1
EXHIBIT 99.2
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
FINANCIAL SUMMARY Three Months
(DOLLARS IN THOUSANDS,EXCEPT PER SHARE DATA) Three Months Ended June 30, Ended March 31,
---------------------------------------- ------------------------
2003 2002 % Change 2003 % Change
----------- ------------ ---------- ------------ ---------
SUMMARY OF OPERATIONS
Net Income $ 12,195 $ 10,405 17.2 % $ 11,785 3.5 %
Net Interest Income 36,799 35,870 2.6 35,627 3.3
Provision for Loan Losses 3,251 2,650 22.7 1,760 84.7
Non-Interest Income 16,360 19,435 (15.8) 22,591 (27.6)
Net Gains (Losses) (6,892) (2,242) 207.4 1,247 -
Non-Interest Income (excluding Net Gains/Losses) 23,252 21,677 7.3 21,344 8.9
Non-Interest Expense 40,300 37,780 6.7 39,050 3.2
Income Tax Expense (Benefit) (2,587) 4,470 (157.9) 5,623 (146.0)
SHARE DATA
Basic Earnings Per Share $ 0.50 $ 0.41 22.0 % $ 0.48 4.2 %
Diluted Earnings Per Share 0.49 0.40 22.5 0.47 4.3
Cash Dividends Paid Per Share 0.230 0.210 9.5 0.225 2.2
Book Value Per Share 13.47 12.02 12.1 13.27 1.5
Weighted Average Shares -- Basic 24,500,552 25,150,841 (2.6) 24,384,142 0.5
Weighted Average Shares -- Diluted 25,085,553 25,974,869 (3.4) 25,053,638 0.1
Common Shares Outstanding 24,565,237 25,102,347 (2.1) 24,408,774 0.6
END OF PERIOD BALANCES
Investment Securities Portfolio $ 2,126,758 $ 1,920,191 10.8 % $ 2,229,246 (4.6)%
Total Loans 2,579,365 2,652,210 (2.7) 2,462,022 4.8
Assets 5,096,296 5,143,776 (0.9) 5,013,492 1.7
Deposits 3,347,974 3,350,461 (0.1) 3,273,017 2.3
Stockholders' Equity 330,816 301,661 9.7 323,988 2.1
Common Stockholders' Equity 317,926 302,245 5.2 307,862 3.3
AVERAGE BALANCES
Investment Securities Portfolio $ 2,132,288 $ 1,890,814 12.8 % $ 2,049,951 4.0 %
Loans:
Core Consumer 866,789 784,134 10.5 845,072 2.6
Core Commercial Business 352,095 334,796 5.2 342,097 2.9
Core Commercial Real Estate 579,714 497,669 16.5 561,085 3.3
Total Core Loans 1,798,598 1,616,599 11.3 1,748,254 2.9
Non-Core Consumer 674,381 978,204 (31.1) 701,449 (3.9)
National Syndicated Loans 38,232 72,073 (47.0) 49,845 (23.3)
Total Non-Core Loans* 712,613 1,050,277 (32.1) 751,294 (5.1)
Total Loans 2,511,211 2,666,876 (5.8) 2,499,548 0.5
Earning Assets 4,657,849 4,565,238 2.0 4,560,447 2.1
Assets 4,998,848 4,870,143 2.6 4,883,827 2.4
Core Deposits 2,856,004 2,704,438 5.6 2,749,150 4.0
Non-Core Deposits (Brokered Deposits) 356,908 630,611 (43.4) 398,018 (10.8)
Total Deposits 3,212,912 3,335,049 (3.7) 3,147,168 2.1
Stockholders' Equity 325,435 293,540 10.9 318,157 2.3
Common Stockholders' Equity 308,020 300,891 2.4 302,380 1.9
SELECTED RATIOS
Return on Average Assets 0.98 % 0.86 % 0.98 %
Return on Average Equity 15.03 14.22 15.02
Return on Average Common Equity 15.88 13.87 15.81
Net Yield on Average Earning Assets (t/e basis) 3.18 3.17 3.18
Efficiency Ratio 66.92 65.42 68.33
Leverage Ratio 7.51 7.46 7.49
Tier I Risk-Based Capital Ratio 12.11 11.06 12.14
Total Risk-Based Capital Ratio 13.21 12.13 13.22
* Includes purchased loans, syndicated loans outside the Bank's normal lending area and loans from discontinued product lines.
2
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
FINANCIAL SUMMARY
(DOLLARS IN THOUSANDS,EXCEPT PER SHARE DATA) Six Months Ended June 30,
--------------------------------------------
2003 2002 % Change
------------ ------------ ------------
SUMMARY OF OPERATIONS
Net Income $ 23,980 $ 21,880 9.6 %
Net Interest Income 72,426 72,522 (0.1)
Provision for Loan Losses 5,011 6,250 (19.8)
Non-Interest Income 38,951 39,635 (1.7)
Net Gains (Losses) (5,645) (1,811) 211.7
Non-Interest Income (excluding Net Gains/Losses) 44,596 41,446 7.6
Non-Interest Expense 79,350 74,163 7.0
Income Tax Expense (Benefit) 3,036 9,864 (69.2)
SHARE DATA
Basic Earnings Per Share $ 0.98 $ 0.87 12.6 %
Diluted Earnings Per Share 0.96 0.84 14.3
Cash Dividends Paid Per Share 0.455 0.415 9.6
Book Value Per Share 13.47 12.02 12.1
Weighted Average Shares -- Basic 24,443,021 25,134,009 (2.7)
Weighted Average Shares -- Diluted 25,067,005 25,970,676 (3.5)
Common Shares Outstanding 24,565,237 25,102,347 (2.1)
END OF PERIOD BALANCES
Investment Securities Portfolio $ 2,126,758 $ 1,920,191 10.8 %
Total Loans 2,579,365 2,652,210 (2.7)
Assets 5,096,296 5,143,776 (0.9)
Deposits 3,347,974 3,350,461 (0.1)
Stockholders' Equity 330,816 301,661 9.7
Common Stockholders' Equity 317,926 302,245 5.2
AVERAGE BALANCES
Investment Securities Portfolio $ 2,091,345 $ 1,834,088 14.0 %
Loans:
Core Consumer 855,989 770,656 11.1
Core Commercial Business 347,124 328,545 5.7
Core Commercial Real Estate 570,450 498,794 14.4
Total Core Loans 1,773,563 1,597,995 11.0
Non-Core Consumer 687,840 1,030,811 (33.3)
National Syndicated Loans 44,006 73,781 (40.4)
Total Non-Core Loans* 731,846 1,104,592 (33.7)
Total Loans 2,505,409 2,702,587 (7.3)
Earning Assets 4,609,413 4,547,862 1.4
Assets 4,941,650 4,855,274 1.8
Core Deposits 2,802,876 2,655,278 5.6
Non-Core Deposits (Brokered Deposits) 377,349 676,610 (44.2)
Total Deposits 3,180,225 3,331,888 (4.6)
Stockholders' Equity 321,809 292,422 10.0
Common Stockholders' Equity 305,208 298,115 2.4
SELECTED RATIOS
Return on Average Assets 0.98 % 0.91 %
Return on Average Equity 15.03 15.09
Return on Average Common Equity 15.84 14.80
Net Yield on Average Earning Assets (t/e basis) 3.18 3.23
Efficiency Ratio 67.61 64.84
Leverage Ratio 7.51 7.46
Tier I Risk-Based Capital Ratio 12.11 11.06
Total Risk-Based Capital Ratio 13.21 12.13
* Includes purchased loans, syndicated loans outside the Bank's normal lending area and loans from discontinued product lines.
3
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
ASSET QUALITY DETAIL
(DOLLARS IN THOUSANDS) 6/30/2003 6/30/2002 3/31/2003
--------------- -------------- ---------------
LOAN PORTFOLIO
- --------------
Acquired Residential Mortgage $ 541,166 $ 640,262 $ 500,487
Other Consumer 913,838 852,128 874,705
--------------- -------------- ---------------
Total Consumer 1,455,004 1,492,390 1,375,192
Commercial Business 379,920 384,799 364,403
Real Estate - Construction - Residential 136,996 109,627 131,872
- Commercial 208,286 208,209 196,247
Real Estate - Mortgage - Residential 111,486 244,482 140,208
- Commercial 287,673 212,703 254,100
--------------- -------------- ---------------
TOTAL LOANS $ 2,579,365 $ 2,652,210 $ 2,462,022
=============== ============== ===============
NON-PERFORMING ASSETS
- ---------------------
Acquired Residential Mortgage $ 15,507 $ 17,823 $ 17,510
Other Consumer 420 664 493
Commercial Business 533 93 493
Real Estate - Construction - Residential 135 215 -
- Commercial - - -
Real Estate - Mortgage - Residential 2,104 3,906 3,141
- Commercial 735 - -
--------------- -------------- ---------------
TOTAL NON-ACCRUAL LOANS 19,434 22,701 21,637
TOTAL RENEGOTIATED LOANS - - -
--------------- -------------- ---------------
TOTAL NON-PERFORMING LOANS 19,434 22,701 21,637
TOTAL OTHER ASSETS AND REAL ESTATE OWNED 5,132 4,060 4,155
--------------- -------------- ---------------
TOTAL NON-PERFORMING ASSETS $ 24,566 $ 26,761 $ 25,792
=============== ============== ===============
90-DAY DELINQUENCIES
- --------------------
Acquired Residential Mortgage $ 5,353 $ 4,710 $ 6,229
Other Consumer 373 977 430
Commercial Business 380 204 407
Real Estate - Construction - Residential - - 136
- Commercial - - -
Real Estate - Mortgage - Residential 6,414 6,711 5,466
- Commercial - - -
--------------- -------------- ---------------
TOTAL 90-DAY DELINQUENCIES $ 12,520 $ 12,602 $ 12,668
=============== ============== ===============
ASSET QUALITY RATIOS
- --------------------
Non-Performing Loans to Loans 0.75% 0.86% 0.88%
Non-Performing Assets to Loans 0.95% 1.01% 1.05%
Allowance for Loan Losses to Loans 1.32% 1.31% 1.32%
Net Charge-Offs to Average Loans 0.28% 0.47% 0.38%
Allowance for Loan Losses to Non-Performing Loans 175.19% 152.94% 150.49%
Three Months
Three Months Ended June 30, Ended March 31,
-----------------------------------
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES 2003 2002 2003
- ------------------------------------- --------------- ----------------- ---------------
Balance at Beginning of Period $ 32,562 $ 35,164 $ 33,425
Provision for Loan Losses 3,251 2,650 1,760
Transfer to Other Liabilities - - (262)
Less: Loans Charged-Off, Net of Recoveries
Acquired Residential Mortgage 1,497 2,565 1,898
Other Consumer 132 346 390
Commercial Business 137 177 122
Real Estate - Construction - Residential - - -
- Commercial - - -
Real Estate - Mortgage - Residential - 18 (49)
- Commercial - (11) -
--------------- ----------------- ---------------
Net Charge-Offs 1,766 3,095 2,361
--------------- ----------------- ---------------
BALANCE AT END OF PERIOD $ 34,047 $ 34,719 $ 32,562
=============== ================= ===============
4
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
COMPARATIVE ANALYSIS OF AVERAGE BALANCES, INTEREST INCOME AND EXPENSE AND INTEREST YIELDS AND RATES
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Three Months Ended
June 30, 2003 June 30, 2002 2003/2002 Increase/(Decrease)
--------------------------------------------------------- ---------------------------------------
(dollars in thousands) Average Income/ Yield/ Average Income/ Yield/ Average % Income/ %
(tax-equivalent basis) Balance Expense Rate Balance Expense Rate Balance Change Expense Change
----------- --------- ------ ---------- -------- ------- ---------- -------- ---------- --------
ASSETS
- ------
Interest-Earning Assets:
Home Equity--Direct $ 387,317 $ 5,048 5.23% $ 365,241 $ 5,625 6.18% $ 22,076 6.0 % $ (577) (10.3)%
Marine 439,310 6,280 5.73 372,664 6,413 6.90 66,646 17.9 (133) (2.1)
Acquired Residential Mortgage 525,282 8,512 6.50 654,113 12,784 7.84 (128,831) (19.7) (4,272) (33.4)
Other Direct Consumer 40,162 795 7.94 46,229 912 7.91 (6,067) (13.1) (117) (12.8)
Other Indirect Consumer 23,786 482 8.13 66,111 1,247 7.57 (42,325) (64.0) (765) (61.3)
Residential Mortgage 125,313 2,434 7.79 257,980 4,937 7.68 (132,667) (51.4) (2,503) (50.7)
----------- -------- ---------- -------- ---------- --------
Total Consumer 1,541,170 23,551 6.13 1,762,338 31,918 7.26 (221,168) (12.5) (8,367) (26.2)
Commercial Business 352,095 5,200 5.92 334,796 5,528 6.62 17,299 5.2 (328) (5.9)
Real Estate-Construction 316,603 3,466 4.39 274,415 3,302 4.83 42,188 15.4 164 5.0
Commercial Mortgage 263,111 3,982 6.07 223,254 3,660 6.58 39,857 17.9 322 8.8
Non-Core Syndicated Loans 38,232 362 3.80 72,073 865 4.81 (33,841) (47.0) (503) (58.2)
----------- -------- ---------- -------- ---------- --------
Total Loans 2,511,211 36,561 5.84 2,666,876 45,273 6.81 (155,665) (5.8) (8,712) (19.2)
----------- -------- ---------- -------- ---------- --------
Loans Held for Sale 11,871 165 5.58 4,897 81 6.63 6,974 142.4 84 103.7
Short-Term Investments 2,479 5 0.81 2,651 15 2.27 (172) (6.5) (10) (66.7)
Taxable Investment Securities 2,113,055 23,493 4.46 1,869,922 26,705 5.73 243,133 13.0 (3,212) (12.0)
Tax-Advantaged Investment
Securities 19,233 331 6.90 20,892 405 7.78 (1,659) (7.9) (74) (18.3)
----------- -------- ---------- -------- ---------- --------
Total Investment Securities 2,132,288 23,824 4.48 1,890,814 27,110 5.75 241,474 12.8 (3,286) (12.1)
----------- -------- ---------- -------- ---------- --------
Total Interest-Earning
Assets 4,657,849 60,555 5.21 4,565,238 72,479 6.37 92,611 2.0 (11,924) (16.5)
----------- -------- ---------- -------- ---------- --------
Less: Allowance for Loan Losses (32,741) (34,710) 1,969 (5.7)
Cash and Due From Banks 113,397 97,474 15,923 16.3
Other Assets 260,343 242,141 18,202 7.5
----------- $4,870,143 ----------
Total Assets $ 4,998,848 ========== $ 128,705 2.6
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Interest-Bearing Liabilities:
Demand/Money Market Deposits $ 884,984 1,673 0.76 $ 785,628 2,383 1.22 $ 99,356 12.6 (710) (29.8)
Savings Deposits 709,444 966 0.55 658,555 1,878 1.14 50,889 7.7 (912) (48.6)
Direct Time Deposits 722,802 4,787 2.66 835,176 7,687 3.69 (112,374) (13.5) (2,900) (37.7)
Brokered Time Deposits 356,908 5,471 6.15 630,611 10,257 6.52 (273,703) (43.4) (4,786) (46.7)
Short-Term Borrowings 393,325 1,077 1.10 330,915 1,374 1.67 62,410 18.9 (297) (21.6)
Long-Term Debt 1,063,829 9,608 3.62 873,153 12,830 5.89 190,676 21.8 (3,222) (25.1)
----------- -------- ---------- -------- ---------- --------
Total Interest-Bearing
Liabilities 4,131,292 23,582 2.29 4,114,038 36,409 3.55 17,254 0.4 (12,827) (35.2)
----------- -------- ---------- -------- ---------- --------
Noninterest-Bearing Demand Deposits 538,774 425,079 113,695 26.7
Other Liabilities 20,762 30,135 (9,373) (31.1)
Common Stockholders' Equity 308,020 300,891 7,129 2.4
----------- ---------- ----------
Total Liabilities and
Stockholders' equity $ 4,998,848 $4,870,143 $ 128,705 2.6
=========== ========== ==========
Net Interest-Earning Assets $ 526,557 $ 451,200 $ 75,357 16.7
=========== ========== ==========
Net Interest Income (tax-equivalent) 36,973 36,070 903 2.5
Less: Tax-Equivalent Adjustment (174) (200) 26 (13.0)
-------- -------- --------
Net Interest Income $ 36,799 $ 35,870 $ 929 2.6
======== ======== ========
Net Yield on Interest-Earning Assets 3.18% 3.17%
2003/2002
INCOME/EXPENSE VARIANCE
----------------------------
(dollars in thousands) AVERAGE AVERAGE
(tax-equivalent basis) RATE VOLUME
----------- -----------
ASSETS
- ------
Interest-Earning Assets:
Home Equity--Direct $ (902) $ 325
Marine (1,180) 1,047
Acquired Residential Mortgage (1,984) (2,288)
Other Direct Consumer 3 (120)
Other Indirect Consumer 87 (852)
Residential Mortgage 73 (2,576)
Total Consumer
Commercial Business (604) 276
Real Estate-Construction (315) 479
Commercial Mortgage (296) 618
Non-Core Syndicated Loans (156) (347)
Total Loans
Loans Held for Sale (15) 99
Short-Term Investments (9) (1)
Taxable Investment Securities (6,400) 3,188
Tax-Advantaged Investment Securities (43) (31)
Total Investment Securities
Total Interest-Earning Assets (13,367) 1,443
Less: Allowance for Loan Losses
Cash and Due From Banks
Other Assets
Total Assets
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Interest-Bearing Liabilities:
Demand/Money Market Deposits (983) 273
Savings Deposits (1,047) 135
Direct Time Deposits (1,960) (940)
Brokered Time Deposits (560) (4,226)
Short-Term Borrowings (525) 228
Long-Term Debt (5,633) 2,411
Total Interest-Bearing Liabilities (12,979) 152
Noninterest-Bearing Demand Deposits
Other Liabilities
Common Stockholders' Equity
Total Liabilities and Stockholders' Equity
Net Interest-Earning Assets
Net Interest Income (tax-equivalent) $ (388) $ 1,291
Less: Tax-Equivalent Adjustment
Net Interest Income
Net Yield on Interest-Earning Assets
5
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------- --------------------------------
(dollars in thousands, except per share data) 2003 2002 2003 2002
--------------- ------------- ------------- -------------
INTEREST INCOME:
Interest and Fees on Loans $ 36,506 $ 45,057 $ 73,332 $ 92,098
Interest on Securities 23,493 26,775 47,542 54,272
Tax-Advantaged Interest 379 432 779 882
Interest on Short-Term Investments 5 15 13 65
--------------- ------------- ------------- -------------
Total Interest Income 60,383 72,279 121,666 147,317
--------------- ------------- ------------- -------------
INTEREST EXPENSE:
Interest on Deposits 12,899 22,205 27,272 46,693
Interest on Short-Term Borrowings 1,077 1,374 2,343 2,705
Interest on Long-Term Borrowings 9,608 12,830 19,625 25,397
--------------- ------------- ------------- -------------
Total Interest Expense 23,584 36,409 49,240 74,795
--------------- ------------- ------------- -------------
Net Interest Income 36,799 35,870 72,426 72,522
Less: Provision for Loan Losses 3,251 2,650 5,011 6,250
--------------- ------------- ------------- -------------
Net Interest Income after Provision for Loan Losses 33,548 33,220 67,415 66,272
--------------- ------------- ------------- -------------
NON-INTEREST INCOME:
Service Charges on Deposit Accounts 19,244 17,789 36,565 33,532
Commissions and Fees 1,150 1,266 2,460 2,600
Net Losses (6,892) (2,242) (5,645) (1,811)
Other Non-Interest Income 2,858 2,622 5,571 5,314
--------------- ------------- ------------- -------------
Total Non-Interest Income 16,360 19,435 38,951 39,635
--------------- ------------- ------------- -------------
NON-INTEREST EXPENSE:
Salaries and Employee Benefits 19,578 17,804 38,562 35,824
Occupancy Expense, Net 3,894 3,553 7,974 7,054
Furniture and Equipment Expense 2,955 2,704 5,821 5,338
External Processing Fees 5,451 5,142 10,543 9,995
Other Non-Interest Expense 8,422 8,577 16,450 15,952
--------------- ------------- ------------- -------------
Total Non-Interest Expense 40,300 37,780 79,350 74,163
--------------- ------------- ------------- -------------
Income before Income Taxes 9,608 14,875 27,016 31,744
Income Tax Expense (Benefit) (2,587) 4,470 3,036 9,864
--------------- ------------- ------------- -------------
Net Income $ 12,195 $ 10,405 $ 23,980 $ 21,880
--------------- ------------- ------------- -------------
NET INCOME PER SHARE AMOUNTS:
Basic $ 0.50 $ 0.41 $ 0.98 $ 0.87
Diluted 0.49 0.40 0.96 0.84
6
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CONDITION
June 30, December 31, June 30,
(dollars in thousands, except share amounts) 2003 2002 2002
--------------- --------------- --------------
ASSETS:
Cash and Due From Banks $ 144,251 $ 145,063 $ 138,480
Short-Term Investments 1,694 3,129 2,150
Mortgage Loans Held for Sale 8,091 8,899 5,352
Securities Available for Sale 2,126,758 1,993,229 1,920,191
Loans 2,579,365 2,560,563 2,652,210
Less: Allowance for Loan Losses 34,047 33,425 34,719
-------------- -------------- --------------
Net Loans 2,545,318 2,527,138 2,617,491
-------------- -------------- --------------
Premises and Equipment, Net 47,083 47,031 45,136
Accrued Interest Receivable 26,296 28,101 31,477
Intangible Assets 9,136 9,340 10,565
Other Assets 187,669 128,792 372,934
-------------- -------------- --------------
Total Assets $ 5,096,296 $ 4,890,722 $ 5,143,776
-------------- -------------- --------------
LIABILITIES:
Deposits:
Noninterest-Bearing $ 672,459 $ 492,661 $ 479,024
Interest-Bearing 2,675,515 2,695,305 2,871,437
-------------- -------------- --------------
Total Deposits 3,347,974 3,187,966 3,350,461
-------------- -------------- --------------
Short-Term Borrowings 369,173 539,758 344,460
Long-Term Debt 975,280 814,546 858,614
Other Liabilities 73,053 32,817 288,580
-------------- -------------- --------------
Total Liabilities 4,765,480 4,575,087 4,842,115
-------------- -------------- --------------
STOCKHOLDERS' EQUITY:
Common Stock (par value $1.00) authorized 100,000,000 shares; issued
31,938,838, 31,737,237 and 31,688,048 shares at
June 30, 2003, December 31, 2002 and June 30, 2002, respectively 31,939 31,737 31,688
Capital Surplus 293,832 289,698 289,573
Retained Earnings 137,737 124,862 109,194
Net Accumulated Other Comprehensive Income (Loss) 12,890 14,920 (584)
Treasury Stock at Cost - 7,373,601, 7,373,601 and 6,585,701 shares at
June 30, 2003, December 31, 2002 and June 30, 2002, respectively (145,582) (145,582) (128,210)
-------------- -------------- --------------
Total Stockholders' Equity 330,816 315,635 301,661
-------------- -------------- --------------
Total Liabilities and Stockholders' Equity $ 5,096,296 $ 4,890,722 $ 5,143,776
============== ============== ==============