Provident Financial Group, Inc.
Selected Consolidated Financial Information
December 31, 2002
(unaudited)
Contents Page
- -------- ----
Consolidated Financial Highlights 1
Consolidated Statements of Income 2
Consolidated Quarterly Statements of Income 3-4
Consolidated Period End Balance Sheets 5-6
Consolidated Credit Loss Experience 7
Consolidated Nonperforming Assets 8
Consolidated Average Balances and Rates 9-10
Consolidated Capital Data 11
Supplementary Data 12
Forward-Looking Statements
- --------------------------
This document contains certain forward-looking statements that are subject to numerous assumptions, risks or uncertainties. The
Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Actual results could
differ materially from those contained in or implied by such forward-looking statements for a variety of factors including:
sharp and/or rapid changes in interest rates; significant changes in the anticipated economic scenario which could materially
change anticipated credit quality trends; the ability to generate loans and leases; significant cost, delay in, or ability to
execute strategic initiatives designed to grow revenues and/or manage expenses; consummation of significant business
combinations or divestitures; and significant changes in accounting, tax, or regulatory practices or requirements and factors
noted in connection with forward-looking statements. Additionally, borrowers could suffer unanticipated losses without regard to
general economic conditions. The result of these and other factors could cause differences from expectations in the level of
defaults, changes in the risk characteristics of the loan and lease portfolio, and changes in the provision for loan and lease
losses. Forward-looking statements speak only as of the date made. Provident undertakes no obligations to update any
forward-looking statements to reflect events or circumstances arising after the date on which they are made.
Provident Financial Group, Inc. and Subsidiaries
Consolidated Financial Highlights
(unaudited)
Three Months Twelve Months
------------------------------ ------------------------------
For The Period Ended December 31 2002 2001 % Change 2002 2001 % Change
- -------------------------------------------------------------------------------------------------------------------------------
PER COMMON SHARE:
Net Income
Basic $ .54 $ (.77) n/m $ 1.94 $ (.04) n/m
Diluted $ .52 $ (.77) n/m 1.88 (.04) n/m
Dividends $ .24 $ .24 0.0% .96 .96 0.0%
Book Value 17.91 16.15 10.9%
RESULTS OF OPERATIONS: (In Millions)
Net Interest Income (Taxable Equivalent) $ 81.0 $ 72.9 11.0% $ 315.7 $ 270.6 16.7%
Provision for Loan and Lease Losses 18.2 108.8 (83.2)% 99.5 215.5 (53.8)%
Net Income 26.6 (37.5) n/m 95.5 (1.0) n/m
FINANCIAL RATIOS:
Performance Ratios:
Return on Average Assets 0.62% -0.92% 0.58% -0.01%
Return on Average Shareholders' Equity 12.38 (17.18) 11.27 (0.11)
Average Shareholders' Equity to Average 5.03 5.36 5.12 5.59
Net Interest Margin 2.36 2.31 2.41 2.19
Capital Adequacy Ratios (Period End):
Shareholders' Equity to Total Assets 5.02 4.84
Tier I Leverage 7.81 6.65
Risk-Based Capital Ratio - Tier I Capital 9.40 7.95
Risk-Based Capital Ratio - Total Capital 11.43 10.71
ASSET QUALITY RATIOS:
Reserve for Loan and Lease Losses to:
Total Loans and Leases 2.20% 2.69%
Nonaccrual Loans 120.80 136.35
Nonperforming Assets to:
Total Loans, Leases and Other Nonperforming Assets 1.99 2.20
Total Assets 1.04 1.19
Net Charge-Off's to
Average Total Loans and Leases (Annualized) .98% 3.35% 1.59 1.63
AVERAGE BALANCES: (In Millions)
Total Loans and Leases $ 8,957 $ 8,955 0.0% $ 8,757 $ 8,829 (0.8)%
Earning Assets 13,633 12,512 9.0% 13,105 12,376 5.9%
Assets 17,114 16,311 4.9% 16,538 16,048 3.1%
Deposits 9,481 9,316 1.8% 9,247 9,080 1.8%
Interest Bearing Liabilities 14,547 13,781 5.6% 14,205 13,544 4.9%
Shareholders' Equity 860 874 (1.6)% 847 897 (5.6)%
PERIOD END BALANCES: (In Millions)
Total Loans and Leases $ 9,134 $ 8,950 2.1%
Assets 17,540 16,561 5.9%
Deposits 9,849 8,854 11.2%
Shareholders' Equity 880 802 9.7%
OFF-BALANCE SHEET SECURITIZED LOANS AND LEASES: (In Millions)
Residential Mortgage $ 1,779 $ 2,627 (32.3)%
Home Equity 195 304 (35.9)%
Direct Finance Leasing 94 207 (54.6)%
-------- -------- ----
Total Off-Balance Sheet Securitized Loans and Leases $ 2,068 $ 3,138 (34.1)%
(See Asset Securitzation Sales Note to Consolidated Financial Statements within the Company's Form 10-K for further discussion of
these off-balance sheet assets.)
- --------------------
n/m - not meaningful
-1-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Statements Of Income
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------------------------- --------------------------------------
(Dollars In Thousands Except Per Share Data) 2002 2001 % Change 2002 2001 % Change
- ----------------------------------------------------------------------------------------------------------------------------------
Net Interest Income $ 80,909 $ 72,874 11.0% $ 315,558 $ 270,495 16.7%
Provision for Loan and Lease Losses 18,237 108,787 (83.2)% 99,549 215,545 (53.8)%
Noninterest Income:
Service Charges on Deposit Accounts 12,139 10,373 17.0% 45,184 39,924 13.2%
Loan Servicing Fees 10,448 7,054 48.1% 33,835 33,026 2.4%
Commercial Mortgage Banking Revenue 8,222 7,115 15.6% 25,354 29,490 (14.0)%
Other Service Charges and Fees 13,856 10,031 38.1% 48,563 38,833 25.1%
Leasing Income 154,107 157,241 (2.0)% 605,887 584,065 3.7%
Cash Gain on Sale of Loans 3,556 1,821 95.3% 15,691 6,311 148.6%
Warrant Gains - - n/m 8,186 412 n/m
Securities Gains 1,309 - n/m 2,596 - n/m
Other 6,650 2,077 220.2% 20,196 24,375 (17.1)%
-------- --------- -------- --------
Total Noninterest Income 210,287 195,712 7.4% 805,492 756,436 6.5%
Noninterest Expense:
Salaries, Wages and Benefits 60,918 47,764 27.5% 233,178 201,715 15.6%
Charges and Fees 7,752 8,339 (7.0)% 30,531 31,888 (4.3)%
Occupancy 5,808 5,822 (0.2)% 23,637 22,605 4.6%
Leasing Expense 108,416 109,312 (0.8)% 416,508 402,372 3.5%
Equipment Expense 6,483 6,008 7.9% 24,345 25,234 (3.5)%
Professional Services 7,679 6,264 22.6% 25,990 24,507 6.1%
Minority Interest Expense 3,180 - n/m 7,069 - n/m
Other 32,464 34,890 (7.0)% 114,770 104,663 9.7%
-------- --------- -------- --------
Total Noninterest Expense 232,700 218,399 6.5% 876,028 812,984 7.8%
-------- --------- -------- --------
Income Before Income Taxes 40,259 (58,600) n/m 145,473 (1,598) n/m
Applicable Income Taxes 13,630 (21,081) n/m 50,022 (595) n/m
-------- --------- -------- --------
Net Income $ 26,629 $ (37,519) n/m $ 95,451 $ (1,003) n/m
======== ========= ======== ========
Other Data:
Earnings Per Common Share - Basic $ 0.54 $ (0.77) n/m $ 1.94 $ (0.04) n/m
Earnings Per Common Share - Diluted $ 0.52 $ (0.77) n/m $ 1.88 $ (0.04) n/m
Dividends Paid Per Common Share $ 0.24 $ 0.24 0.0% $ 0.96 $ 0.96 0.0%
Return on Assets 0.62% (0.92)% 0.58% (0.01)%
Return on Equity 12.38% (17.18)% 11.27% (0.11)%
Net Interest Margin (FTE) 2.36% 2.31% 2.41% 2.19%
Full-Time Equivalent Employees 3,307 3,102
- --------------------
n/m - not meaningful
-2-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Quarterly Statements Of Income
(unaudited)
2002
--------------------------------------------------------------------------------
Fourth Third Second First Full
(Dollars In Thousands Except Per Share Data) Quarter Quarter Quarter Quarter Year
- -----------------------------------------------------------------------------------------------------------------------------------
Net Interest Income $ 80,909 $ 77,626 $ 78,728 $ 78,295 $ 315,558
Provision for Loan and Lease Losses 18,237 23,532 33,575 24,205 99,549
Noninterest Income:
Service Charges on Deposit Accounts 12,139 11,681 10,915 10,449 45,184
Loan Servicing Fees 10,448 8,075 7,778 7,534 33,835
Commercial Mortgage Banking Revenue 8,222 5,365 6,021 5,746 25,354
Other Service Charges and Fees 13,856 11,687 12,657 10,363 48,563
Leasing Income 154,107 148,135 150,664 152,981 605,887
Cash Gain on Sale of Loans 3,556 5,001 4,494 2,640 15,691
Warrant Gains - - 8,186 - 8,186
Securities Gains 1,309 633 654 - 2,596
Other 6,650 5,820 3,209 4,517 20,196
-------- -------- -------- -------- --------
Total Noninterest Income 210,287 196,397 204,578 194,230 805,492
Noninterest Expense:
Salaries, Wages and Benefits 60,918 57,141 58,730 56,389 233,178
Charges and Fees 7,752 7,029 8,099 7,651 30,531
Occupancy 5,808 5,861 5,950 6,018 23,637
Leasing Expense 108,416 100,690 102,537 104,865 416,508
Equipment Expense 6,483 5,680 5,975 6,207 24,345
Professional Services 7,679 6,007 6,219 6,085 25,990
Minority Interest Expense 3,180 3,223 666 - 7,069
Other 32,464 28,448 26,461 27,397 114,770
-------- -------- -------- -------- --------
Total Noninterest Expense 232,700 214,079 214,637 214,612 876,028
-------- -------- -------- -------- --------
Income Before Income Taxes 40,259 36,412 35,094 33,708 145,473
Applicable Income Taxes 13,630 12,376 11,924 12,092 50,022
-------- -------- -------- -------- --------
Net Income $ 26,629 $ 24,036 $ 23,170 $ 21,616 $ 95,451
======== ======== ======== ======== ========
Other Data:
Earnings Per Common Share - Basic $ 0.54 $ 0.49 $ 0.47 $ 0.43 $ 1.94
Earnings Per Common Share - Diluted $ 0.52 $ 0.47 $ 0.46 $ 0.43 $ 1.88
Dividends Paid Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.96
Return on Assets 0.62% 0.59% 0.57% 0.53% 0.58%
Return on Equity 12.38% 11.33% 10.91% 10.45% 11.27%
Net Interest Margin (FTE) 2.36% 2.37% 2.45% 2.47% 2.41%
Full-Time Equivalent Employees 3,307 3,214 3,240 3,204
-3-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Quarterly Statements Of Income
(unaudited)
2001
-------------------------------------------------------------------------------
Fourth Third Second First Full
(Dollars In Thousands Except Per Share Data) Quarter Quarter Quarter Quarter Year
- -------------------------------------------------------------------------------------------------------------------------------
Net Interest Income $ 72,874 $ 71,123 $ 65,844 $ 60,654 $ 270,495
Provision for Loan and Lease Losses 108,787 60,886 23,548 22,324 215,545
Noninterest Income:
Service Charges on Deposit Accounts 10,373 10,312 10,131 9,108 39,924
Loan Servicing Fees 7,054 7,810 9,145 9,017 33,026
Commercial Mortgage Banking Revenue 7,115 6,094 11,081 5,200 29,490
Other Service Charges and Fees 10,031 9,017 10,293 9,492 38,833
Leasing Income 157,241 148,833 143,108 134,883 584,065
Cash Gain on Sale of Loans 1,821 3,254 857 379 6,311
Warrant Gains - - 412 - 412
Securities Gains - - - - -
Other 2,077 7,597 8,507 6,194 24,375
--------- --------- -------- -------- --------
Total Noninterest Income 195,712 192,917 193,534 174,273 756,436
Noninterest Expense:
Salaries, Wages and Benefits 47,764 52,783 53,036 48,132 201,715
Charges and Fees 8,339 8,321 8,584 6,644 31,888
Occupancy 5,822 5,634 5,541 5,608 22,605
Leasing Expense 109,312 118,273 91,036 83,751 402,372
Equipment Expense 6,008 6,209 6,359 6,658 25,234
Professional Services 6,264 5,476 7,344 5,423 24,507
Minority Interest Expense - - - - -
Other 34,890 25,780 22,801 21,192 104,663
--------- --------- -------- -------- --------
Total Noninterest Expense 218,399 222,476 194,701 177,408 812,984
--------- --------- -------- -------- --------
Income Before Income Taxes (58,600) (19,322) 41,129 35,195 (1,598)
Applicable Income Taxes (21,081) (6,540) 14,497 12,529 (595)
--------- --------- -------- -------- --------
Net Income $ (37,519) $ (12,782) $ 26,632 $ 22,666 $ (1,003)
========= ========= ======== ======== ========
Other Data:
Earnings Per Common Share - Basic $ (0.77) $ (0.27) $ 0.54 $ 0.46 $ (0.04)
Earnings Per Common Share - Diluted $ (0.77) $ (0.27) $ 0.53 $ 0.45 $ (0.04)
Dividends Paid Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.96
Return on Assets (0.92)% (0.31)% 0.66% 0.59% (0.01)%
Return on Equity (17.18)% (5.59)% 11.83% 10.08% (0.11)%
Net Interest Margin (FTE) 2.31% 2.23% 2.12% 2.09% 2.19%
Full-Time Equivalent Employees 3,102 3,061 3,073 2,973
-4-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Period End Balance Sheets
(unaudited)
2002
---------------------------------------------------------------------
Fourth Third Second First
(In Thousands) Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and Due From Banks $ 351,994 $ 327,467 $ 244,147 $ 227,137
Federal Funds Sold and
Reverse Repurchase Agreements 188,925 119,464 56,337 96,313
Trading Account Securities 127,848 204,202 81,739 100,002
Loans and Leases Held For Sale 436,884 189,581 328,453 125,421
Investment Securities 4,215,238 4,138,464 3,815,609 3,897,222
Loans and Leases:
Corporate Lending:
Commercial 4,482,373 4,418,133 4,289,690 4,321,443
Mortgage 960,636 973,833 873,726 862,514
Construction 510,331 510,410 575,655 563,425
Lease Financing 1,273,901 1,255,574 1,242,558 1,143,657
------------ ------------ ------------ ------------
Total Corporate Lending 7,227,241 7,157,950 6,981,629 6,891,039
Consumer Lending:
Residential 599,793 676,971 750,045 848,676
Installment 1,306,761 1,164,509 1,008,386 911,151
------------ ------------ ------------ ------------
Total Consumer Lending 1,906,554 1,841,480 1,758,431 1,759,827
------------ ------------ ------------ ------------
Total Loans and Leases 9,133,795 8,999,430 8,740,060 8,650,866
Reserve for Loan and Lease Losses (201,051) (204,809) (214,860) (243,019)
------------ ------------ ------------ ------------
Net Loans and Leases 8,932,744 8,794,621 8,525,200 8,407,847
Leased Equipment 2,350,356 2,397,967 2,479,125 2,559,580
Premises and Equipment 101,513 101,003 101,230 101,794
Goodwill 82,651 82,651 82,432 82,432
Other Assets 751,856 741,695 861,061 707,543
------------ ------------ ------------ ------------
$ 17,540,009 $ 17,097,115 $ 16,575,333 $ 16,305,291
============ ============ ============ ============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest Bearing $ 1,141,990 $ 988,508 $ 844,256 $ 849,694
Interest Bearing 8,706,989 8,284,737 8,548,319 8,056,706
------------ ------------ ------------ ------------
Total Deposits 9,848,979 9,273,245 9,392,575 8,906,400
Short-Term Debt 1,925,005 1,886,715 1,314,980 1,668,360
Long-Term Debt 3,842,657 4,017,644 3,976,155 3,962,991
Guaranteed Preferred Beneficial
Interests in Company's Junior
Subordinated Debentures 451,074 450,969 450,864 450,759
Minority Interest 160,966 163,337 161,213 -
Accrued Interest and Other Liabilities 430,957 449,889 434,465 490,767
------------ ------------ ------------ ------------
Total Liabilities 16,659,638 16,241,799 15,730,252 15,479,277
Shareholders' Equity:
Preferred Stock 7,000 7,000 7,000 7,000
Common Stock 14,454 14,409 14,427 14,603
Capital Surplus 298,025 298,731 298,898 322,836
Retained Earnings 604,013 589,533 577,579 566,481
Accumulated Other
Comprehensive Income (43,121) (54,357) (52,823) (84,906)
------------ ------------ ------------ ------------
Total Shareholders' Equity 880,371 855,316 845,081 826,014
------------ ------------ ------------ ------------
$ 17,540,009 $ 17,097,115 $ 16,575,333 $ 16,305,291
============ ============ ============ ============
-5-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Period End Balance Sheets
(unaudited)
2001
-------------------------------------------------------------------------
Fourth Third Second First
(In Thousands) Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and Due From Banks $ 378,257 $ 271,571 $ 231,888 $ 314,440
Federal Funds Sold and
Reverse Repurchase Agreements 122,966 221,634 82,671 360,136
Trading Account Securities 101,156 78,411 87,748 51,873
Loans and Leases Held For Sale 217,914 230,030 154,682 159,314
Investment Securities 3,486,058 2,991,829 3,038,909 3,173,857
Loans and Leases:
Corporate Lending:
Commercial 4,540,088 4,496,252 4,765,512 4,641,039
Mortgage 939,824 905,600 842,025 857,729
Construction 528,008 537,702 561,295 613,020
Lease Financing 1,106,144 1,092,805 1,080,696 665,531
------------ ------------ ------------ ------------
Total Corporate Lending 7,114,064 7,032,359 7,249,528 6,777,319
Consumer Lending:
Residential 922,747 1,009,233 1,103,816 1,022,342
Installment 913,312 871,575 761,628 677,422
------------ ------------ ------------ ------------
Total Consumer Lending 1,836,059 1,880,808 1,865,444 1,699,764
------------ ------------ ------------ ------------
Total Loans and Leases 8,950,123 8,913,167 9,114,972 8,477,083
Reserve for Loan and Lease Losses (241,143) (207,406) (180,997) (168,124)
------------ ------------ ------------ ------------
Net Loans and Leases 8,708,980 8,705,761 8,933,975 8,308,959
Leased Equipment 2,651,394 2,598,887 2,505,404 2,412,421
Premises and Equipment 103,085 101,506 102,893 102,460
Goodwill 80,649 81,729 82,819 84,028
Other Assets 710,372 941,920 897,111 917,280
------------ ------------ ------------ ------------
$ 16,560,831 $ 16,223,278 $ 16,118,100 $ 15,884,768
============ ============ ============ ============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest Bearing $ 994,978 $ 1,007,242 $ 1,145,640 $ 1,226,372
Interest Bearing 7,859,272 8,308,121 7,618,220 7,862,059
------------ ------------ ------------ ------------
Total Deposits 8,854,250 9,315,363 8,763,860 9,088,431
Short-Term Debt 1,885,309 1,328,721 1,739,251 1,193,264
Long-Term Debt 4,081,414 3,846,966 3,841,907 3,910,416
Guaranteed Preferred Beneficial
Interests in Company's Junior
Subordinated Debentures 450,759 450,649 450,539 450,428
Accrued Interest and Other Liabilities 487,266 416,516 416,647 337,898
Total Liabilities 15,758,998 15,358,215 15,212,204 14,980,437
------------ ------------ ------------ ------------
Shareholders' Equity:
Preferred Stock 7,000 7,000 7,000 7,000
Common Stock 14,587 14,577 14,499 14,488
Capital Surplus 322,024 321,703 317,154 316,326
Retained Earnings 556,918 606,481 631,287 616,629
Accumulated Other
Comprehensive Income (98,696) (84,698) (64,044) (50,112)
------------ ------------ ------------ ------------
Total Shareholders' Equity 801,833 865,063 905,896 904,331
------------ ------------ ------------ ------------
$ 16,560,831 $ 16,223,278 $ 16,118,100 $ 15,884,768
============ ============ ============ ============
-6-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Credit Loss Experience
(unaudited)
2002
--------------------------------------------------------------------
Fourth Third Second First Full
(Dollars In Thousands) Quarter Quarter Quarter Quarter Year
- ----------------------------------------------------------------------------------------------------------------
Reserve for Loan and Lease Losses
At Beginning of Period $ 204,809 $ 214,860 $ 243,019 $ 241,143 $ 241,143
Acquired Reserves - - - - -
Provision Charged to Expense 18,237 23,532 33,575 24,205 99,549
Net Charge-Offs:
Corporate Lending:
Commercial 7,244 24,859 25,057 13,937 71,097
Mortgage - 22 - 24 46
Construction 150 379 - 300 829
Lease Financing 10,101 2,620 21,635 4,324 38,680
--------- --------- --------- --------- ---------
Net Corporate Lending 17,495 27,880 46,692 18,585 110,652
Consumer Lending:
Residential 3,747 4,853 14,260 3,017 25,877
Installment 753 850 782 727 3,112
--------- --------- --------- --------- ---------
Net Consumer Lending 4,500 5,703 15,042 3,744 28,989
--------- --------- --------- --------- ---------
Net Charge-Offs 21,995 33,583 61,734 22,329 139,641
--------- --------- --------- --------- ---------
Reserve for Loan and Lease Losses
At End of Period $ 201,051 $ 204,809 $ 214,860 $ 243,019 $ 201,051
========= ========= ========= ========= =========
Net Charge-Offs to Average Total Loans and Leases: (Annualized)
Corporate Lending:
Commercial 0.66% 2.35% 2.37% 1.27% 1.65%
Mortgage -% 0.01% -% 0.01% 0.01%
Construction 0.11% 0.28% -% 0.21% 0.15%
Lease Financing 3.25% 0.85% 7.25% 1.55% 3.23%
---- ---- ---- ---- ----
Total Corporate Lending 0.98% 1.61% 2.72% 1.07% 1.59%
Consumer Lending:
Residential 2.46% 2.83% 7.21% 1.39% 3.51%
Installment 0.24% 0.31% 0.32% 0.31% 0.30%
---- ---- ---- ---- ----
Total Consumer Lending 0.98% 1.29% 3.43% 0.83% 1.62%
---- ---- ---- ---- ----
Total Loans and Leases 0.98% 1.55% 2.87% 1.02% 1.59%
==== ==== ==== ==== ====
2001
---------------------------------------------------------------------
Fourth Third Second First Full
(Dollars In Thousands) Quarter Quarter Quarter Quarter Year
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Reserve for Loan and Lease Losses
At Beginning of Period $ 207,406 $ 180,997 $ 168,124 $ 159,118 $ 159,118
Acquired Reserves - - 8,728 1,275 10,003
Provision Charged to Expense 108,787 60,886 23,548 22,324 215,545
Net Charge-Offs:
Corporate Lending:
Commercial 52,853 27,900 12,491 9,792 103,036
Mortgage 328 483 - 25 836
Construction - - - - -
Lease Financing 16,038 3,081 3,810 625 23,554
--------- --------- --------- --------- ---------
Net Corporate Lending 69,219 31,464 16,301 10,442 127,426
Consumer Lending:
Residential 5,098 2,179 2,958 3,295 13,530
Installment 733 834 144 856 2,567
--------- --------- --------- --------- ---------
Net Consumer Lending 5,831 3,013 3,102 4,151 16,097
--------- --------- --------- --------- ---------
Net Charge-Offs 75,050 34,477 19,403 14,593 143,523
--------- --------- --------- --------- ---------
Reserve for Loan and Lease Losses
At End of Period $ 241,143 $ 207,406 $ 180,997 $ 168,124 $ 241,143
========= ========= ========= ========= =========
Net Charge-Offs to Average Total Loans and Leases: (Annualized)
Corporate Lending:
Commercial 4.64% 2.41% 1.04% 0.85% 2.21%
Mortgage 0.15% 0.23% -% 0.01% 0.10%
Construction -% -% -% -% -%
Lease Financing 5.79% 1.12% 1.61% 0.41% 2.46%
---- ---- ---- ---- ----
Total Corporate Lending 3.90% 1.76% 0.90% 0.63% 1.81%
Consumer Lending:
Residential 2.12% 0.82% 1.11% 1.40% 1.34%
Installment 0.33% 0.41% 0.08% 0.52% 0.33%
---- ---- ---- ---- ----
Total Consumer Lending 1.26% 0.64% 0.69% 1.04% 0.90%
---- ---- ---- ---- ----
Total Loans and Leases 3.35% 1.53% 0.86% 0.71% 1.63%
==== ==== ==== ==== ====
-7-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Nonperforming Assets
(unaudited)
2002
-------------------------------------------------------
Fourth Third Second First
(Dollars In Thousands) Quarter Quarter Quarter Quarter
- ----------------------------------------------------------------------------------------------------------------------------
Nonaccrual Loans:
Corporate Lending:
Commercial $ 99,805 $ 117,571 $ 108,330 $ 111,727
Mortgage 11,783 10,619 5,546 1,938
Construction 1,746 2,243 7,268 1,984
Lease Financing 4,008 3,952 3,497 5,223
--------- --------- --------- ---------
Total Corporate Lending 117,342 134,385 124,641 120,872
Consumer Lending:
Residential 49,091 44,548 35,920 62,530
Installment - - - -
--------- --------- --------- ---------
Total Consumer Lending 49,091 44,548 35,920 62,530
--------- --------- --------- ---------
Total Nonaccrual Loans 166,433 178,933 160,561 183,402
Other Nonperforming Assets 15,780 14,579 25,471 28,098
--------- --------- --------- ---------
Total Nonperforming Assets $ 182,213 $ 193,512 $ 186,032 $ 211,500
========= ========= ========= =========
Loans 90 Days Past Due Still Accruing $ 29,918 $ 30,482 $ 29,186 $ 29,390
========= ========= ========= =========
Reserve for Loan and Lease Losses as a Percent of:
Nonaccrual Loans 120.80% 114.46% 133.82% 132.51%
Nonperforming Assets 110.34% 105.84% 115.50% 114.90%
Total Loans and Leases 2.20% 2.28% 2.46% 2.81%
Nonaccrual Loans as a % of Total Loans and Leases 1.82% 1.99% 1.84% 2.12%
Nonperforming Assets as a Percent of:
Total Loans, Leases and Other Nonperforming Assets 1.99% 2.15% 2.12% 2.44%
Total Assets 1.04% 1.13% 1.12% 1.30%
2001
---------------------------------------------------------
Fourth Third Second First
(Dollars In Thousands) Quarter Quarter Quarter Quarter
- ----------------------------------------------------------------------------------------------------------------------------
Nonaccrual Loans:
Corporate Lending:
Commercial $ 116,663 $ 84,700 $ 74,098 $ 74,172
Mortgage 1,929 1,984 1,944 1,676
Construction 2,699 2,213 4,585 4,520
Lease Financing 7,986 5,977 6,079 8,685
--------- --------- --------- ---------
Total Corporate Lending 129,277 94,874 86,706 89,053
Consumer Lending:
Residential 47,579 36,792 23,868 17,160
Installment - - - -
--------- --------- --------- ---------
Total Consumer Lending 47,579 36,792 23,868 17,160
--------- --------- --------- ---------
Total Nonaccrual Loans 176,856 131,666 110,574 106,213
Other Nonperforming Assets 20,907 15,758 16,279 7,348
--------- --------- --------- ---------
Total Nonperforming Assets $ 197,763 $ 147,424 $ 126,853 $ 113,561
========= ========= ========= =========
Loans 90 Days Past Due Still Accruing $ 30,326 $ 33,981 $ 22,291 $ 41,725
========= ========= ========= =========
Reserve for Loan and Lease Losses as a Percent of:
Nonaccrual Loans 136.35% 157.52% 163.69% 158.29%
Nonperforming Assets 121.94% 140.69% 142.68% 148.05%
Total Loans and Leases 2.69% 2.33% 1.99% 1.98%
Nonaccrual Loans as a % of Total Loans and Leases 1.98% 1.48% 1.21% 1.25%
Nonperforming Assets as a Percent of:
Total Loans, Leases and Other Nonperforming Assets 2.20% 1.65% 1.39% 1.34%
Total Assets 1.19% .91% .79% .71%
-8-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Average Balances and Rates
On a Fully Taxable Equivalent Basis
(unaudited)
2002
--------------------------------------------------------------
Fourth Quarter Third Quarter Second Quarter
------------------- ------------------- --------------------
Average Average Average Average Average Average
(Dollars In Millions) Balance Rate Balance Rate Balance Rate
- ------------------------------------------------------------------------------------------------
Assets:
Loans and Leases:
Corporate Lending:
Commercial $ 4,404 6.13% $ 4,227 6.36% $ 4,231 6.33%
Mortgage 943 5.88 930 6.08 878 6.42
Construction 524 4.28 533 4.56 560 4.38
Lease Financing 1,245 8.65 1,233 9.06 1,194 9.22
-------- ---- -------- ---- -------- ----
Total Corporate Lending 7,116 6.40 6,923 6.67 6,863 6.68
Consumer Lending:
Residential 609 9.83 685 9.64 791 9.60
Installment 1,232 5.50 1,080 6.16 965 6.41
-------- ---- -------- ---- -------- ----
Total Consumer Lending 1,841 6.94 1,765 7.51 1,756 7.85
-------- ---- -------- ---- -------- ----
Total Loans and Leases 8,957 6.51 8,688 6.84 8,619 6.92
Investment Securities 4,149 5.26 3,789 5.49 3,866 5.90
Federal Funds Sold and Reverse
Repurchase Agreements 161 2.59 102 2.66 127 2.85
Other Short-Term Investments 366 5.76 407 5.28 299 6.55
-------- ---- -------- ---- -------- ----
Total Earning Assets 13,633 6.07 12,986 6.36 12,911 6.57
Cash and Due From Banks 324 245 212
Leased Equipment 2,369 2,429 2,505
Other Assets 788 703 678
-------- -------- --------
Total Assets $ 17,114 $ 16,363 $ 16,306
======== ======== ========
Liabilities and
Shareholders' Equity:
Deposits:
Demand Deposits $ 944 1.60 $ 778 1.61 $ 546 1.12
Savings Deposits 1,464 1.82 1,417 2.03 1,475 1.97
Time Deposits 5,960 3.43 6,211 3.49 6,446 3.66
-------- ---- -------- ---- -------- ----
Total Deposits 8,368 2.94 8,406 3.07 8,467 3.20
Short-Term Debt:
Federal Funds Purchased and
Repurchase Agreements 1,494 2.26 849 2.90 906 2.90
Commercial Paper 295 1.82 268 1.97 284 1.93
-------- ---- -------- ---- -------- ----
Total Short-Term Debt 1,789 2.19 1,117 2.68 1,190 2.67
Long-Term Debt 3,939 5.07 4,019 5.13 3,974 5.14
Junior Subordinated Debentures 451 4.56 451 5.28 451 5.47
-------- ---- -------- ---- -------- ----
Total Interest Bearing Liabilities 14,547 3.48 13,993 3.70 14,082 3.78
Noninterest Bearing Deposits 1,113 934 881
Minority Interest 160 162 34
Other Liabilities 434 425 460
Shareholders' Equity 860 849 849
-------- -------- --------
Total Liabilities and
Shareholders' Equity $ 17,114 $ 16,363 $ 16,306
======== ======== ========
Net Interest Spread 2.59% 2.66% 2.79%
==== ==== ====
Net Interest Margin 2.36% 2.37% 2.45%
==== ==== ====
2002
----------------------------------------
First Quarter Full Year
------------------- -------------------
Average Average Average Average
(Dollars In Millions) Balance Rate Balance Rate
- -----------------------------------------------------------------------------------------------
Assets:
Loans and Leases:
Corporate Lending:
Commercial $ 4,386 6.55% $ 4,312 6.34%
Mortgage 882 6.54 909 6.22
Construction 567 4.82 546 4.51
Lease Financing 1,117 9.84 1,199 9.16
-------- ---- -------- ----
Total Corporate Lending 6,952 6.94 6,966 6.67
Consumer Lending:
Residential 869 9.30 737 9.59
Installment 937 6.99 1,054 6.21
-------- ---- -------- ----
Total Consumer Lending 1,806 8.11 1,791 7.60
-------- ---- -------- ----
Total Loans and Leases 8,758 7.18 8,757 6.86
Investment Securities 3,721 5.82 3,882 5.61
Federal Funds Sold and Reverse
Repurchase Agreements 109 2.79 125 2.71
Other Short-Term Investments 285 6.15 341 5.85
-------- ---- -------- ----
Total Earning Assets 12,873 6.72 13,105 6.42
Cash and Due From Banks 238 255
Leased Equipment 2,606 2,477
Other Assets 644 701
-------- --------
Total Assets $ 16,361 $ 16,538
======== ========
Liabilities and
Shareholders' Equity:
Deposits:
Demand Deposits $ 512 1.01 $ 696 1.40
Savings Deposits 1,535 2.05 1,472 1.97
Time Deposits 5,920 4.00 6,134 3.64
-------- ---- -------- ----
Total Deposits 7,967 3.43 8,302 3.16
Short-Term Debt:
Federal Funds Purchased and
Repurchase Agreements 1,481 2.47 1,182 2.56
Commercial Paper 273 1.92 280 1.91
-------- ---- -------- ----
Total Short-Term Debt 1,754 2.38 1,462 2.44
Long-Term Debt 4,022 5.18 3,990 5.13
Junior Subordinated Debentures 451 5.34 451 5.16
-------- ---- -------- ----
Total Interest Bearing Liabilities 14,194 3.86 14,205 3.70
Noninterest Bearing Deposits 847 945
Minority Interest - 90
Other Liabilities 493 451
Shareholders' Equity 827 847
-------- --------
Total Liabilities and
Shareholders' Equity $ 16,361 $ 16,538
======== ========
Net Interest Spread 2.86% 2.72%
==== ====
Net Interest Margin 2.47% 2.41%
==== ====
-9-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Average Balances and Rates
On a Fully Taxable Equivalent Basis
(unaudited)
2001
------------------------------------------------------------
Fourth Quarter Third Quarter Second Quarter
------------------------------------------------------------
Average Average Average Average Average Average
(Dollars In Millions) Balance Rate Balance Rate Balance Rate
- -------------------------------------------------------------------------------------------------
Assets:
Loans and Leases:
Corporate Lending:
Commercial $ 4,556 6.89% $ 4,640 7.90% $ 4,825 8.29%
Mortgage 904 6.92 855 7.93 856 8.20
Construction 533 5.60 549 6.73 587 7.48
Lease Financing 1,109 9.70 1,096 9.63 946 9.75
-------- ---- -------- ---- -------- ----
Total Corporate Lending 7,102 7.24 7,140 8.08 7,214 8.41
Consumer Lending:
Residential 961 9.32 1,064 9.82 1,067 9.92
Installment 892 8.11 821 8.63 719 9.34
-------- ---- -------- ---- -------- ----
Total Consumer Lending 1,853 8.74 1,885 9.30 1,786 9.68
-------- ---- -------- ---- -------- ----
Total Loans and Leases 8,955 7.55 9,025 8.33 9,000 8.66
Investment Securities 3,135 5.85 3,105 6.30 3,113 6.69
Federal Funds Sold and Reverse
Repurchase Agreements 60 2.99 102 3.53 112 5.46
Other Short-Term Investments 362 5.24 416 5.43 236 4.48
-------- ---- -------- ---- -------- ----
Total Earning Assets 12,512 7.03 12,648 7.70 12,461 8.06
Cash and Due From Banks 246 241 239
Leased Equipment 2,617 2,552 2,453
Other Assets 936 924 922
-------- -------- --------
Total Assets $ 16,311 $ 16,365 $ 16,075
======== ======== ========
Liabilities and
Shareholders' Equity:
Deposits:
Demand Deposits $ 500 1.48 $ 487 2.32 $ 486 2.87
Savings Deposits 1,559 2.52 1,581 3.36 1,550 3.97
Time Deposits 6,050 4.47 5,832 5.28 5,698 5.77
-------- ---- -------- ---- -------- ----
Total Deposits 8,109 3.91 7,900 4.71 7,734 5.23
Short-Term Debt:
Federal Funds Purchased and
Repurchase Agreements 1,118 3.06 1,434 3.97 1,299 4.32
Commercial Paper 266 2.40 209 3.79 221 4.24
-------- ---- -------- ---- -------- ----
Total Short-Term Debt 1,384 2.94 1,643 3.95 1,520 4.31
Long-Term Debt 3,837 5.39 3,839 5.81 3,873 6.06
Junior Subordinated Debentures 451 5.77 451 6.90 450 7.95
-------- ---- -------- ---- -------- ----
Total Interest Bearing Liabilities 13,781 4.29 13,833 5.00 13,577 5.45
Noninterest Bearing Deposits 1,207 1,203 1,212
Other Liabilities 449 414 385
Shareholders' Equity 874 915 901
-------- -------- --------
Total Liabilities and
Shareholders' Equity $ 16,311 $ 16,365 $ 16,075
======== ======== ========
Net Interest Spread 2.74% 2.70% 2.61%
==== ==== ====
Net Interest Margin 2.31% 2.23% 2.12%
==== ==== ====
3001
---------------------------------------
First Quarter Full Year
---------------------------------------
Average Average Average Average
(Dollars In Millions) Balance Rate Balance Rate
- -----------------------------------------------------------------------------------------------
Assets:
Loans and Leases:
Corporate Lending:
Commercial $ 4,600 9.34% $ 4,655 8.10%
Mortgage 841 9.11 864 8.02
Construction 612 8.42 570 7.10
Lease Financing 607 10.48 958 9.65
-------- ----- -------- -----
Total Corporate Lending 6,660 9.33 7,047 8.22
Consumer Lending:
Residential 941 10.63 1,008 9.91
Installment 663 9.69 774 8.87
-------- ----- -------- -----
Total Consumer Lending 1,604 10.24 1,782 9.46
-------- ----- -------- -----
Total Loans and Leases 8,264 9.51 8,829 8.47
Investment Securities 3,270 7.05 3,158 6.47
Federal Funds Sold and Reverse
Repurchase Agreements 96 5.77 92 4.59
Other Short-Term Investments 172 8.73 297 5.66
-------- ----- -------- -----
Total Earning Assets 11,802 8.79 12,376 7.86
Cash and Due From Banks 297 255
Leased Equipment 2,400 2,491
Other Assets 926 926
-------- --------
Total Assets $ 15,425 $ 16,048
======== ========
Liabilities and
Shareholders' Equity:
Deposits:
Demand Deposits $ 464 3.41 $ 484 2.50
Savings Deposits 1,501 4.82 1,548 3.65
Time Deposits 5,727 6.37 5,828 5.45
-------- ----- -------- -----
Total Deposits 7,692 5.89 7,860 4.92
Short-Term Debt:
Federal Funds Purchased and
Repurchase Agreements 767 5.23 1,156 4.05
Commercial Paper 219 5.61 229 3.92
-------- ----- -------- -----
Total Short-Term Debt 986 5.31 1,385 4.03
Long-Term Debt 3,954 6.47 3,877 5.93
Junior Subordinated Debentures 335 8.77 422 7.24
-------- ----- -------- -----
Total Interest Bearing Liabilities 12,967 6.10 13,544 5.19
Noninterest Bearing Deposits 1,260 1,220
Other Liabilities 299 387
Shareholders' Equity 899 897
-------- --------
Total Liabilities and
Shareholders' Equity $ 15,425 $ 16,048
======== ========
Net Interest Spread 2.69% 2.67%
==== ====
Net Interest Margin 2.09% 2.19%
==== ====
-10-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Capital Data
(unaudited)
2002
------------------------------------------------------------
Fourth Third Second First Full
Quarter Quarter Quarter Quarter Year
------------------------------------------------------------
Per Common Share:
- -----------------
Shares Outstanding (In Thousands):
Average - Basic 48,744 48,616 48,646 49,228 48,806
Average - Diluted 50,740 50,727 50,915 50,588 50,743
Period-End 48,760 48,611 48,672 49,257
Book Value $ 17.91 $ 17.45 $ 17.22 $ 16.63
Price:
High $ 28.05 $ 29.51 $ 31.35 $ 29.97 $ 31.35
Low 21.48 24.28 24.42 22.17 21.48
Period-End 26.03 25.09 29.01 28.80
Capital Ratios (Dollars in Millions):
- -------------------------------------
Risk-Based Capital (Current Qtr Estimated):
Risk-Adjusted Assets $ 14,221 $ 13,840 $ 13,489 $ 13,363
Tier 1 Capital $ 1,337 $ 1,321 $ 1,295 $ 1,104
Percentage of Risk Adjusted Assets 9.40% 9.55% 9.60% 8.26%
Total Capital $ 1,625 $ 1,609 $ 1,585 $ 1,441
Percentage of Risk Adjusted Assets 11.43% 11.62% 11.75% 10.78%
Tier 1 Leverage Ratio 7.81% 8.09% 7.97% 6.76%
Period End Shareholders' Equity
to Total Period-End Assets 5.02% 5.00% 5.10% 5.07%
Period-End Tangible Shareholders' Equity
to Total Period-End Tangible Assets 4.49% 4.45% 4.53% 4.48%
Average Shareholders' Equity
to Total Average Assets 5.03% 5.19% 5.21% 5.06% 5.12%
Average Tangible Shareholders' Equity
to Total Average Tangible Assets 4.48% 4.61% 4.62% 4.47% 4.55%
2001
--------------------------------------------------------------
Fourth Third Second First Full
Quarter Quarter Quarter Quarter Year
--------------------------------------------------------------
Per Common Share:
- -----------------
Shares Outstanding (In Thousands):
Average - Basic 49,198 49,081 48,897 48,866 49,011
Average - Diluted 50,417 50,667 50,574 50,537 50,550
Period-End 49,206 49,174 48,915 48,877
Book Value $ 16.15 $ 17.45 $ 18.38 $ 18.36
Price:
High $ 26.29 $ 35.09 $ 33.37 $ 37.38 $ 37.38
Low 21.41 24.90 27.06 25.88 21.41
Period-End 26.28 25.25 32.92 28.13
Capital Ratios (Dollars in Millions):
- -------------------------------------
Risk-Based Capital (Current Qtr Estimated):
Risk-Adjusted Assets $ 13,727 $ 14,316 $ 14,650 $ 14,041
Tier 1 Capital $ 1,091 $ 1,155 $ 1,185 $ 1,177
Percentage of Risk Adjusted Assets 7.95% 8.07% 8.09% 8.38%
Total Capital $ 1,471 $ 1,525 $ 1,552 $ 1,541
Percentage of Risk Adjusted Assets 10.71% 10.65% 10.60% 10.97%
Tier 1 Leverage Ratio 6.65% 6.90% 7.31% 7.62%
Period End Shareholders' Equity
to Total Period-End Assets 4.84% 5.33% 5.62% 5.69%
Period-End Tangible Shareholders' Equity
to Total Period-End Tangible Assets 4.26% 4.73% 5.02% 5.12%
Average Shareholders' Equity
to Total Average Assets 5.36% 5.59% 5.60% 5.83% 5.59%
Average Tangible Shareholders' Equity
to Total Average Tangible Assets 4.77% 5.00% 5.03% 5.25% 5.00%
-11-
Provident Financial Group, Inc. and Subsidiaries
Supplementary Data
(unaudited)
In conjunction with the reclassification of the company's auto leases from the loan category to leased equipment, which is not
included in loans or earning assets, the company believes this presentation aids in illustrating the impact the reclassification
has on certain performance measures as illustrated below. This is not intended to imply that, if this reclassification were not
made, these measures would be precisely equal to the adjusted measures listed below. Instead, we are providing this data to
demonstrate in a general sense how these measures would look if the leased equipment were treated as an earning asset and
operating lease income and depreciation expense were included in revenues.
Full Year
----------------------------------------------
(In Thousands) 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net Interest Income $ 315,558 $ 270,495 $ 243,638
Add: Operating Lease Income 605,887 584,065 461,209
Less: Depreciation on Operating Leases (419,438) (387,235) (296,997)
------------ ------------ ------------
Net Financing Income $ 502,007 $ 467,325 $ 407,850
Noninterest Income $ 805,492 $ 756,436 $ 660,616
Less: Operating Lease Income (605,887) (584,065) (461,209)
------------ ------------ ------------
Noninterest Income Excluding Operating Lease Income $ 199,605 $ 172,371 $ 199,407
Total Financing Revenues $ 701,612 $ 639,696 $ 607,257
Noninterest Expenses $ 876,028 $ 812,984 $ 680,401
Less: Depreciation on Operating Leases (419,438) (387,235) (296,997)
------------ ------------ ------------
Noninterest Expenses Excluding
Depreciation on Operating Leases $ 456,590 $ 425,749 $ 383,404
Average Earning Assets $ 13,105,000 $ 12,376,000 $ 10,164,000
Add: Average Leased Equipment 2,477,000 2,491,000 2,040,000
------------ ------------ ------------
Average Earning Assets Including Leased Equipment $ 15,582,000 $ 14,867,000 $ 12,204,000
Net Interest Margin Ratio - GAAP Basis 2.41% 2.19% 2.40%
Net Financing Income Ratio 3.22% 3.14% 3.34%
Noninterest Expenses as a Percent of
Total Revenues - GAAP Basis 78% 79% 75%
Noninterest Expenses Excluding Depreciation on
Operating Leases as a Percent of Total Revenues
Which Includes Depreciation on Operating Leases 65% 67% 63%
The company has average leased equipment which as a percentage of total average assets were 15.0%, 15.5% and 15.3% for the past
three years ended December 31, 2002. Because of the significance of the leased equipment, which generates significant revenues
but are not included in earning assets in the financial statements, the company believes that in order to compare some of the
company's key metrics to other banks, the impact these financing assets have on the company's net interest margin and its
noninterest expenses as a percentage of total revenues should be illustrated. Additionally, from an internal management
perspective, the leased equipment is included in the company's overall interest sensitivity analysis and these assets are
typically priced based on the company's cost of funds. In the financial statements, the financing cost directly related to these
assets is included in net interest income and the related operating lease revenue and depreciation is reported separately in
noninterest income and noninterest expense. The revenue and expense amounts listed above are derived from the company's income
statements and statements of cash flows. The balance sheet data is derived from the company's average balance sheets.
-12-