Merger cost pares Provident's gain 3rd-quarter net rose 61% before $12 million charge

October 16, 1997|By Bill Atkinson | Bill Atkinson,SUN STAFF

Provident Bankshares Corp. yesterday reported third-quarter net income of $26,000, after a one-time merger charge of $12.6 million.

Excluding the merger costs, Provident's net income for the quarter that ended Sept. 30 would have soared 61 percent to $8.7 million, up from $5.4 million for the same time a year earlier. Net income per share would have been 73 cents a share, up 55.3 percent, compared with 47 cents.

"We feel very good. We are on track with what we expected to do in spite of the merger costs," said James R. Wallis, Provident's chief financial officer.

For the first nine months of the year, Provident's net income was $15.9 million, or $1.34 a share. Excluding merger-related expenses, net income would have risen 35 percent to $24.9 million, or $2.07 per share, compared with $18.5 million, or $1.59 per share, the company said.

Provident's stock fell 37.5 cents yesterday to close at $54.75. It has been on a tear over the past 10 months, rising to a high of $59.625 on Sept. 26, up 61 percent since the beginning of the year.

Last month, Provident acquired Citizens Savings Bank of Gaithersburg for about $100 million. The deal expanded the company into the affluent Montgomery County market and Frederick County.

Net income was driven by a 12 percent increase in income from loans and fees on loans, which totaled $71.8 million in the quarter. Total loans jumped 19.1 percent to $2.6 billion as of Sept. 30, and assets were up nearly 7.5 percent to $3.7 billion.

Noninterest income, or income generated from products and services, fell $1.7 million largely because of a $3.5 million decrease in mortgage banking income. The decline was partially offset by a $1.2 million increase in fee-based services from a higher volume of deposit accounts.

Pub Date: 10/16/97

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