Interest Margin

Provident Bankshares Corp., Maryland's largest independent bank, said yesterday that net income fell nearly 12 percent in the first quarter because of a tough interest rate environment and changes in consumer banking habits. Net income for the three months that ended March 31 was $16.1 million, or 50 cents per diluted share, compared with $18.3 million, or 55 cents per diluted share a year ago. The latest results met the estimate of analysts surveyed by Thomson Financial. Provident stock fell 14 cents to close at $33.07 yesterday on the Nasdaq stock market.

M&T Bank Corp., one of the first lenders to disclose that defaults were spreading beyond subprime mortgages this year, said yesterday that its third-quarter profit fell 5.3 percent as bad loans doubled and the company lost money on its investment in a Florida financial firm. Net income declined to $199 million, or $1.83 a share, from $210 million, or $1.85 a share, in the third quarter last year, M&T said in a statement. Analysts had expected the Buffalo, N.Y., bank to earn $1.93 a share, based on the average estimate of 13 analysts surveyed by Bloomberg.

Homeowners aren't the only ones who would rue the day the housing bubble bursts. Officials at area banks who are struggling to keep up the pace of record-setting profits in recent years have relied upon a brisk business in home mortgages and commercial development. Those loans have helped banks improve their balance sheets in the face of nearly a dozen interest-rate boosts by the Federal Reserve over the past year. Investors and analysts are closely watching the quarterly earnings that banks across the country have begun reporting this week.

Provident Bankshares Corp., Maryland's largest independent bank, said yesterday that net income fell nearly 12 percent in the first quarter because of a tough interest rate environment and changes in consumer banking habits. Net income for the three months that ended March 31 was $16.1 million, or 50 cents per diluted share, compared with $18.3 million, or 55 cents per diluted share a year ago. The latest results met the estimate of analysts surveyed by Thomson Financial. Provident stock fell 14 cents to close at $33.07 yesterday on the Nasdaq stock market.

Mercantile Bankshares Corp.'s profit rose 11.8 percent in the first quarter, fueled by strong loan growth and a vibrant trust business, the company reported yesterday. Mercantile made $41.6 million in the quarter that ended March 31, compared with $37.2 million in the first period in 1999. Net income per diluted share rose 13.2 percent to 60 cents per share, compared with 53 cents in the year-earlier period. Mercantile, which has $8 billion in assets and is Baltimore's largest independently owned banking company, beat Wall Street's estimates by a penny per share, according to Zacks Investment Research, which surveyed 11 analysts.

Columbia Bancorp's profit fell 1.9 percent in the third quarter, squeezed by declining interest rates that reduced the amount of money the bank earned on loans and investments, the company said yesterday. Columbia made $2.04 million, or 28 cents per diluted share, in the quarter that ended Sept. 30, compared with $2.08 million, or 29 cents per diluted share, in the corresponding period in 2000. John A. Scaldara Jr., Columbia's chief financial officer, said that despite the challenges, the performance was good "given all of the external forces that are working against us."

Provident Bankshares Corp. reported yesterday that its net income rose slightly during the fourth quarter as deposits reached a record $4 billion despite a "challenging" environment for banks nationwide. The second-largest independent bank in Maryland said quarterly net income increased less than 1 percent to $19 million, or 57 cents a share, compared with $18.9 million, or 56 cents a share, a year earlier. The fourth-quarter results matched Wall Street expectations, according to analysts polled by Thomson Financial.

Mercantile Bankshares Corp., in probably its last quarterly earnings report, said yesterday that fourth-quarter profit fell 2.7 percent because of costs related to its planned sale to PNC Financial Services Group. The Baltimore-based bank reported net income of $72.9 million, or 57 cents per share, compared with $74.9 million, or 60 cents per share, for the year-earlier period. The average forecast of analysts was for earnings of 59 cents per share. The company's shares fell 37 cents to close at $46.80 in trading yesterday.

NationsBank Corp.'s third-quarter earnings jumped to a record $625 million, an 18 percent increase from a year ago, as consumer loans surged and a strategy of putting more profitable credits on the books has taken hold, the company said yesterday.The Charlotte, N.C.-based bank earned $2.12 a share for the third quarter in 1996, compared with $1.95 for the same quarter a year ago, beating analysts' estimates."It was a good quarter, it came in on target," said George M. Salem, a banking analyst with New York-based Gerard Klauer Mattison & Co. "They are becoming more of a consumer and small corporate bank; that is where returns are higher."

Mercantile Bankshares Corp. reported yesterday that it earned $40.8 million in the third quarter, and its net income per share jumped 13.5 percent, beating analysts' estimates.Profit was up 9.5 percent in the third quarter that ended Sept. 30. Net income per diluted share was 59 cents, compared with 52 cents for the corresponding period last year.Analysts expected Maryland's largest independently owned banking company to make 56 cents a share, according to Zacks Research Inc."They are generating really excellent numbers in light of the fact that they have such a big equity base," said David West, a banking analyst at Richmond, Va.-based Davenport & Co. "They were a little better than what I was looking for."

Mercantile Bankshares Corp., in probably its last quarterly earnings report, said yesterday that fourth-quarter profit fell 2.7 percent because of costs related to its planned sale to PNC Financial Services Group. The Baltimore-based bank reported net income of $72.9 million, or 57 cents per share, compared with $74.9 million, or 60 cents per share, for the year-earlier period. The average forecast of analysts was for earnings of 59 cents per share. The company's shares fell 37 cents to close at $46.80 in trading yesterday.

Provident Bankshares Corp. reported yesterday that its net income rose slightly during the fourth quarter as deposits reached a record $4 billion despite a "challenging" environment for banks nationwide. The second-largest independent bank in Maryland said quarterly net income increased less than 1 percent to $19 million, or 57 cents a share, compared with $18.9 million, or 56 cents a share, a year earlier. The fourth-quarter results matched Wall Street expectations, according to analysts polled by Thomson Financial.

Homeowners aren't the only ones who would rue the day the housing bubble bursts. Officials at area banks who are struggling to keep up the pace of record-setting profits in recent years have relied upon a brisk business in home mortgages and commercial development. Those loans have helped banks improve their balance sheets in the face of nearly a dozen interest-rate boosts by the Federal Reserve over the past year. Investors and analysts are closely watching the quarterly earnings that banks across the country have begun reporting this week.

Mercantile Bankshares Corp., Maryland's largest independent bank, reported a 4 percent rise in fourth-quarter profit yesterday but was cautious about the year ahead as it continued to struggle with low interest rates. Net income in the three months that ended Dec. 31 was $50.6 million, up from $48.5 million in the fourth quarter of 2002. The bank's earnings per share fell 10 percent to 63 cents, largely because of expenses related to its $558.1 million acquisition of F&M Bancorp of Frederick in August.

M&T Bank Corp. reported a 41 percent increase in fourth-quarter profit yesterday as its $3.1 billion purchase of Baltimore-based Allfirst Financial Inc. took hold. But the results fell short of analysts' expectations, and the Buffalo, N.Y.-based bank's shares fell $1.88 to $92.99 in trading yesterday. Expectations for the bank have been high since the merger, which vaulted M&T into the top 20 among U.S. banks and punctuated Allfirst's fall from grace after it announced in February 2002 that a rogue currency trader in Baltimore had hidden $691.

Interest rates on everything from car loans to home mortgages have been so low for so long that banks are finding that lending money - historically their primary source of income - just doesn't pay as well as it used to. But instead of posting losses, U.S. banks have enjoyed two profitable quarters and are expected to have a good year even though Federal Reserve policymakers signaled last week that they plan to keep rates low indefinitely. The reason is fees. Banks have increased charges on everything from bounced checks and late loan payments to ATM transactions and travelers checks.

Mercantile Bankshares Corp.'s profit rose 9.3 percent in the second quarter to $42.5 million, propelled by income generated from loans and its trust business, the Baltimore-based banking company said yesterday. Mercantile made 62 cents in net income per diluted share in the second quarter that ended June 30, up 12.7 percent from the 55 cents per diluted share that it made in the corresponding period a year earlier. The results beat Wall Street's estimates by a penny per share, according to Zacks Investment Research, which surveyed 13 analysts.

Helped by strong loan and deposit growth, Mercantile Bankshares Corp. posted a second-quarter profit increase of 4.9 percent, an increase that would have been higher had it not been for declining interest rates that reduced the amount of money the company made on its loans. The state's largest independently owned banking company said yesterday that it made $44.6 million in the quarter that ended June 30, compared with $42.5 million in the corresponding period a year earlier. Profit per diluted share was 62 cents, unchanged from last year's second quarter.

Mercantile Bankshares Corp.'s profit slipped 3.3 percent in the fourth quarter because of sharply falling interest rates that reduced the amount of money it made on its loans, the company said yesterday. The state's largest independently owned banking company made $44.2 million, or 63 cents per diluted share, in the quarter that ended Dec. 31, compared with $45.7 million, or 64 cents per diluted share, a year earlier. Still, the results met estimates of Wall Street analysts surveyed by Zacks Investment Research, and Mercantile's shares rose 14 cents to $44.75 yesterday.