PFGI Provident Financial Grp. (MM)

Provident Financial Group, Inc. Announces First Quarter 2004 Financial Results CINCINNATI, April 21 /PRNewswire-FirstCall/ -- Provident Financial Group, Inc. announced first quarter 2004 financial results today. For the quarter ended March 31, 2004, net income was $27.1 million or 51 cents per share compared with $25.8 million or 51 cents per share reported in 2003's first quarter. First quarter 2004 returns on average equity and assets were 11.68 percent and 0.65 percent, compared with 11.76 percent and 0.59 percent in last year's first quarter. (Logo: http://www.newscom.com/cgi-bin/prnh/20030424/PFGLOGO ) On February 17, 2004, Provident Financial Group and National City Corporation announced that they had signed a definitive agreement for National City to acquire Provident. First quarter 2004 results include a 5 cent net impact to earnings per share that is directly related to the increase in Provident's share price as a result of the acquisition announcement. Excluding this impact, first quarter 2004 earnings per share were 56 cents. The table below shows a reconciliation of these items. Earnings Per Share (EPS) Impact of Items Related to Share Price Increase as a Result of Pending Merger with National City Corporation Reported EPS $0.51 EPS impact related to higher expenses associated with discontinued variable stock based compensation plan 0.03 EPS impact related to increased common stock equivalents for stock options and PRIDES securities 0.02 Adjusted EPS $0.56 Robert L. Hoverson, Provident's President and Chief Executive Officer, commented, "Excluding the earnings per share impact of the items associated with our pending merger with National City Corporation, first quarter earnings were within the range of our expectations and slightly above market consensus. Our financial results benefited primarily from significantly improved credit quality. Net charge-offs, non-performing assets and the loan loss provision were well below the levels of prior years. The composition of our deposit portfolio also continues to improve. Excluding the managed runoff of higher- cost CDs, average retail and commercial deposit account balances increased 20 percent over last year's first quarter, as sales associates continued to establish new customer relationships. Throughout the quarter, over 13,000 new lower-cost deposit accounts were opened, an increase of 12 percent over the number of new accounts opened last quarter. Additionally, we also realized a 15 basis point increase in the net interest margin over last quarter." "We look forward to joining forces with National City Corporation. Our customers will benefit by having access to more branches and ATMs, as well as an expanded menu of products and services. We are committed to exceeding customer expectations and are working closely with National City to ensure a seamless transition throughout the entire merger process." Loans & Asset Quality Average loans and leases for 2004's first quarter were $8.8 billion compared with $9.1 billion in last year's first quarter. Total loans and leases outstanding on March 31, 2004 were $8.9 billion compared with $9.2 billion on March 31, 2003. Key asset quality indicators: -- The first quarter 2004 provision for loan and lease losses was $10.0 million compared with $16.5 million for 2003's first quarter. -- The first quarter 2004 annualized net charge-offs to average total loans and leases were 0.45 percent compared with 0.73 percent for 2003's first quarter. -- The reserve for loan and lease losses on March 31, 2004 was $160.0 million compared with $201.0 million on March 31, 2003. The reserve for loan and lease losses on March 31, 2004 was 1.80 percent of total loans and leases compared with 2.20 percent on March 31, 2003. The reserve for loan and lease losses on March 31, 2004 was 200 percent of non-performing assets compared with 99 percent on March 31, 2003. -- Non-performing assets were $80.0 million on March 31, 2004, compared with $84.2 million on December 31, 2003, and $203.4 million on March 31, 2003. Non-performing assets were 0.90 percent of total loans, leases and other non-performing assets on March 31, 2004, compared with 0.95 percent on December 31, 2003, and 2.22 percent on March 31, 2003. Revenue & Expenses First quarter 2004 net interest income was $76.0 million compared with $83.0 million in last year's first quarter. The net interest margin was 2.17 percent compared with 2.02 percent last quarter and 2.37 percent in last year's first quarter. The decline in the net interest margin from 2003's first quarter was primarily due to $471.0 million of subprime loans that were sold during the second quarter of 2003. Non-interest income was $168.1 million compared with $193.3 million in last year's first quarter. Revenue, comprised of net interest income and non-interest income, was $244.1 million compared with $276.2 million in last year's first quarter. First quarter 2004 non- interest expenses were $194.1 million compared with $221.2 million in last year's first quarter. Deposits Average retail and commercial deposits for 2004's first quarter were $6.3 billion, an increase of 5 percent from $6.0 billion in 2003's first quarter. Excluding the managed run-off of higher-cost CDs, the average balances of transactional deposit accounts were up 20 percent. For the period ended March 31, 2004, retail and commercial deposits were $6.2 billion, an increase of 4 percent from $6.0 billion on March 31, 2003. Capital Position Common shareholders' equity was $924.0 million or $18.70 per share on March 31, 2004 compared with $892.1 million or $18.19 per share on December 31, 2003. On March 31, 2004, tier 1 capital and total capital as a percentage of risk adjusted assets were 11.03 percent and 12.83 percent respectively, and the tier 1 leverage ratio was 8.73 percent. Conference Call & Webcast Due to the impending acquisition of Provident Financial Group by National City Corporation, the company will not be hosting a conference call or webcast this quarter. Forward-Looking Statements This document may contain 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 http://www.providentbank.com/ . At March 31, 2004, Provident Financial Group had $8.9 billion in loans outstanding, $9.9 billion in deposits, and assets of $16.7 billion. On February 17, 2004, Provident Financial Group and National City Corporation (NYSE:NCC) announced that they had signed a definitive agreement for National City to acquire Provident. The transaction is expected to close by the end of the second quarter. For further information, please contact: Christopher J. Carey Executive Vice President & Chief Financial Officer 1-513-639-4644 / 1-800-851-9521 e-mail: Stockholders are urged to read the joint proxy statement/prospectus which contains important information regarding the proposed transaction. Stockholders can obtain a free copy of the joint proxy statement/prospectus, as well as other filings containing information about National City Corporation and Provident Financial Group, Inc., without charge, at the SEC's Internet site ( http://www.sec.gov/ ). Copies of the joint proxy statement/prospectus and the filings with the SEC incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to National City Corporation, National City Center, 1900 East Ninth Street, Cleveland, Ohio 44114-3484 Attention: Office of the Secretary (216-222-2000), or to Provident Financial Group, Inc., One East Fourth Street, Cincinnati, Ohio 45202 Attention: Secretary (513-579-2861). The respective directors and executive officers of National City and Provident and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed merger. Information regarding National City's directors and executive officers is available in its proxy statement filed with the SEC by National City on March 11, 2003, and information regarding Provident's directors and executive officers is available in its Form 10-K filed with the SEC by Provident on March 15, 2004. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the joint proxy statement/prospectus and other relevant materials filed with the SEC as they become available. Provident Financial Group, Inc. and Subsidiaries Consolidated Financial Highlights (unaudited) Three Months For The Period Ended March 31 2004 2003 % Change Net Income Basic .55 .52 5.8% Diluted .51 .51 0.0% Dividends .24 .24 0.0% Book Value 18.70 17.88 4.6% RESULTS OF OPERATIONS: (In Millions) Net Interest Income $76.0 $83.0 (8.4)% Provision for Loan and Lease Losses 10.0 16.5 (39.7)% Net Income 27.1 25.8 4.8% FINANCIAL RATIOS: Performance Ratios: Return on Average Assets 0.65% 0.59% Return on Average Shareholders' Equity 11.68 11.76 Average Shareholders' Equity to Average Assets 5.58 5.01 Net Interest Margin 2.17 2.37 Capital Adequacy Ratios (Period End): Shareholders' Equity to Total Assets 5.56 4.96 Tier I Leverage Ratio 8.73 7.76 Risk-Based Capital Ratio - Tier I Capital 11.03 9.78 Risk-Based Capital Ratio - Total Capital 12.83 11.65 (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 208.46 110.91 Nonperforming Assets to: Total Loans, Leases and Other Nonperforming Assets .90 2.22 Total Assets .48 1.15 Net Charge-Off's to Average Total Loans and Leases (Annualized) .45 .73 AVERAGE BALANCES: (In Millions) Total Loans and Leases $8,826 $9,085 (2.9)% Earning Assets 14,078 14,194 (0.8)% Leased Equipment 1,551 2,242 (30.8)% Assets 16,613 17,534 (5.3)% Deposits 10,191 10,107 0.8% Interest Bearing Liabilities 13,633 14,978 (9.0)% Shareholders' Equity 927 878 5.6% PERIOD END BALANCES: (In Millions) Total Loans and Leases $8,890 $9,152 (2.9)% Leased Equipment 1,470 2,182 (32.6)% Assets 16,738 17,726 (5.6)% Deposits 9,909 10,665 (7.1)% Shareholders' Equity 931 879 5.9% OFF-BALANCE SHEET SECURITIZED LOANS AND LEASES: (In Millions) Residential Mortgage $1,054 $1,619 (34.9)% Home Equity 106 178 (40.4)% Direct Finance Leasing 31 80 (61.3)% Total Off-Balance Sheet Securitized Loans and Leases $1,191 $1,877 (36.5)% (See Investment in Variable Interest Entities 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 March 31, 2004 2003 % Change Net Interest Income $76,011 $82,959 (8.4)% Provision for Loan and Lease Losses 9,962 16,521 (39.7)% Noninterest Income: Service Charges on Deposit Accounts 11,493 12,332 (6.8)% Loan Servicing Fees 10,569 10,660 (0.9)% Commercial Mortgage Banking Revenue 11,300 10,297 9.7% Other Service Charges and Fees 11,766 11,736 0.3% Leasing Income 104,089 137,974 (24.6)% Cash Gain on Sale of Loans 8,702 4,942 76.1% Warrant Gains 549 328 67.4% Net Securities Gains / (Losses) 272 1,500 (81.9)% Other 9,392 3,518 167.0% Total Noninterest Income 168,132 193,287 (13.0)% Noninterest Expense: Salaries, Wages and Benefits 65,008 61,984 4.9% Charges and Fees 6,168 7,822 (21.1)% Occupancy 6,279 6,228 0.8% Leasing Expense 75,755 95,169 (20.4)% Equipment Expense 6,086 6,949 (12.4)% Professional Services 5,800 8,398 (30.9)% Minority Interest Expense 3,197 3,197 0.0% Other 25,814 31,449 (17.9)% Total Noninterest Expense 194,107 221,196 (12.2)% Income Before Income Taxes 40,074 38,529 4.0% Income Taxes 13,024 12,715 2.4% Net Income $27,050 $25,814 4.8% Other Data: Basic Earnings Per Common Share (GAAP) $0.55 $0.52 5.8% Diluted Earnings Per Common Share (GAAP) $0.51 $0.51 0.0% Adjustments (A): Impact for additional expense related to discontinued variable stock based compensation plan 0.03 - Impact for additional common stock equivalents 0.02 - Adjusted Diluted Earnings Per Common Share (Non-GAAP) $0.56 $0.51 9.8% Dividends Paid Per Common Share $0.24 $0.24 0.0% Return on Assets 0.65% 0.59% Return on Equity 11.68% 11.76% Net Interest Margin (FTE) 2.17% 2.37% Full-Time Equivalent Employees 3,237 3,333 (A) On February 17, 2004, Provident announced that it had signed a definitive agreement to merge with National City Corporation. As a result, the market value of Provident's stock increased causing a higher calculation of common stock equivalents for both its stock options and PRIDES securities outstanding. Additionally, Provident incurred additional expense related to a discontinued variable stock based compensation plan which is directly impacted by the market price of its stock. Therefore, the increase in stock price lowered Provident's diluted earnings per share. The company believes presenting diluted earnings per share excluding the impact of the high stock price might be beneficial to the reader as it provides data that is more comparable to other periods contained within this document. Provident Financial Group, Inc. and Subsidiaries Consolidated Quarterly Statements Of Income (unaudited) 2004 2003 First Fourth Third Quarter Quarter Quarter Net Interest Income $76,011 $74,216 $74,123 Provision for Loan and Lease Losses 9,962 35,070 11,919 Noninterest Income: Service Charges on Deposit Accounts 11,493 12,367 12,933 Loan Servicing Fees 10,569 13,150 6,925 Commercial Mortgage Banking Revenue 11,300 13,550 10,095 Other Service Charges and Fees 11,766 12,758 13,520 Leasing Income 104,089 114,484 126,192 Cash Gain on Sale of Loans 8,702 3,714 4,553 Warrant Gains 549 - - Net Securities Gains / (Losses) 272 (1,128) 5,077 Net Gain on Florida Assets and Liabilities - 74,998 - Net Gain on Merchant Services Business - - - Other 9,392 9,664 6,176 Total Noninterest Income 168,132 253,557 185,471 Noninterest Expense: Salaries, Wages and Benefits 65,008 64,855 60,737 Charges and Fees 6,168 9,059 7,404 Occupancy 6,279 6,449 6,224 Leasing Expense 75,755 88,412 89,047 Equipment Expense 6,086 6,114 6,398 Professional Services 5,800 7,945 7,906 Minority Interest Expense 3,197 3,197 3,197 Debt Retirement Charge - 25,584 - Disposition Cost of Subprime Loans - - - Other 25,814 34,659 26,378 Total Noninterest Expense 194,107 246,274 207,291 Income Before Income Taxes and Cumulative Effect of Changes in Accounting Principles 40,074 46,429 40,384 Income Taxes 13,024 15,005 12,923 Income Before Cumulative Effect of Changes in Accounting Principles 27,050 31,424 27,461 Cumulative Effect of Changes in Accounting Principles - (1,202) - Net Income $27,050 $30,222 $27,461 Other Data: Before Cumulative Effect of Changes in Accounting Principles: Basic Earnings Per Common Share $0.55 $0.63 $0.56 Diluted Earnings Per Common Share $0.51 $0.61 $0.54 After Cumulative Effect of Changes in Accounting Principles: Basic Earnings Per Common Share $0.55 $0.61 $0.56 Diluted Earnings Per Common Share $0.51 $0.59 $0.54 Dividends Paid Per Common Share $0.24 $0.24 $0.24 Return on Assets 0.65% 0.70% 0.62% Return on Equity 11.68% 13.51% 12.91% Net Interest Margin (FTE) 2.17% 2.02% 2.01% Full-Time Equivalent Employees 3,237 3,177 3,345 Provident Financial Group, Inc. and Subsidiaries Consolidated Quarterly Statements Of Income (unaudited) 2003 Second First Full Quarter Quarter Year Net Interest Income $84,494 $82,959 $315,792 Provision for Loan and Lease Losses 52,469 16,521 115,979 Noninterest Income: Service Charges on Deposit Accounts 12,391 12,332 50,023 Loan Servicing Fees 9,428 10,660 40,163 Commercial Mortgage Banking Revenue 10,849 10,297 44,791 Other Service Charges and Fees 12,921 11,736 50,935 Leasing Income 131,459 137,974 510,109 Cash Gain on Sale of Loans 7,124 4,942 20,333 Warrant Gains 1,308 328 1,636 Net Securities Gains / (Losses) 858 1,500 6,307 Net Gain on Florida Assets and Liabilities - - 74,998 Net Gain on Merchant Services Business 19,000 - 19,000 Other 7,636 3,518 26,994 Total Noninterest Income 212,974 193,287 845,289 Noninterest Expense: Salaries, Wages and Benefits 65,823 61,984 253,399 Charges and Fees 7,867 7,822 32,152 Occupancy 6,464 6,228 25,365 Leasing Expense 92,780 95,169 365,408 Equipment Expense 6,824 6,949 26,285 Professional Services 8,418 8,398 32,667 Minority Interest Expense 3,197 3,197 12,788 Debt Retirement Charge - - 25,584 Disposition Cost of Subprime Loans 6,914 - 6,914 Other 27,007 31,449 119,493 Total Noninterest Expense 225,294 221,196 900,055 Income Before Income Taxes and Cumulative Effect of Changes in Accounting Principles 19,705 38,529 145,047 Income Taxes 6,502 12,715 47,145 Income Before Cumulative Effect of Changes in Accounting Principles 13,203 25,814 97,902 Cumulative Effect of Changes in Accounting Principles - - (1,202) Net Income $13,203 $25,814 $96,700 Other Data: Before Cumulative Effect of Changes in Accounting Principles: Basic Earnings Per Common Share $0.27 $0.52 $1.99 Diluted Earnings Per Common Share $0.26 $0.51 $1.92 After Cumulative Effect of Changes in Accounting Principles: Basic Earnings Per Common Share $0.27 $0.52 $1.96 Diluted Earnings Per Common Share $0.26 $0.51 $1.90 Dividends Paid Per Common Share $0.24 $0.24 $0.96 Return on Assets 0.30% 0.59% 0.55% Return on Equity 5.85% 11.76% 10.97% Net Interest Margin (FTE) 2.32% 2.37% 2.18% Full-Time Equivalent Employees 3,355 3,333 Provident Financial Group, Inc. and Subsidiaries Consolidated Period End Balance Sheets (unaudited) 2004 2003 First Fourth Third Quarter Quarter Quarter ASSETS Cash and Due From Banks $276,538 $273,299 $288,176 Federal Funds Sold and Reverse Repurchase Agreements 167,069 253,273 341,833 Trading Account Securities 130,787 119,646 142,660 Loans and Leases Held For Sale 255,968 595,505 494,804 Investment Securities Available for Sale 4,544,536 4,527,912 4,731,323 Investment Securities Held to Maturity 199,889 - - Loans and Leases: Corporate Lending: Commercial 4,109,379 4,038,545 4,288,451 Mortgage 949,765 961,939 992,619 Construction 424,444 452,581 504,071 Lease Financing 1,277,158 1,275,255 1,304,659 Total Corporate Lending 6,760,746 6,728,320 7,089,800 Consumer Lending: Installment 1,548,898 1,670,667 1,573,782 Residential 36,272 36,241 26,812 Lease Financing 544,190 460,302 320,866 Total Consumer Lending 2,129,360 2,167,210 1,921,460 Total Loans and Leases 8,890,106 8,895,530 9,011,260 Reserve for Loan and Lease Losses (160,000) (160,000) (184,160) Net Loans and Leases 8,730,106 8,735,530 8,827,100 Leased Equipment 1,469,955 1,653,264 1,825,721 Premises and Equipment 91,884 92,837 99,561 Goodwill 83,798 81,801 84,269 Other Assets 787,101 684,438 772,186 $16,737,631 $17,017,505 $17,607,633 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposits: Noninterest Bearing $1,484,560 $1,491,473 $1,412,183 Interest Bearing 8,424,208 8,844,245 9,359,919 Total Deposits 9,908,768 10,335,718 10,772,102 Short-Term Debt 1,790,944 1,443,438 1,403,012 Long-Term Debt 3,067,893 3,298,930 3,476,460 Junior Subordinated Debentures 465,904 465,799 - Guaranteed Preferred Beneficial Interests in Junior Subordinated Debentures - - 451,389 Minority Interest 160,966 160,966 160,966 Accrued Interest and Other Liabilities 412,195 413,600 451,294 Total Liabilities 15,806,670 16,118,451 16,715,223 Shareholders' Equity: Preferred Stock 7,000 7,000 7,000 Common Stock 14,646 14,538 14,492 Capital Surplus 316,432 305,632 301,737 Retained Earnings 667,047 652,206 634,018 Accumulated Other Comprehensive Income (74,164) (80,322) (64,837) Total Shareholders' Equity 930,961 899,054 892,410 $16,737,631 $17,017,505 $17,607,633 Provident Financial Group, Inc. and Subsidiaries Consolidated Period End Balance Sheets (unaudited) 2003 Second First Quarter Quarter ASSETS Cash and Due From Banks $352,241 $340,141 Federal Funds Sold and Reverse Repurchase Agreements 337,006 561,446 Trading Account Securities 105,877 111,516 Loans and Leases Held For Sale 447,039 255,593 Investment Securities Available for Sale 4,760,894 4,320,723 Investment Securities Held to Maturity - - Loans and Leases: Corporate Lending: Commercial 4,459,612 4,515,888 Mortgage 1,017,061 947,205 Construction 516,348 528,824 Lease Financing 1,253,851 1,233,533 Total Corporate Lending 7,246,872 7,225,450 Consumer Lending: Installment 1,424,207 1,362,896 Residential 37,741 519,632 Lease Financing 155,577 43,522 Total Consumer Lending 1,617,525 1,926,050 Total Loans and Leases 8,864,397 9,151,500 Reserve for Loan and Lease Losses (185,019) (201,020) Net Loans and Leases 8,679,378 8,950,480 Leased Equipment 2,006,999 2,181,823 Premises and Equipment 97,070 98,853 Goodwill 83,979 82,651 Other Assets 923,516 823,194 $17,793,999 $17,726,420 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposits: Noninterest Bearing $1,357,468 $1,163,209 Interest Bearing 9,598,344 9,502,086 Total Deposits 10,955,812 10,665,295 Short-Term Debt 1,268,198 1,506,797 Long-Term Debt 3,624,262 3,661,219 Junior Subordinated Debentures - - Guaranteed Preferred Beneficial Interests in Junior Subordinated Debentures 451,284 451,179 Minority Interest 160,966 160,966 Accrued Interest and Other Liabilities 442,883 401,981 Total Liabilities 16,903,405 16,847,437 Shareholders' Equity: Preferred Stock 7,000 7,000 Common Stock 14,461 14,454 Capital Surplus 298,838 298,498 Retained Earnings 618,712 619,444 Accumulated Other Comprehensive Income (48,417) (60,413) Total Shareholders' Equity 890,594 878,983 $17,793,999 $17,726,420 Provident Financial Group, Inc. and Subsidiaries Consolidated Credit Loss Experience (unaudited) 2004 2003 First Fourth Third Quarter Quarter Quarter Reserve for Loan and Lease Losses At Beginning of Period $160,000 $184,160 $185,019 Provision Charged to Expense 9,962 35,070 11,919 Net Charge-Offs: Corporate Lending: Commercial 6,295 24,166 7,726 Mortgage 1 1,062 - Construction (52) 52 (56) Lease Financing 1,595 32,094 3,946 Net Corporate Lending 7,839 57,374 11,616 Consumer Lending: Installment 1,061 2,003 1,118 Residential 1,011 (166) 2 Lease Financing 51 19 42 Net Consumer Lending 2,123 1,856 1,162 Net Charge-Offs 9,962 59,230 12,778 Reserve for Loan and Lease Losses At End of Period $160,000 $160,000 $184,160 Net Charge-Offs to Average Total Loans and Leases: (Annualized) Corporate Lending: Commercial 0.64% 2.34% 0.69% Mortgage -% 0.44% -% Construction (0.05%) 0.04% (0.04%) Lease Financing 0.51% 9.89% 1.27% Total Corporate Lending 0.48% 3.33% 0.65% Consumer Lending: Installment 0.25% 0.48% 0.29% Residential 10.16% (2.49%) 0.07% Lease Financing 0.04% 0.02% 0.07% Total Consumer Lending 0.38% 0.35% 0.26% Total Loans and Leases 0.45% 2.64% 0.57% Provident Financial Group, Inc. and Subsidiaries Consolidated Credit Loss Experience (unaudited) 2003 Second First Full Quarter Quarter Year Reserve for Loan and Lease Losses At Beginning of Period $201,020 $201,051 $201,051 Provision Charged to Expense 52,469 16,521 115,979 Net Charge-Offs: Corporate Lending: Commercial 11,147 8,093 51,132 Mortgage 54 46 1,162 Construction (241) 65 (180) Lease Financing 1,714 3,294 41,048 Net Corporate Lending 12,674 11,498 93,162 Consumer Lending: Installment 1,467 576 5,164 Residential 54,320 4,478 58,634 Lease Financing 9 - 70 Net Consumer Lending 55,796 5,054 63,868 Net Charge-Offs 68,470 16,552 157,030 Reserve for Loan and Lease Losses At End of Period $185,019 $201,020 $160,000 Net Charge-Offs to Average Total Loans and Leases: (Annualized) Corporate Lending: Commercial 0.99% 0.73% 1.17% Mortgage 0.02% 0.02% 0.12% Construction (0.18%) 0.05% (0.03%) Lease Financing 0.56% 1.06% 3.27% Total Corporate Lending 0.70% 0.64% 1.31% Consumer Lending: Installment 0.42% 0.17% 0.35% Residential 44.70% 3.25% 22.04% Lease Financing 0.04% -% 0.04% Total Consumer Lending 11.21% 1.04% 3.28% Total Loans and Leases 2.98% 0.73% 1.73% Provident Financial Group, Inc. and Subsidiaries Consolidated Nonperforming Assets (unaudited) 2004 2003 First Fourth Third Second First Quarter Quarter Quarter Quarter Quarter Nonaccrual Loans: Corporate Lending: Commercial $61,656 $62,288 $109,022 $116,926 $123,912 Mortgage 8,638 8,146 5,330 6,307 7,298 Construction 2,333 2,469 3,617 3,792 1,321 Lease Financing 103 514 2,271 2,267 2,792 Total Corporate Lending 72,730 73,417 120,240 129,292 135,323 Consumer Lending: Installment - - - - - Residential 4,025 6,442 3,468 4,011 45,927 Lease Financing - - - - - Total Consumer Lending 4,025 6,442 3,468 4,011 45,927 Total Nonaccrual Loans 76,755 79,859 123,708 133,303 181,250 Other Nonperforming Assets 3,232 4,299 8,251 13,858 22,172 Total Nonperforming Assets $79,987 $84,158 $131,959 $147,161 $203,422 Loans 90 Days Past Due Still Accruing $6,768 $12,702 $10,211 $5,971 $36,038 Reserve for Loan and Lease Losses as a Percent of: Nonaccrual Loans 208.46% 200.35% 148.87% 138.80% 110.91% Nonperforming Assets 200.03% 190.12% 139.56% 125.73% 98.82% Total Loans and Leases 1.80% 1.80% 2.04% 2.09% 2.20% Nonaccrual Loans as a % of Total Loans and Leases .86% .90% 1.37% 1.50% 1.98% Nonperforming Assets as a Percent of: Total Loans, Leases and Other Nonperforming Assets .90% .95% 1.46% 1.66% 2.22% Total Assets .48% .49% .75% .83% 1.15% Provident Financial Group, Inc. and Subsidiaries Consolidated Average Balances and Rates On a Fully Taxable Equivalent Basis (unaudited) 2004 2003 First Quarter Fourth Quarter Average Average Average Average (Dollars In Millions) Balance Rate Balance Rate Assets: Loans and Leases: Corporate Lending: Commercial $3,928 5.58 % $4,130 5.40 % Mortgage 950 4.96 971 5.19 Construction 436 3.79 488 3.79 Lease Financing 1,257 7.99 1,299 7.72 Total Corporate Lending 6,571 5.83 6,888 5.69 Consumer Lending: Installment 1,697 4.03 1,666 4.08 Residential 40 15.44 27 14.21 Lease Financing 518 5.11 401 5.63 Total Consumer Lending 2,255 4.48 2,094 4.51 Total Loans and Leases 8,826 5.49 8,982 5.42 Investment Securities 4,502 3.87 4,583 3.76 Federal Funds Sold and Reverse Repurchase Agreements 297 1.72 377 1.56 Other Short-Term Investments 453 4.67 613 4.66 Total Earning Assets 14,078 4.86 14,555 4.76 Cash and Due From Banks 242 276 Leased Equipment 1,551 1,737 Other Assets 742 827 Total Assets $16,613 $17,395 Liabilities and Shareholders' Equity: Deposits: Demand Deposits $872 0.77 $1,119 1.22 Savings Deposits 1,614 1.61 1,633 1.66 Time Deposits 6,218 2.31 6,384 2.28 Total Deposits 8,704 2.02 9,136 2.04 Short-Term Debt: Federal Funds Purchased and Repurchase Agreements 1,060 2.59 1,046 2.55 Commercial Paper 260 1.09 244 1.01 Total Short-Term Debt 1,320 2.30 1,290 2.26 Long-Term Debt 3,143 4.92 3,459 4.80 Junior Subordinated Debentures 466 3.83 452 3.92 Total Interest Bearing Liabilities 13,633 2.78 14,337 2.78 Noninterest Bearing Deposits 1,487 1,515 Minority Interest 161 161 Other Liabilities 405 488 Shareholders' Equity 927 894 Total Liabilities and Shareholders' Equity $16,613 $17,395 Net Interest Spread 2.08 % 1.98 % Net Interest Margin 2.17 % 2.02 % Provident Financial Group, Inc. and Subsidiaries Consolidated Average Balances and Rates On a Fully Taxable Equivalent Basis (unaudited) 2003 Third Quarter Second Quarter Average Average Average Average (Dollars In Millions) Balance Rate Balance Rate Assets: Loans and Leases: Corporate Lending: Commercial $4,461 5.71 % $4,518 5.73 % Mortgage 980 5.32 909 5.59 Construction 512 4.45 539 4.34 Lease Financing 1,247 8.14 1,227 8.72 Total Corporate Lending 7,200 5.99 7,193 6.12 Consumer Lending: Installment 1,519 4.36 1,407 4.78 Residential 12 13.46 486 10.17 Lease Financing 234 7.02 97 8.91 Total Consumer Lending 1,765 4.77 1,990 6.29 Total Loans and Leases 8,965 5.75 9,183 6.16 Investment Securities 4,702 3.63 4,471 4.32 Federal Funds Sold and Reverse Repurchase Agreements 446 1.55 441 1.90 Other Short-Term Investments 549 5.85 498 5.70 Total Earning Assets 14,662 4.95 14,593 5.45 Cash and Due From Banks 306 310 Leased Equipment 1,918 2,101 Other Assets 791 868 Total Assets $17,677 $17,872 Liabilities and Shareholders' Equity: Deposits: Demand Deposits $1,266 1.33 $1,204 1.51 Savings Deposits 1,553 1.71 1,460 1.80 Time Deposits 6,700 2.56 6,990 2.68 Total Deposits 9,519 2.26 9,654 2.40 Short-Term Debt: Federal Funds Purchased and Repurchase Agreements 1,168 2.32 1,129 2.37 Commercial Paper 250 1.14 265 1.24 Total Short-Term Debt 1,418 2.11 1,394 2.16 Long-Term Debt 3,573 4.72 3,638 4.85 Junior Subordinated Debentures 451 3.95 451 4.09 Total Interest Bearing Liabilities 14,961 2.88 15,137 3.01 Noninterest Bearing Deposits 1,388 1,264 Minority Interest 161 162 Other Liabilities 316 406 Shareholders' Equity 851 903 Total Liabilities and Shareholders' Equity $17,677 $17,872 Net Interest Spread 2.07 % 2.44 % Net Interest Margin 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 Capital Data (unaudited) 2004 2003 First Fourth Third Second First Full Quarter Quarter Quarter Quarter Quarter Year Per Common Share: Shares Outstanding (In Thousands): Average - Basic 49,189 48,943 48,830 48,770 48,776 48,830 Average - Diluted 53,206 51,478 50,885 50,668 50,766 50,950 Period-End 49,401 49,040 48,885 48,783 48,759 Book Value $18.70 $18.19 $18.11 $18.11 $17.88 Price: High $41.40 $32.68 $28.78 $26.45 $28.91 $32.68 Low 32.05 28.00 25.67 21.01 21.23 21.01 Period-End 40.18 31.95 27.97 25.75 21.23 Capital Ratios (Dollars in Millions): Risk-Based Capital (Current Qtr Estimated): Risk-Adjusted Assets $13,096 $13,334 $13,836 $13,807 $13,886 Tier 1 Capital $1,444 $1,412 $1,382 $1,358 $1,359 Percentage of Risk Adjusted Assets 11.03% 10.59% 9.99% 9.84% 9.78% Total Capital $1,680 $1,658 $1,643 $1,625 $1,617 Percentage of Risk Adjusted Assets 12.83% 12.44% 11.87% 11.77% 11.65% Tier 1 Leverage Ratio 8.73% 8.13% 7.82% 7.62% 7.76% Period End Shareholders' Equity to Total Period-End Assets 5.56% 5.28% 5.07% 5.01% 4.96% Period-End Tangible Shareholders' Equity to Total Period-End Tangible Assets 5.05% 4.79% 4.56% 4.49% 4.45% Average Shareholders' Equity to Total Average Assets 5.58% 5.14% 4.81% 5.05% 5.01% 5.00% Average Tangible Shareholders' Equity to Total Average Tangible Assets 5.07% 4.64% 4.30% 4.54% 4.48% 4.49% 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 (In Thousands) March 31, 2004 March 31, 2003 Net Interest Income $76,011 $82,959 Add: Operating Lease Income 104,089 137,974 Less: Depreciation on Operating Leases (77,383) (99,653) Net Financing Income $102,717 $121,280 Noninterest Income $168,132 $193,287 Less: Operating Lease Income (104,089) (137,974) Noninterest Income Excluding Operating Lease Income $64,043 $55,313 Total Financing Revenues $166,760 $176,593 Noninterest Expenses $194,107 $221,196 Less: Depreciation on Operating Leases (77,383) (99,653) Noninterest Expenses Excluding Depreciation on Operating Leases $116,724 $121,543 Average Earning Assets $14,078,000 $14,194,000 Add: Average Leased Equipment 1,551,000 2,242,000 Average Earning Assets Including Leased Equipment $15,629,000 $16,436,000 Net Interest Margin Ratio - GAAP Basis 2.17% 2.37% Net Financing Income Ratio 2.64% 2.99% Noninterest Expenses as a Percent of Total Revenues - GAAP Basis 80% 80% Noninterest Expenses Excluding Depreciation on Operating Leases as a Percent of Total Revenues Which Includes Depreciation on Operating Leases 70% 69% The company has average leased equipment which as a percentage of total average assets were 9.3% and 12.8% for the three 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. http://www.newscom.com/cgi-bin/prnh/20030424/PFGLOGO http://photoarchive.ap.org/ DATASOURCE: Provident Financial Group, Inc. CONTACT: Christopher J. Carey, Executive Vice President & Chief Financial Officer, +1-513-639-4644, or +1-800-851-9521, or Web site: http://www.providentbank.com/ Company News On-Call: http://www.prnewswire.com/comp/721925.html

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