1
EXHIBIT 99.2
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
ASSET QUALITY DETAIL
March 31, March 31, December 31,
(dollars in thousands) 2006 2005 2005
----------- ----------- -------------
LOAN PORTFOLIO:
Originated and acquired residential mortgage $ 421,122 $ 626,952 $ 452,853
Home equity 924,311 745,996 900,985
Marine 398,024 431,381 412,643
Other 28,688 35,482 32,793
----------- ----------- -----------
Total consumer 1,772,145 1,839,811 1,799,274
----------- ----------- -----------
Commercial mortgage 470,364 483,256 485,743
Residential real estate construction 483,309 264,906 414,803
Commercial real estate construction 311,036 282,092 312,399
Commercial business 676,315 671,110 683,162
----------- ----------- -----------
Total commercial 1,941,024 1,701,364 1,896,107
----------- ----------- -----------
Total loans $ 3,713,169 $ 3,541,175 $ 3,695,381
=========== =========== ===========
NON-PERFORMING ASSETS:
Originated and acquired residential mortgage $ 8,648 $ 10,130 $ 7,340
Home equity 310 275 243
Other consumer 205 - 315
Commercial mortgage 1,437 1,598 1,437
Commercial real estate construction - 195 -
Commercial business 15,752 11,008 16,336
----------- ----------- -----------
Total non-accrual loans 26,352 23,206 25,671
Total renegotiated loans - - -
----------- ----------- -----------
Total non-performing loans 26,352 23,206 25,671
Total other assets and real estate owned 1,773 1,578 1,787
----------- ----------- -----------
Total non-performing assets $ 28,125 $ 24,784 $ 27,458
=========== =========== ===========
90-DAY DELINQUENCIES:
Originated and acquired residential mortgage $ 3,578 $ 3,315 $ 5,131
Home equity 263 348 251
Other consumer 875 4,834 1,069
Residential real estate construction - 1,033 118
Commercial business 290 1,244 1,551
----------- ----------- -----------
Total 90-day delinquencies $ 5,006 $ 10,774 $ 8,120
=========== =========== ===========
ASSET QUALITY RATIOS:
Non-performing loans to loans 0.71% 0.66% 0.69%
Non-performing assets to loans 0.76% 0.70% 0.74%
Allowance for loan losses to loans 1.21% 1.29% 1.24%
Net charge-offs in quarter to average loans 0.13% 0.24% 0.09%
Allowance for loan losses to non-performing loans 169.83% 196.67% 177.78%
Three Months Ended March 31, Three Months
---------------------------- Ended December 31,
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES: 2006 2005 2005
----------- ----------- ------------------
Balance at beginning of period $ 45,639 $ 46,169 $ 46,049
Provision for loan losses 318 1,575 400
Less loans charged-off, net of recoveries:
Originated and acquired residential mortgage 331 641 86
Home equity 119 (1) (1)
Other consumer 271 (10) 378
Commercial mortgage - - 107
Residential real estate construction - - (32)
Commercial real estate construction - - -
Commercial business 482 1,475 272
----------- ----------- -----------
Net charge-offs 1,203 2,105 810
----------- ----------- -----------
Balance at end of period $ 44,754 $ 45,639 $ 45,639
=========== =========== ===========
2
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31,
------------------------------
(dollars in thousands, except per share data) 2006 2005
------------- --------------
INTEREST INCOME:
Loans, including fees $ 61,147 $ 50,504
Investment securities 23,952 24,321
Tax-advantaged loans and securities 806 319
Short-term investments 79 43
---------- ---------
Total interest income 85,984 75,187
---------- ---------
INTEREST EXPENSE:
Deposits 17,066 11,328
Short-term borrowings 8,548 4,473
Long-term debt 9,122 10,670
---------- ---------
Total interest expense 34,736 26,471
---------- ---------
Net interest income 51,248 48,716
Less provision for loan losses 318 1,575
---------- ---------
Net interest income, after provision for loan losses 50,930 47,141
---------- ---------
NON-INTEREST INCOME:
Service charges on deposit accounts 22,052 19,349
Commissions and fees 1,608 1,210
Net gains (losses) 540 (776)
Derivative losses on swaps (603) (3,820)
Net cash settlement on swaps 290 1,579
Other non-interest income 4,338 5,502
---------- ---------
Total non-interest income 28,225 23,044
---------- ---------
NON-INTEREST EXPENSE:
Salaries and employee benefits 27,632 22,698
Occupancy expense, net 5,729 5,274
Furniture and equipment expense 3,847 3,464
External processing fees 4,967 5,197
Other non-interest expense 10,616 10,841
---------- ---------
Total non-interest expense 52,791 47,474
---------- ---------
Income before income taxes 26,364 22,711
Income tax expense 8,106 6,961
---------- ---------
Net income $ 18,258 $ 15,750
========== =========
NET INCOME PER SHARE AMOUNTS:
Basic $ 0.55 $ 0.48
Diluted 0.55 0.47
3
PROVIDENT BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
March 31, December 31, March 31,
(dollars in thousands, except share amounts) 2006 2005 2005
------------- -------------- -------------
ASSETS:
Cash and due from banks $ 138,404 $ 159,474 $ 155,562
Short-term investments 12,059 3,992 5,347
Mortgage loans held for sale 8,007 8,169 4,441
Securities available for sale 1,805,972 1,794,086 2,031,290
Securities held to maturity 110,681 111,269 114,091
Loans 3,713,169 3,695,381 3,541,175
Less allowance for loan losses 44,754 45,639 45,639
----------- ----------- ------------
Net loans 3,668,415 3,649,742 3,495,536
----------- ----------- ------------
Premises and equipment, net 64,558 65,893 63,379
Accrued interest receivable 32,465 31,766 29,627
Goodwill 254,855 254,855 255,973
Intangible assets 10,315 10,765 12,167
Other assets 266,703 265,915 257,269
----------- ----------- ------------
Total assets $6,372,434 $6,355,926 $6,424,682
=========== =========== ============
LIABILITIES:
Deposits:
Noninterest-bearing $ 826,598 $ 860,023 $ 876,766
Interest-bearing 3,335,841 3,264,444 3,052,120
----------- ----------- ------------
Total deposits 4,162,439 4,124,467 3,928,886
----------- ----------- ------------
Short-term borrowings 760,110 647,752 719,228
Long-term debt 783,702 920,022 1,125,465
Accrued expenses and other liabilities 35,987 33,190 39,566
----------- ----------- ------------
Total liabilities 5,742,238 5,725,431 5,813,145
----------- ----------- ------------
STOCKHOLDERS' EQUITY:
Common stock (par value $1.00) authorized 100,000,000 shares;
issued 41,577,170, 41,386,297 and 40,966,829 shares at March 31,
2006, December 31, 2005 and March 31, 2005, respectively 41,577 41,386 40,967
Additional paid-in capital 570,453 565,239 554,244
Retained earnings 230,155 221,290 191,226
Net accumulated other comprehensive loss (26,574) (17,283) (12,600)
Treasury stock at cost - 8,602,386, 8,453,179 and 7,904,541
shares at March 31, 2006, December 31, 2005 and
March 31, 2005, respectively (185,415) (180,137) (162,300)
----------- ----------- ------------
Total stockholders' equity 630,196 630,495 611,537
----------- ----------- ------------
Total liabilities and stockholders' equity $6,372,434 $6,355,926 $6,424,682
=========== =========== ============
4
PROVIDENT BANKSHARES CORPORATION
CONSOLIDATED AVERAGE BALANCES AND ANALYSIS OF CHANGES IN TAX EQUIVALENT NET INTEREST INCOME
Three Months Ended Three Months Ended
March 31, 2006 March 31, 2005
----------------------------------------------------------------------------
(dollars in thousands) Average Income/ Yield/ Average Income/ Yield/
(tax-equivalent basis) Balance Expense Rate Balance Expense Rate
------------- ----------- ---------- ------------ --------- ----------
ASSETS:
Interest-earning assets:
Originated and acquired residential $ 439,513 $ 6,883 6.35 % $ 639,845 $ 9,485 6.01 %
Home equity 914,182 14,168 6.29 724,721 9,352 5.23
Marine 406,786 5,235 5.22 432,891 5,583 5.23
Other consumer 30,441 701 9.34 38,250 771 8.17
Commercial mortgage 475,354 7,917 6.75 484,491 7,172 6.00
Residential construction 447,792 9,009 8.16 259,940 3,886 6.06
Commercial construction 309,123 5,461 7.16 281,705 3,914 5.63
Commercial business 677,346 11,786 7.06 678,183 10,529 6.30
----------- ---------- ----------- ----------
Total loans 3,700,537 61,160 6.70 3,540,026 50,692 5.81
----------- ---------- ----------- ----------
Loans held for sale 7,477 126 6.83 6,093 88 5.86
Short-term investments 8,475 79 3.78 8,671 43 2.01
Taxable investment securities 1,849,174 23,952 5.25 2,156,984 24,321 4.57
Tax-advantaged investment securities 72,705 1,105 6.16 12,995 231 7.21
----------- ---------- ----------- ----------
Total investment securities 1,921,879 25,057 5.29 2,169,979 24,552 4.59
----------- ---------- ----------- ----------
Total interest-earning assets 5,638,368 86,422 6.22 5,724,769 75,375 5.34
----------- ---------- ----------- ----------
Less: allowance for loan losses (45,396) (46,051)
Cash and due from banks 121,465 127,760
Other assets 623,221 626,493
----------- -----------
Total assets $6,337,658 $6,432,971
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-bearing liabilities:
Interest-bearing demand deposits $ 569,191 669 0.48 $ 526,831 305 0.23
Money market deposits 614,094 3,635 2.40 533,176 1,910 1.45
Savings deposits 692,013 552 0.32 749,080 540 0.29
Direct time deposits 898,518 7,150 3.23 795,593 4,408 2.25
Brokered time deposits 448,418 5,060 4.58 367,653 4,165 4.59
Short-term borrowings 835,299 8,548 4.15 837,946 4,473 2.16
Long-term debt 805,654 9,122 4.59 1,184,524 10,670 3.65
----------- ---------- ----------- ----------
Total interest-bearing liabilities 4,863,187 34,736 2.90 4,994,803 26,471 2.15
----------- ---------- ----------- ----------
Noninterest-bearing demand deposits 791,615 783,673
Other liabilities 33,576 35,727
Stockholders' equity 649,280 618,768
----------- -----------
Total liabilities and stockholders' equity $6,337,658 $6,432,971
=========== ==============
Net interest-earning assets $ 775,181 $ 729,966
=========== ==============
Net interest income (tax-equivalent) 51,686 48,904
Less: tax-equivalent adjustment (438) (188)
----------- -----------
Net interest income $ 51,248 $ 48,716
=========== ===========
Net yield on interest-earning assets 3.72 % 3.46 %
5
PROVIDENT BANKSHARES CORPORATION
CONSOLIDATED AVERAGE BALANCES AND ANALYSIS OF CHANGES IN TAX EQUIVALENT NET INTEREST INCOME
2006/2005
Income/Expense Variance
2006 Quarter to 2005 Quarter Increase/(Decrease) Due to Change In
----------------------------------------------------- -----------------------------
(dollars in thousands) Average % Income/ % Average Average
(tax-equivalent basis) Balance Change Expense Change Rate Volume
-------------- --------- ------------ ------------- -------------- --------------
ASSETS:
Interest-earning assets:
Originated and acquired residential $ (200,332) (31.3)% $ (2,602) (27.4)% $ 510 $ (3,112)
Home equity 189,461 26.1 4,816 51.5 2,093 2,723
Marine (26,105) (6.0) (348) (6.2) (12) (336)
Other consumer (7,809) (20.4) (70) (9.1) 101 (171)
Commercial mortgage (9,137) (1.9) 745 10.4 883 (138)
Residential construction 187,852 72.3 5,123 131.8 1,658 3,465
Commercial construction 27,418 9.7 1,547 39.5 1,139 408
Commercial business (837) (0.1) 1,257 11.9 1,270 (13)
----------- ----------
Total loans 160,511 4.5 10,468 20.7
----------- ----------
Loans held for sale 1,384 22.7 38 43.2 16 22
Short-term investments (196) (2.3) 36 83.7 37 (1)
Taxable investment securities (307,810) (14.3) (369) (1.5) 3,355 (3,724)
Tax-advantaged investment securities 59,710 459.5 874 378.4 (38) 912
----------- ----------
Total investment securities (248,100) (11.4) 505 2.1
----------- ----------
Total interest-earning assets (86,401) (1.5) 11,047 14.7 12,200 (1,153)
----------- ----------
Less: allowance for loan losses 655 (1.4)
Cash and due from banks (6,295) (4.9)
Other assets (3,272) (0.5)
-----------
Total assets $ (95,313) (1.5)
===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-bearing liabilities:
Interest-bearing demand deposits $ 42,360 8.0 364 119.3 338 26
Money market deposits 80,918 15.2 1,725 90.3 1,399 326
Savings deposits (57,067) (7.6) 12 2.2 55 (43)
Direct time deposits 102,925 12.9 2,742 62.2 2,115 627
Brokered time deposits 80,765 22.0 895 21.5 (16) 911
Short-term borrowings (2,647) (0.3) 4,075 91.1 4,089 (14)
Long-term debt (378,870) (32.0) (1,548) (14.5) 2,351 (3,899)
----------- ----------
Total interest-bearing liabilities (131,616) (2.6) 8,265 31.2 8,980 (715)
----------- ----------
Noninterest-bearing demand deposits 7,942 1.0
Other liabilities (2,151) (6.0)
Stockholders' equity 30,512 4.9
-----------
Total liabilities and stockholders' equity $ (95,313) (1.5)
===========
Net interest-earning assets $ 45,215 6.2
===========
Net interest income (tax-equivalent) 2,782 5.7 $ 3,220 $ (438)
Less: tax-equivalent adjustment (250) 133.0
------------
Net interest income $ 2,532 5.2
============
6
PROVIDENT BANKSHARES CORPORATION
CONSOLIDATED AVERAGE BALANCES AND ANALYSIS OF CHANGES IN TAX EQUIVALENT NET INTEREST INCOME
Three Months Ended Three Months Ended
March 31, 2006 December 31, 2005
-----------------------------------------------------------------------------
(dollars in thousands) Average Income/ Yield/ Average Income/ Yield/
(tax-equivalent basis) Balance Expense Rate Balance Expense Rate
------------- ----------- ------------------------ ----------- ----------
ASSETS:
Interest-earning assets:
Originated and acquired residential $ 439,513 $ 6,883 6.35 % $ 479,884 $ 7,064 5.84 %
Home equity 914,182 14,168 6.29 879,598 13,300 6.00
Marine 406,786 5,235 5.22 416,527 5,538 5.27
Other consumer 30,441 701 9.34 33,737 729 8.57
Commercial mortgage 475,354 7,917 6.75 482,593 7,974 6.56
Residential construction 447,792 9,009 8.16 426,898 8,209 7.63
Commercial construction 309,123 5,461 7.16 301,461 5,212 6.86
Commercial business 677,346 11,786 7.06 649,191 11,155 6.82
---------- ---------- ---------- ---------
Total loans 3,700,537 61,160 6.70 3,669,889 59,181 6.40
---------- ---------- ---------- ---------
Loans held for sale 7,477 126 6.83 9,285 146 6.24
Short-term investments 8,475 79 3.78 7,373 63 3.39
Taxable investment securities 1,849,174 23,952 5.25 1,895,310 23,484 4.92
Tax-advantaged investment securities 72,705 1,105 6.16 32,645 518 6.30
---------- ---------- ---------- ---------
Total investment securities 1,921,879 25,057 5.29 1,927,955 24,002 4.94
---------- ---------- ---------- ---------
Total interest-earning assets 5,638,368 86,422 6.22 5,614,502 83,392 5.89
---------- ---------- ---------- ---------
Less: allowance for loan losses (45,396) (46,007)
Cash and due from banks 121,465 142,914
Other assets 623,221 619,033
---------- ----------
Total assets $6,337,658 $6,330,442
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-bearing liabilities:
Interest-bearing demand deposits $ 569,191 669 0.48 $ 588,077 789 0.53
Money market deposits 614,094 3,635 2.40 604,104 3,368 2.21
Savings deposits 692,013 552 0.32 707,822 516 0.29
Direct time deposits 898,518 7,150 3.23 870,234 6,628 3.02
Brokered time deposits 448,418 5,060 4.58 430,067 4,880 4.50
Short-term borrowings 835,299 8,548 4.15 722,749 6,425 3.53
Long-term debt 805,654 9,122 4.59 912,700 10,033 4.36
---------- ---------- ---------- ---------
Total interest-bearing liabilities 4,863,187 34,736 2.90 4,835,753 32,639 2.68
---------- ---------- ---------- ---------
Noninterest-bearing demand deposits 791,615 816,635
Other liabilities 33,576 38,466
Stockholders' equity 649,280 639,588
---------- ----------
Total liabilities and stockholders' equity $6,337,658 $6,330,442
========== ==========
Net interest-earning assets $ 775,181 $ 778,749
========== ==========
Net interest income (tax-equivalent) 51,686 50,753
Less: tax-equivalent adjustment (438) (245)
---------- ---------
Net interest income $ 51,248 $ 50,508
========== =========
Net yield on interest-earning assets 3.72 % 3.59 %
7
PROVIDENT BANKSHARES CORPORATION
CONSOLIDATED AVERAGE BALANCES AND ANALYSIS OF CHANGES IN TAX EQUIVALENT NET INTEREST INCOME
Quarter to Quarter
Income/Expense Variance
Current Quarter to Prior Quarter Increase/(Decrease) Due to Change In
----------------------------------------------------- -----------------------------
(dollars in thousands) Average % Income/ % Average Average
(tax-equivalent basis) Balance Change Expense Change Rate Volume
-------------- --------- ---------- --------- ------------- -----------
ASSETS:
Interest-earning assets:
Originated and acquired residential $ (40,371) (8.4)% $ (181) (2.6)% $ 501 $ (682)
Home equity 34,584 3.9 868 6.5 476 392
Marine (9,741) (2.3) (303) (5.5) (94) (209)
Other consumer (3,296) (9.8) (28) (3.8) 53 (81)
Commercial mortgage (7,239) (1.5) (57) (0.7) 119 (176)
Residential construction 20,894 4.9 800 9.7 469 331
Commercial construction 7,662 2.5 249 4.8 158 91
Commercial business 28,155 4.3 631 5.7 283 348
--------- --------
Total loans 30,648 0.8 1,979 3.3
--------- --------
Loans held for sale (1,808) (19.5) (20) (13.7) 12 (32)
Short-term investments 1,102 14.9 16 25.4 7 9
Taxable investment securities (46,136) (2.4) 468 2.0 1,171 (703)
Tax-advantaged investment securities 40,060 122.7 587 113.3 (11) 598
--------- --------
Total investment securities (6,076) (0.3) 1,055 4.4
--------- --------
Total interest-earning assets 23,866 0.4 3,030 3.6 2,812 218
--------- --------
Less: allowance for loan losses 611 (1.3)
Cash and due from banks (21,449) (15.0)
Other assets 4,188 0.7
---------
Total assets $ 7,216 0.1
==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-bearing liabilities:
Interest-bearing demand deposits $ (18,886) (3.2) (120) (15.2) (92) (28)
Money market deposits 9,990 1.7 267 7.9 224 43
Savings deposits (15,809) (2.2) 36 7.0 49 (13)
Direct time deposits 28,284 3.3 522 7.9 353 169
Brokered time deposits 18,351 4.3 180 3.7 50 130
Short-term borrowings 112,550 15.6 2,123 33.0 1,129 994
Long-term debt (107,046) (11.7) (911) (9.1) 432 (1,343)
--------- --------
Total interest-bearing liabilities 27,434 0.6 2,097 6.4 1,961 136
--------- --------
Noninterest-bearing demand deposits (25,020) (3.1)
Other liabilities (4,890) (12.7)
Stockholders' equity 9,692 1.5
---------
Total liabilities and stockholders' equity $ 7,216 0.1
==========
Net interest-earning assets $ (3,568) (0.5)
==========
Net interest income (tax-equivalent) 933 1.8 $ 851 $ 82
Less: tax-equivalent adjustment (193) 78.8
--------
Net interest income $ 740 1.5
========