Provident earnings rise with loans 1st-quarter net up 22.8% to $6.5 million

lending, deposits show gains

April 17, 1997|By Bill Atkinson | Bill Atkinson,SUN STAFF

Brisk loan growth boosted Provident Bankshares Corp.'s net income 22.8 percent in the first quarter, the company said yesterday.

Provident earned $6.5 million, or 73 cents a share, in the quarter ended March 31, compared with $5.3 million, or 61 cents a share, for the same period in 1996.

"We continue to gain market share," said Provident's Chairman and Chief Executive Carl W. Stearn, after the company's annual meeting yesterday at its downtown headquarters. "The more we do, the more we can expect to improve our earnings."

Provident's stock closed yesterday at $37 a share, down 12.5 cents.

Loans jumped 24.2 percent from a year ago to $1.8 billion, deposits rose 15.7 percent to $1.9 billion and assets were up 10.6 percent to $2.9 billion.

Problem loans totaled $6.9 million, representing 0.38 percent of loans. Provident added $834,000 to its reserve for loan losses, compared with $5.4 million a year earlier.

The once-troubled company has improved dramatically since 1990 when Stearn joined the bank, but it still has a ways to go to catch up with the country's top performing banks.

"Their profitability is low relative to industry standards," said Denis Laplante, a banking analyst with New York-based Fox-Pitt, Kelton. "So, they have a lot of room to improve."

Rumors swirled a year ago that Provident was easy pickings for larger banks, but last month it surprised analysts when it agreed to acquire First Citizens Financial Corp., a Gaithersburg-based savings bank in a transaction worth about $100 million.

The deal will expand Provident's branch network into the affluent Montgomery County market. When it is completed, Provident will have 62 branches, from Baltimore City to Frederick County.

Provident also will be Maryland's second largest banking

company, with more than $3.4 billion in assets. The deal is expected to close in the third quarter.

Provident is still considered a takeover target by many banking analysts, but Stearn has maintained it is not for sale. He acknowledges, however, that the company will consider an attractive offer.

Pub Date: 4/17/97

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