derivative losses (19) (1,261) (98.5)
Non-interest income, excluding
total gains (losses) 29,975 29,327 2.2
Total revenue, excluding
total gains (losses) 79,255 79,835 (0.7)
Non-interest expense 55,379 51,657 7.2
Income tax expense 3,155 8,025 (60.7)
Net income 11,283 18,970 (40.5)
SHARE DATA:
Basic earnings per share $0.35 $0.58 (39.7)%
Diluted earnings per share 0.34 0.57 (40.4)
Cash dividends paid per share 0.300 0.280 7.1
Book value per share 19.52 19.14 2.0
Weighted average shares - basic 32,573,415 32,904,879 (1.0)
Weighted average shares - diluted 32,887,017 33,560,110 (2.0)
Common shares outstanding 32,433,387 32,933,118 (1.5)
SELECTED RATIOS:
Return on average assets 0.70 % 1.19 %
Return on average equity 6.89 12.06
Return on average common equity 6.78 11.77
Net yield on average
earning assets (t/e basis) 3.50 3.59
Efficiency ratio 69.32 64.51
Leverage ratio 8.53 8.40
Tier I risk-based capital ratio 10.90 10.97
Total risk-based capital ratio 11.85 11.97
Tangible common equity ratio 6.50 6.27
END OF PERIOD BALANCES:
Investment securities portfolio $1,684,962 $1,905,355 (11.6)%
Total loans 3,865,492 3,695,381 4.6
Assets 6,296,494 6,355,926 (0.9)
Deposits 4,140,112 4,124,467 0.4
Stockholders' equity 633,154 630,495 0.4
Common stockholders' equity 655,739 647,778 1.2
AVERAGE BALANCES:
Investment securities portfolio $1,833,442 $1,927,955 (4.9)%
Loans:
Originated and acquired
residential mortgage 344,201 479,884 (28.3)
Home equity 993,942 879,598 13.0
Other consumer 409,401 450,264 (9.1)
Commercial real estate 1,348,307 1,210,952 11.3
Commercial business 714,037 649,191 10.0
Total loans 3,809,888 3,669,889 3.8
Earning assets 5,663,261 5,614,502 0.9
Assets 6,372,161 6,330,442 0.7
Deposits:
Noninterest-bearing 742,494 816,635 (9.1)
Interest-bearing 3,337,785 3,200,304 4.3
Total deposits 4,080,279 4,016,939 1.6
Stockholders' equity 649,859 623,954 4.2
Common stockholders' equity 660,342 639,588 3.2
Three Months Ended
September 30,
2006 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $51,088 (3.5)%
Provision for loan losses 954 96.8
Non-interest income 31,626 (29.1)
Net gains (losses) 373 -
Derivative losses 643 (103.0)
Non-interest income, excluding
total gains (losses) 30,610 (2.1)
Total revenue, excluding
total gains (losses) 81,698 (3.0)
Non-interest expense 52,614 5.3
Income tax expense 8,707 (63.8)
Net income 20,439 (44.8)
SHARE DATA:
Basic earnings per share $0.63 (44.4)%
Diluted earnings per share 0.62 (45.2)
Cash dividends paid per share 0.295 1.7
Book value per share 19.79 (1.4)
Weighted average shares - basic 32,632,516 (0.2)
Weighted average shares - diluted 33,037,479 (0.5)
Common shares outstanding 32,680,266 (0.8)
SELECTED RATIOS:
Return on average assets 1.26 %
Return on average equity 12.81
Return on average common equity 12.34
Net yield on average
earning assets (t/e basis) 3.60
Efficiency ratio 63.93
Leverage ratio 8.58
Tier I risk-based capital ratio 11.18
Total risk-based capital ratio 12.13
Tangible common equity ratio 6.50
END OF PERIOD BALANCES:
Investment securities portfolio $1,889,954 (10.8)%
Total loans 3,768,027 2.6
Assets 6,410,291 (1.8)
Deposits 4,131,702 0.2
Stockholders' equity 646,886 (2.1)
Common stockholders' equity 663,758 (1.2)
AVERAGE BALANCES:
Investment securities portfolio $1,908,566 (3.9)%
Loans:
Originated and acquired
residential mortgage 373,568 (7.9)
Home equity 983,288 1.1
Other consumer 422,094 (3.0)
Commercial real estate 1,292,143 4.3
Commercial business 703,523 1.5
Total loans 3,774,616 0.9
Earning assets 5,701,946 (0.7)
Assets 6,406,772 (0.5)
Deposits:
Noninterest-bearing 759,874 (2.3)
Interest-bearing 3,264,255 2.3
Total deposits 4,024,129 1.4
Stockholders' equity 632,886 2.7
Common stockholders' equity 657,158 0.5
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
FINANCIAL SUMMARY
(dollars in thousands, except
per share data) Twelve Months Ended
December 31,
2006 2005 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $204,003 $198,710 2.7 %
Provision for loan losses 3,973 5,023 (20.9)
Non-interest income 113,670 112,509 1.0
Net gains (losses) (6,426) 1,292 -
Derivative losses (533) (4,367) (87.8)
Non-interest income, excluding
total gains (losses) 120,629 115,584 4.4
Total revenue, excluding
total gains (losses) 324,632 314,294 3.3
Non-interest expense 214,579 200,737 6.9
Income tax expense 29,118 32,509 (10.4)
Net income 70,003 72,950 (4.0)
SHARE DATA:
Basic earnings per share $2.14 $2.21 (3.2)%
Diluted earnings per share 2.12 2.17 (2.3)
Cash dividends paid per share 1.17 1.09 7.3
Book value per share 19.52 19.14 2.0
Weighted average shares - basic 32,727,420 32,956,055 (0.7)
Weighted average shares - diluted 33,082,089 33,655,673 (1.7)
Common shares outstanding 32,433,387 32,933,118 (1.5)
SELECTED RATIOS:
Return on average assets 1.09 % 1.14 %
Return on average equity 11.02 11.70
Return on average common equity 10.71 11.59
Net yield on average
earning assets (t/e basis) 3.64 3.52
Efficiency ratio 65.66 63.39
Leverage ratio 8.53 8.40
Tier I risk-based capital ratio 10.90 10.97
Total risk-based capital ratio 11.85 11.97
Tangible common equity ratio 6.50 6.27
END OF PERIOD BALANCES:
Investment securities portfolio $1,684,962 $1,905,355 (11.6)%
Total loans 3,865,492 3,695,381 4.6
Assets 6,296,494 6,355,926 (0.9)
Deposits 4,140,112 4,124,467 0.4
Stockholders' equity 633,154 630,495 0.4
Common stockholders' equity 655,739 647,778 1.2
AVERAGE BALANCES:
Investment securities portfolio $1,896,460 $2,044,417 (7.2)%
Loans:
Originated and acquired
residential mortgage 389,836 565,693 (31.1)
Home equity 959,731 802,723 19.6
Other consumer 422,364 461,219 (8.4)
Commercial real estate 1,284,924 1,109,272 15.8
Commercial business 697,050 666,552 4.6
Total loans 3,753,905 3,605,459 4.1
Earning assets 5,668,682 5,664,773 0.1
Assets 6,375,183 6,381,398 (0.1)
Deposits:
Noninterest-bearing 773,369 808,137 (4.3)
Interest-bearing 3,271,892 3,094,212 5.7
Total deposits 4,045,261 3,902,349 3.7
Stockholders' equity 635,356 623,319 1.9
Common stockholders' equity 653,822 629,354 3.9
SOURCE Provident Bankshares Corporation
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Related links:
http://www.provbank.com
http://www.prnewswire.com/comp/721938.html /
CONTACT:
MEDIA: Lillian Kilroy, +1-410-277-2833;
INVESTMENT COMMUNITY: Melissa P. Kelly, +1-410-277-2080, both of
Provident Bankshares Corporation
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