No desire to be taken over, Provident says

August 27, 2008|By Eileen Ambrose | Eileen Ambrose,eileen.ambrose@baltsun.com

Provident Bankshares Corp. Chief Executive Gary Geisel said yesterday that the bank's long-term strategy is to remain independent, despite an analyst report that says the Baltimore-based company could be an attractive takeover candidate.

Stifel Nicolaus analysts Collyn Bement Gilbert and Travis Lan said in a report released yesterday that they remain cautious about Provident's securities portfolio, but that the bank has one of the strongest depository franchises in the Baltimore-Washington market.

"We believe Provident could potentially make a very attractive takeover candidate for any institution that is looking to expand in, what we expect to be, a fairly stable economic region," the analysts wrote.

Provident's stock is down 69 percent from the beginning of the year. Provident's shares fell 16 cents, or 2.3 percent, to close at $6.70 yesterday.

But Geisel, who also is chairman of the company, said he believes the best return for shareholders over the long haul is for the bank to remain independent.

"On the other hand, if someone has a compelling offer, we will have to consider those offers," Geisel said. He would not comment on whether any offers had been made.

This has been a tough year for Maryland's largest independent bank as well as other banks dealing with the housing and credit crunch.

This month, Provident revised its second-quarter profit from $15.1 million to $10.2 million. The revision came after the bank took a pretax charge of about $16.7 million in the quarter on certain investment securities that had dropped in value.

The bank has had other multimillion-dollar write-offs this year, partly because of its real estate investment trust securities and some of its mortgages.

The stock has declined 20 percent since the bank announced Aug. 13 that it was restating its second-quarter earnings.

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