Anne Arundel’s Suburban Federal ordered to find buyer
Provident Bankshares’ losses deepened in the fourth quarter, as the Baltimore-based parent of Provident Bank took additional write-offs to its investment securities in the real estate and financial services sectors.
Provident saw a net loss for the quarter of $26.7 million, or 88 cents a share, down from a net loss of $15.5 million, or 49 cents a share, during the fourth quarter of 2007.
“As we anticipated, the deterioration in economic conditions during the fourth quarter had a significant impact on our investment and loan portfolios,” Gary Geisel, Provident chairman and chief executive officer, said in a statement. Geisel was not available for further comment Tuesday.
The bank wrote off $32.7 million in the fourth quarter: $6.3 million in real estate investments and mortgage-backed securities, and $26.4 million in investments in the financial sector.
“It’s more of the same,” said Jim Sinegal, an analyst covering Provident for Chicago-based investment research firm Morningstar. “Provident’s credit quality was down maybe a little more than expected. But as far as the write-downs … that’s not surprising. It’s pretty obvious fourth quarter was worse than the first three for a lot of banks.”
For 2008, Provident took a net loss of $39.5 million, or $1.38 a share, a sharp drop from a net income of $32.1 million, or $1 per share, in 2007.
Provident stock closed up 16 cents, or 2.62 percent, to $6.27 in Nasdaq trading Tuesday.
In December, Provident accepted a $401 million buyout offer from Buffalo, N.Y.-based M&T Bank Corp. Provident spokeswoman Vicki Cox said that deal remains on course for a second-quarter closing.
Sinegal said Tuesday’s earnings report likely did not come as a surprise to M&T, which could have expected further losses in the fourth quarter. M&T representatives did not return calls for comment.
Provident’s report came as Crofton-based Suburban Federal Savings Bank faces an order by federal regulators to find a buyer by the end of the week. If seized, the bank would become the first Maryland institution to fail since 1992, during the late stages of the savings and loan crisis.
According to an order by the federal Office of Thrift Supervision, the 53-year-old bank must increase its capital levels through a merger to avoid the takeover. The bank has seven branches and approximately $354 million in assets, but has struggled to recover from defaults on real estate-related losses.
