Provident Bankshares has announced a multi-tiered plan to strengthen the company's capital base. The plan includes the issuance of $65 million in equity securities and a subordinated debt offering of $50 million for a total of $115 million.
The plan also includes the realignment of dividend payment that will save approximately $29 million annually in retained earnings. The capital offering is expected to be completed soon and will mitigate the recently announced and expected write-downs in the bank’s investment portfolio.
The bank said that the plan positions it to have a prudent response to future economic uncertainty in the market. These initiatives will further improve the bank’s capital ratios, which already exceed the regulatory definition of ‘well capitalized’.
In addition, the management will engage an independent capital markets advisory firm to undertake a comprehensive review of the bank’s investment policies and risk control procedures regarding the investment portfolio.
Gary Geisel, CEO, said: This initiative provides us the capital to bolster our balance sheet in this challenging and uncertain operating environment at the same time providing a financial foundation to support the growth expectation of our business franchise.