Profit rises nearly 13% at Provident Bankshares

1Q earnings per share increase to 44 cents from 37 cents

April 18, 2002|By Eileen Ambrose | Eileen Ambrose,SUN STAFF

Provident Bankshares Corp. reported yesterday a nearly 13 percent increase in its first-quarter profit, thanks in part to the growth in fee income from deposit services and debit cards.

The Baltimore banking company reported it earned $11.5 million, or 44 cents per share, for the quarter that ended March 31, compared with $10.2 million, or 37 cents per share, for the first quarter last year.

"We're very pleased with the quarter and enthused with 2002," said Peter M. Martin, chairman and chief executive officer.

Martin said the bank is comfortable with analysts' earnings projections of $1.82 per share this year.

One of the highlights of the quarter was the 16 percent growth in non-interest income, excluding gains from securities. Non-interest income, or income from fees for services, reached about $20 million in the first quarter, a $2.7 million increase over a year ago. This income accounted for 35 percent of quarterly revenue.

Core deposits in the quarter reached $2.6 billion, up about $119 million from a year ago. Loans originated by Provident were $1.6 billion, up about $206 million.

Assets at the end of the quarter were $4.9 billion, down from $5.3 billion a year ago. The decrease is due to the bank getting out of the business of purchasing loans, the company said.

At the company's annual shareholder meeting yesterday, Martin said Provident expects to open 10 to 12 branches this year in the Washington area. That would give Provident about 110 branches.

Shareholders raised questions about auditor independence, currency trading, and the accuracy of financial statements in light of the currency trading scandal at Allfirst Financial Inc. in Baltimore and questionable accounting at Enron Corp. and its former outside auditor, Arthur Andersen LLP.

"We are confident in controls and we are confident in our financial reports," Martin said.

Martin also said the company in the past has hired its outside auditor to do consulting work, but won't do so again. The bank also doesn't do any foreign currency trading, he said.

Also yesterday, the company said it increased its quarterly dividend by a half penny to 21 cents per share, payable May 10 to shareholders of record April 29.

Provident's stock closed at $26.59 per share, down 21 cents.

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