BALTIMORE, Oct. 19 /PRNewswire-FirstCall/ -- Provident Bankshares
Corporation (Nasdaq: PBKS), the parent company of Provident Bank, reported
net income of $20.4 million, or $0.62 per diluted share, for the third
quarter of 2006.
The Company continues to have success as the right size bank for
consumers and businesses in the Greater Baltimore, Greater Washington and
Central Virginia market despite the challenging operating environment.
Provident's emphasis on loan growth in its target markets continues to show
sound results. Relationship based average loans(1) grew by $306.8 million
or 9.9%. This growth has enabled the Company to strengthen the balance
sheet, improve the net interest margin to 3.60% from 3.55%, and increase
return on assets to 1.26% from 1.14%, from the third quarter of 2005. In
addition, asset quality continues to remain strong in the third quarter of
2006, with the ratio of net loan charge-offs to average loans declining to
0.10%, from 0.15% in the same period of last year.
Third Quarter Financial Highlights
Results for the third quarter of 2006 compared to the third quarter of
2005:
-- Return on assets increased to 1.26% from 1.14%
-- Net interest margin improved to 3.60% from 3.55%
-- Average home equity and residential construction loans increased 18%
and 54%, respectively
-- Average total deposits increased 3% to $4.0 billion
-- Service charge income increased 3% to $24.6 million
-- Net charge-offs as a percentage of average loans improved to 0.10%
from 0.15%
-- Capital ratios remained strong with a leverage ratio of 8.58% and a
total risk-based capital ratio of 12.13%
"Despite the current rate environment and the intense level of
competition for deposits, our focus on deepening customer relationships is
evident in our solid financial performance in the third quarter," said
Chairman and CEO Gary N. Geisel.
Third Quarter Results
Provident Bankshares reported net income of $20.4 million, or $0.62 per
diluted share, for the third quarter of 2006, compared to net income of
$18.3 million and $0.54 per diluted share in the same period a year ago.
Net interest income grew by 2% from the corresponding period of 2005; this
resulted from an improvement in the net interest margin from 3.55% to 3.60%
and average loan growth of 4%. Average deposit growth of $119.0 million, or
3% was due to significant growth in certificate of deposit balances.
Customer deposit balances have been shifting from lower yielding checking
and savings accounts towards higher yielding certificates of deposit over
the past six months due to the current interest rate environment. In
addition to this change in mix, there is intense competition for deposits
within and outside the banking industry.
Total average loans to consumers, businesses and developers increased
by 4% or $139.3 million. Average home equity balances grew by $151.3
million, while originated and acquired residential, marine and other
categories of consumer loans declined by $206.4 million. This resulted in a
3% decline in total average consumer loans. Total commercial loan average
balances grew by $194.4 million or 11%; this growth primarily consisted of
increased average balances in residential construction of $188.2 million
and commercial business of $41.2 million. These results illustrate the
effectiveness of the Company's strategy to profitably grow and deepen
customer relationships in all four key market segments: commercial,
commercial real estate, consumer and small business.
Non-interest income from service charges on accounts, commissions and
fees increased 4% from the third quarter of 2005, to $26.0 million in third
quarter 2006. Non-interest expense increased 4% in the third quarter of
2006, driven primarily by higher compensation and healthcare costs.
Dividend Declared
Provident Bankshares announced today that its Board of Directors has
declared an increased quarterly cash dividend of $0.30 per share. This is
the fifty-second consecutive quarterly dividend increase. The quarterly
cash dividend will be paid on November 10, 2006 to stockholders of record
at the close of business on October 30, 2006.
2006 Year to Date Highlights
Results of year to date 2006 compared to year to date 2005:
-- Net income grew 8.8% while diluted earnings per share increased $0.17
per diluted share or 10.6%
-- Net interest income grew 4.4%
-- Net interest margin increased from 3.50% to 3.68%
-- Service charge income increased 8.6% to $70.6 million
-- Return on assets increased from 1.13% to 1.23%
-- Average customer deposits increased $62.4 million or 1.8%
-- Average residential construction loans increased $199.1 million or
66.7%
-- Average consumer home equity loans increased $171.4 million or 22.1%
-- Net charge-offs as a percentage of average loans improved to 0.11%
from 0.18%
-- Allowance to non-performing loans remained strong at 189.4%
Outlook for the Future
Commenting on the future for Provident Bankshares, Chairman and CEO
Gary N. Geisel added, "To address the current deposit challenges, we are
taking a number of actions that we expect to be successful. While we still
anticipate earnings to be within the range of analysts' estimates, the
lower end of the range appears to be more realistic given the increasing
pressure on margins."
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 third quarter earnings
teleconference will be webcast at 10 a.m. ET on Thursday, October 19, 2006.
The conference call will include a discussion of the Company's third
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 November 2, 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 Third Quarter 2006
Results Audio Webcast
An audio replay of the teleconference will be available through
November 2, 2006 by dialing 1-888-286-8010, passcode 29577185; 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.
(1) Total loans less originated and acquired residential mortgages
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
FINANCIAL SUMMARY
(dollars in thousands,
except per share data) Three Months Ended
September 30,
2006 2005 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $51,088 $50,093 2.0 %
Provision for loan losses 954 826 15.5
Non-interest income 31,626 27,737 14.0
Net gains (losses) 373 884 (57.8)
Derivative gains (losses) 643 (3,207) (120.0)
Non-interest income, excluding total
gains (losses) 30,610 30,060 1.8
Total revenue, excluding total gains
(losses) 81,698 80,153 1.9
Non-interest expense 52,614 50,649 3.9
Income tax expense 8,707 8,102 7.5
Net income 20,439 18,253 12.0
SHARE DATA:
Basic earnings per share $0.63 $0.55 14.5 %
Diluted earnings per share 0.62 0.54 14.8
Cash dividends paid per share 0.295 0.275 7.3
Book value per share 19.79 19.05 3.9
Weighted average shares - basic 32,632,516 32,939,059 (0.9)
Weighted average shares - diluted 33,037,479 33,640,029 (1.8)
Common shares outstanding 32,680,266 32,963,053 (0.9)
SELECTED RATIOS:
Return on average assets 1.26 % 1.14 %
Return on average equity 12.81 11.47
Return on average common equity 12.34 11.41
Net yield on average earning assets
(t/e basis) 3.60 3.55
Efficiency ratio 63.93 63.08
Leverage ratio 8.58 8.24
Tier I risk-based capital ratio 11.18 10.85
Total risk-based capital ratio 12.13 11.86
Tangible common equity ratio 6.50 6.08
END OF PERIOD BALANCES:
Investment securities portfolio $1,889,954 $1,941,014 (2.6)%
Total loans 3,768,027 3,666,758 2.8
Assets 6,410,291 6,405,013 0.1
Deposits 4,131,702 3,979,656 3.8
Stockholders' equity 646,886 627,972 3.0
Common stockholders' equity 663,758 639,854 3.7
AVERAGE BALANCES:
Investment securities portfolio $1,908,566 $1,964,137 (2.8)%
Loans:
Originated and acquired residential
mortgage 373,568 541,096 (31.0)
Home equity 983,288 831,987 18.2
Other consumer 422,094 460,956 (8.4)
Commercial real estate 1,292,143 1,138,972 13.4
Commercial business 703,523 662,337 6.2
Total loans 3,774,616 3,635,348 3.8
Earning assets 5,701,946 5,611,818 1.6
Assets 6,406,772 6,334,883 1.1
Deposits:
Noninterest-bearing 759,874 814,400 (6.7)
Interest-bearing 3,264,255 3,090,705 5.6
Total deposits 4,024,129 3,905,105 3.0
Stockholders' equity 632,886 631,422 0.2
Common stockholders' equity 657,158 634,905 3.5
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
FINANCIAL SUMMARY
(dollars in thousands,
except per share data) Three Months Ended
June 30,
2006 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $52,387 (2.5)%
Provision for loan losses 824 15.8
Non-interest income 31,405 0.7
Net gains (losses) 203 83.7
Derivative gains (losses) (554) (216.1)
Non-interest income, excluding total
gains (losses) 31,756 (3.6)
Total revenue, excluding total gains
(losses) 84,143 (2.9)
Non-interest expense 53,795 (2.2)
Income tax expense 9,150 (4.8)
Net income 20,023 2.1
SHARE DATA:
Basic earnings per share $0.61 3.3 %
Diluted earnings per share 0.60 3.3
Cash dividends paid per share 0.290 1.7
Book value per share 19.03 4.0
Weighted average shares - basic 32,785,258 (0.5)
Weighted average shares - diluted 33,133,175 (0.3)
Common shares outstanding 32,789,289 (0.3)
SELECTED RATIOS:
Return on average assets 1.26 %
Return on average equity 12.83
Return on average common equity 12.32
Net yield on average earning assets
(t/e basis) 3.74
Efficiency ratio 63.57
Leverage ratio 8.53
Tier I risk-based capital ratio 11.03
Total risk-based capital ratio 11.98
Tangible common equity ratio 6.41
END OF PERIOD BALANCES:
Investment securities portfolio $1,898,055 (0.4)%
Total loans 3,759,295 0.2
Assets 6,409,226 -
Deposits 4,150,570 (0.5)
Stockholders' equity 624,119 3.6
Common stockholders' equity 658,334 0.8
AVERAGE BALANCES:
Investment securities portfolio $1,922,792 (0.7)%
Loans:
Originated and acquired residential
mortgage 403,284 (7.4)
Home equity 946,382 3.9
Other consumer 421,042 0.2
Commercial real estate 1,265,622 2.1
Commercial business 692,819 1.5
Total loans 3,729,149 1.2
Earning assets 5,670,512 0.6
Assets 6,372,448 0.5
Deposits:
Noninterest-bearing 800,183 (5.0)
Interest-bearing 3,262,110 0.1
Total deposits 4,062,293 (0.9)
Stockholders' equity 625,998 1.1
Common stockholders' equity 651,939 0.8
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
FINANCIAL SUMMARY
(dollars in thousands,
except per share data) Nine Months Ended
September 30,
2006 2005 % Change
SUMMARY INCOME STATEMENTS:
Net interest income $154,723 $148,202 4.4 %
Provision for loan losses 2,096 4,623 (54.7)
Non-interest income 91,256 83,965 8.7
Net gains (losses) 1,116 814 37.1
Derivative gains (losses) (514) (3,106) (83.5)
Non-interest income, excluding total
gains (losses) 90,654 86,257 5.1
Total revenue, excluding total gains
(losses) 245,377 234,459 4.7
Non-interest expense 159,200 149,080 6.8
Income tax expense 25,963 24,484 6.0
Net income 58,720 53,980 8.8
SHARE DATA:
Basic earnings per share $1.79 $1.64 9.1 %
Diluted earnings per share 1.77 1.60 10.6
Cash dividends paid per share 0.870 0.810 7.4
Book value per share 19.79 19.05 3.9
Weighted average shares - basic 32,791,209 32,971,081 (0.5)
Weighted average shares - diluted 33,194,655 33,662,348 (1.4)
Common shares outstanding 32,680,266 32,963,053 (0.9)
SELECTED RATIOS:
Return on average assets 1.23 % 1.13 %
Return on average equity 12.45 11.58
Return on average common equity 12.03 11.53
Net yield on average earning assets
(t/e basis) 3.68 3.50
Efficiency ratio 64.48 63.01
Leverage ratio 8.58 8.24
Tier I risk-based capital ratio 11.18 10.85
Total risk-based capital ratio 12.13 11.86
Tangible common equity ratio 6.50 6.08
END OF PERIOD BALANCES:
Investment securities portfolio $1,889,954 $1,941,014 (2.6)%
Total loans 3,768,027 3,666,758 2.8
Assets 6,410,291 6,405,013 0.1
Deposits 4,131,702 3,979,656 3.8
Stockholders' equity 646,886 627,972 3.0
Common stockholders' equity 663,758 639,854 3.7
AVERAGE BALANCES:
Investment securities portfolio $1,917,697 $2,083,665 (8.0)%
Loans:
Originated and acquired residential
mortgage 405,214 594,610 (31.9)
Home equity 948,202 776,815 22.1
Other consumer 426,734 464,911 (8.2)
Commercial real estate 1,263,564 1,075,007 17.5
Commercial business 691,325 672,403 2.8
Total loans 3,735,039 3,583,746 4.2
Earning assets 5,670,509 5,681,714 (0.2)
Assets 6,372,546 6,398,570 (0.4)
Deposits:
Noninterest-bearing 783,774 805,273 (2.7)
Interest-bearing 3,249,687 3,058,459 6.3
Total deposits 4,033,461 3,863,732 4.4
Stockholders' equity 630,468 623,105 1.2
Common stockholders' equity 652,821 625,905 4.3
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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