Provident Bankshares Corp. in Baltimore revised its second-quarter results to reflect a significantly higher charge on its investment securities.
The $6.4 billion-asset company said Wednesday that it earned $10.2 million for the quarter, or 32% less than it reported last month. It cited an additional pretax charge of $16.7 million for "other-than-temporary impairment" of its securities, which are declining in value because they are backed by residential and commercial mortgages.
Provident said Wednesday that its accounting firm had a discussion June 20 with the Securities and Exchange Commission about the impairment analysis but did not alert the company that a higher charge might be required until July 31.
"We regret the timing of this announcement, but we were not made aware of the guidance until 41 days after our independent registered public accounting firm received communication on this issue from the SEC," Gary N. Geisel, Provident's chairman and chief executive officer, said in a press release. "These noncash writedowns, or paper loss adjustments, are frustrating because substantially all of the issuers in these securities are paying principal and interest as agreed and are expected to do so until maturity."
Provident reported losses the previous two quarters, partly because of steep charges on its securities.
