Provident Financial (NASDAQ:PFGI)
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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.
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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