Exhibit 99
Provident Financial Group Announces Financial Results
for the Fourth Quarter & Full-Year 2003
Strategic Actions Taking Hold -- Improved Credit Profile
CINCINNATI, Jan. 21 /PRNewswire-FirstCall/ -- Provident Financial Group,
Inc. announced fourth quarter and full year 2003 financial results today. For
the quarter ended December 31, 2003, reported net income was $30.2 million or
59 cents per share, a 14 percent increase over $26.6 million or 52 cents per
share reported in 2002's fourth quarter. Fourth quarter 2003 reported returns
on average equity and assets were 13.51 percent and 0.70 percent, compared
with 12.38 percent and 0.62 percent in last year's fourth quarter. The company
closed on the sale of its Florida operations during the quarter and recorded a
$75.0 million pre-tax gain. Excluding the net positive impact from the gain
and other items that are discussed in more detail on page two, fourth quarter
earnings were $28.7 million or 56 cents per share.
Commenting on the quarter as well as the full year, Robert L. Hoverson,
Provident's President and Chief Executive Officer, said, "Over the past few
years we have been actively engaged in lowering the company's risk profile.
Several additional related strategic actions taken during the fourth quarter
constitute very significant milestones in the history of our company. We are
very excited about our future as we emerge from this transformation. Actions
taken to solidify our risk profile will now help us shift our focus even more
unequivocally on increasing profitability in 2004 and beyond."
During the quarter, the company executed the sale of approximately
$38 million of non-performing loans and leases in its commercial portfolio. As
a result of this sale and other actions taken throughout the year, non-
performing assets are nearly $100 million lower than the outstandings at the
end of 2002, and approximately $48 million lower than at the end of September
2003. All key credit ratios have improved significantly over year-end 2002.
For the period ended December 31, 2003, the reserve as a percentage of non-
performing assets was over 190 percent, and non-performing assets as a
percentage of total loans and leases were 0.95 percent. Also through sales
executed during the quarter, the company's exposure to the commercial airline
industry is now at $97 million compared with $178 million at year-end 2002.
These initiatives along with all the other steps taken throughout the past two
years should result in similar to or better credit performance than industry
peers. The business lines the company has chosen to selectively pursue and
grow should make this change permanent. This transformation should have a
lasting impact on the performance of the company.
The after-tax losses on the sales of non-performing assets, certain
commercial aircraft loan and lease exposures, and other asset impairments were
$22.3 million. Also during the quarter, the company recorded charges totaling
$24.8 million related to the prepayment of $140.0 million of high-rate Federal
Home Loan Bank debt, and costs associated with contract terminations,
severance and exited businesses. Furthermore, as a result of new accounting
rules implemented by FASB Interpretation No. 46, "Consolidation of Variable
Interest Entities," the company took a cumulative after-tax charge of $1.2
million. The company also recorded an after-tax gain of $48.7 million from the
sale of its Florida operations, which closed in mid-November. Initial
projections indicated a pre-tax gain from the Florida operations of
approximately $70 million; however, the actual pre-tax gain was $75.0 million.
The net positive impact from this gain as well as the other items impacting
fourth quarter results were approximately $1.6 million, or 3 cents per share
as detailed in the chart below.
Fourth Quarter 2003 Earnings Overview
($ in millions, excluding per share data)
After-Tax
Gain/(Loss) EPS
Earnings, before impact of accounting change $31.4 $0.61
Impact of changes in accounting
principle (FIN 46) (1.2) (0.02)
Reported earnings, after impact of accounting change 30.2 0.59
Fourth Quarter Items
Sale of Florida operations 48.7 0.95
Sale of classified loans & aircraft leases (17.8) (0.35)
Retirement of corporate debt (16.6) (0.32)
Contract termination, severance,
business exit costs & other (8.2) (0.16)
Impairment of equity investment &
aircraft lease residuals (4.5) (0.09)
Total impact of fourth quarter items 1.6 0.03
Earnings, after impact of fourth quarter items
& accounting change $28.7 $0.56
Full-Year 2003 Earnings Results
* Full-year 2003 reported net income was $96.7 million or $1.90 per
share, and reported returns on average equity and assets were
10.97 percent and 0.55 percent. This compares with net income of
$95.5 million or $1.88 per share and returns on average equity and
assets of 11.27 percent and 0.58 percent reported for the year ended
December 31, 2002.
* Excluding the impact of the accounting change, full-year 2003 earnings
were $97.9 million or $1.92 per share.
* Excluding the impact of the accounting change as well as other items
recorded during the second and fourth quarters, full-year 2003 earnings
were $109.3 million or $2.15 per share.
Loans & Asset Quality
Average loans and leases for 2003's fourth quarter were $9.0 billion
compared with $9.0 billion in last year's fourth quarter. Average loans and
leases for the full-year 2003 were $9.1 billion compared with $8.8 billion for
the full-year 2002. Total loans and leases outstanding on December 31, 2003
were $8.9 billion compared with $9.1 billion on December 31, 2002. Fourth
quarter and full year 2003 loan and lease comparisons are skewed by the second
quarter sale of $471.0 million of subprime residential mortgage loans and the
fourth quarter sale of Florida operations. Excluding these sales, loans and
leases outstanding on December 31, 2002 were $8.3 billion, and average loans
and leases for 2003's fourth quarter and full-year were $8.7 billion and
$8.5 billion, compared with $8.1 billion and $7.8 billion for 2002's fourth
quarter and full-year.
The tables below present a comparison of key asset quality indicators.
($ in millions) Quarter Full-Year
4Q-03 3Q-03 4Q-02 2003 2002
Provision for Loan & Lease Losses
Reported $35.1 $11.9 $18.2 $116.0 $99.5
Excluding Impact of Sales* 10.1 11.9 18.2 57.7 99.5
NCOs to Average Total Loans &
Leases
Reported 2.64% 0.57% 0.98% 1.73% 1.59%
Excluding Impact of Sales* 0.45% 0.57% 0.98% 0.65% 1.59%
Period Ended
12/31/03 09/30/03 12/31/02
Reserve for Loan & Lease Losses $160.0 $184.2 $201.1
Reserves to NPAs 190% 140% 110%
Reserves to Total Loans & Leases 1.80% 2.04% 2.20%
NPAs $84.2 $132.0 $182.2
NPAs to Total Loans, Leases
& Other NPAs 0.95% 1.46% 1.99%
* Sold classified loans, aircraft leases & other impairments in 4Q-03;
sold subprime residential mortgage in 2Q-03.
Revenue & Expenses
Revenue and expense category comparisons for 2003 and 2002, including the
net interest margin, are skewed by the sale of the Florida operations, which
closed in late November 2003, and the sale of subprime residential mortgage
loans executed in 2003's second quarter. Fourth quarter 2003 net interest
income was $74.2 million compared with $80.9 million in last year's fourth
quarter. The net interest margin was 2.02 percent compared with 2.01 percent
last quarter and 2.36 percent in last year's fourth quarter. Non-interest
income was $253.6 million. Excluding the net positive impact from fourth
quarter items, non-interest income was $181.4 million compared with
$204.3 million in last year's fourth quarter. Revenue, comprised of net
interest income and non-interest income, but excluding warrant and securities
gains/losses as well as other gains/losses from the sales of certain
businesses and assets, was $256.8 million compared with $283.9 million in last
year's fourth quarter. Fourth quarter 2003 non-interest expenses were
$246.3 million. Excluding charges related to fourth quarter items, non-
interest expenses were $203.4 million compared with $207.3 million last
quarter and $226.7 million in last year's fourth quarter.
Deposits
Average retail and commercial deposits for 2003's fourth quarter were
$6.4 billion, an increase of 6 percent from $6.0 billion in 2002's fourth
quarter. Excluding the managed run-off of higher-cost CDs, transactional
deposit accounts were up 22 percent. For the period ended December 31, 2003,
retail and commercial deposits were $6.4 billion, an increase of 4 percent
from $6.2 billion on December 31, 2002. All comparisons exclude results from
Florida operations.
Outlook
At this time the range of the company's internal earnings projections is
between $2.35 and $2.45 per share for the full-year 2004. Underlying credit
expectations are for performance similar to the fourth quarter, excluding the
impact of the sale transactions. These projections are based on a steady, but
slow improvement in the economy.
Capital Position
Common shareholders' equity was $892.1 million or $18.19 per share on
December 31, 2003 compared with $885.4 million or $18.11 per share on
September 30, 2003. On December 31, 2003 common equity to assets was5.24
percent and Tier I and total risk-based capital ratios were 10.62 percent and
12.48 percent respectively.
Additional Twelve Months Results
For the full-year 2003, net interest income was $315.8 million compared
with $315.6 million for 2002. Non-interest income for 2003 was $845.3 million.
Excluding the net positive impact from second and fourth quarter items, non-
interest income was $754.2 million compared with $805.5 million for 2002.
Revenue, comprised of net interest income and non-interest income, but
excluding warrant and securities gains/losses as well as other gains/losses
from the sales of certain businesses and assets, was $1,062.0 million for 2003
compared with $1,110.3 million for 2002. The full-year 2003 net interest
margin was 2.18 percent compared with 2.41 percent for 2002. Non-interest
expenses for 2003 were $900.1 million. Excluding charges related to second and
fourth quarter items, non-interest expenses were $850.3 million compared with
$876.0 million for 2002.
Conference Call & Webcast
A conference call and webcast will be held today at 2:00 p.m. (ET). To
participate in the conference call, dial 1-800-404-1354, approximately five
minutes prior to the start of the call. A replay will be available from 5:00
p.m. today through Monday, January 26, 2004 at 11:59 p.m. by calling 1-800-
642-1687 (passcode 476 56 82). The webcast can be accessed from the Investor
Relations area of Provident's websiteat http://www.providentbank.com. The
webcast will be available for replay approximately one hour after the call.
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. Forward-looking statements may be identified by words such as
estimates, anticipates, projects, plans, expects, intends, believes, should
and similar expressions and by the context in which they are used. Such
statements are based upon current expectations of the company and speak only
as of the date made. 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
results 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.
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. (Nasdaq: PFGI) 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 and Northern
Kentucky, 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 December 31,
2003, Provident Financial Group had $8.9 billion in loans outstanding,
$10.4 billion in deposits, and assets of $17.0 billion. Provident has served
the financial needs of its customers for 100 years, and currently 3,200
Provident associates serve approximately 500,000 customers.
Provident Financial Group, Inc. and Subsidiaries
Consolidated Financial Highlights
(unaudited)
Three Months Twelve Months
For The Period Ended
December 31 2003 2002 % Change 2003 2002 % Change
PER COMMON SHARE:
Net Income
Basic - Before
Cumulative
Effect of
Changes in
Accounting
Principles $.63 $.54 16.7% $1.98 $1.94 2.1%
Basic - After
Cumulative
Effect of
Changes in
Accounting
Principles .61 .54 13.0% 1.96 1.94 1.0%
Diluted - Before
Cumulative
Effect of
Changes in
Accounting
Principles .61 .52 17.3% 1.92 1.88 2.1%
Diluted - After
Cumulative
Effect of
Changes in
Accounting
Principles .59 .52 13.5% 1.90 1.88 1.1%
Dividends .24 .24 0.0% .96 .96 0.0%
Book Value 18.19 17.91 1.6%
RESULTS OF OPERATIONS:
(In Millions)
Net Interest Income $74.2 $80.9 (8.3)% $315.8 $315.6 0.1%
Provision for Loan
and Lease Losses 35.1 18.2 92.3% 116.0 99.5 16.5%
Net Income 30.2 26.6 13.5% 96.7 95.5 1.3%
FINANCIAL RATIOS:
Performance Ratios:
Return on
Average Assets 0.70% 0.62% 0.55% 0.58%
Return on
Average
Shareholders'
Equity 13.51 12.38 10.97 11.27
Average
Shareholders'
Equity to
Average Assets 5.14 5.03 5.00 5.12
Net Interest
Margin 2.02 2.36 2.18 2.41
Capital Adequacy
Ratios (Period
End):
Shareholders'
Equity to Total
Assets 5.28 5.02
Tier I Leverage
Ratio 8.14 7.81
Risk-Based
Capital Ratio -
Tier I Capital 10.62 9.40
Risk-Based
Capital Ratio -
Total Capital 12.48 11.42
(Current
Period
Regulatory
Ratios are
Estimated)
ASSET QUALITY RATIOS:
Reserve for Loan and
Lease Losses to:
Total Loans and
Leases 1.80% 2.20%
Nonaccrual Loans 200.35 120.80
Nonperforming Assets
to:
Total Loans,
Leases and Other
Nonperforming
Assets .95 1.99
Total Assets .49 1.04
Net Charge-Off's to
Average Total
Loans and Leases
(Annualized) 2.64% .98% 1.73 1.59
AVERAGE BALANCES: (In
Millions)
Total Loans and
Leases $8,982 $8,957 0.3% $9,051 $8,757 3.4%
Earning Assets 14,555 13,633 6.8% 14,502 13,105 10.7%
Leased Equipment 1,737 2,369 (26.7)% 1,999 2,477 (19.3)%
Assets 17,395 17,114 1.6% 17,619 16,538 6.5%
Deposits 10,651 9,481 12.3% 10,648 9,247 15.2%
Interest Bearing
Liabilities 14,337 14,547 (1.4)% 14,852 14,205 4.6%
Shareholders' Equity 894 860 4.0% 882 847 4.1%
PERIOD END BALANCES: (In
Millions)
Total Loans and
Leases $8,896 $9,134 (2.6)%
Leased Equipment 1,653 2,350 (29.7)%
Assets 17,018 17,540 (3.0)%
Deposits 10,336 9,849 4.9%
Shareholders' Equity 899 880 2.2%
OFF-BALANCE SHEET
SECURITIZED LOANS AND
LEASES: (In Millions)
Residential Mortgage $1,170 $1,779 (34.2)%
Home Equity 133 195 (31.8)%
Direct Finance
Leasing 41 94 (56.4)%
Total Off-Balance
Sheet Securitized
Loans and Leases $1,344 $2,068 (35.0)%
(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.)
Provident Financial Group, Inc. and Subsidiaries
Consolidated Statements Of Income
(unaudited)
Three Months Ended
December 31,
(Dollars In Thousands Except Per
Share Data) 2003 2002 % Change
Net Interest Income $74,216 $80,909 (8.3)%
Provision for Loan and Lease Losses 35,070 18,237 92.3%
Noninterest Income:
Service Charges on Deposit Accounts 12,367 12,139 1.9%
Loan Servicing Fees 13,150 11,550 13.9%
Commercial Mortgage Banking Revenue 13,550 8,222 64.8%
Other Service Charges and Fees 12,758 12,754 0.0%
Leasing Income 114,484 148,107 (22.7)%
Cash Gain on Sale of Loans 3,714 3,556 4.4%
Warrant Gains - - n/m
Net Securities Gains / (Losses) (1,128) 1,309 (186.2)%
Net Gain on Florida Assets and
Liabilities 74,998 - n/m
Net Gain on Merchant Services
Business - - n/m
Other 9,664 6,650 45.3%
Total Noninterest Income 253,557 204,287 24.1%
Noninterest Expense:
Salaries, Wages and Benefits 64,855 60,918 6.5%
Charges and Fees 9,059 7,752 16.9%
Occupancy 6,449 5,808 11.0%
Leasing Expense 88,412 102,416 (13.7)%
Equipment Expense 6,114 6,483 (5.7)%
Professional Services 7,945 7,679 3.5%
Minority Interest Expense 3,197 3,180 0.5%
Debt Retirement Charge 25,584 - n/m
Disposition Cost of Subprime Loans - - n/m
Other 34,659 32,464 6.8%
Total Noninterest Expense 246,274 226,700 8.6%
Income Before Income Taxes and
Cumulative Effect of Changes in
Accounting Principles 46,429 40,259 15.3%
Income Taxes 15,005 13,630 10.1%
Income Before Cumulative Effect
of Changes in Accounting
Principles 31,424 26,629 18.0%
Cumulative Effect of Changes in
Accounting Principles (1,202) - n/m
Net Income $30,222 $26,629 13.5%
Other Data:
Basic Earnings Per Common Share:
Before Cumulative Effect of
Changes in Accounting Principles $0.63 $0.54 16.7%
Cumulative Effect of Changes in
Accounting Principles (0.02) - n/m
Net Income $0.61 $0.54 13.0%
Diluted Earnings Per Common Share:
Before Cumulative Effect of
Changes in Accounting Principles $0.61 $0.52 17.3%
Cumulative Effect of Changes in
Accounting Principles (0.02) - n/m
Net Income $0.59 $0.52 13.5%
Dividends Paid Per Common Share $0.24 $0.24 0.0%
Return on Assets 0.70% 0.62%
Return on Equity 13.51% 12.38%
Net Interest Margin (FTE) 2.02% 2.36%
Full-Time Equivalent Employees 3,177 3,307
n/m - not meaningful
Provident Financial Group, Inc. and Subsidiaries
Consolidated Statements Of Income
(unaudited)
Twelve Months Ended
December 31,
(Dollars In Thousands Except Per
Share Data) 2003 2002 % Change
Net Interest Income $315,792 $315,558 0.1%
Provision for Loan and Lease Losses 115,979 99,549 16.5%
Noninterest Income:
Service Charges on Deposit Accounts 50,023 45,184 10.7%
Loan Servicing Fees 40,163 36,980 8.6%
Commercial Mortgage Banking Revenue 44,791 25,354 76.7%
Other Service Charges and Fees 50,935 45,418 12.1%
Leasing Income 510,109 605,887 (15.8)%
Cash Gain on Sale of Loans 20,333 15,691 29.6%
Warrant Gains 1,636 8,186 (80.0)%
Net Securities Gains / (Losses) 6,307 2,596 143.0%
Net Gain on Florida Assets and
Liabilities 74,998 - n/m
Net Gain on Merchant Services
Business 19,000 - n/m
Other 26,994 20,196 33.7%
Total Noninterest Income 845,289 805,492 4.9%
Noninterest Expense:
Salaries, Wages and Benefits 253,399 233,178 8.7%
Charges and Fees 32,152 30,531 5.3%
Occupancy 25,365 23,637 7.3%
Leasing Expense 365,408 416,508 (12.3)%
Equipment Expense 26,285 24,345 8.0%
Professional Services 32,667 25,990 25.7%
Minority Interest Expense 12,788 7,069 80.9%
Debt Retirement Charge 25,584 - n/m
Disposition Cost of Subprime Loans 6,914 - n/m
Other 119,493 114,770 4.1%
Total Noninterest Expense 900,055 876,028 2.7%
Income Before Income Taxes and
Cumulative Effect of Changes in
Accounting Principles 145,047 145,473 (0.3)%
Income Taxes 47,145 50,022 (5.8)%
Income Before Cumulative Effect
of Changes in Accounting
Principles 97,902 95,451 2.6%
Cumulative Effect of Changes in
Accounting Principles (1,202) - n/m
Net Income $96,700 $95,451 1.3%
Other Data:
Basic Earnings Per Common Share:
Before Cumulative Effect of
Changes in Accounting Principles $1.98 $1.94 2.1%
Cumulative Effect of Changes in
Accounting Principles (0.02) - n/m
Net Income $1.96 $1.94 1.0%
Diluted Earnings Per Common Share:
Before Cumulative Effect of
Changes in Accounting Principles $1.92 1.88 2.1%
Cumulative Effect of Changes in
Accounting Principles (0.02) - n/m
Net Income $1.90 $1.88 1.1%
Dividends Paid Per Common Share $0.96 $0.96 0.0%
Return on Assets 0.55% 0.58%
Return on Equity 10.97% 11.27%
Net Interest Margin (FTE) 2.18% 2.41%
Full-Time Equivalent Employees
n/m - not meaningful
Provident Financial Group, Inc. and Subsidiaries
Consolidated Quarterly Statements Of Income
(unaudited)
2003
(Dollars In Thousands Except Fourth Third Second First Full
Per Share Data) Quarter Quarter Quarter Quarter Year
Net Interest Income $74,216 $74,123 $84,494 $82,959 $315,792
Provision for Loan and Lease
Losses 35,070 11,919 52,469 16,521 115,979
Noninterest Income:
Service Charges on Deposit
Accounts 12,367 12,933 12,391 12,332 50,023
Loan Servicing Fees 13,150 6,925 9,428 10,660 40,163
Commercial Mortgage
Banking Revenue 13,550 10,095 10,849 10,297 44,791
Other Service Charges and
Fees 12,758 13,520 12,921 11,736 50,935
Leasing Income 114,484 126,192 131,459 137,974 510,109
Cash Gain on Sale of Loans 3,714 4,553 7,124 4,942 20,333
Warrant Gains - - 1,308 328 1,636
Net Securities Gains /
(Losses) (1,128) 5,077 858 1,500 6,307
Net Gain on Florida Assets
and Liabilities 74,998 - - - 74,998
Net Gain on Merchant
Services Business - - 19,000 - 19,000
Other 9,664 6,176 7,636 3,518 26,994
Total Noninterest
Income 253,557 185,471 212,974 193,287 845,289
Noninterest Expense:
Salaries, Wages and
Benefits 64,855 60,737 65,823 61,984 253,399
Charges and Fees 9,059 7,404 7,867 7,822 32,152
Occupancy 6,449 6,224 6,464 6,228 25,365
Leasing Expense 88,412 89,047 92,780 95,169 365,408
Equipment Expense 6,114 6,398 6,824 6,949 26,285
Professional Services 7,945 7,906 8,418 8,398 32,667
Minority Interest Expense 3,197 3,197 3,197 3,197 12,788
Debt Retirement Charge 25,584 - - - 25,584
Disposition Cost of
Subprime Loans - - 6,914 - 6,914
Other 34,659 26,378 27,007 31,449 119,493
Total Noninterest
Expense 246,274 207,291 225,294 221,196 900,055
Income Before Income
Taxes and Cumulative
Effect of Changes
in Accounting
Principles 46,429 40,384 19,705 38,529 145,047
Income Taxes 15,005 12,923 6,502 12,715 47,145
Income Before
Cumulative Effect
of Changes in
Accounting
Principles 31,424 27,461 13,203 25,814 97,902
Cumulative Effect of Changes
in Accounting Principles (1,202) - - - (1,202)
Net Income $30,222 $27,461 $13,203 $25,814 $96,700
Other Data:
Basic Earnings Per Common
Share:
Before Cumulative Effect
of Changes in
Accounting Principles $0.63 $0.56 $0.27 $0.52 $1.98
Cumulative Effect of
Changes in Accounting
Principles (0.02) - - - (0.02)
Net Income $0.61 $0.56 $0.27 $0.52 $1.96
Diluted Earnings Per
Common Share:
Before Cumulative Effect
of Changes in
Accounting Principles $0.61 $0.54 $0.26 $0.51 $1.92
Cumulative Effect of
Changes in Accounting
Principles (0.02) - - - (0.02)
Net Income $0.59 $0.54 $0.26 $0.51 $1.90
Dividends Paid Per Common
Share $0.24 $0.24 $0.24 $0.24 $0.96
Return on Assets 0.70% 0.62% 0.30% 0.59% 0.55%
Return on Equity 13.51% 12.91% 5.85% 11.76% 10.97%
Net Interest Margin (FTE) 2.02% 2.01% 2.32% 2.37% 2.18%
Full-Time Equivalent
Employees 3,177 3,345 3,355 3,333
Provident Financial Group, Inc. and Subsidiaries
Consolidated Quarterly Statements Of Income
(unaudited)
2002
(Dollars In Thousands Except Fourth Third Second First Full
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 11,550 9,018 8,414 7,998 36,980
Commercial Mortgage
Banking Revenue 8,222 5,365 6,021 5,746 25,354
Other Service Charges and
Fees 12,754 10,744 12,021 9,899 45,418
Leasing Income 148,107 150,135 152,664 154,981 605,887
Cash Gain on Sale of Loans 3,556 5,001 4,494 2,640 15,691
Warrant Gains - - 8,186 - 8,186
Net Securities Gains /
(Losses) 1,309 633 654 - 2,596
Other 6,650 5,820 3,209 4,517 20,196
Total Noninterest
Income 204,287 198,397 206,578 196,230 805,492
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 102,416 102,690 104,537 106,865 416,508
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 226,700 216,079 216,637 216,612 876,028
Income Before Income
Taxes 40,259 36,412 35,094 33,708 145,473
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
Provident Financial Group, Inc. and Subsidiaries
Consolidated Period End Balance Sheets
(unaudited)
2003
Fourth Third Second First
(In Thousands) Quarter Quarter Quarter Quarter
ASSETS
Cash and Due From
Banks $273,299 $288,176 $352,241 $340,141
Federal Funds Sold
and Reverse
Repurchase
Agreements 253,273 341,833 337,006 561,446
Trading Account
Securities 119,646 142,660 105,877 111,516
Loans and Leases
Held For Sale 595,505 494,804 447,039 255,593
Investment
Securities 4,527,912 4,731,323 4,760,894 4,320,723
Loans and Leases:
Corporate Lending:
Commercial 4,038,545 4,288,451 4,459,612 4,515,888
Mortgage 961,939 992,619 1,017,061 947,205
Construction 452,581 504,071 516,348 528,824
Lease
Financing 1,275,255 1,304,659 1,253,851 1,233,533
Total
Corporate
Lending 6,728,320 7,089,800 7,246,872 7,225,450
Consumer Lending:
Installment 1,670,667 1,573,782 1,424,207 1,362,896
Residential 36,241 26,812 37,741 519,632
Lease
Financing 460,302 320,866 155,577 43,522
Total
Consumer
Lending 2,167,210 1,921,460 1,617,525 1,926,050
Total Loans and
Leases 8,895,530 9,011,260 8,864,397 9,151,500
Reserve for Loan
and Lease Losses (160,000) (184,160) (185,019) (201,020)
Net Loans
and Leases 8,735,530 8,827,100 8,679,378 8,950,480
Leased Equipment 1,653,264 1,825,721 2,006,999 2,181,823
Premises and
Equipment 92,837 99,561 97,070 98,853
Goodwill 81,801 84,269 83,979 82,651
Other Assets 684,438 772,186 923,516 823,194
$17,017,505 $17,607,633 $17,793,999 $17,726,420
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Liabilities:
Deposits:
Noninterest
Bearing $1,491,473 $1,412,183 $1,357,468 $1,163,209
Interest Bearing 8,844,245 9,359,919 9,598,344 9,502,086
Total Deposits 10,335,718 10,772,102 10,955,812 10,665,295
Short-Term Debt 1,443,438 1,403,012 1,268,198 1,506,797
Long-Term Debt 3,298,930 3,476,460 3,624,262 3,661,219
Guaranteed Preferred
Beneficial
Interests in
Company's Junior
Subordinated
Debentures 465,799 451,389 451,284 451,179
Minority Interest 160,966 160,966 160,966 160,966
Accrued Interest
and Other
Liabilities 413,600 451,294 442,883 401,981
Total
Liabilities 16,118,451 16,715,223 16,903,405 16,847,437
Shareholders' Equity:
Preferred Stock 7,000 7,000 7,000 7,000
Common Stock 14,538 14,492 14,461 14,454
Capital Surplus 305,632 301,737 298,838 298,498
Retained Earnings 652,206 634,018 618,712 619,444
Accumulated Other
Comprehensive
Income (80,322) (64,837) (48,417) (60,413)
Total
Shareholders'
Equity 899,054 892,410 890,594 878,983
$17,017,505 $17,607,633 $17,793,999 $17,726,420
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:
Installment 1,306,761 1,164,509 1,008,386 911,151
Residential 599,793 676,971 750,045 848,676
Lease
Financing - - - -
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
Provident Financial Group, Inc. and Subsidiaries
Consolidated Credit Loss Experience
(unaudited)
2003
Fourth Third Second First Full
(Dollars In Thousands) Quarter Quarter Quarter Quarter Year
Reserve for Loan and
Lease Losses
At Beginning of Period $184,160 $185,019 $201,020 $201,051 $201,051
Provision Charged to
Expense 35,070 11,919 52,469 16,521 115,979
Net Charge-Offs:
Corporate Lending:
Commercial 24,166 7,726 11,147 8,093 51,132
Mortgage 1,062 - 54 46 1,162
Construction 52 (56) (241) 65 (180)
Lease Financing 32,094 3,946 1,714 3,294 41,048
Net Corporate
Lending 57,374 11,616 12,674 11,498 93,162
Consumer Lending:
Installment 2,003 1,118 1,467 576 5,164
Residential (166) 2 54,320 4,478 58,634
Lease Financing 19 42 9 - 70
Net Consumer
Lending 1,856 1,162 55,796 5,054 63,868
Net Charge-Offs 59,230 12,778 68,470 16,552 157,030
Reserve for Loan and
Lease Losses
At End of Period $160,000 $184,160 $185,019 $201,020 $160,000
Net Charge-Offs to
Average Total Loans and
Leases: (Annualized)
Corporate Lending:
Commercial 2.34% 0.69% 0.99% 0.73% 1.17%
Mortgage 0.44% -% 0.02% 0.02% 0.12%
Construction 0.04% (0.04%) (0.18%) 0.05% (0.03%)
Lease Financing 9.89% 1.27% 0.56% 1.06% 3.27%
Total Corporate
Lending 3.33% 0.65% 0.70% 0.64% 1.31%
Consumer Lending:
Installment 0.48% 0.29% 0.42% 0.17% 0.35%
Residential (2.49%) 0.07% 44.70% 3.25% 22.04%
Lease Financing 0.02% 0.07% 0.04% -% 0.04%
Total Consumer
Lending 0.35% 0.26% 11.21% 1.04% 3.28%
Total Loans and
Leases 2.64% 0.57% 2.98% 0.73% 1.73%
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
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:
Installment 753 850 782 727 3,112
Residential 3,747 4,853 14,260 3,017 25,877
Lease Financing - - - - -
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:
Installment 0.24% 0.31% 0.32% 0.31% 0.30%
Residential 2.46% 2.83% 7.21% 1.39% 3.51%
Lease Financing -% -% -% -% -%
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%
Provident Financial Group, Inc. and Subsidiaries
Consolidated Nonperforming Assets
(unaudited)
2003
Fourth Third Second First
(Dollars In Thousands) Quarter Quarter Quarter Quarter
Nonaccrual Loans:
Corporate Lending:
Commercial $62,288 $109,022 $116,926 $123,912
Mortgage 8,146 5,330 6,307 7,298
Construction 2,469 3,617 3,792 1,321
Lease Financing 514 2,271 2,267 2,792
Total Corporate Lending 73,417 120,240 129,292 135,323
Consumer Lending:
Installment - - - -
Residential 6,442 3,468 4,011 45,927
Lease Financing - - - -
Total Consumer Lending 6,442 3,468 4,011 45,927
Total Nonaccrual Loans 79,859 123,708 133,303 181,250
Other Nonperforming Assets 4,299 8,251 13,858 22,172
Total Nonperforming Assets $84,158 $131,959 $147,161 $203,422
Loans 90 Days Past Due Still
Accruing $12,702 $10,211 $5,971 $36,038
Reserve for Loan and Lease Losses
as a Percent of:
Nonaccrual Loans 200.35% 148.87% 138.80% 110.91%
Nonperforming Assets 190.12% 139.56% 125.73% 98.82%
Total Loans and Leases 1.80% 2.04% 2.09% 2.20%
Nonaccrual Loans as a % of Total
Loans and Leases .90% 1.37% 1.50% 1.98%
Nonperforming Assets as a Percent
of:
Total Loans, Leases and Other
Nonperforming Assets .95% 1.46% 1.66% 2.22%
Total Assets .49% .75% .83% 1.15%
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:
Installment - - - -
Residential 49,091 44,548 35,920 62,530
Lease Financing - - - -
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%
Provident Financial Group, Inc. and Subsidiaries
Consolidated Average Balances and Rates
On a Fully Taxable Equivalent Basis
(unaudited)
2003
Fourth Quarter Third Quarter Second Quarter
Average Average Average Average Average Average
(Dollars In Balance Rate Balance Rate Balance Rate
Millions)
Assets:
Loans and Leases:
Corporate
Lending:
Commercial $4,130 5.40 % $4,461 5.71 % $4,518 5.73 %
Mortgage 971 5.19 980 5.32 909 5.59
Construction 488 3.79 512 4.45 539 4.34
Lease
Financing 1,299 7.72 1,247 8.14 1,227 8.72
Total
Corporate
Lending 6,888 5.69 7,200 5.99 7,193 6.12
Consumer
Lending:
Installment 1,666 4.08 1,519 4.36 1,407 4.78
Residential 27 14.21 12 13.46 486 10.17
Lease
Financing 401 5.63 234 7.02 97 8.91
Total
Consumer
Lending 2,094 4.51 1,765 4.77 1,990 6.29
Total Loans
and Leases 8,982 5.42 8,965 5.75 9,183 6.16
Investment
Securities 4,583 3.76 4,702 3.63 4,471 4.32
Federal Funds Sold
and Reverse
Repurchase
Agreements 377 1.56 446 1.55 441 1.90
Other Short-Term
Investments 613 4.66 549 5.85 498 5.70
Total Earning
Assets 14,555 4.76 14,662 4.95 14,593 5.45
Cash and Due From
Banks 276 306 310
Leased Equipment 1,737 1,918 2,101
Other Assets 827 791 868
Total Assets $17,395 $17,677 $17,872
Liabilities and
Shareholders'
Equity:
Deposits:
Demand Deposits $1,119 1.22 $1,266 1.33 $1,204 1.51
Savings Deposits 1,633 1.66 1,553 1.71 1,460 1.80
Time Deposits 6,384 2.28 6,700 2.56 6,990 2.68
Total Deposits 9,136 2.04 9,519 2.26 9,654 2.40
Short-Term Debt:
Federal Funds
Purchased and
Repurchase
Agreements 1,046 2.55 1,168 2.32 1,129 2.37
Commercial Paper 244 1.01 250 1.14 265 1.24
Total Short-
Term Debt 1,290 2.26 1,418 2.11 1,394 2.16
Long-Term Debt 3,459 4.80 3,573 4.72 3,638 4.85
Junior
Subordinated
Debentures 452 3.92 451 3.95 451 4.09
Total Interest
Bearing
Liabilities 14,337 2.78 14,961 2.88 15,137 3.01
Noninterest
Bearing Deposits 1,515 1,388 1,264
Minority Interest 161 161 162
Other Liabilities 488 316 406
Shareholders'
Equity 894 851 903
Total
Liabilities and
Shareholders'
Equity $17,395 $17,677 $17,872
Net Interest Spread 1.98 % 2.07 % 2.44 %
Net Interest Margin 2.02 % 2.01 % 2.32 %
Provident Financial Group, Inc. and Subsidiaries
Consolidated Average Balances and Rates
On a Fully Taxable Equivalent Basis
(unaudited)
2003
First Quarter Full Year
Average Average Average Average
(Dollars In Millions) Balance Rate Balance Rate
Assets:
Loans and Leases:
Corporate Lending:
Commercial $4,446 5.66 % $4,388 5.63 %
Mortgage 934 5.83 949 5.48
Construction 522 4.19 515 4.20
Lease Financing 1,246 8.85 1,254 8.35
Total Corporate Lending 7,148 6.13 7,106 5.98
Consumer Lending:
Installment 1,352 5.12 1,487 4.55
Residential 552 11.68 266 11.12
Lease Financing 33 7.92 192 6.56
Total Consumer Lending 1,937 7.04 1,945 5.65
Total Loans and Leases 9,085 6.32 9,051 5.91
Investment Securities 4,292 4.90 4,514 4.13
Federal Funds Sold and Reverse
Repurchase Agreements 313 2.13 395 1.76
Other Short-Term Investments 504 5.35 542 5.35
Total Earning Assets 14,194 5.76 14,502 5.22
Cash and Due From Banks 311 301
Leased Equipment 2,242 1,999
Other Assets 787 817
Total Assets $17,534 $17,619
Liabilities and
Shareholders' Equity:
Deposits:
Demand Deposits $1,053 1.43 $1,161 1.37
Savings Deposits 1,419 1.76 1,517 1.73
Time Deposits 6,498 2.94 6,643 2.61
Total Deposits 8,970 2.57 9,321 2.31
Short-Term Debt:
Federal Funds Purchased and
Repurchase Agreements 1,488 2.11 1,206 2.32
Commercial Paper 300 1.47 265 1.23
Total Short-Term Debt 1,788 2.00 1,471 2.12
Long-Term Debt 3,769 5.20 3,609 4.89
Junior Subordinated Debentures 451 4.22 451 4.04
Total Interest Bearing Liabilities 14,978 3.22 14,852 2.97
Noninterest Bearing Deposits 1,137 1,327
Minority Interest 161 161
Other Liabilities 380 397
Shareholders' Equity 878 882
Total Liabilities and
Shareholders' Equity $17,534 $17,619
Net Interest Spread 2.54 % 2.25 %
Net Interest Margin 2.37 % 2.18 %
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:
Installment 1,232 5.50 1,080 6.16 965 6.41
Residential 609 9.83 685 9.64 791 9.60
Lease
Financing - - - - - -
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 %
Provident Financial Group, Inc. and Subsidiaries
Consolidated Average Balances and Rates
On a Fully Taxable Equivalent Basis
(unaudited)
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:
Installment 937 6.99 1,054 6.21
Residential 869 9.30 737 9.59
Lease Financing - - - -
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 %
Provident Financial Group, Inc. and Subsidiaries
Consolidated Capital Data
(unaudited)
2003
Fourth Third Second First Full
Quarter Quarter Quarter Quarter Year
Per Common Share:
Shares Outstanding (In
Thousands):
Average - Basic 48,943 48,830 48,770 48,776 48,830
Average - Diluted 51,478 50,885 50,668 50,766 50,950
Period-End 49,040 48,885 48,783 48,759
Book Value $18.19 $18.11 $18.11 $17.88
Price:
High $32.68 $28.78 $26.45 $28.91 $32.68
Low 28.00 25.67 21.01 21.23 21.01
Period-End 31.95 27.97 25.75 21.23
Capital Ratios (Dollars in
Millions):
Risk-Based Capital (Current
Qtr Estimated):
Risk-Adjusted Assets $13,289 $13,836 $13,807 $13,886
Tier 1 Capital $1,411 $1,382 $1,358 $1,359
Percentage of Risk
Adjusted Assets 10.62% 9.99% 9.84% 9.78%
Total Capital $1,658 $1,643 $1,625 $1,617
Percentage of Risk
Adjusted Assets 12.48% 11.87% 11.77% 11.65%
Tier 1 Leverage Ratio 8.14% 7.82% 7.62% 7.76%
Period End Shareholders'
Equity to Total Period-End
Assets 5.28% 5.07% 5.01% 4.96%
Period-End Tangible
Shareholders' Equity to Total
Period-End Tangible Assets 4.79% 4.56% 4.49% 4.45%
Average Shareholders' Equity
to Total Average Assets 5.14% 4.81% 5.05% 5.01% 5.00%
Average Tangible Shareholders'
Equity to Total Average
Tangible Assets 4.64% 4.30% 4.54% 4.48% 4.49%
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 $14,226 $13,467 $13,279 $13,248
Tier 1 Capital $1,337 $1,321 $1,295 $1,104
Percentage of Risk
Adjusted Assets 9.40% 9.81% 9.75% 8.34%
Total Capital $1,625 $1,604 $1,582 $1,439
Percentage of Risk
Adjusted Assets 11.42% 11.91% 11.91% 10.86%
Tier 1 Leverage Ratio 7.81% 8.09% 7.96% 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%
Provident Financial Group, Inc. and Subsidiaries
Financial Information Excluding Selected Sales and Debt Retirement
(unaudited)
In conjunction with the sale of subprime residential mortgage loans and
the Merchant Services business during the second quarter of 2003, and the
sale of Florida operations, sale of classified loans and aircraft leases,
retirement of corporate debt, contract termination, severance, business
exit cost, and the impairment of equity investments and aircraft lease
residuals during the fourth quarter of 2003, the company believes
presenting financial information excluding these transactions might be
beneficial to the reader as it provides data that is more comparable to
other periods contained within this document.
Sale of
Subprime Classified
As Resid- Merchant Loans and
Reported ential Services Florida Aircraft
(GAAP) Loans Business Operations Leases
For the Three Months
Ended December 31, 2003:
Condensed Income
Statement (In
Thousands):
Net Interest Income $74,216 $- $- $- $-
Provision for Loan
and Leases Losses (35,070) - - - (20,940)
Noninterest Income 253,557 - - 74,998 -
Noninterest Expense (246,274) - - - (6,499)
Income Before Income
Taxes 46,429 - - 74,998 (27,439)
Applicable Income
Taxes (15,005) - - (26,249) 9,604
Effect of Changes in
Accounting
Principles (1,202) - - - -
Net Income $30,222 $- $- $48,749 $(17,835)
Other Data:
Earnings Per Common
Share - Diluted $0.59 n/a n/a $0.95 $(0.35)
Return on Assets 0.70% n/a n/a 1.12% (0.41)%
Return on Equity 13.51% n/a n/a 21.80% (7.98)%
Net Charge Offs 59,230 n/a n/a 1,000 44,100
Net Charge Offs to
Average
Loans and Leases
(annualized) 2.64% n/a n/a n/a n/a
For the Twelve Months
Ended December 31, 2003:
Condensed Income
Statement (In
Thousands):
Net Interest Income $315,792 $- $- $- $-
Provision for Loan
and Leases Losses (115,979) (33,225) - - (20,940)
Noninterest Income 845,289 - 19,000 74,998 -
Noninterest Expense (900,055) (6,914) - - (6,499)
Income Before Income
Taxes 145,047 (40,139) 19,000 74,998 (27,439)
Applicable Income
Taxes (47,145) 13,246 (6,270) (26,249) 9,604
Effect of Changes in
Accounting
Principles (1,202) - - - -
Net Income $96,700 $(26,893) $12,730 $48,749 $(17,835)
Other Data:
Earnings Per Common
Share - Diluted $1.90 $(0.53) $0.25 $0.96 $(0.35)
Return on Assets 0.55% (0.15)% 0.07% 0.28% (0.10)%
Return on Equity 10.97% (3.05)% 1.44% 5.53% (2.02)%
Net Charge Offs 157,030 49,225 n/a 1,000 44,100
Net Charge Offs to
Average
Loans and Leases
(annualized) 1.73% n/a n/a n/a n/a
Provident Financial Group, Inc. and Subsidiaries
Financial Information Excluding Selected Sales and Debt Retirement
(unaudited)
In conjunction with the sale of subprime residential mortgage loans and
the Merchant Services business during the second quarter of 2003, and the
sale of Florida operations, sale of classified loans and aircraft leases,
retirement of corporate debt, contract termination, severance, business
exit cost, and the impairment of equity investments and aircraft lease
residuals during the fourth quarter of 2003, the company believes
presenting financial information excluding these transactions might be
beneficial to the reader as it provides data that is more comparable to
other periods contained within this document.
Impair- Excluding
ment Sales,
Contract of Impairment,
Termina- Equity Debt
tion, Invest- Retirement
Retire- Severance, ment and
ment Business and Other
of Exit Aircraft Cost
Corporate Costs and Lease (Non-
Debt Other Residuals GAAP)
For the Three Months Ended December 31, 2003:
Condensed Income Statement (In Thousands):
Net Interest Income $- $- $74,216
Provision for Loan and Leases
Losses - - (4,075) (10,055)
Noninterest Income - - (2,860) 181,419
Noninterest Expense (25,584) (10,793) - (203,398)
Income Before Income Taxes (25,584) (10,793) (6,935) 42,182
Applicable Income Taxes 8,954 3,778 2,427 (13,519)
Effect of Changes in Accounting
Principles - (1,202) - -
Net Income $(16,630) $(8,217) $(4,508) $28,663
Other Data:
Earnings Per Common Share -
Diluted $(0.32) $(0.16) $(0.09) $0.56
Return on Assets (0.38)% (0.19)% (0.10)% 0.66%
Return on Equity (7.44)% (3.67)% (2.02)% 12.82%
Net Charge Offs n/a n/a 4,075 10,055
Net Charge Offs to Average
Loans and Leases (annualized) n/a n/a n/a 0.45%
For the Twelve Months Ended December 31, 2003:
Condensed Income Statement (In Thousands):
Net Interest Income $- $- $- $315,792
Provision for Loan and Leases
Losses - - (4,075) (57,739)
Noninterest Income - - (2,860) 754,151
Noninterest Expense (25,584) (10,793) - (850,265)
Income Before Income Taxes (25,584) (10,793) (6,935) 161,939
Applicable Income Taxes 8,954 3,778 2,427 (52,635)
Effect of Changes in Accounting
Principles - (1,202) - -
Net Income $(16,630) $(8,217) $(4,508) $109,304
Other Data:
Earnings Per Common Share -
Diluted $(0.33) $(0.16) $(0.09) $2.15
Return on Assets (0.09)% (0.05)% (0.03)% 0.62%
Return on Equity (1.89)% (0.93)% (0.51)% 12.40%
Net Charge Offs n/a n/a 4,075 58,630
Net Charge Offs to Average
Loans and Leases (annualized) n/a n/a n/a 0.65%
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 Twelve Months Ended
(In Thousands) Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2003 2002 2003 2002
Net Interest Income $74,216 $80,909 $315,792 $315,558
Add: Operating
Lease Income 114,484 148,107 510,109 605,887
Less:
Depreciation on
Operating Leases (82,929) (101,885) (366,731) (419,438)
Net Financing Income $105,771 $127,131 $459,170 $502,007
Noninterest Income $253,557 $204,287 $845,289 $805,492
Less: Operating
Lease Income (114,484) (148,107) (510,109) (605,887)
Noninterest Income
Excluding Operating
Lease Income $139,073 $56,180 $335,180 $199,605
Total Financing
Revenues $244,844 $183,311 $794,350 $701,612
Noninterest Expenses $246,274 $226,700 $900,055 $876,028
Less: Depreciation
on Operating
Leases (82,929) (101,885) (366,731) (419,438)
Noninterest Expenses
Excluding
Depreciation on
Operating Leases $163,345 $124,815 $533,324 $456,590
Average Earning
Assets $14,555,000 $13,633,000 $14,502,000 $13,105,000
Add: Average
Leased Equipment 1,737,000 2,369,000 1,999,000 2,477,000
Average Earning
Assets Including
Leased Equipment $16,292,000 $16,002,000 $16,501,000 $15,582,000
Net Interest Margin
Ratio - GAAP Basis 2.02% 2.36% 2.18% 2.41%
Net Financing Income
Ratio 2.58% 3.15% 2.78% 3.22%
Noninterest Expenses
as a Percent of
Total Revenues -
GAAP Basis 75% 79% 78% 78%
Noninterest Expenses
Excluding
Depreciation on
Operating Leases
as a Percent of
Total Revenues
Which Includes
Depreciation on
Operating Leases 67% 68% 67% 65%
The company has average leased equipment which as a percentage of total
average assets were 11.3% and 15.0% for the twelve month 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.
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
SOURCE Provident Financial Group, Inc.
-0- 01/21/2004
/CONTACT: Christopher J. Carey, Executive Vice President & Chief
Financial Officer of Provident Financial Group, Inc., +1-513-639-4644,
or +1-800-851-9521, or IR@provident-financial.com/
/Company News On-Call: http://www.prnewswire.com/comp/721925.html/
/Photo: http://www.newscom.com/cgi-bin/prnh/20030424/PFGLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com/
/Web site: http://www.providentbank.com /
(PFGI)
CO: Provident Financial Group, Inc.
ST: Ohio
IN: FIN
SU: ERN CCA MAV