Exhibit 99
Provident Financial Group Announces Financial Results
for the First Quarter of 2003
Reports 19% EPS Growth
Focusing Efforts on Executing Strategic Plan
Cincinnati, April 30, 2003 - Provident Financial Group, Inc. (Nasdaq: PFGI)
announced first quarter 2003 financial results today. For the quarter ended
March 31, 2003, earnings per share increased 19 percent to 51 cents from 43
cents in 2002's first quarter. First quarter 2003 net income also increased 19
percent to $25.8 million from $21.6 million in 2002's first quarter. First
quarter 2003 returns on average equity and assets were 11.76 percent and 0.59
percent, respectively, compared with 10.45 percent and 0.53 percent in 2002's
first quarter.
Robert L. Hoverson, Provident's President and Chief Executive Officer,
commented, "We continue to focus our efforts on executing our strategic plan of
reducing risk and strengthening our balance sheet to build value for our
shareholders. We continue to grow and invest in predictable lines of business.
This quarter we reported our lowest charge-off ratio in the last two years and
our loan loss reserve remains unchanged from last quarter's level. Despite an
increase in non-accruals this quarter, we expect to see modest improvements in
our credit metrics over the remainder of the year.
"The composition of our deposit portfolio continues to improve. All lines of
business are actively promoting deposit products and we continue to see positive
results as evidenced by the consistent increases in service charges on deposit
accounts. Average retail and commercial deposits increased 8 percent to $6.7
billion from $6.2 billion in last year's first quarter.
"Despite our announcements earlier this year regarding our earnings restatement
and the reclassification of our auto lease portfolio, the direction of our
company is clear and our strategy for growth is the correct one. Our future
earnings power is intact and we are determined to continue on the path of risk
reduction and positioning Provident for consistent and predictable earnings
growth."
Revenue & Expenses
- ------------------
First quarter 2003 net interest income was $83.0 million compared with $78.3
million in last year's first quarter, and non-interest income was $194.2 million
compared with $196.2 million. Revenue was $277.1 million compared with $274.5
million in last year's first quarter. The net interest margin was 2.37 percent
compared with 2.36 percent last quarter and 2.47 percent in last year's first
quarter. First quarter 2003 non-interest expenses were $222.1 million compared
with $216.6 million in last year's first quarter.
-1-
Loans & Asset Quality
- ---------------------
Average loans for 2003's first quarter were $9.1 billion compared with $8.8
billion in last year's first quarter. Total loans outstanding on March 31, 2003
were $9.2 billion compared with $8.7 billion on March 31, 2002.
Key asset quality indicators:
o The first quarter 2003 provision for loan and lease losses was $16.5 million
compared with $18.2 million last quarter and $24.2 million for 2002's first
quarter.
o The first quarter 2003 annualized net charge-offs to average total loans and
leases were 0.73 percent compared with 0.98 percent last quarter and 1.02
percent for 2002's first quarter.
o The reserve for loan and lease losses on March 31, 2003 was $201.0 million
compared with $201.1 million on December 31, 2002, and $243.0 million on
March 31, 2002. The reserve for loan and lease losses on March 31, 2003 was
2.20 percent of total loans and leases compared with 2.20 percent on December
31, 2002 and 2.81 percent on March 31, 2002. The reserve for loan and lease
losses on March 31, 2003 was 99 percent of non-performing assets compared
with 110 percent on December 31, 2002 and 115 percent on March 31, 2002.
o Non-performing assets were $203.4 million on March 31, 2003 compared with
$182.2 million on December 31, 2002 and $211.5 million on March 31, 2002.
Non-performing assets were 2.22 percent of total loans, leases and other
non-performing assets on March 31, 2003 compared with 1.99 percent on
December 31, 2002 and 2.44 percent on March 31, 2002.
Deposits
- --------
Average retail and commercial deposits for 2003's first quarter were $6.7
billion, an increase of 8 percent from $6.2 billion in 2002's first quarter. For
the period ended March 31, 2003, retail and commercial deposits were $6.7
billion, an increase of 6 percent from $6.3 billion on March 31, 2002.
Capital Position
- ----------------
Common shareholders' equity was $872.0 million or $17.88 per share on March 31,
2003 compared with $873.4 million or $17.91 per share on December 31, 2002. On
March 31, 2003 common equity to assets was 4.92 percent and Tier I and total
risk-based capital ratios were 9.82 percent and 11.69 percent respectively.
Conference Call & Webcast
- -------------------------
A conference call and webcast will be held today at 2:00 p.m. (ET). The live
call can be accessed by calling 1-877-818-4511. A replay of the call will be
available through Monday, May 5, 2003 by calling 1-800-642-1687 (passcode 986 54
91). Both the live and archived webcast can be accessed from the Investor
Relations area of Provident's website at http://www.providentbank.com.
-2-
Forward-Looking Statements
- --------------------------
This news release 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 inability 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.
About Provident Financial Group, Inc.
- -------------------------------------
Provident Financial Group, Inc. is a bank holding company located in Cincinnati,
Ohio. Its main subsidiary, The Provident Bank, provides a diverse line of
banking and financial products, services and solutions through retail banking
offices located in Southwestern Ohio, Northern Kentucky and the West Coast of
Florida, and through commercial lending offices located throughout Ohio and
surrounding states. Customers have access to banking services 24-hours a day
through Provident's extensive network of ATMs, Telebank, a telephone customer
service center, and the Internet at www.providentbank.com. At March 31, 2003,
Provident Financial Group had $9.2 billion in loans outstanding, $10.7 billion
in deposits, and assets of $17.7 billion. Provident has served the financial
needs of its customers for 100 years, and currently 3,400 Provident associates
serve approximately 600,000 customers. Provident Financial Group's common stock
trades on the Nasdaq Stock Market under the symbol PFGI.
For further information, please contact:
- ----------------------------------------
Christopher J. Carey
Executive Vice President & Chief Financial Officer
1-513-639-4644 / 1-800-851-9521
e-mail: IR@PROVIDENT-FINANCIAL.COM
-3-
Provident Financial Group, Inc.
Selected Consolidated Financial Information
March 31, 2003
(unaudited)
Contents Page
- -------- ----
Consolidated Financial Highlights ........................................ 5
Consolidated Statements of Income ........................................ 6
Consolidated Quarterly Statements of Income .............................. 7
Consolidated Period End Balance Sheets ................................... 8
Consolidated Credit Loss Experience ...................................... 9
Consolidated Nonperforming Assets ........................................ 10
Consolidated Average Balances and Rates .................................. 11
Consolidated Capital Data ................................................ 12
Supplementary Data ....................................................... 13
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.
-4-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Financial Highlights
(unaudited)
Three Months Ended March 31,
-------------------------------
For The Period Ended March 31 2003 2002 % Change
- -----------------------------------------------------------------------------------------------
PER COMMON SHARE:
Net Income
Basic $ .52 $ .43 20.9%
Diluted .51 .43 18.6%
Dividends .24 .24 0.0%
Book Value 17.88 16.63 7.5%
RESULTS OF OPERATIONS: (In Millions)
Net Interest Income $ 83.0 $ 78.3 6.0%
Provision for Loan and Lease Losses 16.5 24.2 (31.7)%
Net Income 25.8 21.6 19.4%
FINANCIAL RATIOS:
Performance Ratios:
Return on Average Assets 0.59% 0.53%
Return on Average Shareholders' Equity 11.76 10.45
Average Shareholders' Equity to Average Assets 5.01 5.06
Net Interest Margin 2.37 2.47
Capital Adequacy Ratios (Period End):
Shareholders' Equity to Total Assets 4.96 5.07
Tier I Leverage Ratio 7.77 6.76
Risk-Based Capital Ratio - Tier I Capital 9.82 8.26
Risk-Based Capital Ratio - Total Capital 11.69 10.78
(Current Period Regulatory Ratios are Estimated)
ASSET QUALITY RATIOS:
Reserve for Loan and Lease Losses to:
Total Loans and Leases 2.20% 2.81%
Nonaccrual Loans 110.91 132.51
Nonperforming Assets to:
Total Loans, Leases and Other Nonperforming Assets 2.22 2.44
Total Assets 1.15 1.30
Net Charge-Off's to
Average Total Loans and Leases (Annualized) .73 1.02
AVERAGE BALANCES: (In Millions)
Total Loans and Leases $ 9,085 $ 8,758 3.7%
Earning Assets 14,194 12,873 10.3%
Leased Equipment 2,242 2,606 (14.0)%
Assets 17,534 16,361 7.2%
Deposits 10,107 8,814 14.7%
Interest Bearing Liabilities 14,978 14,194 5.5%
Shareholders' Equity 878 827 6.2%
PERIOD END BALANCES: (In Millions)
Total Loans and Leases $ 9,152 $ 8,651 5.8%
Leased Equipment 2,182 2,560 (14.8)%
Assets 17,726 16,305 8.7%
Deposits 10,665 8,906 19.8%
Shareholders' Equity 879 826 6.4%
OFF-BALANCE SHEET SECURITIZED LOANS AND LEASES: (In Millions)
Residential Mortgage $ 1,619 $ 2,412 (32.9)%
Home Equity 178 269 (33.8)%
Direct Finance Leasing 80 179 (55.3)%
------- -------
Total Off-Balance Sheet Securitized Loans and Leases $ 1,877 $ 2,860 (34.4)%
(See Asset Securitization Sales Note to Consolidated Financial Statements within
the Company's Form 10-K for further discussion of these off-balance sheet
assets.)
-5-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Statements Of Income
(unaudited)
Three Months Ended
March 31,
--------------------------------
(Dollars In Thousands Except Per Share Data) 2003 2002 % Change
- -------------------------------------------------------------------------------
Net Interest Income $ 82,959 $ 78,295 6.0%
Provision for Loan and Lease Losses 16,521 24,205 (31.7)%
Noninterest Income:
Service Charges on Deposit Accounts 12,332 10,449 18.0%
Loan Servicing Fees 10,660 7,998 33.3%
Commercial Mortgage Banking Revenue 10,297 5,746 79.2%
Other Service Charges and Fees 11,736 9,899 18.6%
Leasing Income 138,861 154,981 (10.4)%
Cash Gain on Sale of Loans 4,942 2,640 87.2%
Warrant Gains 328 - n/m
Net Securities Gains 1,500 - n/m
Other 3,518 4,517 (22.1)%
-------- --------
Total Noninterest Income 194,174 196,230 (1.0)%
Noninterest Expense:
Salaries, Wages and Benefits 61,984 56,389 9.9%
Charges and Fees 7,822 7,651 2.2%
Occupancy 6,228 6,018 3.5%
Leasing Expense 95,760 106,865 (10.4)%
Equipment Expense 6,949 6,207 12.0%
Professional Services 8,398 6,085 38.0%
Minority Interest Expense 3,197 - n/m
Other 31,745 27,397 15.9%
-------- --------
Total Noninterest Expense 222,083 216,612 2.5%
-------- --------
Income Before Income Taxes 38,529 33,708 14.3%
Applicable Income Taxes 12,715 12,092 5.2%
-------- --------
Net Income $ 25,814 $ 21,616 19.4%
======== ========
Other Data:
Earnings Per Common Share - Basic $ 0.52 $ 0.43 20.9%
Earnings Per Common Share - Diluted $ 0.51 $ 0.43 18.6%
Dividends Paid Per Common Share $ 0.24 $ 0.24 0.0%
Return on Assets 0.59% 0.53%
Return on Equity 11.76% 10.45%
Net Interest Margin (FTE) 2.37% 2.47%
Full-Time Equivalent Employees 3,333 3,204
n/m - not meaningful
-6-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Quarterly Statements Of Income
(unaudited)
2003 2002
-------- --------------------------------------------------------
First Fourth Third Second First Full
(Dollars In Thousands Except Per Share Data) Quarter Quarter Quarter Quarter Quarter Year
- -------------------------------------------------------------------------------------------------------------------
Net Interest Income $ 82,959 $ 80,909 $ 77,626 $ 78,728 $ 78,295 $315,558
Provision for Loan and Lease Losses 16,521 18,237 23,532 33,575 24,205 99,549
Noninterest Income:
Service Charges on Deposit Accounts 12,332 12,139 11,681 10,915 10,449 45,184
Loan Servicing Fees 10,660 11,550 9,018 8,414 7,998 36,980
Commercial Mortgage Banking Revenue 10,297 8,222 5,365 6,021 5,746 25,354
Other Service Charges and Fees 11,736 12,754 10,744 12,021 9,899 45,418
Leasing Income 138,861 148,107 150,135 152,664 154,981 605,887
Cash Gain on Sale of Loans 4,942 3,556 5,001 4,494 2,640 15,691
Warrant Gains 328 - - 8,186 - 8,186
Net Securities Gains 1,500 1,309 633 654 - 2,596
Other 3,518 6,650 5,820 3,209 4,517 20,196
-------- -------- -------- -------- -------- --------
Total Noninterest Income 194,174 204,287 198,397 206,578 196,230 805,492
Noninterest Expense:
Salaries, Wages and Benefits 61,984 60,918 57,141 58,730 56,389 233,178
Charges and Fees 7,822 7,752 7,029 8,099 7,651 30,531
Occupancy 6,228 5,808 5,861 5,950 6,018 23,637
Leasing Expense 95,760 102,416 102,690 104,537 106,865 416,508
Equipment Expense 6,949 6,483 5,680 5,975 6,207 24,345
Professional Services 8,398 7,679 6,007 6,219 6,085 25,990
Minority Interest Expense 3,197 3,180 3,223 666 - 7,069
Other 31,745 32,464 28,448 26,461 27,397 114,770
-------- -------- -------- -------- -------- --------
Total Noninterest Expense 222,083 226,700 216,079 216,637 216,612 876,028
-------- -------- -------- -------- -------- --------
Income Before Income Taxes 38,529 40,259 36,412 35,094 33,708 145,473
Applicable Income Taxes 12,715 13,630 12,376 11,924 12,092 50,022
-------- -------- -------- -------- -------- --------
Net Income $ 25,814 $ 26,629 $ 24,036 $ 23,170 $ 21,616 $ 95,451
======== ======== ======== ======== ======== ========
Other Data:
Earnings Per Common Share - Basic $ 0.52 $ 0.54 $ 0.49 $ 0.47 $ 0.43 $ 1.94
Earnings Per Common Share - Diluted $ 0.51 $ 0.52 $ 0.47 $ 0.46 $ 0.43 $ 1.88
Dividends Paid Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.96
Return on Assets 0.59% 0.62% 0.59% 0.57% 0.53% 0.58%
Return on Equity 11.76% 12.38% 11.33% 10.91% 10.45% 11.27%
Net Interest Margin (FTE) 2.37% 2.36% 2.37% 2.45% 2.47% 2.41%
Full-Time Equivalent Employees 3,333 3,307 3,214 3,240 3,204
-7-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Period End Balance Sheets
(unaudited)
2003 2002
------------ ------------------------------------------------------------
First Fourth Third Second First
(In Thousands) Quarter Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and Due From Banks $ 340,141 $ 351,994 $ 327,467 $ 244,147 $ 227,137
Federal Funds Sold and
Reverse Repurchase Agreements 561,446 188,925 119,464 56,337 96,313
Trading Account Securities 111,516 127,848 204,202 81,739 100,002
Loans and Leases Held For Sale 255,593 436,884 189,581 328,453 125,421
Investment Securities 4,320,723 4,215,238 4,138,464 3,815,609 3,897,222
Loans and Leases:
Corporate Lending:
Commercial 4,515,888 4,482,373 4,418,133 4,289,690 4,321,443
Mortgage 947,205 960,636 973,833 873,726 862,514
Construction 528,824 510,331 510,410 575,655 563,425
Lease Financing 1,233,533 1,273,901 1,255,574 1,242,558 1,143,657
------------ ------------ ------------ ------------ ------------
Total Corporate Lending 7,225,450 7,227,241 7,157,950 6,981,629 6,891,039
Consumer Lending:
Installment 1,362,896 1,306,761 1,164,509 1,008,386 911,151
Residential 519,632 599,793 676,971 750,045 848,676
Lease Financing 43,522 - - - -
------------ ------------ ------------ ------------ ------------
Total Consumer Lending 1,926,050 1,906,554 1,841,480 1,758,431 1,759,827
------------ ------------ ------------ ------------ ------------
Total Loans and Leases 9,151,500 9,133,795 8,999,430 8,740,060 8,650,866
Reserve for Loan and Lease Losses (201,020) (201,051) (204,809) (214,860) (243,019)
------------ ------------ ------------ ------------ ------------
Net Loans and Leases 8,950,480 8,932,744 8,794,621 8,525,200 8,407,847
Leased Equipment 2,181,823 2,350,356 2,397,967 2,479,125 2,559,580
Premises and Equipment 98,853 101,513 101,003 101,230 101,794
Goodwill 82,651 82,651 82,651 82,432 82,432
Other Assets 823,194 751,856 741,695 861,061 707,543
------------ ------------ ------------ ------------ ------------
$ 17,726,420 $ 17,540,009 $ 17,097,115 $ 16,575,333 $ 16,305,291
============ ============ ============ ============ ============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest Bearing $ 1,163,209 $ 1,141,990 $ 988,508 $ 844,256 $ 849,694
Interest Bearing 9,502,086 8,706,989 8,284,737 8,548,319 8,056,706
------------ ------------ ------------ ------------ ------------
Total Deposits 10,665,295 9,848,979 9,273,245 9,392,575 8,906,400
Short-Term Debt 1,506,797 1,925,005 1,886,715 1,314,980 1,668,360
Long-Term Debt 3,661,219 3,842,657 4,017,644 3,976,155 3,962,991
Guaranteed Preferred Beneficial
Interests in Company's Junior
Subordinated Debentures 451,179 451,074 450,969 450,864 450,759
Minority Interest 160,966 160,966 163,337 161,213 -
Accrued Interest and Other Liabilities 401,981 430,957 449,889 434,465 490,767
------------ ------------ ------------ ------------ ------------
Total Liabilities 16,847,437 16,659,638 16,241,799 15,730,252 15,479,277
Shareholders' Equity:
Preferred Stock 7,000 7,000 7,000 7,000 7,000
Common Stock 14,454 14,454 14,409 14,427 14,603
Capital Surplus 298,498 298,025 298,731 298,898 322,836
Retained Earnings 619,444 604,013 589,533 577,579 566,481
Accumulated Other
Comprehensive Income (60,413) (43,121) (54,357) (52,823) (84,906)
------------ ------------ ------------ ------------ ------------
Total Shareholders' Equity 878,983 880,371 855,316 845,081 826,014
------------ ------------ ------------ ------------ ------------
$ 17,726,420 $ 17,540,009 $ 17,097,115 $ 16,575,333 $ 16,305,291
============ ============ ============ ============ ============
-8-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Credit Loss Experience
(unaudited)
2003 2002
-------- --------------------------------------------------------
First Fourth Third Second First Full
(Dollars In Thousands) Quarter Quarter Quarter Quarter Quarter Year
- --------------------------------------------------------------------------------------------------------
Reserve for Loan and Lease Losses
At Beginning of Period $201,051 $204,809 $214,860 $243,019 $241,143 $241,143
Provision Charged to Expense 16,521 18,237 23,532 33,575 24,205 99,549
Net Charge-Offs:
Corporate Lending:
Commercial 8,093 7,244 24,859 25,057 13,937 71,097
Mortgage 46 - 22 - 24 46
Construction 65 150 379 - 300 829
Lease Financing 3,294 10,101 2,620 21,635 4,324 38,680
-------- -------- -------- -------- -------- --------
Net Corporate Lending 11,498 17,495 27,880 46,692 18,585 110,652
Consumer Lending:
Installment 576 753 850 782 727 3,112
Residential 4,478 3,747 4,853 14,260 3,017 25,877
Lease Financing - - - - - -
-------- -------- -------- -------- -------- --------
Net Consumer Lending 5,054 4,500 5,703 15,042 3,744 28,989
-------- -------- -------- -------- -------- --------
Net Charge-Offs 16,552 21,995 33,583 61,734 22,329 139,641
-------- -------- -------- -------- -------- --------
Reserve for Loan and Lease Losses
At End of Period $201,020 $201,051 $204,809 $214,860 $243,019 $201,051
======== ======== ======== ======== ======== ========
Net Charge-Offs to Average Total Loans and Leases: (Annualized)
Corporate Lending:
Commercial 0.73% 0.66% 2.35% 2.37% 1.27% 1.65%
Mortgage 0.02% -% 0.01% -% 0.01% 0.01%
Construction 0.05% 0.11% 0.28% -% 0.21% 0.15%
Lease Financing 1.06% 3.25% 0.85% 7.25% 1.55% 3.23%
---- ---- ---- ---- ---- ----
Total Corporate Lending 0.64% 0.98% 1.61% 2.72% 1.07% 1.59%
Consumer Lending:
Residential 3.25% 2.46% 2.83% 7.21% 1.39% 3.51%
Installment 0.17% 0.24% 0.31% 0.32% 0.31% 0.30%
Lease Financing -% -% -% -% -% -%
---- ---- ---- ---- ---- ----
Total Consumer Lending 1.04% 0.98% 1.29% 3.43% 0.83% 1.62%
---- ---- ---- ---- ---- ----
Total Loans and Leases 0.73% 0.98% 1.55% 2.87% 1.02% 1.59%
==== ==== ==== ==== ==== ====
-9-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Nonperforming Assets
(unaudited)
2003 2002
-------- --------------------------------------------
First Fourth Third Second First
(Dollars In Thousands) Quarter Quarter Quarter Quarter Quarter
- ----------------------------------------------------------------------------------------------------------------
Nonaccrual Loans:
Corporate Lending:
Commercial $123,912 $ 99,805 $117,571 $108,330 $111,727
Mortgage 7,298 11,783 10,619 5,546 1,938
Construction 1,321 1,746 2,243 7,268 1,984
Lease Financing 2,792 4,008 3,952 3,497 5,223
-------- -------- -------- -------- --------
Total Corporate Lending 135,323 117,342 134,385 124,641 120,872
Consumer Lending:
Installment - - - - -
Residential 45,927 49,091 44,548 35,920 62,530
Lease Financing - - - - -
-------- -------- -------- -------- --------
Total Consumer Lending 45,927 49,091 44,548 35,920 62,530
-------- -------- -------- -------- --------
Total Nonaccrual Loans 181,250 166,433 178,933 160,561 183,402
Other Nonperforming Assets 22,172 15,780 14,579 25,471 28,098
-------- -------- -------- -------- --------
Total Nonperforming Assets $203,422 $182,213 $193,512 $186,032 $211,500
======== ======== ======== ======== ========
Loans 90 Days Past Due Still Accruing $ 36,038 $ 29,918 $ 30,482 $ 29,186 $ 29,390
Reserve for Loan and Lease Losses as a Percent of:
Nonaccrual Loans 110.91% 120.80% 114.46% 133.82% 132.51%
Nonperforming Assets 98.82% 110.34% 105.84% 115.50% 114.90%
Total Loans and Leases 2.20% 2.20% 2.28% 2.46% 2.81%
Nonaccrual Loans as a % of Total Loans and Leases 1.98% 1.82% 1.99% 1.84% 2.12%
Nonperforming Assets as a Percent of:
Total Loans, Leases and Other Nonperforming Assets 2.22% 1.99% 2.15% 2.12% 2.44%
Total Assets 1.15% 1.04% 1.13% 1.12% 1.30%
-10-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Average Balances and Rates
On a Fully Taxable Equivalent Basis
(unaudited)
2003 2002
----------------- -------------------------------------
First Quarter Fourth Quarter Third Quarter
----------------- ----------------- -----------------
Average Average Average Average Average Average
(Dollars In Millions) Balance Rate Balance Rate Balance Rate
- ----------------------------------------------------------------------------------------------
Assets:
Loans and Leases:
Corporate Lending:
Commercial $ 4,446 5.66% $ 4,404 6.13% $ 4,227 6.36%
Mortgage 934 5.83 943 5.88 930 6.08
Construction 522 4.19 524 4.28 533 4.56
Lease Financing 1,246 8.85 1,245 8.65 1,233 9.06
------ ----- ------ ----- ------ -----
Total Corporate Lending 7,148 6.13 7,116 6.40 6,923 6.67
Consumer Lending:
Installment 1,352 5.12 1,232 5.50 1,080 6.16
Residential 552 11.68 609 9.83 685 9.64
Lease Financing 33 7.92 - - - -
------ ----- ------ ----- ------ -----
Total Consumer Lending 1,937 7.04 1,841 6.94 1,765 7.51
------ ----- ------ ----- ------ -----
Total Loans and Leases 9,085 6.32 8,957 6.51 8,688 6.84
Investment Securities 4,292 4.90 4,149 5.26 3,789 5.49
Federal Funds Sold and Reverse
Repurchase Agreements 313 2.13 161 2.59 102 2.66
Other Short-Term Investments 504 5.35 366 5.76 407 5.28
------ ----- ------ ----- ------ -----
Total Earning Assets 14,194 5.76 13,633 6.07 12,986 6.36
Cash and Due From Banks 311 324 245
Leased Equipment 2,242 2,369 2,429
Other Assets 787 788 703
------- ------- -------
Total Assets $17,534 $17,114 $16,363
======= ======= =======
Liabilities and
Shareholders' Equity:
Deposits:
Demand Deposits $ 1,053 1.43 $ 944 1.60 $ 778 1.61
Savings Deposits 1,419 1.76 1,464 1.82 1,417 2.03
Time Deposits 6,498 2.94 5,960 3.43 6,211 3.49
------ ----- ------ ----- ------ -----
Total Deposits 8,970 2.57 8,368 2.94 8,406 3.07
Short-Term Debt:
Federal Funds Purchased and
Repurchase Agreements 1,488 2.11 1,494 2.26 849 2.90
Commercial Paper 300 1.47 295 1.82 268 1.97
------ ----- ------ ----- ------ -----
Total Short-Term Debt 1,788 2.00 1,789 2.19 1,117 2.68
Long-Term Debt 3,769 5.20 3,939 5.07 4,019 5.13
Junior Subordinated Debentures 451 4.22 451 4.56 451 5.28
------ ----- ------ ----- ------ -----
Total Interest Bearing Liabilities 14,978 3.22 14,547 3.48 13,993 3.70
Noninterest Bearing Deposits 1,137 1,113 934
Minority Interest 161 160 162
Other Liabilities 380 434 425
Shareholders' Equity 878 860 849
------- ------- -------
Total Liabilities and
Shareholders' Equity $17,534 $17,114 $16,363
======= ======= =======
Net Interest Spread 2.54% 2.59% 2.66%
==== ==== ====
Net Interest Margin 2.37% 2.36% 2.37%
==== ==== ====
2002
---------------------------------------------------------
Second Quarter First Quarter Full Year
----------------- ----------------- -----------------
Average Average Average Average Average Average
(Dollars In Millions) Balance Rate Balance Rate Balance Rate
- ----------------------------------------------------------------------------------------------
Assets:
Loans and Leases:
Corporate Lending:
Commercial $ 4,231 6.33% $ 4,386 6.55% $ 4,312 6.34%
Mortgage 878 6.42 882 6.54 909 6.22
Construction 560 4.38 567 4.82 546 4.51
Lease Financing 1,194 9.22 1,117 9.84 1,199 9.16
------ ----- ------ ----- ------ -----
Total Corporate Lending 6,863 6.68 6,952 6.94 6,966 6.67
Consumer Lending:
Installment 965 6.41 937 6.99 1,054 6.21
Residential 791 9.60 869 9.30 737 9.59
Lease Financing - - - - - -
------ ----- ------ ----- ------ -----
Total Consumer Lending 1,756 7.85 1,806 8.11 1,791 7.60
------ ----- ------ ----- ------ -----
Total Loans and Leases 8,619 6.92 8,758 7.18 8,757 6.86
Investment Securities 3,866 5.90 3,721 5.82 3,882 5.61
Federal Funds Sold and Reverse
Repurchase Agreements 127 2.85 109 2.79 125 2.71
Other Short-Term Investments 299 6.55 285 6.15 341 5.85
------ ----- ------ ----- ------ -----
Total Earning Assets 12,911 6.57 12,873 6.72 13,105 6.42
Cash and Due From Banks 212 238 255
Leased Equipment 2,505 2,606 2,477
Other Assets 678 644 701
------- ------- -------
Total Assets $16,306 $16,361 $16,538
======= ======= =======
Liabilities and
Shareholders' Equity:
Deposits:
Demand Deposits $ 546 1.12 $ 512 1.01 $ 696 1.40
Savings Deposits 1,475 1.97 1,535 2.05 1,472 1.97
Time Deposits 6,446 3.66 5,920 4.00 6,134 3.64
------ ----- ------ ----- ------ -----
Total Deposits 8,467 3.20 7,967 3.43 8,302 3.16
Short-Term Debt:
Federal Funds Purchased and
Repurchase Agreements 906 2.90 1,481 2.47 1,182 2.56
Commercial Paper 284 1.93 273 1.92 280 1.91
------ ----- ------ ----- ------ -----
Total Short-Term Debt 1,190 2.67 1,754 2.38 1,462 2.44
Long-Term Debt 3,974 5.14 4,022 5.18 3,990 5.13
Junior Subordinated Debentures 451 5.47 451 5.34 451 5.16
------ ----- ------ ----- ------ -----
Total Interest Bearing Liabilities 14,082 3.78 14,194 3.86 14,205 3.70
Noninterest Bearing Deposits 881 847 945
Minority Interest 34 - 90
Other Liabilities 460 493 451
Shareholders' Equity 849 827 847
Total Liabilities and
------- ------- -------
Shareholders' Equity $16,306 $16,361 $16,538
======= ======= =======
Net Interest Spread 2.79% 2.86% 2.72%
==== ==== ====
Net Interest Margin 2.45% 2.47% 2.41%
==== ==== ====
-11-
Provident Financial Group, Inc. and Subsidiaries
Consolidated Capital Data
(unaudited)
2003 2002
-------- -------------------------------------------------------
First Fourth Third Second First Full
Quarter Quarter Quarter Quarter Quarter Year
-------------------------------------------------------------------
Per Common Share:
Shares Outstanding (In Thousands):
Average - Basic 48,776 48,744 48,616 48,646 49,228 48,806
Average - Diluted 50,766 50,740 50,727 50,915 50,588 50,743
Period-End 48,759 48,760 48,611 48,672 49,257
Book Value $ 17.88 $ 17.91 $ 17.45 $ 17.22 $ 16.63
Price:
High $ 28.91 $ 28.05 $ 29.51 $ 31.35 $ 29.97 $ 31.35
Low 21.23 21.48 24.28 24.42 22.17 21.48
Period-End 21.23 26.03 25.09 29.01 28.80
Capital Ratios (Dollars in Millions):
Risk-Based Capital (Current Qtr Estimated):
Risk-Adjusted Assets $ 13,833 $ 14,221 $ 13,840 $ 13,489 $ 13,363
Tier 1 Capital $ 1,359 $ 1,337 $ 1,321 $ 1,295 $ 1,104
Percentage of Risk Adjusted Assets 9.82% 9.40% 9.55% 9.60% 8.26%
Total Capital $ 1,617 $ 1,625 $ 1,609 $ 1,585 $ 1,441
Percentage of Risk Adjusted Assets 11.69% 11.43% 11.62% 11.75% 10.78%
Tier 1 Leverage Ratio 7.77% 7.81% 8.09% 7.97% 6.76%
Period End Shareholders' Equity
to Total Period-End Assets 4.96% 5.02% 5.00% 5.10% 5.07%
Period-End Tangible Shareholders' Equity
to Total Period-End Tangible Assets 4.45% 4.49% 4.45% 4.53% 4.48%
Average Shareholders' Equity
to Total Average Assets 5.01% 5.03% 5.19% 5.21% 5.06% 5.12%
Average Tangible Shareholders' Equity
to Total Average Tangible Assets 4.48% 4.48% 4.61% 4.62% 4.47% 4.55%
-12-
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.
Three Months Ended
------------------------------------------------
(In Thousands) March 31, 2003 Dec. 31, 2002 March 31, 2002
- ------------------------------------------------------------------------------------------------------
Net Interest Income $ 82,959 $ 80,909 $ 78,295
Add: Operating Lease Income 138,861 148,107 154,981
Less: Depreciation on Operating Leases (99,653) (101,885) (107,928)
------------ ------------ ------------
Net Financing Income $ 122,167 $ 127,131 $ 125,348
Noninterest Income $ 194,174 $ 204,287 $ 196,230
Less: Operating Lease Income (138,861) (148,107) (154,981)
------------ ------------ ------------
Noninterest Income Excluding Operating Lease Income $ 55,313 $ 56,180 $ 41,249
Total Financing Revenues $ 177,480 $ 183,311 $ 166,597
Noninterest Expenses $ 222,083 $ 226,700 $ 216,612
Less: Depreciation on Operating Leases (99,653) (101,885) (107,928)
------------ ------------ ------------
Noninterest Expenses Excluding
Depreciation on Operating Leases $ 122,430 $ 124,815 $ 108,684
Average Earning Assets $ 14,194,000 $ 13,633,000 $ 12,873,000
Add: Average Leased Equipment 2,242,000 2,369,000 2,606,000
------------ ------------ ------------
Average Earning Assets Including Leased Equipment $ 16,436,000 $ 16,002,000 $ 15,479,000
Net Interest Margin Ratio - GAAP Basis 2.37% 2.36% 2.47%
Net Financing Income Ratio 3.01% 3.15% 3.28%
Noninterest Expenses as a Percent of
Total Revenues - GAAP Basis 80% 79% 79%
Noninterest Expenses Excluding Depreciation on
Operating Leases as a Percent of Total Revenues
Which Includes Depreciation on Operating Leases 69% 68% 65%
The company has average leased equipment which as a percentage of total average
assets were 12.8%, 13.8% and 15.9% for the periods presented. 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.
-13-
