Provident posts increase in profit

Shareholder meeting placid after 2 testy years

April 19, 2001|By Bill Atkinson | Bill Atkinson,SUN STAFF

Provident Bankshares Corp., which for the first time in three years held an annual meeting free of controversy, said yesterday that first-quarter operating profit rose 7.9 percent before a one-time charge.

The company, which has assets of $5.3 billion and is the second-largest independent banking concern in the state, posted operating profit of $11.7 million, or 45 cents per diluted share, in the quarter ended March 31, up from $10.9 million, or 40 cents per diluted share, a year earlier.

Provident, however, made $10.6 million, or 40 cents per share, in the quarter after taking a $1.2 million charge because of a change in accounting rules.

The bank met Wall Street's estimates, according to Zacks Investment Research, which surveyed six analysts.

"I think they are on the right track," said Christopher W. Marinac, a banking analyst at Robinson-Humphrey in Atlanta. "My impression is this is the first of many decent quarters for them."

Shares of Provident closed at $23.91, up 62 cents.

Yesterday marked the first annual meeting in three years at which there were no impassioned speeches regarding the company's future. In two prior stockholder meetings held at Provident's downtown headquarters, investor Jerry Shearer tried to persuade shareholders to vote to force management to sell the company.

In February, Provident agreed to pay $33.6 million to buy out Shearer, his partner Jerry Zucker and their firm, Columbia, S.C.-based Mid-Atlantic Investors. The group owned about 5.4 percent of Provident's outstanding shares.

"It is a great relief; there is no question," Peter M. Martin, Provident's chairman and chief executive, said after the meeting, which lasted about 15 minutes and was uneventful.

Martin also said that he was pleased with the company's performance.

Provident's interest income (profit largely generated from loans) was $97.8 million, compared with $98.3 million a year earlier. But noninterest income ( profit from fee-generating services) was $23.5 million, up 63.8 percent after including a $6 million securities gain.

Martin said the bank's credit quality is "very good, and we are working to make sure it is very, very good."

Provident boosted its provision for problem loans to $7.1 million in the quarter, up from $4.3 million in the quarter a year earlier. It also said it made a one-time addition of $12 million to non-performing loans to conform with a new federal rule governing consumer loans.

Nonperforming loans - or loans that are late on principal or interest 90 days - represent 0.79 percent of the company's $3.3 billion loan portfolio.

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