Company to host conference call on February 27, 2008 at 9:00 A.M.
BALTIMORE, Feb. 26 /PRNewswire-FirstCall/ -- Provident Bankshares
Corporation (Nasdaq: PBKS), the parent company of Provident Bank, announced
today that it anticipates additional write downs on its REIT trust
preferred securities portfolio. As previously reported, the Corporation
recorded a $47.5 million pre-tax write down relating to the REIT portfolio
as a result of declines in dealer price quotes and a downgrade in the
securities by the rating agencies.
Based upon newly available information, continued deterioration in
market prices subsequent to year-end and its continuing analysis of the
REIT portfolio, the Company may realize additional impairment charges on
some or all of the remaining $32.8 million of the REIT portfolio at the end
of the first quarter. These anticipated write downs result from the
Company's analysis of the individual securities' credit risk surrounding
the residential mortgage and homebuilding industries and the risk with
respect to collection of future interest or principal payments on the
securities.
In addition, based upon the ongoing credit analysis of the Company's
non- agency mortgage backed securities portfolio, the Company may realize
additional impairment charges on some or all of $14.9 million of that
portfolio at the end of the first quarter due to increased delinquency
levels in the loans underlying these securities.
At this time, there have been no other securities in the investment
portfolio identified as other than temporarily impaired. The determination
of actual impairment charges will be made at the end of the first quarter
based upon information available to management at that time.
"We felt it important to get this updated information regarding our
investment portfolio out as soon as it came to our attention and to be as
transparent as possible," said Gary N. Geisel, Chairman and Chief Executive
Officer. "While the news is disappointing, these developments result in no
direct customer impact. The Bank's core businesses remain profitable and
the Bank remains well-capitalized for regulatory purposes."
The following seven tables reflect the Company's current analysis of
the investment portfolio. Table one presents the composition of the entire
portfolio. Tables two, three and four present information on the trust
preferred portfolio. Tables five, six and seven present information on the
non-agency mortgage backed securities portfolio.
The Company will conduct a conference call for analysts at 9 A.M.
Eastern Time on February 27, 2008 to discuss this information. The
conference call will be simultaneously webcast at http://www.provbank.com and
archived through March 5, 2008. 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 Conference Call
An audio replay of the teleconference will be available through March
5, 2008 by dialing 1-888-286-8010, passcode 15679173; 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, 2006, and its reports on Forms 10-Q and 8-K, which
the Company incorporates by reference.
Table 1
Investment Portfolio Composition
January 31, 2008 Book Values
($000)
Description % Amount
U.S. Treasury &
Agency MBS 39% $622,707
Pooled Trust
Preferred Stock 34% $547,393
G.O. Municipals 10% $152,858
Non Agency 8% $131,331
Corporate Bonds 9% $142,845
Total 100% $1,597,134
Table 2
Pooled Trust Preferred Portfolio
Description % Amount
Banks 75% $410,430
REITs 11% $57,551
Insurance 15% $79,412
Total 100% $547,393
Table 3
REIT Trust Preferred
Description % Amount
Senior Securities
(AAA S&P / A+ to BBB + Fitch) 43% $24,747
Mezzanine Securities
(A to BBB- S&P / BBB to B Fitch) 57% $32,804
Remaining REIT Trust Preferred Portfolio 100% $57,551
Table 4
REIT Credit Composition
($000)
Mezzanine Senior
Securities Securities
Securities "Other than temporarily impaired"
on Dec 31 $18,698
Mezzanine Securities (A- AA S&P, BBB Fitch) 14,106
At-Risk Securities $32,804
Senior Securities (AAA S&P, BBB+ to A+ Fitch) $24,747
Credit Quality: Defaults and Credit Support
Current Default Level 11.7% 10.9%
Average Credit Support Level*
For Interest Payments 25% 40%
For Principal Payments 35% 56%
* Credit Support Level represents the % of issues in default required
before the security suffers permanent loss of interest or principal
payments.
Table 5
Non-Agency MBS Portfolio
AAA 51 % $66,979
AA 49 % 64,352
$131,331
Table 6
AAA Averages AA Averages
# of Issues 13 # of Issues 16
FICO 733 FICO 731
LTV 64% LTV 70%
Avg. Loan Size $514,000 Avg. Loan Size $371,000
Delinquency + 60 Delinquency + 60
Day 1.84% Day 3.79%
Table 7
Non-Agency MBS
Credit Composition
60+ Days Potential
Book Delin- Losses Current Potential
Value quency (35% Sev- Credit Remaining AVG AVG
erity) Support Support FICO LTV
Non-Agency MBS
at Risk
AA-rated
Mezzanine
securities $14,932 9.18% 3.21% 4.11% 0.90% 707 74%
Remaining
AA-rated Mezzanine
Non-Agency MBS
1st Quartile 12,578 4.63% 1.62% 3.53% 1.91% 714 71%
2nd Quartile 9,591 2.69% 0.94% 3.08% 2.14% 720 69%
3rd Quartile 12,455 1.21% 0.42% 2.24% 1.82% 742 70%
4th Quartile 14,795 0.55% 0.19% 1.92% 1.73% 745 71%
$49,420
AAA-rated
Non-Agency MBS
AAA-rated Senior
securities -
2 positions 8,946 10.26% 3.59% 6.30% 2.71% 707 72%
Remaining
AAA-rated
Senior
Securities 58,034 0.54% 0.19% 4.28% 4.09% 737 63%
$66,979
Total Non-Agency
MBS $131,331
SOURCE Provident Bankshares Corporation
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Related links:
http://www.provbank.com/
http://www.prnewswire.com/comp/721938.html /
CONTACT:
Media, Vicki Cox, +1-410-277-2063, or
Investors, Cheryl B. Ursida, +1-410-277-2080, both of Provident
Bankshares Corporation
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