Earnings up 88% at Provident in third quarter First Maryland posts solid gains

October 21, 1993|By David Conn | David Conn,Staff Writer

Provident Bankshares Corp., enjoying improvement in the quality of its assets, yesterday posted an 88 percent increase in earnings during the third quarter, while First Maryland Bancorp, parent of First National Bank of Maryland, reported less-spectacular but still solid gains.

Provident, parent of Provident Bank of Maryland, benefited most from a sharp decline in problem loans since last year, as the slow improvement in the economy drove fewer of the company's borrowers into default. Provident reported earnings of $2.1 million, or 32 cents a share, compared with $1.1 million, or 18 cents a share, in the third quarter of 1992.

Earnings so far this year were $5.6 million, up 113 percent from $2.6 million in the first nine months of 1992.

"Tremendous," said Robert A. Bonelli, a Provident investor and manager of the Ernst Bank Equity Fund in New Jersey. "Absolutely tremendous. If they weren't No. 1 on everyone's hit list for acquisitions before, they should be now. These guys are on a roll."

Provident had assets of nearly $1.8 billion on Sept. 30, up 7.5 percent since last year. Its return on assets, which measures profits against the size of the company, nearly doubled, to 0.49 percent, from 0.28 percent.

Unlike many other banks in the area, the company saw its loans grow dramatically in the past year, reaching $1.1 billion, a 59 percent increase over last year. Most of that growth was in home mortgages and other consumer lending.

Although net interest income -- the difference between income earned from the bank's loans and investments and the interest paid to depositors -- was up during the third quarter, most of the earnings gain came from reducing the loan-loss provision, which is money set aside to cover possible losses from loans.

Last year, Provident set aside $4.4 million, an amount that is deducted from earnings. This year, as the economy has improved, both nonperforming loans and the amount of loans that had to be declared completely uncollectible have fallen. So the company added only $470,000 to its reserves, although that was up from $181,000 in the second quarter.

First Maryland, owned by Allied Irish Banks plc in Dublin, Ireland, earned $26.7 million in the quarter, about 11 percent more than a year ago. Still, earnings were 14 percent lower than in the previous quarter. Allied Irish does not report per-share earnings for its subsidiaries.

"A decrease in the provision for possible loan losses combined with an increase in net interest income and [gains from the sale of] securities produced an extension of the company's strong performance throughout this year in an economic environment which is slowly improving," President and Chief Executive Charles W. Cole Jr. said in a statement.

First Maryland, whose assets grew 4.5 percent, to $9.3 billion, as of Sept. 30, said its return on assets for the first three quarters rose to 1.23 percent, compared with 1.02 percent a year ago. The industry average is about 1 percent.

Provident Bankshares

.. .. .. .. .. .. .. .. ..Ticker .. .. .. ..Yesterday's

.. .. .. .. .. .. .. .. ..Symbol .. ...Cls... .. ..Chg.

.. .. .. .. .. .. .. .. .. PBKS .. .. .20.. .. .. ...+ 1/2

Period ended

Sept. 30 .. .. .. .. .. ..3rd qtr. .. .Year ago .. .Chg.

Net Income .. .. .. .. .. .$2,105 .. ...$1,120 .. +87.9%

Primary EPS .. .. .. .. .. .$0.32 .. .. .$0.18 ...+77.8%

Annualized return

on avg. assets .. .. .. .. .0.49% .. .. .0.28%

Add. to allowance

for loan losses .. .. .. .. .$470 .. .. .$4,350 .. -89.2%

.. .. .. .. .. .. .. .. .. .9 mos. .. ..Year ago ...Chg.

Net Income .. .. .. .. .. ..$5,613 .. ...$2,630 .+113.4%

Primary EPS .. .. .. .. .. ..$0.86 .. .. .$0.42 .+104.8%

Annualized

return on assets .. .. .. ...0.44% .. .. .0.23%

Add. to allowance

for loan losses .. .. .. ...$1,516 .. .. $7,400 .. -79.5%

Balances as of

.. .. . .. .. .. .. ..9/30/93 .. .. .. .. ..9/30/92

Assets .. .. .. .. .$1,756,742 .. .. .. ...$1,637,076 .+7.3%

Deposits .. .. .. ..$1,245,730 .. .. .. ...$1,187,343 .+4.9%

Loans outst. .. .. .$1,066,702 .. .. .. ...$669,506 ..+59.3%

Loan loss

reserve .. .. .. .. ...$20,162 .. .. .. ...$19,481 ....+3.5%

Figures in thousands (except per share data.)

First Maryland Bancorp

.. .. .. .. .. .... ..Ticker .. .. .. .. .. .. ..Yesterday's

.. .. .. .. .. .. .. .Symbol .. .. .. .. .Cls... .. ....Chg.

.. .. .. .. .. .. .. ...* .. .. .. .. .. .. .. .. .. ....NA

Period ended

Sept. 30 .. .. .. ....3rd qtr. .. .. ...Year ago .. ...Chg.

Net Income .. .. .. ..$26,659 .. .. .. ..$24,061 .. .+10.8%

Primary EPS* .. .. .. ..NA .. .. .. .. .. ..NA .. .. ....--

Annualized return

on assets .. .. .. .. .1.14% .. .. .. .. ..1.08% .. .. ..--

Add. to allowance

for loan losses .. .. $13,119 .. .. .. ..$15,595 .. ..-15.9%

.. .. .. .. .. .. .. ..9 mos. .. .. ..Year ago .. .. ...Chg.

Net Income .. .. .. ..$86,141 .. .. ...$68,389 .. .. ..+26.0

Primary EPS* .. .. .. ...NA .. .. .. .. ..NA .. .. .. .. .--

Annualized return

on avg. assets .. .. ..1.23% .. .. .. ..1.02% .. .. .. ...--

Add. to allowance

for loan losses .. .. .$37,336 .. .. ..$41,590 .. .. ..-10.2%

Balances as of

.. .. ... .. .. .. .. ..9/30/93 .. .. .. .. ..9/30/92

Assets.. .. .. .... ..$9,326,713 .. .. .. ..$8,921,563 ..+4.5%

Deposits .. .. .. .. .$6,675,965 .. .. .. ..$6,552,726 ..+1.9%

Loans outst. .. .. ...$5,002,217 .. .. .. ..$4,970,719 ..+0.6%

Loan loss

reserve .. .. .. .. ..$206,688 .. .. .. ....$204,878 ....+0.9%

Figures in thousands (except per share data.)

* First Maryland is a wholly owned subsidiary of Allied Irish Banks plc. and does not report per-share data.

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