Continued margin expansion contributes to rise in net income
BALTIMORE, April 20 /PRNewswire-FirstCall/ -- Provident Bankshares
Corporation (Nasdaq: PBKS), the parent company of Provident Bank, reported
net income of $18.3 million, or $0.55 per diluted share, for the first
quarter of 2006.
The financial results of the first quarter reflect the Company's
continued improvement in financial fundamentals through the consistent
execution of the Bank's key strategies and transition of the balance sheet.
In the first quarter of 2006, net income increased 16% from the same
quarter of 2005. Provident continued to shift from wholesale to core
banking activities during the first quarter of 2006, and the net interest
margin improved to 3.72%, compared to 3.46% in the first quarter of 2005.
As a result of strong lending activity, the Company was able to reduce
investment securities by 11% from the same period of 2005. Average deposit
balances grew by $258 million led by strong growth in both consumer and
commercial deposits. Asset quality remained strong in the first quarter of
2006, with the ratio of net loan charge-offs to average loans declining to
0.13%, compared to 0.24% for the same period last year.
First Quarter Financial Highlights
Results for the first quarter 2006 compared to first quarter 2005:
- Return on assets increased to 1.17% from 0.99%
- Return on average common equity improved to 11.40% from 10.32%
- Net interest margin improved to 3.72% from 3.46%
- Average home equity and total commercial loans increased 26% and 12%,
respectively
- Average total deposits increased 7% to $4 billion
- Net charge-offs as a percentage of average loans improved to 13 basis
points from 24 basis points
- Capital ratios remained strong with a leverage ratio of 8.54%, and a
total risk-based capital ratio of 12.34%
"The execution of our key strategies and the vibrancy of our regional
market have enabled us to deliver solid results on a consistent basis. Due
to the seasonality of our business, our earnings per share is slightly
short of consensus for the quarter, and this is as we expected. We are
pleased with our performance, and continue to agree with the consensus
estimate for full year 2006," said Chairman and CEO Gary N. Geisel.
Dividend Declared
Provident Bankshares announced today that its Board of Directors has
declared an increased quarterly cash dividend of $0.29 per share. This is
the fiftieth consecutive quarterly dividend increase. The quarterly cash
dividend will be paid on May 12, 2006 to stockholders of record at the
close of business on May 1, 2006.
First Quarter Results
Provident Bankshares reported net income of $18.3 million, or $0.55 per
diluted share, for the first quarter of 2006, as compared to $15.8 million
in net income, or $0.47 per diluted share, in the same period last year.
The Company's experience and expertise in real estate lending resulted
in first quarter 2006 growth in average home equity loans of $189 million,
or 26%, and growth in average commercial real estate loans of $206 million,
or 20%, from first quarter 2005. The growth in these categories of loans
offset planned reductions in average originated and acquired residential
loans and investments of $200 million and $248 million, respectively, from
first quarter 2005.
Growth in average deposits was driven by both consumer and commercial
customers. Commercial clients in the Greater Washington and Central
Virginia regions were a particularly strong source of the deposit growth
from first quarter 2005 to first quarter 2006, contributing $88 million of
net deposit growth.
Fee income from commissions, deposit and loan accounts increased 14%
from first quarter 2005, to $25 million in first quarter 2006. Non-interest
expense increased 11% in first quarter 2006, driven primarily by
compensation, healthcare and regulatory compliance cost increases.
Execution of Key Business Strategies
The Bank's current business strategies are listed below:
- Maximize Provident's position as the right size bank in the marketplace
- Grow and deepen consumer and small business relationships in Maryland
and Virginia
- Grow and deepen commercial and real estate relationships in Maryland
and Virginia
- Move from a product driven organization to a customer relationship
focused sales culture
- Create a high performance culture that focuses on employee development
and retention
During the first quarter of 2006, significant progress was made in all
of these areas. Provident had notable success with growing and deepening
relationships across the major markets of Greater Baltimore, Greater
Washington and Central Virginia. This is evident in the growth of customer
deposit and loan balances. In the first quarter of 2006, average commercial
deposits increased 18% over the first quarter of 2005. During the same
period, home equity average balances increased by 26% and total commercial
loan balances increased $205 million, a 12% increase.
Outlook for the Future
Commenting on the future for Provident Bankshares, Chairman and CEO
Gary N. Geisel added, "Our business lines are producing excellent results,
and I am especially pleased with the growth in deposits, non-interest
income, home equity and commercial lending. This momentum, along with our
unique position as the right sized bank in this growing region, will be
factors for our continued success."
About Provident Bankshares Corporation
Provident Bankshares Corporation is the holding company for Provident
Bank, the second largest independent commercial bank headquartered in
Maryland. With $6.4 billion in assets, Provident serves individuals and
businesses in the key urban areas of Baltimore, Washington and Richmond
through a network of 153 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 10:00 AM ET on Thursday, April 20, 2006.
The conference call will include a discussion of the Company's first
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 May 5, 2006. To listen to the
conference call, please go to the Company's website at least 15 minutes
early to register, download, and install any necessary software. When in
the Company's website, click on the link to "About Provident" and "Investor
Relations" and look under "Upcoming Events" and then click on the link to
"Provident Bankshares Corporation First Quarter 2006 Results" audio webcast
and download Real Player or Media Player as necessary. An audio replay of
the teleconference will be available through May 5, 2006 by dialing
1-888-286-8010, passcode 99995014; 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") (including, without limitation, the Company's 2005 Annual Report
to Stockholders) 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
determined using U.S. generally accepted accounting principles ("GAAP");
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.
The Company cautions you that a number of important factors could cause
actual results to differ materially from those currently anticipated in any
forward-looking statement. Such factors include, but are not limited to:
the factors identified in the Company's Form 10-K for the year ended
December 31, 2005 under the headings "Forward-Looking Statements" and "Item
1A. Risk Factors," prevailing economic conditions, either nationally or
locally in some or all areas in which the Company conducts business or
conditions in the securities markets or the banking industry; changes in
interest rates, deposit flows, loan demand, real estate values and
competition, which can materially affect, among other things, consumer
banking revenues, revenues from sales on non-deposit investment products,
origination levels in the Company's lending businesses and the level of
defaults, losses and prepayments on loans made by the Company, whether held
in portfolio or sold in the secondary markets; changes in the quality or
composition of the loan or investment portfolios; the Company's ability to
successfully integrate any assets, liabilities, customers, systems and
management personnel the Company may acquire into its operations and its
ability to realize related revenue synergies and cost savings within
expected time frames; the Company's timely development of new and
competitive products or services in a changing environment, and the
acceptance of such products or services by customers; operational issues
and/or capital spending necessitated by the potential need to adapt to
industry changes in information technology systems, on which it is highly
dependent; changes in accounting principles, policies, and guidelines;
changes in any applicable law, rule, regulation or practice with respect to
tax or legal issues; risks and uncertainties related to mergers and related
integration and restructuring activities; conditions in the securities
markets or the banking industry; changes in the quality or composition of
the investment portfolio; litigation liabilities, including costs,
expenses, settlements and judgments; or the outcome of other matters before
regulatory agencies, whether pending or commencing in the future; and other
economic, competitive, governmental, regulatory and technological factors
affecting the Company's operations, pricing, products and services.
Additionally, the timing and occurrence or non-occurrence of events may be
subject to circumstances beyond the Company's control. Readers are
cautioned not to place undue reliance on these forward-looking statements
which are made as of the date of this report, and, except as may be
required by applicable law or regulation, the Company assumes no obligation
to update the forward-looking statements or to update the reasons why
actual results could differ from those projected in the forward-looking
statements.
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,
2006 2005 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $51,248 $48,716 5.2 %
Provision for loan losses 318 1,575 (79.8)
Non-interest income 28,225 23,044 22.5
Net gains (losses) 540 (776) (169.6)
Derivative gains (losses) (603) (3,820) (84.2)
Non-interest income, excluding total
gains (losses) 28,288 27,640 2.3
Total revenue, excluding total gains
(losses) 79,536 76,356 4.2
Non-interest expense 52,791 47,474 11.2
Income tax expense 8,106 6,961 16.4
Net income 18,258 15,750 15.9
SHARE DATA:
Basic earnings per share $0.55 $0.48 14.6 %
Diluted earnings per share 0.55 0.47 17.0
Cash dividends paid per share 0.285 0.265 7.5
Book value per share 19.11 18.50 3.3
Weighted average shares - basic 32,948,119 33,029,444 (0.2)
Weighted average shares - diluted 33,364,813 33,720,433 (1.1)
Common shares outstanding 32,974,784 33,062,288 (0.3)
SELECTED RATIOS:
Return on average assets 1.17 % 0.99 %
Return on average equity 11.71 10.33
Return on average common equity 11.40 10.32
Net yield on average earning assets
(t/e basis) 3.72 3.46
Efficiency ratio 66.01 62.02
Leverage ratio 8.54 7.91
Tier I risk-based capital ratio 11.35 11.24
Total risk-based capital ratio 12.34 12.30
Tangible common equity ratio 6.41 5.78
END OF PERIOD BALANCES:
Investment securities portfolio $1,916,653 $2,145,381 (10.7)%
Total loans 3,713,169 3,541,175 4.9
Assets 6,372,434 6,424,682 (0.8)
Deposits 4,162,439 3,928,886 5.9
Stockholders' equity 630,196 611,537 3.1
Common stockholders' equity 656,770 624,137 5.2
AVERAGE BALANCES:
Investment securities portfolio $1,921,879 $2,169,979 (11.4)%
Loans:
Originated and acquired residential
mortgage 439,513 639,845 (31.3)
Home equity 914,182 724,721 26.1
Other consumer 437,227 471,141 (7.2)
Commercial real estate 1,232,269 1,026,136 20.1
Commercial business 677,346 678,183 (0.1)
Total loans 3,700,537 3,540,026 4.5
Earning assets 5,638,368 5,724,769 (1.5)
Assets 6,337,658 6,432,971 (1.5)
Deposits:
Noninterest-bearing 791,615 783,673 1.0
Interest-bearing 3,222,234 2,972,333 8.4
Total deposits 4,013,849 3,756,006 6.9
Stockholders' equity 632,515 618,617 2.2
Common stockholders' equity 649,280 618,768 4.9
Three Months Ended
December 31,
2005 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $50,508 1.5 %
Provision for loan losses 400 (20.5)
Non-interest income 28,544 (1.1)
Net gains (losses) 478 13.0
Derivative gains (losses) (1,261) (52.2)
Non-interest income, excluding total
gains (losses) 29,327 (3.5)
Total revenue, excluding total gains (losses) 79,835 (0.4)
Non-interest expense 51,657 2.2
Income tax expense 8,025 1.0
Net income 18,970 (3.8)
SHARE DATA:
Basic earnings per share $0.58 (5.2)%
Diluted earnings per share 0.57 (3.5)
Cash dividends paid per share 0.280 1.8
Book value per share 19.14 (0.2)
Weighted average shares - basic 32,904,879 0.1
Weighted average shares - diluted 33,560,110 (0.6)
Common shares outstanding 32,933,118 0.1
SELECTED RATIOS:
Return on average assets 1.19 %
Return on average equity 12.06
Return on average common equity 11.77
Net yield on average earning assets
(t/e basis) 3.59
Efficiency ratio 64.51
Leverage ratio 8.40
Tier I risk-based capital ratio 10.97
Total risk-based capital ratio 11.97
Tangible common equity ratio 6.27
END OF PERIOD BALANCES:
Investment securities portfolio $1,905,355 0.6 %
Total loans 3,695,381 0.5
Assets 6,355,926 0.3
Deposits 4,124,467 0.9
Stockholders' equity 630,495 0.0
Common stockholders' equity 647,778 1.4
AVERAGE BALANCES:
Investment securities portfolio $1,927,955 (0.3)%
Loans:
Originated and acquired residential
mortgage 479,884 (8.4)
Home equity 879,598 3.9
Other consumer 450,264 (2.9)
Commercial real estate 1,210,952 1.8
Commercial business 649,191 4.3
Total loans 3,669,889 0.8
Earning assets 5,614,502 0.4
Assets 6,330,442 0.1
Deposits:
Noninterest-bearing 816,635 (3.1)
Interest-bearing 3,200,304 0.7
Total deposits 4,016,939 (0.1)
Stockholders' equity 623,954 1.4
Common stockholders' equity 639,588 1.5
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, or
Investment Community - Melissa P. Kelly, +1-410-277-2080, both of
Provident Bankshares Corporation
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