Exhibit 99.1
Exhibit 99.1
PROVIDENT BANKSHARES CORPORATION
FORWARD-LOOKING STATEMENTS AND RISK FACTORS
This presentation, and other written materials and oral statements made by management, may contain certain forward-looking statements, including those regarding the Company’s prospective performance, plans, strategies and expectations, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of said harbor provisions.
Forward-looking statements, which are based on certain assumptions and describe future events, plans, strategies, and expectations of the Company, are generally identified by use of the words “plan,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or other similar expressions. The Company’s ability to predict results or the actual effects of its performance, plans, strategies and expectations, including those with respect to its merger with Southern Financial Bancorp, Inc., is inherently uncertain. Accordingly, actual results may differ materially from anticipated results. The following factors, among others, could cause the actual results of the merger to differ materially from the expectations stated in this presentation: the ability to successfully integrate the companies following the merger, including the retention of key personnel; the ability to effect the proposed capital recovery and optimization plan; the ability to fully realize the expected cost savings and revenues; and the ability to realize the expected cost savings and revenues on a timely basis.
Factors that could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to: changes in general economic conditions, interest rates, deposit flows, loan demand, real estate values, competition, and the demand for financial services and loan, deposit, and investment products in the Company’s local markets; changes in the quality or composition of the loan or investment portfolios; inability to successfully carry out marketing and/or expansion plans; changes in accounting principles, policies, or guidelines; changes in legislation and regulation; changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; war or terrorist activities; and other economic, competitive, governmental, regulatory, geopolitical, and technological factors affecting the Company’s operations, pricing, and services.
The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
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AGENDA
HISTORY ‘THE NEW PROVIDENT’ KEY STRATEGIES
INVESTMENT ATTRIBUTES
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HISTORY
1886—Founded
1987—Converted to Commercial Bank
1993—Totally Free Checking/In-Store Branches
1997 – Citizen’s Savings Bank Merger
2004 – Southern Financial Merger
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PROVIDENT BANKSHARES
C O R P O R A T I O N
THE NEW PROVIDENT
430,000 Customers 2000 Employees 146 Branches $4.1B Total Deposits $3.5B Total Loans
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PROVIDENT BANKSHARES
C O R P O R A T I O N
THE NEW PROVIDENT FRANCHISE
Branches located in Maryland and Virginia’s best markets
County Demographics
PBKS Branches
4—8% Projected Growth
+8% Projected Growth
County Demographics
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STRATEGY STATEMENT
Provident is a regional bank serving Maryland and Virginia with emphasis in the key urban markets of Baltimore, Washington, and Richmond.
Provident will continue to provide the products and services of our largest competitors, while delivering the level of service found in only the best community banks.
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PROVIDENT BANKSHARES
C O R P O R A T I O N
KEY STRATEGIES
Broaden Presence and Customer Base in Washington Metro and Virginia
Grow Commercial Banking Market Share in the Maryland and Virginia Markets
Focus Resources on Growth in Core Business Lines
Improve Financial Fundamentals
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PROVIDENT BANKSHARES
C O R P O R A T I O N
BROADEN PRESENCE AND CUSTOMER BASE IN WASHINGTON METRO AND VIRGINIA
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PROVIDENT BANKSHARES
C O R P O R A T I O N
VIRGINIA AND WASHINGTON METRO EXPANSION
BRANCH NETWORK
83
98
100
109
118
146
59
66
65
66
67
70
24
32
35
43
51
76
1999
2000
2001
2002
2003
2Q04
VA/Wash Metro
Baltimore
100
90
80
70
60
50
40
30
2Q 00
1Q 01
4Q 01
3Q 02
2Q 03
1Q 04
Baltimore
Sub MD
Virginia
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TOTAL AWARENESS
CHECKING BALANCE GROWTH VA/WASHINGTON METRO
CONSUMER
$202 $151 $134 $106 $81
2001
2002
2003
1Q04
2Q04
Average Balances (millions) $49 $100 $160 $156 $302
COMMERCIAL
2001
2002
2003
1Q04
2Q04
CAGR Consumer 2000-2003 28.60%
CAGR Commercial 2000-2003 61.48%
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GROW COMMERCIAL BANKING MARKET SHARE IN THE MARYLAND AND VIRGINIA MARKETS
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PROVIDENT BANKSHARES
C O R P O R A T I O N
CORE COMMERCIAL LOAN AND DEPOSIT/REPO GROWTH
LOANS
DEPOSIT/REPO
$791 $856 $961 $1,076 $1,429
2001
2002
2003
2Q04
Baltimore
VA/Wash
Average Balances (millions)
2001 $426 $579 $680 $708 $1,006
2002
2003
2Q04
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CAGR Loans
2000-2003
12.78%
CAGR Dep/Repo
2000-2003
25.26%
FOCUS RESOURCES ON GROWTH IN CORE BUSINESS LINES
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PROVIDENT BANKSHARES
C O R P O R A T I O N
CORE LOAN AND DEPOSIT GROWTH
CORE LOANS VS TOTAL LOANS
CORE DEPOSITS VS TOTAL DEPOSITS
$1.5 $3.1 $1.7 $2.7 $1.9 $2.6 $2.1 $2.8 $2.5 $3.3
47%
62%
72%
74%
77%
2001
2002
2003
1Q04
2Q04 $2.5 $3.6
71% $2.7 $3.3
82% $2.8 $3.1 $2.9 $3.1 $3.5 $3.8
90%
93%
91%
2001
2002
2003
1Q04
2Q04
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Core
Total
Average Balances (billions)
CAGR Core Loans 2000-2003 16.55%
CAGR Core Deposits 2000-2003 6.78%
IMPROVE FINANCIAL FUNDAMENTALS
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PROVIDENT BANKSHARES
C O R P O R A T I O N
THE NEW PROVIDENT
TRANSFORMED BALANCE SHEET
HIGHER ABSOLUTE EARNINGS
IMPROVED EARNINGS QUALITY
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Components of Earning Assets
CAGR 4%
2001
2Q04
36%
30%
34%
40%
14%
46%
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Non-Core Loans
Core Loans
Investment Securities
CAGR 17%
Core Loans to Total Loans
2Q04
2001
53%
26%
21%
24%
32%
44%
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Consumer
Commercial
Non-Core
Core Deposit Growth
(in millions)
Total Deposits
CAGR 2%
Core Deposits
CAGR 9%
$3,591 $3,819 $2,548 $3,481
2001
2Q04
2001
2Q04
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Asset Quality Improvement
NON PERFORMING LOANS TO LOANS
Period End
NET CHARGE OFFS TO AVERAGE LOANS
Annualized
0.68%
1.04% $28.8 $21.0
0.83% $21.1
0.80% $22.3
0.84% $29.7
0.68% $21.0
0.41% $11.0
0.29% $7.6
0.21% $1.7
2001
2002
2003
2Q04
2001
2002
2003
2Q04
$ in millions
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Earnings Per Share Growth
$1.56 $1.88 $2.05 $0.49 $0.51 $0.52
2001
2002
2003
2Q03
1Q04
2Q04*
* Based on Operating Results
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Dividends Growth $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00
3.3%
3.6%
3.5%
3.5%
6.00%
5.25%
4.50%
3.75%
3.00%
2.25%
1.50%
0.75%
0.00%
2001
2002
2003
2004
Cash Dividend
Dividend Yield
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Measures of Success
EFFICIENCY RATIO
NET INTEREST MARGIN
RETURN ON ASSETS
CAPITAL LEVEL
68%
65%
2.89%
3.31%
.83%
1.05%*
7.13%
8.48%
*based on operating results
2001
2Q04
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INVESTMENT ATTRIBUTES
Core balance sheet momentum
Effective expansion strategy
Growing market share in attractive markets
Stable and improving credit quality
Experienced management team
PROVIDENT BANKSHARES
C O R P O R A T I O N
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PROVIDENT BANKSHARES
CORPORATION
(www.provbank.com)
Contact:
Media: Lillian Kilroy: (410) 277-2833
Investment Community: Tricia Ferrick: (703)352-2583
PROVIDENT BANKSHARES
C O R P O R A T I O N
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