1
EXHIBIT 99.2
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
FINANCIAL SUMMARY
Three Months Ended Three Months Ended
(dollars in thousands, except per share data) September 30, June 30,
------------------------------------------ -----------------------------
2003 2002 % Change 2003 % Change
------------- ------------- ----------- ------------ --------------
SUMMARY OF OPERATIONS:
Net income $ 13,308 $ 13,140 1.3 % $ 12,195 9.1 %
Net interest income 38,037 34,764 9.4 36,799 3.4
Provision for loan losses 2,950 2,150 37.2 3,251 (9.3)
Non-interest income 24,623 24,026 2.5 16,360 50.5
Net gains (losses) 746 1,997 (62.6) (6,892) -
Non-interest income (excluding net gains/losses) 23,877 22,029 8.4 23,252 2.7
Non-interest expense 39,330 37,471 5.0 40,300 (2.4)
Income tax expense 7,072 6,029 17.3 (2,587) -
SHARE DATA:
Basic earnings per share $ 0.54 $ 0.53 1.9 $ 0.50 $ 8.0 %
Diluted earnings per share 0.53 0.52 1.9 0.49 8.2
Cash dividends paid per share 0.235 0.215 9.3 0.230 2.2
Book value per share 12.93 12.59 2.7 13.47 (4.0)
Weighted average shares - basic 24,555,675 24,839,708 (1.1) 24,500,552 0.2
Weighted average shares - diluted 25,205,315 25,492,725 (1.1) 25,085,553 0.5
Common shares outstanding 24,483,143 24,733,718 (1.0) 24,565,237 (0.3)
END OF PERIOD BALANCES:
Investment securities portfolio $ 1,970,618 $ 1,916,868 2.8 % $ 2,126,758 (7.3)%
Total loans 2,702,255 2,635,325 2.5 2,579,365 4.8
Assets 4,985,445 4,899,172 1.8 5,096,296 (2.2)
Deposits 3,087,906 3,233,415 (4.5) 3,347,974 (7.8)
Stockholders' equity 316,661 311,380 1.7 330,816 (4.3)
Common stockholders' equity 321,350 300,942 6.8 317,926 1.1
AVERAGE BALANCES:
Investment securities portfolio $ 1,993,040 $ 1,914,305 4.1 % $ 2,132,288 (6.5)%
Loans:
Core consumer 928,730 811,417 14.5 866,789 7.1
Core commercial business 355,002 343,577 3.3 353,261 0.5
Core commercial real estate 630,095 524,259 20.2 579,714 8.7
Total core loans 1,913,827 1,679,253 14.0 1,799,764 6.3
Non-core consumer 694,637 895,848 (22.5) 674,381 3.0
National syndicated loans 31,499 67,103 (53.1) 37,066 (15.0)
Total non-core loans* 726,136 962,951 (24.6) 711,447 2.1
Total loans 2,639,963 2,642,204 (0.1) 2,511,211 5.1
Earning assets 4,648,407 4,565,181 1.8 4,657,849 (0.2)
Assets 4,984,959 4,860,787 2.6 4,998,848 (0.3)
Core deposits 2,869,728 2,717,922 5.6 2,856,004 0.5
Non-core deposits (brokered deposits) 282,405 519,125 (45.6) 356,908 (20.9)
Total deposits 3,152,133 3,237,047 (2.6) 3,212,912 (1.9)
Stockholders' equity 303,702 304,793 (0.4) 325,435 (6.7)
Common stockholders' equity 317,578 297,280 6.8 308,020 3.1
SELECTED RATIOS:
Return on average assets 1.06 % 1.07 % 0.98 %
Return on average equity 17.38 17.10 15.03
Return on average common equity 16.63 17.54 15.88
Net yield on average earning assets (t/e basis) 3.26 3.04 3.18
Efficiency ratio 63.35 65.76 66.92
Leverage ratio 7.61 7.43 7.51
Tier I risk-based capital ratio 11.99 11.33 12.01
Total risk-based capital ratio 13.11 12.42 13.10
* 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
Nine Months Ended
(dollars in thousands, except per share data) September 30,
---------------------------------------------
2003 2002 % Change
------------- ------------- -------------
SUMMARY OF OPERATIONS:
Net income $ 37,288 $ 35,020 6.5 %
Net interest income 110,463 107,286 3.0
Provision for loan losses 7,961 8,400 (5.2)
Non-interest income 63,574 63,661 (0.1)
Net gains (losses) (4,899) 186 -
Non-interest income (excluding net gains/losses) 68,473 63,475 7.9
Non-interest expense 118,680 111,634 6.3
Income tax expense 10,108 15,893 (36.4)
SHARE DATA:
Basic earnings per share $ 1.52 $ 1.40 8.6 %
Diluted earnings per share 1.48 1.36 8.8
Cash dividends paid per share 0.690 0.630 9.5
Book value per share 12.93 12.59 2.7
Weighted average shares - basic 24,482,641 25,035,130 (2.2)
Weighted average shares - diluted 25,112,217 25,807,292 (2.7)
Common shares outstanding 24,483,143 24,733,718 (1.0)
END OF PERIOD BALANCES:
Investment securities portfolio $ 1,970,618 $ 1,916,868 2.8 %
Total loans 2,702,255 2,635,325 2.5
Assets 4,985,445 4,899,172 1.8
Deposits 3,087,906 3,233,415 (4.5)
Stockholders' equity 316,661 311,380 1.7
Common stockholders' equity 321,350 300,942 6.8
AVERAGE BALANCES:
Investment securities portfolio $ 2,058,218 $ 1,861,120 10.6 %
Loans:
Core consumer 880,503 784,392 12.3
Core commercial business 350,167 337,246 3.8
Core commercial real estate 590,551 503,740 17.2
Total core loans 1,821,221 1,625,378 12.0
Non-core consumer 690,130 985,328 (30.0)
National syndicated loans 39,403 71,530 (44.9)
Total non-core loans* 729,533 1,056,858 (31.0)
Total loans 2,550,754 2,682,236 (4.9)
Earning assets 4,622,555 4,553,695 1.5
Assets 4,956,247 4,857,126 2.0
Core deposits 2,825,403 2,676,389 5.6
Non-core deposits (brokered deposits) 345,355 623,538 (44.6)
Total deposits 3,170,758 3,299,927 (3.9)
Stockholders' equity 315,962 296,586 6.5
Common stockholders' equity 309,378 297,858 3.9
SELECTED RATIOS:
Return on average assets 1.00 % 0.96 %
Return on average equity 15.78 15.79
Return on average common equity 16.11 15.72
Net yield on average earning assets (t/e basis) 3.21 3.17
Efficiency ratio 66.13 65.14
Leverage ratio 7.61 7.43
Tier I risk-based capital ratio 11.99 11.33
Total risk-based capital ratio 13.11 12.42
* 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
September 30, September 30, June 30,
(dollars in thousands) 2003 2002 2003
----------------- --------------- --------------
LOAN PORTFOLIO:
Acquired residential mortgage $ 584,886 $ 599,010 $ 541,166
Other consumer 977,758 873,607 913,838
----------------- --------------- --------------
Total consumer 1,562,644 1,472,617 1,455,004
Commercial business 374,888 373,646 379,920
Residential real estate construction 160,519 112,438 136,996
Commercial real estate construction 201,906 237,055 208,286
Residential real estate mortgage 90,268 208,304 111,486
Commercial real estate mortgage 312,030 231,265 287,673
----------------- --------------- ---------------
Total loans $ 2,702,255 $ 2,635,325 $ 2,579,365
================= =============== ===============
NON-PERFORMING ASSETS:
Acquired residential mortgage $ 16,122 $ 16,626 $ 15,507
Other consumer 266 642 420
Commercial business 1,810 88 533
Residential real estate construction 134 213 135
Commercial real estate construction - - -
Residential real estate mortgage 2,002 2,776 2,104
Commercial real estate mortgage - - 735
----------------- --------------- ---------------
Total non-accrual loans 20,334 20,345 19,434
Total renegotiated loans - - -
----------------- --------------- ---------------
Total non-performing loans 20,334 20,345 19,434
Total Other Assets and Real Estate Owned 3,916 4,105 5,132
----------------- --------------- ---------------
Total non-performing assets $ 24,250 $ 24,450 $ 24,566
================= =============== ===============
90-DAY DELINQUENCIES:
Acquired residential mortgage $ 4,276 $ 5,601 $ 5,353
Other consumer 723 1,391 373
Commercial business 380 648 380
Residential real estate construction - - -
Commercial real estate construction - - -
Residential real estate mortgage 5,899 8,099 6,414
Commercial real estate mortgage - - -
----------------- --------------- ---------------
Total 90-day delinquencies $ 11,278 $ 15,739 $ 12,520
================= =============== ===============
ASSET QUALITY RATIOS:
Non-performing loans to loans 0.75% 0.77% 0.75%
Non-performing assets to loans 0.90% 0.93% 0.95%
Allowance for loan losses to loans 1.30% 1.31% 1.32%
Net charge-offs in quarter to average loans 0.30% 0.34% 0.28%
Allowance for loan losses to non-performing loans 172.16% 170.14% 175.19%
Three Months
Three Months Ended September 30, Ended June 30,
--------------------------------------
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES: 2003 2002 2003
----------------- --------------- ---------------
Balance at beginning of period $ 34,047 $ 34,719 $ 32,562
Provision for loan losses 2,950 2,150 3,251
Transfer to other liabilities - - -
Less loans charged-off, net of recoveries:
Acquired residential mortgage 1,346 2,394 1,497
Other consumer 440 264 132
Commercial business 195 (331) 137
Residential real estate construction - - -
Commercial real estate construction - - -
Residential real estate mortgage 10 65 -
Commercial real estate mortgage - (138) -
----------------- --------------- ---------------
Net charge-offs 1,991 2,254 1,766
----------------- --------------- ---------------
Balance at end of period $ 35,006 $ 34,615 $ 34,047
================= =============== ===============
4
PROVIDENT BANKSHARES CORPORATION
COMPARATIVE ANALYSIS OF AVERAGE BALANCES, INTEREST INCOME AND EXPENSE AND INTEREST YIELDS AND RATES
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Three Months Ended
September 30, 2003 September 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 $ 433,193 $ 5,395 4.94% $ 369,341 $ 5,665 6.09% $ 63,852 17.3 % $ (270) (4.8)%
Marine 455,867 6,287 5.47 397,002 6,813 6.81 58,865 14.8 (526) (7.7)
Acquired Residential Mortgage 573,449 8,972 6.21 613,457 10,967 7.09 (40,008) (6.5) (1,995) (18.2)
Other Direct Consumer 39,670 773 7.73 45,074 869 7.65 (5,404) (12.0) (96) (11.0)
Other Indirect Consumer 20,085 382 7.55 54,980 1,028 7.42 (34,895) (63.5) (646) (62.8)
Residential Mortgage 101,103 2,110 8.28 227,411 4,349 7.59 (126,308) (55.5) (2,239) (51.5)
----------- -------- ---------- -------- ---------- --------
Total Consumer 1,623,367 23,919 5.85 1,707,265 29,691 6.90 (83,898) (4.9) (5,772) (19.4)
Commercial Business 355,002 5,150 5.76 343,577 5,802 6.70 11,425 3.3 (652) (11.2)
Real Estate-Construction 334,702 3,567 4.23 296,668 3,568 4.77 38,034 12.8 (1) (0.0)
Commercial Mortgage 295,393 4,320 5.80 227,591 3,672 6.40 67,802 29.8 648 17.6
Non-Core SNC's 31,499 278 3.50 67,103 778 4.60 (35,604) (53.1) (500) (64.3)
----------- -------- ---------- -------- ---------- --------
Total Loans 2,639,963 37,234 5.60 2,642,204 43,511 6.53 (2,241) (0.1) (6,277) (14.4)
----------- -------- ---------- -------- ---------- --------
Loans Held for Sale 11,912 172 5.73 6,340 107 6.70 5,572 87.9 65 60.7
Short-Term Investments 3,492 7 0.80 2,332 16 2.72 1,160 49.7 (9) (56.3)
Taxable Investment Securities 1,974,264 21,187 4.26 1,893,581 23,427 4.91 80,683 4.3 (2,240) (9.6)
Tax-Advantaged Investment
Securities 18,776 331 6.99 20,724 375 7.18 (1,948) (9.4) (44) (11.7)
----------- -------- ---------- -------- ---------- --------
Total Investment Securities 1,993,040 21,518 4.28 1,914,305 23,802 4.93 78,735 4.1 (2,284) (9.6)
----------- -------- ---------- -------- ---------- --------
Total Interest-Earning
Assets 4,648,407 58,931 5.03 4,565,181 67,436 5.86 83,226 1.8 (8,505) (12.6)
----------- -------- ---------- -------- ---------- --------
Less: Allowance for Loan Losses (34,472) (34,385) (87) 0.3
Cash and Due From Banks 116,487 97,755 18,732 19.2
Other Assets 254,537 232,236 22,301 9.6
----------- $4,860,787 ----------
Total Assets $ 4,984,959 ========== $ 124,172 2.6
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Interest-Bearing Liabilities:
Demand/Money Market Deposits $ 895,396 1,797 0.80 $ 804,225 2,282 1.13 $ 91,171 11.3 (485) (21.3)
Savings Deposits 708,493 680 0.38 657,405 1,772 1.07 51,088 7.8 (1,092) (61.6)
Direct Time Deposits 691,228 4,116 2.36 822,964 7,193 3.47 (131,736) (16.0) (3,077) (42.8)
Brokered Time Deposits 282,405 4,387 6.16 519,125 8,325 6.36 (236,720) (45.6) (3,938) (47.3)
Short-Term Borrowings 515,080 1,142 0.88 452,750 1,911 1.67 62,330 13.8 (769) (40.2)
Long-Term Debt 982,872 8,604 3.47 845,590 10,998 5.16 137,282 16.2 (2,394) (21.8)
----------- -------- ---------- -------- ---------- --------
Total Interest-Bearing
Liabilities 4,075,474 20,726 2.02 4,102,059 32,481 3.14 (26,585) (0.6) (11,755) (36.2)
----------- -------- ---------- -------- ---------- --------
Noninterest-Bearing Demand Deposits 574,611 433,328 141,283 32.6
Other Liabilities 17,296 28,120 (10,824) (38.5)
Stockholders' Equity 317,578 297,280 20,298 6.8
----------- ---------- ----------
Total Liabilities and
Stockholders' Equity $ 4,984,959 $4,860,787 $ 124,172 2.6
=========== ========== ==========
Net Interest-Earning Assets $ 572,933 $ 463,122 $ 109,811 23.7
=========== ========== ==========
Net Interest Income (tax-equivalent) 38,205 34,955 3,250 9.3
Less: Tax-Equivalent Adjustment (168) (191) 23 (12.0)
-------- -------- --------
Net Interest Income $ 38,037 $ 34,764 $ 3,273 9.4
======== ======== ========
Net Yield on Interest-Earning Assets 3.26% 3.04%
2003/2002
Income/Expense Variance
Due to Change In
---------------------------
(dollars in thousands) Average Average
(tax-equivalent basis) Rate Volume
------------ ------------
ASSETS
- ------
Interest-Earning Assets:
Home Equity $ (1,161) $ 891
Marine (1,451) 925
Acquired Residential Mortgage (1,310) (685)
Other Direct Consumer 9 (105)
Other Indirect Consumer 17 (663)
Residential Mortgage 366 (2,605)
Total Consumer
Commercial Business (840) 188
Real Estate-Construction (431) 430
Commercial Mortgage (368) 1,016
Non-Core SNC's (155) (345)
Total Loans
Loans Held for Sale (17) 82
Short-Term Investments (15) 6
Taxable Investment Securities (3,206) 966
Tax-Advantaged Investment Securities (9) (35)
Total Investment Securities
Total Interest-Earning Assets (9,715) 1,210
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 (722) 237
Savings Deposits (1,220) 128
Direct Time Deposits (2,048) (1,029)
Brokered Time Deposits (253) (3,685)
Short-Term Borrowings (1,004) 235
Long-Term Debt (3,986) 1,592
Total Interest-Bearing Liabilities (11,546) (209)
Noninterest-Bearing Demand Deposits
Other Liabilities
Stockholders' Equity
Total Liabilities and Stockholders' Equity
Net Interest-Earning Assets
Net Interest Income (tax-equivalent) $ 1,831 $ 1,419
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 Nine Months Ended
September 30, September 30,
------------------------------ ------------------------------
(dollars in thousands, except per share data) 2003 2002 2003 2002
------------- -------------- -------------- -------------
INTEREST INCOME:
Loans, including fees $ 37,202 $ 43,309 $ 110,534 $ 135,407
Investment securities 21,187 23,451 68,729 77,723
Tax-advantaged loans and securities 367 469 1,146 1,351
Short-term investments 7 16 20 81
------------- -------------- -------------- -------------
Total interest income 58,763 67,245 180,429 214,562
------------- -------------- -------------- -------------
INTEREST EXPENSE:
Deposits 10,980 19,572 38,252 66,265
Short-term borrowings 1,169 1,911 3,512 4,616
Long-term debt 8,577 10,998 28,202 36,395
------------- -------------- -------------- -------------
Total interest expense 20,726 32,481 69,966 107,276
------------- -------------- -------------- -------------
Net interest income 38,037 34,764 110,463 107,286
Less provision for loan losses 2,950 2,150 7,961 8,400
------------- -------------- -------------- -------------
Net interest income, after provision for loan losses 35,087 32,614 102,502 98,886
------------- -------------- -------------- -------------
NON-INTEREST INCOME:
Service charges on deposit accounts 19,453 18,358 56,018 51,890
Commissions and fees 1,085 1,142 3,545 3,742
Net gains (losses) 746 1,997 (4,899) 186
Other non-interest income 3,339 2,529 8,910 7,843
------------- -------------- -------------- -------------
Total non-interest income 24,623 24,026 63,574 63,661
------------- -------------- -------------- -------------
NON-INTEREST EXPENSE:
Salaries and employee benefits 19,441 18,709 58,003 54,533
Occupancy expense, net 4,023 3,722 11,997 10,776
Furniture and equipment expense 2,988 2,806 8,809 8,144
External processing fees 5,358 5,138 15,901 15,133
Other non-interest expense 7,520 7,096 23,970 23,048
------------- -------------- -------------- -------------
Total non-interest expense 39,330 37,471 118,680 111,634
------------- -------------- -------------- -------------
Income before income taxes 20,380 19,169 47,396 50,913
Income tax expense 7,072 6,029 10,108 15,893
------------- -------------- -------------- -------------
Net income $ 13,308 $ 13,140 $ 37,288 $ 35,020
============= ============== ============== =============
NET INCOME PER SHARE AMOUNTS:
Basic $ 0.54 $ 0.53 $ 1.52 $ 1.40
Diluted 0.53 0.52 1.48 1.36
6
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CONDITION
September 30, December 31, September 30,
(dollars in thousands, except share amounts) 2003 2002 2002
-------------- ------------- --------------
ASSETS:
Cash and due from banks $ 111,659 $ 145,063 $ 158,571
Short-term investments 2,213 3,129 1,964
Mortgage loans held for sale 13,157 8,899 7,421
Securities available for sale 1,970,618 1,993,229 1,916,868
Loans 2,702,255 2,560,563 2,635,325
Less allowance for loan losses 35,006 33,425 34,615
-------------- ------------- --------------
Net loans 2,667,249 2,527,138 2,600,710
-------------- ------------- --------------
Premises and equipment, net 47,975 47,031 45,494
Accrued interest receivable 24,988 28,101 30,520
Intangible assets 9,034 9,340 10,463
Other assets 138,552 128,792 127,161
-------------- ------------- --------------
Total assets $4,985,445 $4,890,722 $4,899,172
============== ============= ==============
LIABILITIES:
Deposits:
Noninterest-bearing $ 576,482 $ 492,661 $ 488,674
Interest-bearing 2,511,424 2,695,305 2,744,741
-------------- ------------- --------------
Total deposits 3,087,906 3,187,966 3,233,415
-------------- ------------- --------------
Short-term borrowings 511,838 539,758 487,485
Long-term debt 1,047,612 814,546 835,141
Accrued expenses and other liabilities 21,428 32,817 31,751
-------------- ------------- --------------
Total liabilities 4,668,784 4,575,087 4,587,792
-------------- ------------- --------------
STOCKHOLDERS' EQUITY:
Common stock (par value $1.00) authorized 100,000,000 shares;
issued 32,134,460, 31,737,237 and 31,717,319 shares at September 30,
2003, December 31, 2002 and September 30, 2002, respectively 32,134 31,737 31,717
Additional paid-in capital 297,284 289,698 289,348
Retained earnings 145,265 124,862 116,990
Net accumulated other comprehensive income (loss) (4,689) 14,920 10,438
Treasury stock at cost - 7,651,317, 7,373,601 and 6,983,601
shares at September 30, 2003, December 31, 2002 and
September 30, 2002, respectively (153,333) (145,582) (137,113)
-------------- ------------- --------------
Total stockholders' equity 316,661 315,635 311,380
-------------- ------------- --------------
Total liabilities and stockholders' equity $4,985,445 $4,890,722 $4,899,172
============== ============= ==============