Earnings Up 8% For The Year
BALTIMORE, July 20 /PRNewswire-FirstCall/ -- Provident Bankshares
Corporation (Nasdaq: PBKS), the parent company of Provident Bank, reported
net income of $20 million, or $0.60 per diluted share, for the second
quarter of 2006.
The results for the second quarter of 2006 reflect the Company's
continued improvement in financial fundamentals through the consistent
execution of the Bank's strategic priorities and transition of the balance
sheet from wholesale to core banking activities. As a result, return on
assets was 1.26%, and the net interest margin improved to 3.74%, compared
to 3.48% in the second quarter of 2005. Strong lending activity provided
the Company with the ability to reduce average investment securities by 9%
from the same period of 2005. In addition, strong growth in commercial
deposit accounts contributed to a $134 million increase in average total
deposit balances. Asset quality remained strong in the second quarter of
2006, with the ratio of net loan charge-offs to average loans declining to
0.09%, compared to 0.14% for the same period last year.
Second Quarter Financial Highlights
Results for the second quarter of 2006 compared to the second quarter
of 2005:
- Return on assets increased to 1.26% from 1.25%
- Net interest margin improved to 3.74% from 3.48%
- Average home equity and real estate construction loans increased 22%
and 38%, respectively
- Average total deposits increased 3% to $4.1 billion
- Service charge income increased 10% to $23.9 million
- Net charge-offs as a percentage of average loans improved to 9 basis
points from 14 basis points
- Capital ratios remained strong with a leverage ratio of 8.53% and a
total risk-based capital ratio of 11.98%
"The consistent execution of our key strategies and the opportunity
provided by the Greater Baltimore, Greater Washington and Central Virginia
regions has resulted in another quarter of solid performance," 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 $0.295 per share. This is
the fifty-first consecutive quarterly dividend increase. The quarterly cash
dividend will be paid on August 11, 2006 to stockholders of record at the
close of business on July 31, 2006.
Second Quarter Results
Provident Bankshares reported net income of $20 million, or $0.60 per
diluted earnings per share, for the second quarter of 2006, compared to net
income of $20 million and $0.60 per diluted earnings per share in the same
period a year ago. However, the composition of revenue differed from the
second quarter of 2005; that quarter included $3.9 million of derivative
valuation gains versus the current quarter, which had $554 thousand in
valuation losses. These non-cash amounts represent the change in the value
of certain derivatives that are used to mitigate the impact of changing
interest rates. The changes in the value of these derivatives are required
to be reflected in earnings; and this non-cash adjustment has and will
continue to produce fluctuations in reported earnings.
As a result of the favorable growth in consumer and commercial loans
and deposits, net interest income grew by 6% from the corresponding period
of 2005; this led to an improvement in the net interest margin from 3.48%
to 3.74%. Non-interest income from service charges on deposit accounts,
commissions and fees increased 11% from the second quarter of 2005, to
$25.6 million in second quarter 2006. Non-interest expense increased 6% in
the second quarter of 2006, driven primarily by compensation and healthcare
cost increases.
2006 Year to Date Highlights
Diluted earnings per share for the six months ended June 30, 2006 are
8% higher than the corresponding period a year ago. Net interest income
growth of 6% and the 12% increase in fee based services has led to an
increase in total revenue of $9.4 million excluding total gains (losses)
over the first six months of 2005. The increase in net interest income can
be attributed to the beneficial changes in the mix of earning assets, which
more than offset increased funding costs. Average consumer home equity
average loan balances have grown by 24%, and real estate construction loan
balances have increased by 39% year to date compared to the same period of
2005.
Execution of Key Business Strategies
In addition to the focus on improving financial fundamentals, the Bank
has four strategic priorities.
- Maximize Provident's position as the right size bank in the marketplace
- Consistently execute a high-performance, customer relationship-focused
sales culture
- Profitably grow and deepen customer relationships in all four key
market segments: commercial, commercial real estate, consumer and
small business
- Sustain a culture that attracts and retains employees who provide the
differentiating "Provident Way" customer experience.
During the second quarter of 2006, significant progress was made in all
of these areas. The Bank's recent expansion of the ATM surcharge free
network by joining the MoneyPass network in June 2006 is a notable example
of a recent initiative that was completed in support of several key
strategies. By providing customers with free access to more than 11,000
ATMs nationwide, the Bank is able to deliver on its promise of being the
right sized bank, while also growing and retaining customer relationships.
The Company's experience and expertise in real estate lending resulted
in second quarter 2006 growth in average home equity loans of $174 million,
or 22%, and growth in average real estate construction loans of $223
million, or 38%, from second quarter of 2005. The growth in these loan
types offset planned reductions in average originated and acquired
residential loans and investments of $201 million and $196 million,
respectively, from second quarter of 2005.
Commercial deposits accounted for much of the $62 million in average
customer deposit growth in the second quarter of 2006. Commercial clients
in the Greater Washington and Central Virginia regions were a particularly
strong source of the year over year deposit growth, contributing $38
million of net average deposit growth.
Outlook for the Future
Commenting on the future for Provident Bankshares, Chairman and CEO
Gary N. Geisel added, "I am pleased with our progress and am proud of the
management team especially considering the challenges in the operating
environment for the banking industry."
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 154 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 second quarter earnings
teleconference will be webcast at 10 a.m. ET on Thursday, July 20, 2006.
The conference call will include a discussion of the Company's second
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 August 4, 2006. 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 Second Quarter 2006 Results
Audio Webcast
An audio replay of the teleconference will be available through August
4, 2006 by dialing 1-888-286-8010, passcode 71688990; 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
June 30,
2006 2005 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $52,387 $49,393 6.1 %
Provision for loan losses 824 2,222 (62.9)
Non-interest income 31,405 33,184 (5.4)
Net gains (losses) 203 706 (71.2)
Derivative gains (losses) (554) 3,921 (114.1)
Non-interest income, excluding total
gains (losses) 31,756 28,557 11.2
Total revenue, excluding total gains
(losses) 84,143 77,950 7.9
Non-interest expense 53,795 50,957 5.6
Income tax expense 9,150 9,421 (2.9)
Net income 20,023 19,977 0.2
SHARE DATA:
Basic earnings per share $0.61 $0.61 0.0 %
Diluted earnings per share 0.60 0.60 0.0
Cash dividends paid per share 0.290 0.270 7.4
Book value per share 19.03 19.09 (0.3)
Weighted average shares - basic 32,785,258 32,938,762 (0.5)
Weighted average shares - diluted 33,133,175 33,524,779 (1.2)
Common shares outstanding 32,789,289 32,865,817 (0.2)
SELECTED RATIOS:
Return on average assets 1.26 % 1.25 %
Return on average equity 12.83 12.94
Return on average common equity 12.32 12.84
Net yield on average earning assets
(t/e basis) 3.74 3.48
Efficiency ratio 63.57 63.89
Leverage ratio 8.53 8.00
Tier I risk-based capital ratio 11.03 11.01
Total risk-based capital ratio 11.98 12.06
Tangible common equity ratio 6.41 5.89
END OF PERIOD BALANCES:
Investment securities portfolio $1,898,055 $2,058,074 (7.8)%
Total loans 3,759,295 3,623,791 3.7
Assets 6,409,226 6,407,115 -
Deposits 4,150,570 4,035,705 2.8
Stockholders' equity 624,119 627,339 (0.5)
Common stockholders' equity 658,334 629,396 4.6
AVERAGE BALANCES:
Investment securities portfolio $1,922,792 $2,119,140 (9.3)%
Loans:
Originated and acquired residential
mortgage 403,284 603,975 (33.2)
Home equity 946,382 772,558 22.5
Other consumer 421,042 462,751 (9.0)
Commercial real estate 1,265,622 1,058,669 19.5
Commercial business 692,819 676,863 2.4
Total loans 3,729,149 3,574,816 4.3
Earning assets 5,670,512 5,709,796 (0.7)
Assets 6,372,448 6,428,933 (0.9)
Deposits:
Noninterest-bearing 800,183 817,408 (2.1)
Interest-bearing 3,262,110 3,111,039 4.9
Total deposits 4,062,293 3,928,447 3.4
Stockholders' equity 625,998 619,137 1.1
Common stockholders' equity 651,939 623,865 4.5
Three Months Ended
March 31,
2006 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $51,248 2.2 %
Provision for loan losses 318 159.1
Non-interest income 28,225 11.3
Net gains (losses) 540 (62.4)
Derivative gains (losses) (603) (8.1)
Non-interest income, excluding total
gains (losses) 28,288 12.3
Total revenue, excluding total gains
(losses) 79,536 5.8
Non-interest expense 52,791 1.9
Income tax expense 8,106 12.9
Net income 18,258 9.7
SHARE DATA:
Basic earnings per share $0.55 10.9 %
Diluted earnings per share 0.55 9.1
Cash dividends paid per share 0.285 1.8
Book value per share 19.11 (0.4)
Weighted average shares - basic 32,948,119 (0.5)
Weighted average shares - diluted 33,364,813 (0.7)
Common shares outstanding 32,974,784 (0.6)
SELECTED RATIOS:
Return on average assets 1.17 %
Return on average equity 11.71
Return on average common equity 11.40
Net yield on average earning assets
(t/e basis) 3.72
Efficiency ratio 66.01
Leverage ratio 8.54
Tier I risk-based capital ratio 11.35
Total risk-based capital ratio 12.34
Tangible common equity ratio 6.41
END OF PERIOD BALANCES:
Investment securities portfolio $1,916,653 (1.0)%
Total loans 3,713,169 1.2
Assets 6,372,434 0.6
Deposits 4,162,439 (0.3)
Stockholders' equity 630,196 (1.0)
Common stockholders' equity 656,770 0.2
AVERAGE BALANCES:
Investment securities portfolio $1,921,879 - %
Loans:
Originated and acquired residential
mortgage 439,513 (8.2)
Home equity 914,182 3.5
Other consumer 437,227 (3.7)
Commercial real estate 1,232,269 2.7
Commercial business 677,346 2.3
Total loans 3,700,537 0.8
Earning assets 5,638,368 0.6
Assets 6,337,658 0.5
Deposits:
Noninterest-bearing 791,615 1.1
Interest-bearing 3,222,234 1.2
Total deposits 4,013,849 1.2
Stockholders' equity 632,515 (1.0)
Common stockholders' equity 649,280 0.4
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
FINANCIAL SUMMARY
(dollars in thousands, except per share data)
Six Months Ended
June 30,
2006 2005 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $103,635 $98,109 5.6 %
Provision for loan losses 1,142 3,797 (69.9)
Non-interest income 59,630 56,228 6.1
Net gains (losses) 743 (70) -
Derivative gains (losses) (1,157) 101 -
Non-interest income, excluding total
gains (losses) 60,044 56,197 6.8
Total revenue, excluding total gains
(losses) 163,679 154,306 6.1
Non-interest expense 106,586 98,431 8.3
Income tax expense 17,256 16,382 5.3
Net income 38,281 35,727 7.1
SHARE DATA:
Basic earnings per share $1.16 $1.08 7.4 %
Diluted earnings per share 1.15 1.06 8.5
Cash dividends paid per share 0.575 0.535 7.5
Book value per share 19.03 19.09 (0.3)
Weighted average shares - basic 32,863,255 32,984,013 (0.4)
Weighted average shares - diluted 33,233,941 33,616,247 (1.1)
Common shares outstanding 32,789,289 32,865,817 (0.2)
SELECTED RATIOS:
Return on average assets 1.21 % 1.12 %
Return on average equity 12.27 11.64
Return on average common equity 11.87 11.60
Net yield on average earning assets
(t/e basis) 3.73 3.47
Efficiency ratio 64.75 62.96
Leverage ratio 8.53 8.00
Tier I risk-based capital ratio 11.03 11.01
Total risk-based capital ratio 11.98 12.06
Tangible common equity ratio 6.41 5.89
END OF PERIOD BALANCES:
Investment securities portfolio $1,898,055 $2,058,074 (7.8)%
Total loans 3,759,295 3,623,791 3.7
Assets 6,409,226 6,407,115 -
Deposits 4,150,570 4,035,705 2.8
Stockholders' equity 624,119 627,339 (0.5)
Common stockholders' equity 658,334 629,396 4.6
AVERAGE BALANCES:
Investment securities portfolio $1,922,338 $2,144,419 (10.4)%
Loans:
Originated and acquired residential
mortgage 421,298 621,811 (32.2)
Home equity 930,371 748,772 24.3
Other consumer 429,090 466,923 (8.1)
Commercial real estate 1,249,039 1,042,492 19.8
Commercial business 685,124 677,519 1.1
Total loans 3,714,922 3,557,517 4.4
Earning assets 5,654,529 5,717,241 (1.1)
Assets 6,355,149 6,430,941 (1.2)
Deposits:
Noninterest-bearing 795,923 800,634 (0.6)
Interest-bearing 3,242,282 3,042,069 6.6
Total deposits 4,038,205 3,842,703 5.1
Stockholders' equity 629,239 618,878 1.7
Common stockholders' equity 650,617 621,331 4.7
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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