1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
For Quarter Ended Commission File Number
June 30, 1997 0-16421
PROVIDENT BANKSHARES CORPORATION
--------------------------------
(Exact Name of Registrant as Specified in its Charter)
Maryland 52-1518642
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification
Number)
114 East Lexington Street Baltimore, Maryland 21202
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(Address of Principal Executive Offices)
(410) 281-7000
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(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of The Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
-----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, par value $1.00 per share, 9,056,389 shares outstanding at July
31, 1997.
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PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statement of Condition--
June 30, 1997 and 1996 and December 31, 1996 3
Consolidated Statement of Income--
Three and Six Months Ended June 30, 1997 and 1996 4
Consolidated Statement of Cash Flows--
Six Months Ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial Condition 9
PART II - OTHER INFORMATION 12
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES 13
EXHIBIT INDEX 14
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PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENT OF CONDITION
Provident Bankshares Corporation and Subsidiaries
June 30, December 31, June 30,
(dollars in thousands) 1997 1996 1996
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ASSETS
Cash and Due From Banks $ 53,708 $ 54,153 $ 57,247
Short-Term Investments 794 11,003 1,058
Mortgage Loans Held for Sale 25,656 32,228 96,906
Securities Available for Sale 903,398 882,905 895,338
Securities Held to Maturity (Market Value $31,729, $29,676
and $31,430 at June 30, 1997, December 31, 1996 and
June 30, 1996, respectively) 32,109 30,202 32,347
Loans:
Consumer 1,301,655 1,100,702 964,712
Commercial Business 258,039 250,395 226,608
Real Estate -- Construction 100,556 99,473 117,879
Real Estate -- Mortgage 303,940 288,176 262,758
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Total Loans 1,964,190 1,738,746 1,571,957
Less: Allowance for Loan Losses 26,878 24,828 21,733
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Net Loans 1,937,312 1,713,918 1,550,224
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Premises and Equipment, Net 33,392 33,031 32,978
Accrued Interest Receivable 22,703 19,637 18,114
Other Assets 17,823 21,762 18,669
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TOTAL ASSETS $ 3,026,895 $ 2,798,839 $ 2,702,881
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LIABILITIES
Deposits:
Noninterest-Bearing $ 166,828 $ 150,360 $ 143,759
Interest-Bearing 1,803,862 1,615,865 1,603,964
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TOTAL DEPOSITS 1,970,690 1,766,225 1,747,723
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Short-Term Borrowings 544,884 553,979 455,929
Long-Term Debt 269,581 256,217 284,508
Other Liabilities 30,002 25,237 32,935
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TOTAL LIABILITIES 2,815,157 2,601,658 2,521,095
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STOCKHOLDERS' EQUITY
Common Stock (Par Value $1.00) Authorized 30,000,000 Shares,
Issued 9,277,659, 8,705,395 and 8,655,385 Shares at
June 30, 1997, December 31, 1996 and June 30, 1996,
respectively 9,278 8,705 8,655
Capital Surplus 111,872 95,005 93,842
Retained Earnings 92,278 97,249 88,645
Net Unrealized Gain (Loss) on Debt Securities 800 (1,288) (6,866)
Treasury Stock at Cost - 228,066 Shares (2,490) (2,490) (2,490)
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TOTAL STOCKHOLDERS' EQUITY 211,738 197,181 181,786
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,026,895 $ 2,798,839 $ 2,702,881
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CONSOLIDATED STATEMENT OF INCOME
Provident Bankshares Corporation and Subsidiaries
Three Months Ended Six Months Ended
June 30, June 30,
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(in thousands, except per share data) 1997 1996 1997 1996
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INTEREST INCOME
Interest and Fees on Loans $ 38,580 $ 32,342 $ 74,852 $ 61,803
Interest on Securities 16,839 15,690 33,579 32,436
Tax-Advantaged Interest 469 749 933 1,501
Interest on Short-Term Investments 42 44 149 81
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TOTAL INTEREST INCOME 55,930 48,825 109,513 95,821
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INTEREST EXPENSE
Interest on Deposits 19,002 15,441 36,561 30,510
Interest on Short-Term Borrowings 7,823 6,776 15,523 13,277
Interest on Long-Term Debt 4,000 3,918 8,007 7,654
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TOTAL INTEREST EXPENSE 30,825 26,135 60,091 51,441
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NET INTEREST INCOME 25,105 22,690 49,422 44,380
Less: Provision for Loan Losses 2,053 375 2,887 5,775
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 23,052 22,315 46,535 38,605
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NON-INTEREST INCOME
Service Charges on Deposit Accounts 5,757 4,581 10,988 8,196
Mortgage Banking Activities 1,863 3,209 3,867 6,509
Commissions and Fees 904 785 1,765 1,538
Net Securities Gains (Losses) 107 (65) 178 5,005
Other Non-Interest Income 1,435 1,130 2,852 2,234
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TOTAL NON-INTEREST INCOME 10,066 9,640 19,650 23,482
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NON-INTEREST EXPENSE
Salaries and Employee Benefits 11,869 12,149 23,663 24,272
Occupancy Expense, Net 2,116 1,928 4,208 3,943
Furniture and Equipment Expense 1,655 1,576 3,301 3,078
External Processing Fees 2,796 2,421 5,461 4,709
Other Non-Interest Expense 4,328 4,827 9,268 8,782
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TOTAL NON-INTEREST EXPENSE 22,764 22,901 45,901 44,784
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INCOME BEFORE TAXES 10,354 9,054 20,284 17,303
Income Tax Expense 3,549 3,449 6,964 6,393
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NET INCOME $ 6,805 $ 5,605 $ 13,320 $ 10,910
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PER SHARE AMOUNTS:
Net Income -- Primary $ 0.73 $ 0.61 $ 1.43 $ 1.19
Net Income -- Fully Diluted 0.73 0.61 1.42 1.19
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CONSOLIDATED STATEMENT OF CASH FLOWS
Provident Bankshares Corporation and Subsidiaries
Six Months Ended June 30,
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(in thousands) 1997 1996
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OPERATING ACTIVITIES:
Net Income $ 13,320 $ 10,910
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and Amortization 3,438 3,277
Provision for Loan Losses 2,887 5,775
Provision for Deferred Income Tax Benefit (1,419) (631)
Realized Net Securities Gains (178) (5,005)
Loans Originated or Acquired and Held for Sale (143,374) (227,192)
Proceeds from Sales of Loans 151,183 219,423
Gain on Sales of Loans (1,237) (2,811)
Other Operating Activities 3,731 10,222
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Total Adjustments 15,031 3,058
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NET CASH PROVIDED BY OPERATING ACTIVITIES 28,351 13,968
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INVESTING ACTIVITIES:
Principal Collections and Maturities of Securities Available for Sale 66,468 106,549
Principal Collections and Maturities of Securities Held to Maturity 82 2,876
Proceeds on Sales of Securities Available for Sale 65,408 188,378
Purchases of Securities Held to Maturity (2,018) (3,832)
Purchases of Securities Available for Sale (149,292) (190,477)
Loan Originations and Purchases Less Principal Collections (224,424) (242,734)
Purchases of Premises and Equipment (3,112) (2,464)
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NET CASH USED BY INVESTING ACTIVITIES (246,888) (141,704)
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FINANCING ACTIVITIES:
Net Increase in Deposits 204,465 178,384
Net Decrease in Short-Term Borrowings (9,095) (61,712)
Proceeds from Long-Term Debt 47,000 56,750
Payments and Maturities of Long-Term Debt (33,636) (40,107)
Issuance of Common Stock 2,834 2,891
Cash Dividends on Common Stock (3,685) (2,766)
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NET CASH PROVIDED BY FINANCING ACTIVITIES 207,883 133,440
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Increase (Decrease) in Cash and Cash Equivalents (10,654) 5,704
Cash and Cash Equivalents at Beginning of Year 65,156 52,601
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 54,502 $ 58,305
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SUPPLEMENTAL DISCLOSURES
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Interest Paid, Net of Amount Capitalized $ 34,049 $ 29,668
Income Taxes Paid 4,680 8,122
Stock Dividend 14,606 12,530
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
JUNE 30, 1997
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and notes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of only normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the six month period ended June 30, 1997 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1997. For further information, refer to the consolidated financial statements
and notes thereto included in the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1996 as filed with the Securities and Exchange
Commission on March 7, 1997.
NOTE B - PER SHARE INFORMATION
Net income per share is based on the number of weighted average common
shares outstanding for the six month period ended June 30, 1997 (9,360,078
shares) which includes common stock equivalents resulting from outstanding stock
options. For the six month period ended June 30, 1997 dividends of $.41 per
common share were paid. The results for 1996 have been given retroactive
treatment to the beginning of the year for the May 9, 1997 stock dividend. With
the restatement for the stock dividend in the second quarter 1997, the second
quarter restated earnings per share were $.61 for the six month period ended
June 30, 1996.
The Corporation will adopt Statement of Financial Accounting Standard
No. 128 - "Earnings Per Share" ("SFAS No. 128") on December 31, 1997. SFAS No.
128 requires the Corporation to change its method of computing, presenting and
disclosing earnings per share information. Upon adoption, all prior period
data presented will be restated to conform to the provisions of SFAS No. 128.
Adoption of this standard is not expected to have a material impact on the
Corporation's financial statements.
NOTE C - INVESTMENT SECURITIES
The Corporation's investment portfolio is divided among three
categories: investment securities, securities available for sale and trading
account securities. Debt securities that the Corporation has the intent and
ability to hold to maturity are included in securities held to maturity and,
accordingly, are carried at cost adjusted for amortization of premiums and
accretion of discounts using the interest method. Securities available for sale
are reported at fair value with any unrealized appreciation or depreciation in
value reported, net of applicable taxes, directly as a separate component of
stockholders' equity as an unrealized gain or loss on debt securities and
therefore, has no effect on the reported earnings of the Corporation.
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The aggregate amortized cost and market values of the investment
securities portfolio at June 30 were as follows:
June 30, 1997
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Gross Gross
Amortized Unrealized Unrealized Market
(in thousands) Cost Gains Losses Value
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SECURITITES AVAILABLE FOR SALE
U.S. Treasury and Government
Agencies and Corporations $ 5,014 $ 12 $ -- $ 5,026
Mortgage-Backed Securities 848,538 5,948 4,599 849,887
Municipal Securities 18,875 287 150 19,012
Other Debt Securities 29,647 26 200 29,473
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Total Securities Available for Sale 902,074 6,273 4,949 903,398
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SECURITITES HELD TO MATURITY
U.S. Treasury and Government
Agencies and Corporations 16,332 50 -- 16,382
Mortgage-Backed Securities 15,777 -- 430 15,347
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Total Securities Held to Maturity 32,109 50 430 31,729
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Total Investment Securities Portfolio $ 934,183 $ 6,323 $ 5,379 $ 935,127
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June 30, 1996
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Gross Gross
Amortized Unrealized Unrealized Market
(in thousands) Cost Gains Losses Value
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SECURITITES AVAILABLE FOR SALE
U.S. Treasury and Government
Agencies and Corporations $ 27,163 $ 60 $ 11 $ 27,212
Mortgage-Backed Securities 815,995 3,217 14,813 804,399
Municipal Securities 11,550 229 181 11,598
Other Debt Securities 52,021 390 282 52,129
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Total Securities Available for Sale 906,729 3,896 15,287 895,338
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SECURITITES HELD TO MATURITY
U.S. Treasury and Government
Agencies and Corporations 15,726 -- -- 15,726
Mortgage-Backed Securities 16,621 -- 917 15,704
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Total Securities Held to Maturity 32,347 -- 917 31,430
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Total Investment Securities Portfolio $ 939,076 $ 3,896 $ 16,204 $ 926,768
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At June 30, 1997 a net unrealized gain of $800 thousand was reflected as a
separate component of Stockholders' Equity in the Consolidated Statement of
Condition as compared to a net unrealized loss of $1.3 million on Securities
Available for Sale at December 31, 1996. For details regarding investment
securities at December 31, 1996, refer to Note 3 of the Consolidated Financial
Statements incorporated in the Corporation's 10-K filed March 7, 1997.
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NOTE D - SERVICING ASSETS
Effective January 1, 1997, the Corporation adopted the provisions of Statement
of Accounting Standards No. 125 - "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" ("SFAS No. 125"). This new
statement supersedes SFAS No. 122 - "Accounting for Mortgage Servicing Rights",
which was adopted on January 1 of the prior year. The adoption of SFAS No. 125
has had no significant impact on the earnings or financial condition of the
Corporation. SFAS No. 125 requires the Corporation to carry any retained
interest in a transferred asset on the Statement of Condition as a servicing
asset. In the case of the Corporation, the servicing assets represent the fair
value of the servicing contracts associated with the purchase or origination and
subsequent securitization of the mortgage loans. Servicing assets are amortized
in proportion to and over the period of estimated net servicing income.
Servicing assets are evaluated periodically for impairment based on their fair
value and impairment, if any, is recognized through a valuation allowance and a
charge to operations. At June 30, 1997 no valuation allowance was required.
The following is an analysis of servicing asset balance, net of
accumulated amortization, during the period ended June 30, 1997:
June 30,
(in thousands) 1997
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Balance at January 1, 1997 $2,085
Additions 337
Amortization 65
Sales of Servicing Assets 828
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Balance at June 30, 1997 $1,529
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NOTE E - CONTINGENT LIABILITIES
In April of 1997, a judgment stemming from a lawsuit alleging that Provident
Bank of Maryland had failed to fully honor a letter of credit was entered
against Provident in the amount of $5.2 million. This decision reversed an
earlier court holding in favor of Provident. The Bank plans to appeal the
decision. Management, in consultation with legal counsel, is of the opinion that
there exists a significant possibility that the award will be reversed or
substantially altered at the appellate level. The ultimate outcome of the case
will not have a material adverse effect on the Corporation's financial
statements.
NOTE F - PENDING ACQUISITION
On March 10, 1997, the Corporation and First Citizens Financial Corporation, a
$694 million savings bank holding company, entered into a definitive merger
agreement whereby each First Citizens share will be converted into .7665 shares
of Provident common stock, subject to adjustments and certain circumstances.
Upon shareholder and various regulatory approvals, First Citizens Financial
Corporation will be merged into Provident Bankshares Corporation using the
pooling-of-interest accounting method. The transaction is expected to be
finalized in the third quarter of 1997.
NOTE G - FUTURE ACCOUNTING DISCLOSURE REQUIREMENTS
In June, 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 130 ("SFAS No. 130"), "Reporting
Comprehensive Income." The statement establishes requirements for the disclosure
and presentation of comprehensive income and its components in full sets of
financial statements. Comprehensive income is defined as transactions and other
occurrences which are the result of nonowner changes in equity. Nonowner equity
changes, such as unrealized gains or losses on
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debt securities for example, will be accumulated with net income in determining
comprehensive income. This statement will not impact the historical financial
results of the Corporation's operations. This statement is effective for years
beginning after December 15, 1997 and requires reclassification of financial
statements for earlier periods provided for comparative purposes is required.
The FASB also issued Statement of Financial Accounting Standards No. 131
("SFAS No. 131"), "Disclosures about Segments of an Enterprise and Related
Information" during June 1997. This statement provides standards for reporting
information on the operating segments of public businesses in their annual and
interim reports to shareholders. SFAS No. 131 requires that selected financial
information be provided for segments meeting specific criteria. The statement
will not have an impact on the results of operations of the Corporation but will
expand present disclosures. This statement becomes effective for all periods
beginning after December 15, 1997. Currently, management has not yet determined
the core segments for SFAS No. 131 reporting purposes.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIAIRIES
FINANCIAL REVIEW
EARNINGS SUMMARY
Provident recorded a 21.4% increase in net income over the same period a
year ago. Net income for the quarter ended June 30, 1997 was $6.8 million or
$.73 per share, compared to $5.6 million or $.61 per share for the second
quarter of the prior year. The higher earnings in 1997 were mainly due to loan
growth, increased fee income and lower operating expenses. Average consumer
loans outstanding grew $279 million as total average loans increased 22% to
$1.84 billion. Increase in non-interest income was driven by a 26% increase in
fee based services on higher account volume. Even with higher account volume
and continued investment in business initiatives, operating expenses declined
$137 thousand. There was a $1.7 million increase in the provision for loan
losses during the quarter with net charge-offs of $510 thousand. The increase
in provision is related to the growth in loans experienced during the quarter.
NET INTEREST INCOME
Growth in average earning assets raised tax-equivalent net interest income
to $25.3 million for the second quarter of 1997, a $2.5 million increase over
the prior year. This was partially offset by a 10 basis point decline in yield-
cost spread. As a result, the net interest margin decreased 4 basis points.
Provident's interest income on earning assets rose $7.1 million from the
second quarter of 1996, the result of a $300 million expansion in average
earning asset balances and an 17 basis point rise in yield. Growth in total
average earning assets was provided by increases of $279 million in consumer
loans, $32 million in commercial business loans, and $8.6 million in commercial
mortgage loans. Investments increased $21 million while mortgage loans held
for sale declined $54 million. The yield increase was mainly attributable to
a greater mix of higher yielding loans versus investments.
Total interest expense was $4.7 million above a year ago, the combined
result of an increase of 27 basis points in the average rate paid and a $256
million increase in the average outstanding balance of interest-bearing
liabilities. Included in this increase were $147 million in matched maturity
brokered deposits, $60 million in money market certificates of deposits, $21
million in interest bearing demand/money market deposits, $3 million in savings
and $39 million of borrowings.
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As a result of off-balance sheet transactions undertaken to insulate the
bank from interest rate risks, interest income decreased by $198 thousand and
interest expense increased by $640 thousand, for a total decrease of $838
thousand for the quarter ending June 30, 1997. For the six months ending
June 30, 1997, these transactions decreased interest income by $283 thousand
and increased interest expense by $1.47 million combining to decrease net
interest income $1.75 million. Included in this net interest income decrease
was the amortization of closed positions which reduced interest income by $102
thousand and increased interest expense $780 thousand (a net decrease of $882
thousand) for the current quarter and reduced interest income by $278 thousand
and increased interest expense $1.34 million (a net decrease of $1.62 million)
for the six months ending June 30, 1997. Without the amortization of closed
positions, off-balance sheet positions increased net interest income $44
thousand for the current quarter and decreased net interest income $129
thousand for the six months ending June 30, 1997.
The forward yield curve indicates that short-term rates will increase by
33 basis points and long term rates will increase 10 basis points over the next
twelve months. The Corporation's analyis indicates that if management does
not adjust its June 30, 1997 off-balance sheet positions and the forward yield
curve assumptions occur, off-balance sheet positions, including amortization of
closed positions, would decrease net interest income by $1.8 million over the
next twelve months. This compares to a decrease in net interest income of
$1.9 million should interest rates remain unchanged. Amortization of closed
positions will reduce net interest income $3.0 million over the next twelve
months.
PROVISION FOR LOAN LOSSES
The Corporation recorded a $2.1 million provision for loan losses for the
quarter. Net charge-offs were $510 thousand compared to net charge-offs of
$198 thousand for the second quarter of 1996. The Corporation continues to
emphasize loan quality and closely monitors potential problem credits. Senior
managers meet at least monthly to review the credit quality of the loan
portfolios and at least quarterly with executive management to review the
adequacy of the allowance for loan losses. The allowance for loan losses at
June 30, 1997 was $26.9 million, up from the $21.7 million a year ago. At
June 30, 1997, the allowance represented 1.37% of total loans and 604% of non-
performing loans. Total non-performing loans were $4.4 million at June 30,
1997. Beginning in 1997, the Corporation no longer places consumer loans in
non-accural status to better conform to standard industry practice. Consumer
loans and any uncollected accrued interest are generally charged-off at 120
days past due. Non-performing loans as a percent of loans outstanding as of
June 30, 1997 were .23%.
In April of 1997, a judgment stemming from a lawsuit alleging that
Provident Bank of Maryland had failed to fully honor a letter of credit was
entered against Provident in the amount of $5.2 million. This decision reversed
an earlier court holding in favor of Provident. The Bank plans to appeal the
decision. Management, in consultation with legal counsel, is of the opinion
that there exists a significant possibility that the award will be reversed or
substantially altered at the appellate level. The ultimate outcome of the case
will not have a material adverse effect on the Corporation's financial
statements.
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NON-INTEREST INCOME
Non-interest income totaled $10.1 million in the second quarter of 1997
compared to $9.6 million in 1996. Net of security gains, non-interest income
increased $254 thousand. This increase was driven by a rise in fee based
services caused by higher account volume. Mortgage banking income declined by
$1.3 million due to lower originations associated with the decision to divest
five mortgage origination offices in Pennsylvania and New Jersey. Morgage
originations were $70.7 million for the second quarter of 1997 compared to
$119.2 million for the second quarter of 1996. Deposit service fees continued
their upward trend, increasing 26% over the prior year. Commercial deposit
fees increased 27% and commercial loan fees increased 35%. Income from
Provident Investment Center increased 28% generating $604 thousand in fee
income.
NON-INTEREST EXPENSE
Second quarter non-interest expense of $22.8 million was slightly less than
the $22.9 million recorded during the second quarter of 1996. Salaries and
benefits declined $280 thousand mainly related to the downsized mortgage
banking business.
Occupancy costs increased $188 thousand over last year and furniture and
equipment expense increased $79 thousand. These increases were required by
branch network expansion and upgrades of technology.
External processing fees increased $375 thousand due to increased account
volume. All other expenses decreased a total of $499 thousand mainly
associated with a $432 thousand decrease in advertising and promotion expense.
INCOME TAXES
Provident recorded income tax expense of $3.5 million on income before
taxes of $10.4 million, an effective tax rate of 34.3%. During the second
quarter of 1996, Provident's tax expense was $3.4 million on pre-tax income
of $9.1 million, an effective tax rate of 38.1%. The decrease in the effective
tax rate is primarily due to lower state income tax expense.
FINANCIAL CONDITION
Total assets of the Corporation increased $228 million from December 31,
1996 to June 30, 1997 as loan balances increased $225 million. Consumer loans
were up $201 million, commercial business loans $7.6 million and real estate
mortgage loans $15.8 million. Total deposits ended the quarter at $1.97
billion, an increase of $204 million over the December 31, 1996 level. Non-
interest bearing deposits increased $16.5 million from December 31, 1996 while
interest bearing deposits increased $188 million. Borrowings increased
$4.3 million from December 31, 1996 ending the quarter at $814 million.
The primary source of liquidity at June 30, 1997 were loans held for sale
and investments available for sale, which totaled $929 million. This represents
33% of total liabilities compared to 35% at December 31, 1996.
At quarter-end, the leverage ratio was 7.14% and total stockholders' equity
represented 10.24% of risk adjusted assets. These ratios exceed the minimum
requirements of the current leverage capital and risk-based capital standards
established by regulatory agencies.
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PART II - OTHER INFORMATION.
Item 1. Legal Proceedings - See Part I, Note E - Contingent Liabilities
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of Provident Bankshares
Corporation was held on April 16, 1997.
The following persons were elected as directors to serve until
the 1998 Annual Meeting of Stockholders: Robert B. Barnhill,
Jr., Melvin A. Bilal, M. Jenkins Cromwell, Jr., and Sister
Rosemarie Nassif; until the 1999 Annual Meeting of the
Stockholders: Charles W. Cole, Jr., Francis G. Riggs and Carl
W. Stern.
The following directors were elected at the 1997 Annual Meeting
of Stockholders. The corresponding votes for each director and
their terms of office which continue until the respective Annual
Meeting of Stockholders is reflected below.
For % Withheld %
--- - -------- -
1999 Annual Meeting:
Barbara B. Lucas 7,312,410 99.0 77,022 1.0
2000 Annual Meeting:
Dr. Calvin W. Burnett 7,305,369 98.9 84,063 1.1
Pierce B. Dunn 7,308,413 98.9 81,020 1.1
Mark K. Joseph 7,312,000 99.0 77,433 1.0
Peter M. Martin 7,309,242 98.9 80,191 1.1
Sheila K. Riggs 7,308,273 98.9 81,160 1.1
The Stockholders approved the selection of Coopers & Lybrand as
independent auditors for 1997, with 7,363,963 (99.6%) shares
cast in favor, 13,352 (.2%) shares cast against and 12,117
(.2%) abstaining.
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits filed as part of this report are listed below:
(11) Statement re: Computation of Per Share Earnings.
(27) Financial Data Schedule.
(b) Reports on Form 8-K
There were no current reports on Form 8-K filed during the
quarter ended June 30, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PROVIDENT BANKSHARES CORPORATION
--------------------------------
Registrant
/s/ Peter M. Martin
August 8, 1997 -------------------------------------
Peter M. Martin
President and Chief Operating Officer
/s/ R. Wayne Hall
August 8, 1997 -------------------------------------
R. Wayne Hall
Treasurer
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14
EXHIBIT INDEX
Exhibit Description
- ------- -----------
(11) Statement re: Computation of Per Share Earnings
(27) Financial Data Schedule
14