Company Posts Solid Earnings from Core Banking Operations and 32%
Increase in EPS
BALTIMORE, Oct. 17 /PRNewswire/ --
Provident Bankshares Corporation (Nasdaq: PBKS), the parent company of
Provident Bank, today reported $10.8 million in earnings and a 32% increase in
earnings per share for the quarter ending September 30, 2001. Solid
performance from core banking operations continued to drive revenue growth, as
the Company remained focused on increasing its market share, customer
relationships and delivery network in the Baltimore-Washington corridor.
Third Quarter Financial Overview
-- Diluted earnings per share were $.41, up 32% from the 2000 third
quarter
-- Net income was $10.8 million, an increase of 27% from the same quarter
last year
-- Return on average common equity was 14.73% for the third quarter, up
from 10.71% in 2000
-- Return on average assets was .85% for the quarter
-- Average core deposits increased 9.5% from the 2000 third quarter
-- Average core loans increased $264 million, or 17%, from the same
quarter last year
-- Non-interest income (excluding securities gains) grew 15% from the
same quarter last year and comprised 36% of total quarterly revenue
Third Quarter Strategic Highlights
-- Opened two new branches in Northern Virginia, bringing Provident's
total branch network to 100 offices
-- Increased business checking account openings by 100% from the same
quarter last year
-- Grew average commercial deposits $78.3 million, or 38%, compared to
third quarter 2000
-- Opened more than 20,000 new checking accounts during the quarter, with
expansion branches accounting for 32% of this growth
Third Quarter Results
Provident Bankshares today reported net income for the quarter ended
September 30, 2001 of $10.8 million, or $.41 per diluted share. This is a 32%
increase in diluted earnings per share from $.31 in the 2000 comparable
quarter. Net income was up 27% from $8.5 million in third quarter 2000.
Return on average common equity was 14.73% for third quarter 2001, up from
10.71% in the same quarter a year ago. Return on average assets was .85%,
also up from .61% for the comparable period last year.
Solid performance from core business operations drove continued growth in
average core loans and average core deposits. Average core loans increased
$264 million or 17% compared to third quarter 2000. Led by a 14.7% increase
in non-interest bearing demand deposits, average core deposits increased 9.5%
from the same quarter last year.
Consistent with Provident's strategic focus on growth from core banking
sources, the Company continued to shrink the wholesale segment of its balance
sheet during the quarter. As a result, average loans were down $552 million
and average deposits were down $468 million from the same quarter last year
while growth occurred in the company's core balance sheet.
Net interest income for the 2001 third quarter was down $3.8 million, or
9.8%, from one year ago. This decline in net interest income is consistent
with the reduction in wholesale assets and liabilities. The net interest
margin for the quarter was 2.91%, up from 2.84% in the same quarter last year.
At September 30, 2001, total non-performing assets were $31.7 million,
down from $35.2 million, or 9.9%, from the same quarter last year. Allowance
for loan losses to loans was 1.20% and the allowance for loans to non-
performing loans was 120.5%.
Total non-interest income (excluding securities gains) was up
$2.5 million, or 14.75%, for the third quarter of 2001 and comprised 36% of
Provident's total revenue for the quarter. This increase was driven by
Provident's strong retail and commercial checking account growth, with income
from retail deposit fees up 16% and commercial deposit service fees up more
than 40% from one year ago. There were $167,000 in securities gains during
the 2001 third quarter compared with none in the same period a year ago.
Non-interest expense was $36.6 million in the third quarter of 2001, up
just 2.3% from the same quarter last year. These results reflect the
Company's continued focus on operating expense control and realized expense
reductions from lines of business exited last year.
Provident repurchased 114,275 shares of common stock during the third
quarter. The Company has remaining authority to repurchase up to 636,000
shares of common stock under the current repurchase program.
Nine Month Results
For the nine months ended September 30, 2001, net income totaled
$29.0 million, up slightly from $28.7 million for the 2000 period. Diluted
earnings per share were $1.08, also up slightly from $1.02 for the same nine
months last year.
Dividend Declared
Provident Bankshares also announced today that its Board of Directors has
declared a quarterly cash dividend of $.20 per share. This quarterly cash
dividend will be paid on November 9, 2001 to stockholders of record at the
close of business on October 29, 2001.
Management Comment
Commenting on the Company's third quarter performance, Chairman and CEO
Peter M. Martin said, "I am pleased with the steady growth in both the
customer base and profitability of our core banking operations. Provident's
third quarter results show positive revenue momentum generated through
increases in core deposits, core loans and fee income. We continue to focus
on our strategy to decrease all of our wholesale businesses while we increase
our core operations. These results show significant progress toward these
objectives and point to continued solid performance through year-end and into
2002."
Positive Growth Trends from Core Business Units
Consumer lending posted strong gains in the third quarter with
$74.2 million in new business production. This marks a 114% increase over the
same quarter last year. The majority of this increase came from home equity
lines and boat loans. Total core consumer loan balances of $776 million
exceeded the same quarter last year by 12%.
Average core commercial loans were also up in the third quarter by 13.4%
compared to the third quarter of last year.
Provident's new small business checking products continued to gain
momentum. After a successful launch earlier this year, the Bank opened over
1,969 new business checking accounts in third quarter 2001. This reflects
more than a 100% increase in new account production from the same period last
year.
Provident's increase in core deposits was fueled by a 6% growth in the
number of new checking accounts compared to the same quarter last year. The
Company opened more than 20,000 retail checking accounts during the quarter
with expansion branches accounting for 32% of this growth. Fee income from
checking accounts grew 16% this quarter compared to third quarter 2000.
Internet Banking showed strong growth in the third quarter with a 69%
increase in the number of new accounts opened over the same quarter last year.
Provident Bankshares Corporation is the holding company for Provident
Bank, the second largest independent commercial bank headquartered in
Maryland. With $5.0 billion in assets, Provident serves individuals and
businesses in the dynamic Baltimore-Washington corridor through a network of
100 offices in Maryland, Northern Virginia, and southern York County, PA.
Provident Bank also offers related financial services through wholly owned
subsidiaries. Mutual funds, annuities and insurance products 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.
Special Note: Provident Bankshares Corporation's Third Quarter Earnings
Teleconference will be webcast at 10:00 a.m. on Thursday, October 18, 2001.
Log on to http://www.provbank.com. The webcast will include discussions of the most
recent quarter's results of operations and may include forward-looking
information such as guidance on future results.
Statements contained in this Press Release that are not historical facts
are forward-looking statements, as the term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risks and uncertainties which could cause actual results to differ
materially from those currently anticipated due to a number of factors, which
include, but are not limited to, factors discussed in documents filed by the
Company with the Securities and Exchange Commission from time to time.
PROVIDENT BANKSHARES CORPORATION
FINANCIAL SUMMARY
(dollars in thousands, except per share data)
(tax-equivalent basis)
Three Months Ended September 30,
2001 2000 % Change
SUMMARY OF OPERATIONS
Interest Income $85,561 $107,392 (20.3)%
Interest Expense 50,645 68,688 (26.3)
Net Interest Income 34,916 38,704 (9.8)
Provision for Loan Losses 2,100 7,285 (71.2)
Net Interest Income after Provision
for Loan Losses 32,816 31,419 4.4
Non-Interest Income 19,844 17,148 15.7
Non-Interest Expense 36,564 35,758 2.3
Income Before Income Taxes 16,096 12,809 25.7
Income Tax Expense 5,030 4,030 24.8
Less: Tax-Equivalent Adjustment 236 244 (3.3)
Income Before Extraordinary Item and
Cumulative
Effect of Change in Accounting
Principle 10,830 8,535 26.9
Extraordinary Item -- Gain on Debt
Extinguishment, Net - - -
Cumulative Effect of Change
in Accounting Principle, Net* - - -
Net Income $10,830 $8,535 26.9
PER SHARE
Basic
Income Before Extraordinary Item
and Cumulative Effect of Change
in Accounting Principle $0.42 $0.31
Net Income 0.42 0.31
Diluted
Income Before Extraordinary Item
and Cumulative Effect of Change
in Accounting Principle 0.41 0.31
Net Income 0.41 0.31
Cash Dividends Paid 0.195 0.167
Stockholders' Equity
Market Value (closing sales price as
reported on the NASDAQ Stock
Market)
Common Shares Outstanding
Weighted Average Shares -- Basic 25,666,305 27,279,584
Weighted Average Shares -- Diluted 26,460,569 27,817,569
PROFITABILITY RATIOS**
Return on Average Assets 0.85 % 0.61 %
Return on Average Equity 14.68 12.34
Return on Average Common Equity 14.73 10.71
Net Yield on Average Earning Assets
(t/e basis) 2.91 2.84
CAPITAL RATIOS AT SEPTEMBER 30
Leverage Ratio
Risk-Based Capital Ratios:
Tier I Capital Ratio
Total Capital Ratio
ASSET QUALITY
Non-Performing Loans
Loans Past Due 90 Days or More
Allowance for Loan Losses
Net Charge-offs $2,706 $10,372 (73.9)%
Non-Performing Loans to Loans
Allowance for Loan Losses to Loans
Net Charge-Offs to Average Loans 0.36 % 1.18 %
Allowance for Loan Losses to
Non-Performing Loans
AVERAGE BALANCES
Investment Securities Portfolio $1,813,221 $1,878,536 (3.5)%
Loans 2,941,465 3,493,789 (15.8)
Earning Assets 4,765,385 5,416,675 (12.0)
Assets 5,068,051 5,615,736 (9.8)
Deposits 3,471,766 3,939,326 (11.9)
Stockholders' Equity 292,745 275,176 6.4
Common Equity 291,745 317,131 (8.0)
SELECTED FINANCIAL DATA AT PERIOD END
Investment Securities Portfolio
Loans
Earning Assets
Assets
Deposits
Stockholders' Equity
Common Equity
* Effective January 1, 2001, the Corporation adopted SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities"
** Exclusive of cumulative effect of change in accounting principle
PROVIDENT BANKSHARES CORPORATION
FINANCIAL SUMMARY
(dollars in thousands, except per share data)
(tax-equivalent basis)
Nine Months Ended September 30,
2001 2000 % Change
SUMMARY OF OPERATIONS
Interest Income $272,777 $306,666 (11.1)%
Interest Expense 165,612 191,027 (13.3)
Net Interest Income 107,165 115,639 (7.3)
Provision for Loan Losses 15,170 24,620 (38.4)
Net Interest Income after Provision
for Loan Losses 91,995 91,019 1.1
Non-Interest Income 64,019 55,896 14.5
Non-Interest Expense 111,019 105,262 5.5
Income Before Income Taxes 44,995 41,653 8.0
Income Tax Expense 14,069 12,962 8.5
Less: Tax-Equivalent Adjustment 736 731 0.7
Income Before Extraordinary Item and
Cumulative Effect of Change
in Accounting Principle 30,190 27,960 8.0
Extraordinary Item -- Gain on Debt
Extinguishment, Net - 770 -
Cumulative Effect of Change
in Accounting Principle, Net* (1,160) - -
Net Income $29,030 $28,730 1.0
PER SHARE
Basic
Income Before Extraordinary Item and
Cumulative Effect of Change
in Accounting Principle $1.16 $1.01
Net Income 1.12 1.04
Diluted
Income Before Extraordinary Item and
Cumulative Effect of Change
in Accounting Principle 1.12 0.99
Net Income 1.08 1.02
Cash Dividends Paid 0.552 0.471
Stockholders' Equity 11.94 11.20
Market Value (closing sales price as
reported on the NASDAQ Stock Market) 20.70 15.95
Common Shares Outstanding 25,644,906 27,058,084
Weighted Average Shares -- Basic 25,898,199 27,511,718
Weighted Average Shares -- Diluted 26,828,482 28,052,234
PROFITABILITY RATIOS**
Return on Average Assets 0.78 % 0.71 %
Return on Average Equity 13.86 14.22
Return on Average Common Equity 13.68 12.10
Net Yield on Average Earning Assets
(t/e basis) 2.91 2.94
CAPITAL RATIOS AT SEPTEMBER 30
Leverage Ratio 7.04 % 7.00 %
Risk-Based Capital Ratios:
Tier I Capital Ratio 9.57 9.18
Total Capital Ratio 10.51 10.06
ASSET QUALITY
Non-Performing Loans $28,810 $31,297 (7.9)%
Loans Past Due 90 Days or More 11,847 13,689 (13.5)
Allowance for Loan Losses 34,704 37,469 (7.4)
Net Charge-offs 18,150 23,050 (21.3)
Non-Performing Loans to Loans 0.99 % 0.93 %
Allowance for Loan Losses to Loans 1.20 1.11
Net Charge-Offs to Average Loans 0.77 0.90
Allowance for Loan Losses to
Non-Performing Loans 120.46 119.72
AVERAGE BALANCES
Investment Securities Portfolio $1,734,513 $1,805,474 (3.9)%
Loans 3,165,856 3,405,067 (7.0)
Earning Assets 4,916,075 5,253,653 (6.4)
Assets 5,189,134 5,434,590 (4.5)
Deposits 3,667,042 3,836,687 (4.4)
Stockholders' Equity 291,204 269,950 7.9
Common Equity 295,113 317,173 (7.0)
SELECTED FINANCIAL DATA AT PERIOD END
Investment Securities Portfolio $1,837,925 $2,027,827 (9.4)%
Loans 2,901,145 3,373,117 (14.0)
Earning Assets 4,749,745 5,437,179 (12.6)
Assets 5,027,388 5,695,763 (11.7)
Deposits 3,431,574 4,017,396 (14.6)
Stockholders' Equity 306,131 302,945 1.1
Common Equity 297,196 336,240 (11.6)
* Effective January 1, 2001, the Corporation adopted SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities"
** Exclusive of cumulative effect of change in accounting principle
SOURCE Provident Bankshares Corporation
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Related links:
http://www.provbank.com
Company News On-Call:
http://www.prnewswire.com/gh/cnoc/comp/721938.html
CONTACT:
Media: Lillian Kilroy, +1-410-277-2833, or
Investors: Ellen Grossman, +1-410-277-2889, both of Provident
Bankshares
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