Provident Bankshares posts loss on impairment charge

(Reuters) - Provident Bankshares Corp PBKS.O posted a loss for the third quarter, hurt by a $24.6 million impairment charge on investment securities.

The company expects modest loan growth, stable non-interest income, a further decline in net interest margin and a flat or downward trend in expense levels for the next few quarters, Chief Executive Gary Geisel said in a statement.

"In the current environment, our top priority is maintaining the strength of our balance sheet," he said.

The bank holding company recorded a net loss of $5.4 million during the quarter, compared with a profit of $16 million a year earlier.

"The turmoil in the financial markets resulted in a further decline in the value of certain securities in our investment portfolio during the third quarter," CEO Geisel said.

Non-performing loans were 0.95 percent of total loans. Net charge-offs were 0.48 percent of total loans. Provisions for bad loans fell 12 percent to $6.6 million.

In August, Provident cut its second-quarter earnings by 32 percent to account for an additional impairment charge in its investment portfolio.

Shares of the company were down more than 1 percent at $7.88 in early trade on Nasdaq.

(Reporting by Adheesha Sarkar in Bangalore; Editing by Anil D'Silva;)