Vibrant Regional Economy Leads to Strong Loan Growth
BALTIMORE, April 19 /PRNewswire-FirstCall/ -- Provident Bankshares
Corporation (Nasdaq: PBKS), the parent company of Provident Bank, reported
$16.1 million in net income, or $0.50 per diluted share, for the quarter
ended March 31, 2007.
"We are uniquely positioned for success as the largest independent
commercial bank headquartered in Maryland and a branch network that spans
the vibrant metropolitan areas of Baltimore, Washington and Richmond," said
Gary N. Geisel, Chairman and CEO. "I am extremely pleased with the first
quarter results, which met our expectations and those of the Street."
Return on average assets and return on average common equity for the
first quarter was 1.05% and 10.21%, respectively. Benefits of the Bank's
December 2006 securities and debt restructuring were evident in the margin
improvement between the fourth quarter of 2006 and the first quarter of
2007. Net interest margin increased to 3.62% versus 3.50% for the previous
quarter. Average customer deposits grew by $55.6 million, or 2%, and
average total loans by $61.5 million, or 2% compared to the fourth quarter
of 2006.
First Quarter 2007 Highlights
Results of the first quarter 2007 compared to first quarter 2006:
-- Average total relationship-based loans (total loans excluding
originated and acquired residential mortgages) increased $284.9
million, or 9%
-- Average commercial real estate loans increased $175.4 million, or 14%
-- Average home equity loans increased $82.3 million, or 9%
-- Service charge income increased 1% to $22.3 million
-- Commissions, fees and other non-interest income increased 7%
-- Net charge-offs as a percentage of average loans improved to 0.08% from
0.13%
-- Non-performing loans declined by $5.6 million, or 21%
-- Allowance for loan losses to non-performing loans is 219.70%
Net income versus the first quarter of 2006 declined by $2.1 million,
or $0.05 per diluted share. This was driven by a lower net interest margin
resulting from the yield curve environment and the shift in deposit mix as
customers have been moving balances from low yielding checking and savings
accounts to higher yielding certificate of deposit accounts.
Average customer deposits for the first quarter of 2007 remained
relatively flat compared to the same period a year ago, reflecting the
industry-wide deposit growth challenges. As in previous quarters, the flat
to inverted yield curve and customer demand for higher rates of return have
been limiting the ability of most banks to increase deposit balances. The
management team at Provident has responded to this environment by
developing a number of new initiatives to attract and retain customer
deposits, including remote deposit capture. The Bank's business clients
have embraced this product, which allows a customer to electronically post
deposits from the workplace, and the sales results have surpassed initial
expectations.
In comparison to the same quarter a year ago, total average commercial
real estate and home equity loans have increased 14% and 9% respectively.
This strong loan growth reflects the Bank's focus on business development
and the lenders' experience in the market. Average residential construction
loans grew $138.2 million, or 31%, from a year ago while average commercial
construction loans grew $62.2 million, or 20%, reflecting balanced growth
in the Maryland, Washington, D.C. and Virginia markets. Average home equity
loans increased by $82.3 million over the same period a year ago.
Asset quality continued to be excellent during the quarter with net
charge-offs and non-performing loans declining 39% and 21%, respectively,
from the same quarter a year ago. Capital levels also improved during the
current quarter as the leverage and tangible common equity ratios improved
to 8.71% and 6.55%. During the first quarter of 2007, Provident Bankshares
Corporation received a credit rating upgrade from both Standard & Poor's
and Fitch.
The Bank's focus on expense control produced more modest cost growth
for the current quarter. Total non-interest expense, excluding costs
associated with restructuring activities, increased 0.7% over the prior
year quarter. The restructuring activities' costs included $1.6 million of
expenses associated with seven branch closures and consulting costs for
corporate efficiency and infrastructure initiatives that are currently in
process.
Outlook for the Future
"Along with our key strategies, we remain committed to the cost
initiatives we announced in late 2006 to mitigate the effects of the
difficult banking environment," said Geisel. "We are pleased with the
progress of our corporate efficiency program and are on track to realize
revenue increases and expense reductions in the third and fourth quarter of
2007."
Dividend Declared
Provident Bankshares announced today that its Board of Directors has
declared an increased quarterly cash dividend of $0.31 per share. This is
the fifty-fourth consecutive quarterly dividend increase. The quarterly
cash dividend will be paid on May 11, 2007 to stockholders of record at the
close of business on April 30, 2007.
About Provident Bankshares Corporation
Provident Bankshares Corporation is the holding company for Provident
Bank, the largest independent commercial bank headquartered in Maryland.
With $6.2 billion in assets, Provident serves individuals and businesses in
the key metropolitan areas of Baltimore, Washington and Richmond through a
network of 148 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 first quarter earnings
teleconference will be webcast at 10 a.m. ET on April 19, 2007. The
conference call will include a discussion of the Company's first quarter
2007 results of operations and may include forward-looking information. The
conference call will be simultaneously webcast at http://www.provbank.com and
archived through May 3, 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 First Quarter 2007 Results Audio
Webcast
An audio replay of the teleconference will be available through May 3,
2007 by dialing 1-888-286-8010, passcode 19939692; 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.
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
March 31,
2007 2006 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $ 48,843 $ 51,248 (4.7)%
Provision for loan losses 1,052 318 230.8
Non-interest income 29,961 28,225 6.2
Net gains (losses) 1,203 540 122.8
Derivative losses (63) (603) (89.6)
Non-interest income, excluding total
gains (losses) 28,821 28,288 1.9
Total revenue, excluding total gains
(losses) 77,664 79,536 (2.4)
Non-interest expense 54,768 52,791 3.7
Restructuring activities 867 -- --
Non-interest expense, excluding
restructuring 53,901 52,791 2.1
Income tax expense 6,870 8,106 (15.2)
Net income 16,114 18,258 (11.7)
SHARE DATA:
Basic earnings per share $ 0.50 $ 0.55 (9.1)%
Diluted earnings per share 0.50 0.55 (9.1)
Cash dividends paid per share 0.305 0.285 7.0
Book value per share 19.72 19.11 3.2
Weighted average shares -- basic 32,196,432 32,948,119 (2.3)
Weighted average shares -- diluted 32,496,168 33,364,813 (2.6)
Common shares outstanding 32,243,534 32,974,784 (2.2)
SELECTED RATIOS:
Return on average assets 1.05 % 1.17 %
Return on average equity 10.37 11.71
Return on average common equity 10.21 11.40
Net yield on average earning assets
(t/e basis) 3.62 3.72
Efficiency ratio (excludes
restructuring activities) 68.83 66.01
Leverage ratio 8.71 8.54
Tier I risk-based capital ratio 10.95 11.35
Total risk-based capital ratio 11.92 12.34
Tangible common equity ratio 6.55 6.41
END OF PERIOD BALANCES:
Investment securities portfolio $ 1,638,183 $ 1,916,653 (14.5)%
Total loans 3,890,421 3,713,169 4.8
Assets 6,234,692 6,372,434 (2.2)
Deposits 4,282,400 4,162,439 2.9
Stockholders' equity 635,797 630,196 0.9
Common stockholders' equity 653,583 656,770 (0.5)
AVERAGE BALANCES:
Investment securities portfolio $ 1,663,335 $1,921,879 (13.5)%
Loans:
Originated and acquired residential
mortgage 325,377 439,513 (26.0)
Home equity 996,519 914,182 9.0
Other consumer 400,949 437,227 (8.3)
Commercial real estate 1,407,691 1,232,269 14.2
Commercial business 740,810 677,346 9.4
Total loans 3,871,346 3,700,537 4.6
Earning assets 5,549,736 5,638,368 (1.6)
Assets 6,234,498 6,337,658 (1.6)
Deposits:
Noninterest-bearing 724,805 791,615 (8.4)
Interest-bearing 3,370,707 3,222,234 4.6
Total deposits 4,095,512 4,013,849 2.0
Stockholders' equity 629,971 632,515 (0.4)
Common stockholders' equity 639,836 649,280 (1.5)
Three Months Ended
December 31,
2006 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $ 49,280 (0.9)%
Provision for loan losses 1,877 (44.0)
Non-interest income 22,414 33.7
Net gains (losses) (7,542) (116.0)
Derivative losses (19) 231.6
Non-interest income, excluding total
gains (losses) 29,975 (3.8)
Total revenue, excluding total gains
(losses) 79,255 (2.0)
Non-interest expense 55,379 (1.1)
Restructuring activities -- --
Non-interest expense, excluding
restructuring 55,379 (2.7)
Income tax expense 3,155 117.7
Net income 11,283 42.8
SHARE DATA:
Basic earnings per share $ 0.35 42.9 %
Diluted earnings per share 0.34 47.1
Cash dividends paid per share 0.300 1.7
Book value per share 19.54 0.9
Weighted average shares - basic 32,573,415 (1.2)
Weighted average shares - diluted 32,887,017 (1.2)
Common shares outstanding 32,433,387 (0.6)
SELECTED RATIOS:
Return on average assets 0.70 %
Return on average equity 6.89
Return on average common equity 6.78
Net yield on average earning assets
(t/e basis) 3.50
Efficiency ratio (excludes
restructuring activities) 69.32
Leverage ratio 8.53
Tier I risk-based capital ratio 10.90
Total risk-based capital ratio 11.85
Tangible common equity ratio 6.50
END OF PERIOD BALANCES:
Investment securities portfolio $ 1,684,603 (2.8)%
Total loans 3,865,492 0.6
Assets 6,295,893 (1.0)
Deposits 4,140,112 3.4
Stockholders' equity 633,631 0.3
Common stockholders' equity 655,738 (0.3)
AVERAGE BALANCES:
Investment securities portfolio $ 1,833,442 (9.3)%
Loans:
Originated and acquired residential
mortgage 344,201 (5.5)
Home equity 993,942 0.3
Other consumer 409,401 (2.1)
Commercial real estate 1,348,307 4.4
Commercial business 714,037 3.7
Total loans 3,809,888 1.6
Earning assets 5,663,261 (2.0)
Assets 6,372,157 (2.2)
Deposits:
Noninterest-bearing 742,494 (2.4)
Interest-bearing 3,337,785 1.0
Total deposits 4,080,279 0.4
Stockholders' equity 649,865 (3.1)
Common stockholders' equity 660,350 (3.1)
SOURCE Provident Bankshares Corporation
 back to top
Related links:
http://www.provbank.com
http://www.prnewswire.com/comp/721938.html /
CONTACT:
Media: Lillian Kilroy, +1-410-277-2833, or
Investment Community: Melissa P. Kelly, +1-410-277-2080, both of
Provident Bankshares Corporation
|
