<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended                                     Commission File
December 31, 2003                                                  No. 1-8019

                         PROVIDENT FINANCIAL GROUP, INC.

Incorporated Under                                          IRS Employer I.D.
the Laws of Ohio                                               No. 31-0982792

                 One East Fourth Street, Cincinnati, Ohio 45202
                      Phone: 1-800-851-9521 or 513-345-7102

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:     None

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:     Common Stock,
                                                                 Without Par

      Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and need not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

      Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [X] No [ ]

      As of February 27, 2004, there were 49,195,045 shares of the Registrant's
Common Stock outstanding. The aggregate market value of the Common Stock held by
non-affiliates at June 30, 2003, was approximately $709,698,000 (based upon
non-affiliated holdings of 27,561,000 shares and a market price of $25.75 per
share).

                      DOCUMENTS INCORPORATED BY REFERENCE:

                                      None

                      Please address all correspondence to:
                              Christopher J. Carey
              Executive Vice President and Chief Financial Officer
                         Provident Financial Group, Inc.
                             One East Fourth Street
                             Cincinnati, Ohio 45202


<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                             INDEX TO ANNUAL REPORT
                                  ON FORM 10-K

<TABLE>
<S>          <C>                                                          <C>
PART I
   ITEM  1.  BUSINESS .................................................... 1
   ITEM  2.  PROPERTIES .................................................. 4
   ITEM  3.  LEGAL PROCEEDINGS ........................................... 4
   ITEM  4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ......... 5
PART II
   ITEM  5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
             MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ........... 5
   ITEM  6.  SELECTED FINANCIAL DATA ..................................... 6
   ITEM  7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             CONDITION AND RESULTS OF OPERATIONS
                RESULTS OF OPERATIONS .................................... 7
                FINANCIAL CONDITION ......................................22
                OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL
                OBLIGATIONS...............................................34
                CAPITAL RESOURCES ........................................40
                CRITICAL ACCOUNTING POLICIES .............................41
   ITEM  7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ..44
   ITEM  8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA .................45
   ITEM  9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
             ACCOUNTING AND FINANCIAL DISCLOSURE .........................93
   ITEM  9A. CONTROLS AND PROCEDURES .....................................93
PART III
   ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ..........93
   ITEM 11.  EXECUTIVE COMPENSATION ......................................96
   ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
             AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS .............103
   ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .............107
   ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES......................108
PART IV
   ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
             ON FORM 8-K ................................................109
SIGNATURES ..............................................................114
</TABLE>


<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES

                           FORWARD-LOOKING STATEMENTS

This Form 10-K contains 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;
changes by rating agencies in Provident's debt rating; 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 result
of these and other factors could cause differences from expectations in the
level of defaults, changes in 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.


<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES

                                     PART I

ITEM 1. BUSINESS

Provident Financial Group, Inc.

Provident Financial Group, Inc. (Provident) is a Cincinnati-based commercial
banking and financial services company. At December 31, 2003, Provident had
total assets of $17.0 billion, loans and leases of $8.9 billion, deposits of
$10.3 billion and shareholders' equity of $899 million. Additionally, Provident
services loans and leases for other entities including $1.3 billion which have
been securitized (off-balance sheet managed assets); $3.8 billion which have
been sold by a wholly-owned subsidiary through the Fannie Mae DUS program as an
approved seller/servicer; and $16.0 billion which have no recourse to Provident.

Provident's executive offices are located at One East Fourth Street, Cincinnati,
Ohio 45202 and its Investor Relations telephone number is (513) 345-7102 or
(800) 851-9521. The Annual Report, on Form 10-K, is filed with the Securities
and Exchange Commission (SEC). Copies of this document and all other SEC filings
by Provident may be obtained, without charge, by contacting Investor Relations.
These reports may also be obtained via the Internet at the web sites of
Provident at http://www.providentbank.com, or the SEC at http://www.sec.gov.

Provident has 65 full service branch banking centers located in Ohio and
Kentucky. Provident also provides commercial financing, equipment leasing and
mortgage lending at a national level with commercial lending offices located in
eleven states. During the fourth quarter of 2003, Provident sold its 13 Florida
branches along with certain deposits and loans to RBC Centura Bank, a subsidiary
of Royal Bank of Canada.

Provident conducts its banking operations through The Provident Bank. Major
business lines are Commercial Banking, Retail Banking and Mortgage Banking. See
ITEM 7 "Management's Discussion and Analysis of Financial Condition and Results
of Operations - Business Lines" and Note 21 included in "Notes to Consolidated
Financial Statements" for details as to the types of financial products and
services offered by these business lines.

At December 31, 2003, Provident and its subsidiaries employed approximately
3,200 full-time-equivalent employees.

Subsequent Event

On February 17, 2004, Provident announced that it had signed a definitive
agreement to merge with National City Corporation. National City Corporation is
a financial holding company headquartered in Cleveland, Ohio. Under terms of the
agreement, Provident shareholders will receive 1.135 shares of National City
Corporation common stock for each share of Provident common stock in a tax-free
exchange. Subject to regulatory and stockholder approvals, the transaction is
expected to close in the second quarter of 2004.


                                       1
<PAGE>

                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES

Competition

The financial services business is highly competitive with many products and
services priced on a commodity basis. Provident competes actively with both
national and state chartered banks, savings and loan associations, securities
dealers, mortgage bankers, finance companies and other financial service
entities.

Supervision and Regulation

Provident is registered as a bank holding company, and is subject to regulations
of the Board of Governors of the Federal Reserve System (Federal Reserve) under
the Bank Holding Company Act of 1956 (the BHC Act), as amended. Bank holding
companies are required to file periodic reports with and are subject to
examination by the Federal Reserve. The BHC Act requires Federal Reserve
approval of acquisitions of control of more than 5% of the voting stock or
substantially all of the assets of any bank or bank holding company. The BHC Act
authorizes interstate bank acquisitions anywhere in the country and allows
interstate branching by acquisition and consolidation in those states that have
not opted out. Ohio and Kentucky did not opt out of interstate branching.

Provident is prohibited by the BHC Act from engaging in nonbanking activities,
unless such activities are determined by the Federal Reserve to be financial in
nature, incidental to such financial activity, or complementary to a financial
activity. The BHC Act does not place territorial restrictions on such
nonbanking-related activities.

The Sarbanes-Oxley Act, enacted by Congress in 2002, mandates a variety of
corporate governance and financial reporting requirements intended to enhance
the accuracy and transparency of public companies' financial reports. It
established new responsibilities for corporate Chief Executive Officers, Chief
Financial Officers and audit committees in the financial reporting process.
Among other major issues in Sarbanes-Oxley, Provident's Chief Executive Officer
and Chief Financial Officer are each required to certify that Provident's
quarterly and annual reports do not contain any known untrue statements of a
material fact. More information about Provident's corporate governance practices
is available on the Investor Relations page of the corporate web site at
http://www.providentbank.com.

The Gramm-Leach-Bliley Act, which was enacted on November 12, 1999, imposes
privacy disclosure and "opt out" requirements on virtually all regulated
financial services organizations.

The Financial Institutions Reform, Recovery and Enforcement Act of 1989 provides
that a holding company's controlled insured depository institutions can be held
liable for any loss incurred by, or reasonably expected to be incurred by, the
Federal Deposit Insurance Corporation (FDIC) in connection with the default of
an affiliated insured bank or savings association.

Provident's subsidiary bank, The Provident Bank, an Ohio state-chartered member
bank of the Federal Reserve System, and its subsidiaries are subject to
supervision and examination by applicable federal and state banking agencies,
including the Federal Reserve, FDIC and the Ohio Division of Financial
Institutions. One aspect of this supervision is that there are various legal and
regulatory limits on the extent to which The Provident Bank may pay dividends or
otherwise supply funds to Provident. In addition, federal and state regulatory
agencies also have the authority to prevent a


                                       2
<PAGE>

                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


bank or bank holding company from paying a dividend or engaging in any other
activity that, in the opinion of the agency, would constitute an unsafe or
unsound practice. See ITEM 7 "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity" and Note 25 included in "Notes
to Consolidated Financial Statements."

Federal and state laws regulate other aspects of the operations of The Provident
Bank, including requiring the maintenance of cash balances against deposits,
limiting the nature of loans and interest that may be charged thereon, and
restricting investments and other activities.

As a regulated financial services firm, Provident's relationships and good
standing with its regulators are of fundamental importance to the continuation
and growth of Provident's businesses. The Federal Reserve, the FDIC, the Ohio
Division of Financial Institutions, and other regulators have broad enforcement
powers, and powers to approve, deny, or refuse to act upon applications or
notices of Provident or its subsidiaries to conduct new activities, acquire or
divest businesses or assets or reconfigure existing operations. Provident and
its subsidiaries are subject to examination by various regulators which results
in examination reports and ratings (which are not publicly available pursuant to
regulatory rules) that can impact the conduct and growth of Provident's
businesses. These examinations consider not only compliance with applicable laws
and regulations, but also capital levels, asset quality and risk, management
ability and performance, earnings, liquidity, and various other factors. The
ratings are largely at the discretion of the regulator and involve many
qualitative judgments that are not as a practical matter subject to review or
appeal.

State and federal banking agencies possess broad powers to take corrective
action as deemed appropriate for an insured depository institution and its
holding company. The extent of these powers depends upon whether the institution
in question is considered "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized." Generally, as an institution is deemed to be less than well
capitalized, the scope and severity of the agencies' powers increase, ultimately
permitting the agency to appoint a receiver for the institution. Business
activities may also be influenced by an institution's capital classification. As
of December 31, 2003, Provident and The Provident Bank were deemed to be well
capitalized for the above purposes. See Note 15 included in "Notes to
Consolidated Financial Statements."

The monetary policies of regulatory authorities, including the Federal Reserve,
have a significant effect on the operating results of banks and bank holding
companies. The nature of future monetary policies and the effect of such
policies on the future business and income of Provident and its subsidiaries
cannot be predicted.

Red Capital Markets, Inc., a Provident Bank subsidiary, is licensed as a
securities broker-dealer and is subject to regulation by the Securities and
Exchange Commission, state securities authorities and the National Association
of Securities Dealers, Inc. Provident Insurance Agency, Inc., a subsidiary of
Red Capital Markets, is subject to regulation by state insurance authorities.
Provident Investment Advisors, Inc., a Provident subsidiary, is a registered
investment advisor, subject to regulation by the Securities and Exchange
Commission and state securities authorities.


                                       3
<PAGE>

                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


ITEM 2.  PROPERTIES

Provident and its significant subsidiaries occupy their headquarters located at
One East Fourth Street, Cincinnati, Ohio under long-term leases. Additional
operation centers are leased in Cincinnati, Columbus, Cleveland and Atlanta.
Provident owns buildings that contain approximately 422,000 square feet which
are used for offices, banking centers, data processing and warehouse facilities.
Provident owns thirty-four of its full-service banking center locations and
leases thirty-one. For information concerning rental obligations, see Note 7
included in "Notes to Consolidated Financial Statements."

ITEM 3.  LEGAL PROCEEDINGS

Provident and its subsidiaries are not parties to any pending legal proceedings
other than routine litigation incidental to their business except for the
following matters related to the restatements announced March 5, 2003, and April
15, 2003. The restatement of previously reported operating results announced on
March 5, 2003, was attributed to unintentional errors in the accounting for nine
auto lease financing transactions originated between 1997 and 1999.

Provident's audit committee, through legal counsel, engaged the auditing firm of
PricewaterhouseCoopers LLP for the purpose of conducting a review of the
Company's March 5, 2003 restatement. Provident's management affirmed, based upon
the review of its advisors, its prior conclusion that the accounting errors that
led to the restatement were unintentional.

Several purported class-actions were filed against Provident, its President,
Robert L. Hoverson, its Chief Financial Officer, Christopher J. Carey, and their
predecessors in those positions, on behalf of all purchasers of Provident
securities from March 30, 1998 through March 5, 2003. Litigation was also filed
against Provident, its President, Robert L. Hoverson and its Chief Financial
Officer, Christopher J. Carey plus PFGI Capital Corporation, a Provident
subsidiary, and others on behalf of all purchasers of PRIDES in or traceable to
a June 6, 2002 offering of those securities registered with the Securities and
Exchange Commission and extending to March 5, 2003. That action alleges
violations of securities laws by the defendants in Provident's financial
disclosures during the period from March 30, 1998 through March 5, 2003 and in
the June 2002 offering. These actions are based upon circumstances involved in
the restatement of earnings announced by Provident on March 5, 2003 and allege
violations of federal securities laws by the defendants in Provident's financial
disclosures during the period from March 30, 1998 through March 5, 2003. They
seek an unspecified amount of damages and, in two cases, reimbursement of all
executive bonuses received during that period.

These actions were consolidated before Judge S. Arthur Spiegel of the United
States District Court for the Southern District of Ohio under the caption,
Merzin v. Provident Financial Group, Inc., consolidated Civil Action Master File
No. C-1-03-165. The Amended Consolidated Complaint was filed on August 22, 2003.
Provident and the other Defendants filed a Motion to Dismiss the Complaint on
November 5, 2003. The motion was granted on March 9, 2004 and the Court
dismissed all claims except those relating to the June 6, 2002 offering of
6,600,000 PRIDE securities. However, the Court's order confined any later
finding of damages to $0.70 per PRIDE security.


                                       4
<PAGE>

                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


Several derivative actions have also been filed in federal and state courts on
behalf of Provident versus Provident's directors and others. These suits were
also concerned with the restatements of earnings and allege that the defendants
breached fiduciary duties owed to Provident and are responsible for the
conditions that led to the restatements and failed to ensure that the accounting
errors were prevented or detected. These actions seek recovery from the
defendants of an unspecified amount of damages and reimbursement of all
executive bonuses and stock options.

The derivative actions filed in federal court are pending before Chief Judge
Walter Herbert Rice of the United States District Court for the Southern
District of Ohio under the captions, Plumbers & Pipefitters Local 572 Pension
Fund v. Jack Cook, et al., Case No. C-1-03-168, and Peter Berg v. Jack M. Cook,
et al., Case No. C-1-03-196. Motions to dismiss the federal court derivative
actions were filed on behalf of all of the defendants on September 2, 2003.
Plaintiffs have opposed the motions. All proceedings in the derivative actions
filed in state court have been indefinitely stayed by agreement of the parties
and their respective legal counsel.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None in the fourth quarter.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

The Common Stock is traded on the NASDAQ Stock Market under the symbol "PFGI".
The following table sets forth, for the periods indicated, the high, low and
period end closing sales prices as reported on NASDAQ and the quarterly
dividends paid by Provident.

<TABLE>
<CAPTION>
                                             2003                                       2002
                      ---------------------------------------------   ---------------------------------------------
                       Fourth       Third      Second       First       Fourth      Third      Second       First
                       Quarter     Quarter     Quarter     Quarter     Quarter     Quarter     Quarter     Quarter
                       -------     -------     -------     -------     -------     -------     -------     -------
<S>                   <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
High Close            $   32.68   $   28.78   $   26.45   $   28.91   $   28.05   $   29.51   $   31.35   $   29.97
Low Close                 28.00       25.67       21.01       21.23       21.48       24.28       24.42       22.17
Period End Close          31.95       27.97       25.75       21.23       26.03       25.09       29.01       28.80
Cash Dividends              .24         .24         .24         .24         .24         .24         .24         .24
</TABLE>

At February 17, 2004, there were 4,946 holders of record and an additional
12,563 non-registered or "street name" holders of Provident's Common Stock.

Provident paid dividends on its Common Stock of $47.6 million and $47.4 million
during 2003 and 2002, respectively, and $0.9 million on its Preferred Stock for
both years. Provident's quarterly dividend rate per share was $.24 for 2003 and
2002. It is expected that in the next several years, Provident's (Parent's)
revenues will consist principally of dividends paid to it by its subsidiaries
and interest generated from investing activities. A discussion of limitations
and restrictions on the payment of dividends by subsidiaries to Provident is
contained under ITEM 7 "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity" and Note 25 included in "Notes
to Consolidated Financial Statements."

A report of purchases of equity securities is not required for this period.


                                       5
<PAGE>

                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
(Dollars In Millions                                                   For Year Ended December 31,
                                                 ------------------------------------------------------------------------
 Except Per Share Amounts)                         2003            2002            2001            2000            1999
                                                 --------        --------        --------        --------        --------
<S>                                              <C>             <C>             <C>             <C>             <C>
Earnings:
 Total Interest Income                           $    758        $    841        $    973        $    906        $    680
 Total Interest Expense                              (442)           (526)           (703)           (662)           (430)
                                                 --------        --------        --------        --------        --------
  Net Interest Income                                 316             315             270             244             250
 Provision for Loan and Lease Losses                 (116)            (99)           (216)           (133)            (46)
 Noninterest Income                                   845             805             757             660             537
 Noninterest Expense                                 (900)           (876)           (813)           (680)           (544)
                                                 --------        --------        --------        --------        --------
  Income (Loss) Before Income Taxes and
    Cumulative Effect of Changes in
    Accounting Principles                             145             145              (2)             91             197
 Applicable Income Taxes                              (47)            (50)              1             (34)            (70)
                                                 --------        --------        --------        --------        --------
     Income (Loss) Before Cumulative Effect
      of Changes in Accounting Principles              98              95              (1)             57             127
 Cumulative Effect of Changes in
   Accounting Principles                               (1)             --              --              --              --
                                                 --------        --------        --------        --------        --------
  Net Income (Loss)                              $     97        $     95        $     (1)       $     57        $    127
                                                 ========        ========        ========        ========        ========
Per Common Share Data:
  Before Cumulative Effect of Changes in
   Accounting Principles:
 Basic Earnings (Loss)                           $   1.99        $   1.94        $  (0.04)       $   1.14        $   2.66
 Diluted Earnings (Loss)                             1.92            1.88           (0.04)           1.12            2.58
  After Cumulative Effect of Changes in
   Accounting Principles:
 Basic Earnings (Loss)                           $   1.96        $   1.94        $  (0.04)       $   1.14        $   2.66
 Diluted Earnings (Loss)                             1.90            1.88           (0.04)           1.12            2.58
 Dividends Paid                                       .96             .96             .96             .96             .88
 Book Value                                         18.19           17.91           16.15           18.79           17.89
Selected Balances at December 31:
 Total Investment Securities                        4,528           4,215           3,486           3,014           2,111
 Total Loans and Leases                             8,896           9,134           8,950           7,996           6,634
 Reserve for Loan and Lease Losses                    160             201             241             159              95
 Leased Equipment                                   1,653           2,350           2,651           2,386           1,807
 Total Assets                                      17,018          17,540          16,561          14,997          11,849
 Noninterest Bearing Deposits                       1,491           1,142             995           1,293           1,185
 Interest Bearing Deposits                          8,844           8,707           7,859           7,536           6,045
 Long-Term Debt and Junior
  Subordinated Debentures                           3,765           4,294           4,532           4,353           2,515
 Total Shareholders' Equity                           899             880             802             924             877
 Off-Balance Sheet Managed Assets                   1,344           2,068           3,138           4,621           4,641
Other Statistical Information:
 Return on Average Assets                            0.55%           0.58%          -0.01%           0.42%           1.20%
 Return on Average Equity                           10.97           11.27           (0.11)           6.32           16.20
 Dividend Payout Ratio                              50.16           50.64             n/m           84.43           32.36
Capital Ratios at December 31:
 Total Equity to Total Assets                        5.28%           5.02%           4.84%           6.16%           7.40%
 Tier 1 Leverage Ratio                               8.13            7.81            6.65            8.21            9.67
 Tier 1 Capital to Risk-Weighted Assets             10.59            9.40            7.95            8.56            8.57
 Total Risk-Based Capital to
  Risk-Weighted Assets                              12.44           11.42           10.71           10.60           10.82
Loan Quality Ratios at December 31:
 Reserve for Loan and Lease Losses to
  Total Loans and Leases                             1.80%           2.20%           2.69%           1.99%           1.43%
 Reserve for Loan and Lease Losses to
  Nonaccrual Loans                                 200.35          120.80          136.35          165.71          170.98
 Nonaccrual Loans to Total Loans
  and Leases                                         0.90            1.82            1.98            1.20            0.84
 Net Charge-Offs to Average Total
  Loans and Leases                                   1.73            1.59            1.63            1.04            0.51
</TABLE>

--------------------
n/m - not meaningful


                                       6
<PAGE>

                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Introduction

Provident Financial Group, Inc. (Provident) is a holding company for The
Provident Bank (Provident Bank), an FDIC member bank. Major business lines are:
Commercial Banking, a provider of credit products and cash management services
to commercial customers; Retail Banking, a provider of consumer loans and
leases, deposit accounts, trust, brokerage and investment products and services;
and Mortgage Banking, an originator and servicer of conforming and nonconforming
residential loans to consumers and short-term financing to mortgage originators
and brokers.

During 2003 Provident took a number of strategic actions to lower the company's
risk profile and to align its core business with its corporate operating
strategy. The company reduced its risk profile through the sales of $471 million
of subprime residential loans in the second quarter, and approximately $112
million of other classified loans and aircraft leases in the fourth quarter.
Provident sold its merchant services business, a payment solutions provider for
credit and debit card acceptance programs, in the second quarter. During the
fourth quarter, 13 Florida branches along with various deposits and loans were
sold to RBC Centura Bank, a wholly-owned subsidiary of Royal Bank of Canada.
Sales of the merchant servicing business and the Florida branches will allow the
company to focus more on its core Midwest retail and commercial banking
franchise.


                                       7
<PAGE>

                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

Performance Summary

The following table summarizes three-year financial data for Provident, along
with calculated variances from the prior year:

<TABLE>
<CAPTION>
                                                                                                Percentage
(Dollars in Millions                               Year Ended December 31,                  Increase (Decrease)
                                            --------------------------------------        -----------------------
 Except Per Share Data)                       2003           2002           2001          2003/02        2002/01
                                            --------       --------       --------        --------       --------
<S>                                         <C>            <C>            <C>             <C>            <C>
Net Interest Income                         $    316       $    315       $    270              --%            17%
Noninterest Income                               845            805            757               5              6
Total Revenue                                  1,161          1,120          1,027               4              9
Provision for Loan and Lease Losses              116             99            216              17            (54)
Noninterest Expense                              900            876            813               3              8
Net Income (Loss)                                 97             95             (1)              2             --
Total Loans and Leases                         8,896          9,134          8,950              (3)             2
Leased Equipment                               1,653          2,350          2,651             (30)           (11)
Total Assets                                  17,018         17,540         16,561              (3)             6
Total Off-Balance Sheet Managed Assets         1,344          2,068          3,138             (35)           (34)
Total Deposits                                10,336          9,849          8,854               5             11
Long-Term Debt and Junior
 Subordinated Debentures                       3,765          3,843          4,532              (2)           (15)
Stockholders' Equity                             899            880            802               2             10
Per Common Share:
  Book Value                                   18.19          17.91          16.15               2             11
  Diluted Earnings (Loss)                       1.90           1.88          (0.04)             --             --
Ratio Analysis:
  Net Interest Margin                           2.18%          2.41%          2.19%
  Return on Average Equity                     10.97%         11.27%         -0.11%
  Return on Average Assets                      0.55%          0.58%         -0.01%
  Average Equity to
   Average Assets                               5.00%          5.12%          5.59%
  Dividend Payout to
   Net Earnings                                50.16%         50.64%           n/m
</TABLE>

--------------------
n/m - not meaningful

Provident reported net income (loss) of $96.7 million, $95.5 million and ($1.0)
million for 2003, 2002 and 2001, respectively. Diluted earnings (loss) per share
was $1.90 for 2003, compared to $1.88 for 2002 and ($0.04) for 2001. Return on
average equity was 10.97%, 11.27% and (0.11)% and return on average assets was
0.55%, 0.58% and (0.01)% for the years ended December 31, 2003, 2002 and 2001,
respectively.

All key credit ratios have improved significantly over year-end 2002. The
economy, while sluggish during 2002, showed signs of improvement in 2003, and
management anticipates a steady but slow improvement in 2004. Provident's
credit-related volatility has begun to stabilize. As a result of an improved
loan quality outlook, Provident lowered its loan loss reserve ratio from 2.20%
at December 31, 2002, to 1.80% at December 31, 2003. Due to sales of
nonperforming loans and leases in the second and fourth quarters of 2003,
Provident's reserve for loan and lease losses is now over 190% of nonperforming
assets.

Provident recorded provisions for loan and lease losses of $116.0 million, $99.5
million and $215.5 million in 2003, 2002 and 2001, respectively. The 2003
expense included $58.3 million related to the sales of subprime residential
loans, classified commercial loans, aircraft leases and the


                                       8
<PAGE>

                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


impairment of aircraft lease residuals. Excluding these charges, Provident's
provision expense for 2003 would have been $57.7 million.

Revenue (net interest income plus noninterest income) increased 4% during 2003
over 2002 and 9% during 2002 over 2001. Net interest income was essentially
unchanged for 2003 compared to 2002, after increasing $45 million, or 17%, in
2002 compared to 2001. Higher net interest income in 2002 was primarily the
result of growth in the investment portfolio. Noninterest income increased $40
million in 2003 while increasing $48 million in 2002. The increase in
noninterest income in 2003 was due to the gain on sale of Florida assets and
liabilities in the fourth quarter, the sale of the Merchant Services business in
the second quarter and increases in commercial mortgage banking revenue,
partially offset by a decrease in leasing income. The decrease in leasing income
was a result of amortization of the portfolio and because auto leases originated
since February, 2003 have been classified as finance leases rather than
operating leases. In February, 2003, Provident changed the structure of the
residual insurance it obtains on its auto leases resulting in this type of
lending being classified as a direct financing lease in the loan category and
income being recorded as interest income. The increase in noninterest income
during 2002 was primarily the result of an increase in leasing income. Gain on
sales of loans and leases, a component of noninterest income, was $20.3 million,
$15.7 million and $6.3 million for 2003, 2002 and 2001, respectively. The
increases are primarily the result of gains recognized from whole-loan sales
(without recourse) of residential loans and the sale of home equity loans.

Total noninterest expense was $900 million, $876 million and $813 million for
2003, 2002 and 2001, respectively. Included in 2003 is a $25.6 million charge
related to the early retirement of debt and $6.9 million of expenses related to
the disposal of subprime residential mortgage loans. These costs, in addition to
increases in salary expense and professional fees, were partially offset by
decreases in leasing and other real estate expenses. Similar to leasing income,
leasing expense decreased due to auto leases originated since February 2003
being classified as finance leases rather than operating leases. The increase in
noninterest expense during 2002 was primarily the result of Provident investing
in businesses where strong growth opportunities exist, including middle-market
commercial lending, middle-market equipment leasing and mortgage servicing.
Also, significant investments were made within the credit and risk management
functions. Offsetting these increases were lower write-downs of foreclosed
properties and leased equipment.

Total assets at December 31, 2003, 2002 and 2001 were $17.0 billion, $17.5
billion and $16.6 billion, respectively. The decrease in 2003 was due primarily
to sales of classified commercial loans, aircraft leases, subprime residential
mortgage loans and Florida loans, partially offset by increases in home equity
lending and investment securities. Total assets increased during 2002 primarily
as a result of an increase in investment securities, middle-market equipment
lease financing and home equity loans. Partially offsetting these increases were
reductions in nonconforming residential loans, structured finance loans, large
equipment leases and auto leases. The changes in these loan and lease balances
reflect management's decision to lower the risk profile of its loan and lease
portfolio.


                                       9
<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


Nonperforming assets at December 31, 2003 decreased approximately $98 million
from year-end 2002. The ratio of nonperforming assets to total assets was 0.49%,
1.04% and 1.19% as of December 31, 2003, 2002 and 2001, respectively. The
decrease in nonperforming assets is attributable to the sales of troubled loans
during the year and fewer loans being placed on nonaccrual. The improvements in
nonperforming asset levels and other asset quality indicators, as well as the
sale of nonperforming loans, resulted in the decision to lower the ratio of
reserve for loan and lease losses to total loans and leases to 1.80% as of
December 31, 2003 compared to 2.20% and 2.69% as of year-ends 2002 and 2001,
respectively.

Total deposits for 2003, 2002 and 2001 were $10.3 billion, $9.8 billion and $8.9
billion, respectively. Deposits increased during 2003 despite a reduction of
approximately $883 million as a result of the sale of Provident's Florida
branches that occurred during the fourth quarter of 2003. Commercial deposits
increased 68% to $1.1 billion during 2002. Beginning in 2003, Provident began
placing a renewed emphasis on increasing low-cost transactional deposits. This
included an increased emphasis on customer service and an aggressive marketing
campaign.

Shareholders' equity at December 31, 2003, 2002 and 2001 was $899 million, $880
million and $802 million, respectively. The increase in shareholders' equity
during 2003 was due principally to earnings exceeding dividends paid, partially
offset by a decrease in the mark-to-market on investment securities. In 2002
there was an increase in the mark-to-market of investment securities as well as
earnings exceeding dividends paid.

In conjunction with the sale of subprime residential mortgage loans and the
Merchant Services business during the second quarter of 2003 and the sale of
Florida assets and liabilities, sale of classified loans and leases, debt
retirement, and other non-recurring transactions during the fourth quarter of
2003, the company believes presenting financial information excluding these
transactions might be beneficial to the reader as it provides data that is more
comparable to other periods contained within this document. This does not infer
that (GAAP) earnings, as reported, which include the impact of such significant
transactions, are not meaningful or unimportant to management and investors. As
noted in the following table, excluding these transactions, Provident's net
income and diluted earnings per share for 2003 would have been $109.3 million
and $2.15 respectively. Additional discussion of each transaction follows the
table.

<TABLE>
<CAPTION>
(Dollars in Millions,                           Excluding Selected Transactions, See Footnote:
                         --------------------------------------------------------------------------------------------
Except Per Share Data)   (GAAP)         (1)         (2)         (3)         (4)         (5)         (6)         (7)     (Non-GAAP)
                         -------      -------     -------     -------     -------     -------     -------     -------    -------
<S>                      <C>          <C>         <C>         <C>         <C>         <C>         <C>         <C>        <C>
Year Ended
 December 31, 2003:
 Income Statement:
  Net Interest Income    $ 315.8      $    --     $    --     $    --     $    --     $    --     $    --     $    --    $ 315.8
  Provision               (116.0)       (33.2)         --          --       (21.0)         --          --        (4.1)     (57.7)
  Noninterest Income       845.3           --        19.0        75.0          --          --          --        (2.8)     754.1
  Noninterest Expense     (900.1)        (6.9)         --          --        (6.5)      (25.6)      (10.8)         --     (850.3)
                         -------      -------     -------     -------     -------     -------     -------     -------    -------
  Income Before Taxes      145.0        (40.1)       19.0        75.0       (27.5)      (25.6)      (10.8)       (6.9)     161.9
  Income Taxes             (47.1)        13.2        (6.3)      (26.2)        9.6         9.0         3.8         2.4      (52.6)
  Effect of Changes
   in Accounting
   Principles               (1.2)          --          --          --          --          --        (1.2)         --         --
                         -------      -------     -------     -------     -------     -------     -------     -------    -------
  Net Income             $  96.7      $ (26.9)    $  12.7     $  48.8     $ (17.9)    $ (16.6)    $  (8.2)    $  (4.5)   $ 109.3
                         =======      =======     =======     =======     =======     =======     =======     =======    =======
 Other Data:
  Diluted EPS            $  1.90      $ (0.53)    $  0.25     $  0.96     $ (0.35)    $ (0.33)    $ (0.16)    $ (0.09)   $  2.15
  Return on Assets          0.55%       (0.15%)      0.07%       0.28%      (0.10%)     (0.09%)     (0.05%)     (0.03%)     0.62%
  Return on Equity         10.97%       (3.05%)      1.44%       5.53%      (2.02%)     (1.89%)     (0.93%)     (0.51%)    12.40%
  Net Charge Offs        $ 157.0      $  49.2         n/a     $   1.0     $  44.1         n/a         n/a     $   4.1    $  58.6
  Net Charge Offs to
  Average Loans             1.73%         n/a         n/a         n/a         n/a         n/a         n/a         n/a       0.65%
</TABLE>


                                       10
<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


(1)   Sale of Subprime Residential Loans: During the second quarter of 2003,
      Provident completed the sale of $471 million of subprime residential
      mortgage loans and related assets. The loans were sold at a $40.1 million
      net discount, of which $6.9 million was recorded as disposition cost in
      noninterest expense.

(2)   Sale of Merchant Services Business: Also during the second quarter,
      Provident sold its Merchant Services business, a payment solutions
      provider for credit and debit card acceptance programs. The sale of the
      Merchant Services business resulted in a pre-tax gain of $19 million.

(3)   Sale of Florida Deposits, Loans and Branches: Provident sold its 13
      Florida branches, along with approximately $883 million of deposits and
      $368 million in loans which were primarily originated at its Florida
      offices, to RBC Centura Bank, a subsidiary of Royal Bank of Canada. The
      transaction closed on November 21, 2003 and generated a pre-tax gain of
      $75 million.

(4)   Sale of Classified Loans and Aircraft Leases: During the fourth quarter of
      2003, Provident sold approximately $50 million of classified loans and $62
      million of aircraft leases. The loans and leases, which included
      approximately $38 million of nonperforming assets, were sold at a pre-tax
      loss of approximately $27.5 million.

(5)   Retirement of Corporate Debt: Also in the fourth quarter, the company
      recorded pre-tax charges of $25.6 million related to the prepayment of
      $292.2 million of high-rate debt.

(6)   Contract Termination, Severance, Business Exit Costs and Other: Provident
      recorded pre-tax charges of $10.8 million on contract terminations,
      severance and business exit costs. Additionally, Provident posted
      cumulative effect of changes in accounting principles of $1.2 million (net
      of tax). This was the result of new accounting rules implemented by FASB
      Interpretation No. 46, "Consolidation of Variable Interest Entities,"
      which required Provident to consolidate certain securitization trusts.

(7)   Impairment of Equity Investments and Aircraft Lease Residuals: Impairment
      of equity investments and aircraft lease residuals resulted in a pre-tax
      charge of $6.9 million. Residual values on commercial lease assets are
      reviewed regularly for impairment. The deterioration in residual values of
      aircraft was a result of continuing problems in the airline industry.

Business Initiatives

In recent years, Provident's profitability has been significantly impacted by
the downturn in the nation's economy and the resulting credit deterioration of
its lending portfolio. In order to compete effectively in today's economy and
grow shareholder value, Provident's goal is to become a lower risk company
engaged in achieving predictable and profitable long-term earnings growth.
Examples of how this goal is being achieved follows:

-     Discontinued or De-emphasized Higher Risk Lending Products: Provident is


                                       11
<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


      reducing or exiting businesses with higher credit risk and where the
      benefits received do not justify the risks taken. Provident has
      de-emphasized both its Structured Finance business unit and its
      Nonconforming Residential Lending Portfolio. Structured Finance provided
      senior debt to support leveraged financings including management buyouts,
      recapitalizations, acquisitions and business expansions. While Provident
      continues to originate nonconforming residential loans, these loans are no
      longer being held, but are sold with no retained recourse (credit risk).
      These loans are being sold to third-parties whereby Provident recognizes a
      gain on the sale.

      Lending businesses where originations have been significantly reduced
      include the Large Equipment Leasing and Auto Leasing business units. Large
      Equipment Leasing is the financing of assets such as corporate and
      commercial aircraft, construction, distribution, manufacturing and mining
      equipment, as well as transportation equipment including trucks, tractors
      and freight containers.

-     Sale of Higher Risk Portfolio Loans and Leases: Provident sold various
      loans and leases during the past two years in order to accelerate the
      reduction of higher risk loans and leases. Portfolio subprime mortgage
      loans of $471 million and $27 million were sold during 2003 and 2002,
      respectively. In addition, Provident sold $50 million of classified loans
      and $62 million in aircraft leases during the fourth quarter of 2003.
      These sales resulted in a less risky lending portfolio, improved credit
      quality metrics and reduced future earnings volatility.

-     Expansion of Lower Risk Lending Products: Funding formerly used in the
      higher risk areas noted above is being re-deployed toward lending products
      which have lower credit risk and less volatile earnings. Provident is
      expanding its Regional Commercial Banking, Middle-Market Equipment
      Leasing, and Prime Home Equity business units. Each of these business
      units are viewed by management as being areas of expertise for Provident
      with lower risk profiles and better growth opportunities.

-     Monitoring of Risk: Over the past two years, Provident significantly
      enhanced its monitoring of risk. The Credit and Risk Management Group is
      responsible for establishing the framework for managing and overseeing
      Provident's credit, operational and compliance risks. Accomplishments
      within this area include improved and expanded credit policies,
      implementation of an expanded risk rating system and updated credit risk
      factors, as well as the addition of portfolio and information specialists,
      retail analytics staff and centralized risk management operation units.
      This has resulted in the timely resolution of credit issues, improved
      credit quality and improved reporting, analysis and forecasting of the
      credit quality of the lending portfolio.

-     Improvement of Capital and Liquidity Levels: During 2003, capital and
      liquidity levels improved as a result of the sale of the Florida branch
      network and Merchant Services business. The sale of the Florida branch
      network included the sale of $883 million in deposits and $368 million in
      loans. The sale of its Florida branch network also allows Provident to
      further focus on its core Midwest retail and banking franchise.


                                       12
<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


-     Expansion of Fee Revenue Businesses: Provident is investing in businesses
      that generate fee income. These businesses provide Provident with a steady
      stream of income, with lower risk, while utilizing lower levels of
      capital. Businesses which fit this description include Red Capital Group,
      Capstone and Mortgage Banking. Each of these businesses provide a platform
      to generate fee income from originating, selling and servicing of
      commercial and residential mortgage loans.

-     Higher Concentration of Transaction Deposits: Stronger efforts are being
      made to obtain low-cost transaction deposits. Included in these efforts is
      the offering of a no fee deposit account product, improved service and
      delivery processes, the use of a state-of-the-art contact management and
      relationship building software tool in all branches, increased training
      and enhanced incentive plans for branch associates, expanded focus on
      commercial lending relationships to include their deposit business, and
      improved internet banking capabilities.

-     Customer Focus: Beginning in 2004, Provident is placing a renewed emphasis
      on the customer experience. A company-wide focus is being placed on
      customer service, including the creation of "Raving Fans" whereby
      customers will receive elevated customer service levels and improved
      problem resolution processes. Additionally, Provident is implementing a
      new brand image campaign which includes expanded advertising, a logo
      change and branch additions.

Business Lines

Provident's major business lines are Commercial Banking, Retail Banking and
Mortgage Banking. The following table summarizes net income by major lines of
business for the years ended December 31, 2003 2002 and 2001. Condensed income
statements and total assets are provided in Note 21 of the "Notes to
Consolidated Financial Statements".

<TABLE>
<CAPTION>
                                                                          Percentage
                                                                     Increase (Decrease)
                                                                     -------------------
(Dollars in Millions)       2003          2002          2001         2003/02    2002/01
                           -------       -------       -------       -------    -------
<S>                        <C>           <C>           <C>           <C>        <C>
Net Income:
  Commercial Banking       $  69.4       $  57.7       $  (0.8)           20%       n/m
  Retail Banking              26.3          27.1           6.0            (3)       352%
  Mortgage Banking             9.3           9.5          (6.2)           (2)       n/m
  Corporate Center            (8.3)          1.2            --           n/m        n/m
                           -------       -------       -------
                           $  96.7       $  95.5       $  (1.0)            1        n/m
                           =======       =======       =======
</TABLE>

--------------------
  n/m - not meaningful

Key components of the management reporting process follow:

-     Risk-Based Equity Allocations: Provident uses a comprehensive approach for
      measuring risk and making risk-based equity allocations. Risk measurements
      are applied to credit, operational and other corporate-level risks.

-     Transfer Pricing: Provident utilizes a matched funded transfer pricing
      methodology that in most cases isolates the business units from
      fluctuations in interest rates, and provides management with the ability
      to measure business unit, product and customer level profitability based
      on the financial characteristics of the products rather than the level of
      interest rates.


                                       13
<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


-     Provision for Loan and Lease Losses: Business lines are charged for
      provision based upon their level of net charge-offs as well as the size
      and composition of their lending portfolio.

-     Cost Allocations: Provident applies a detailed approach to allocating
      costs at the business unit, product and customer levels. Allocations are
      generally based on volume/activity and are reviewed and updated regularly.

-     Corporate Center: Corporate Center includes balance sheet and income
      statement items not allocated to the primary business lines, and gain/loss
      on the sale of investment securities.

      Business line descriptions and analyses follow:

-     Commercial Banking provides a broad range of commercial banking and
      commercial real estate products, services and solutions. Areas of focus
      and expertise include regional middle-market lending, equipment leasing
      and financing, treasury management, and loan servicing, transaction
      structuring and various capital solutions for the multi-family housing
      industry. Primary operating groups within Commercial Banking are Regional
      Middle-Market Commercial Banking, Commercial Real Estate, Middle-Market
      Equipment Leasing and Financing and Corporate Services.

      Net income for Commercial Banking for the years ending December 31, 2003,
      2002 and 2001 was $69.4 million, $57.7 million and ($0.8) million,
      respectively. Contributing to the higher net income for 2003 was an
      increase in noninterest income and lower provision expense, which was
      partially offset by lower net interest income and higher operating
      expenses.

      The growth in noninterest income came primarily from its fee-based
      commercial real estate businesses, Red Capital Group and Capstone Realty
      Advisors. Both Red Capital Group and Capstone recognized a significant
      increase in revenue while utilizing lower levels of capital. The favorable
      rate environment during the past year provided for an increased demand for
      their services.

      Average assets for 2003 increased $323 million, or 5%, compared to 2002.
      However, net interest income for 2003 failed to keep pace with asset
      growth due to modest spread compression. Furthermore, provision expense
      decreased in 2003 primarily due to an overall improvement in credit
      quality of the commercial loan portfolio.

      Competitive product offerings contributed to an increase in deposits for
      2003. Average commercial deposits for 2003 increased by $355 million, or
      49%, as compared to 2002. Product offerings have attracted new
      relationships and generated more business from the existing commercial
      customer base.

      The loss incurred during 2001 and the improvement in 2002 can be primarily
      attributed to provision and other credit-related charges. During 2001,
      Commercial Banking was affected by a weak economy which was accentuated by
      the impact of the events of September 11, 2001. Commercial Banking
      incurred credit write-offs and residual impairments from loans and leases
      to the commercial airline industry. In addition, net income was reduced as
      a result of higher loan loss provision due to a need to boost its reserve
      for

                                       14
<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


      loan and lease losses. Although the economy remained stagnant in 2002,
      credit related volatility declined which resulted in Commercial Banking
      benefiting from lower provision and other credit related charges during
      2002 as compared to 2001.

      Management continues to reposition this business line in order to produce
      a more predictable earnings pattern. Management has de-emphasized its
      higher credit risk areas of structured finance lending and large equipment
      leasing while growing its lower credit risk areas of middle-market leasing
      and regional middle-market commercial lending units.

-     Retail Banking provides a variety of deposit, credit and investment
      products, services and solutions to consumers and small businesses through
      various delivery channels including: branches, ATMs, a call center and the
      internet. Consumer lending primarily focuses on offering home equity loans
      to high credit-quality borrowers. Primary operating groups within Retail
      Banking include Branch Banking, Business Banking and Consumer
      Lending/Prime Home Equity. Retail Banking also includes Provident
      Financial Advisors, which provides an extensive range of investment,
      insurance and financial products, services and solutions to individuals,
      businesses and government agencies.

      Net income for Retail Banking was $26.3 million, $27.1 million and $6.0
      million for the years ended December 31, 2003, 2002 and 2001,
      respectively. The slight decrease in net income during 2003 occurred
      primarily as a result of a decrease in net interest income on total retail
      deposits. The decrease in the deposit net interest income is due primarily
      to the current low interest rate environment. Management has directed its
      efforts to the home equity lending business. This portfolio grew from $1.1
      billion at December 31, 2002 to $1.5 billion at year-end 2003. Management
      believes that the change in the overall lending portfolio mix will result
      in an overall lower exposure to credit risk.

      Transaction deposits for Retail Banking increased 18% in 2003. However,
      total retail deposit growth decreased slightly due to less aggressive
      pricing on certificates of deposits. Provident plans to further enhance
      its distribution system to improve customer acquisition and market
      penetration, including opening new branch locations.

      Net income increased during 2002 primarily as a result of increased net
      interest income on deposits and lower provision for loan and lease losses.
      The lower provision was due to slower loan growth and a lower level of
      loan loss reserves as compared to 2001.

-     Mortgage Banking offers conforming and nonconforming residential mortgage
      loans to consumers, and also provides fee-based loan processing, loan
      warehousing and servicing for third party originators. Loans are
      originated through retail, broker and correspondent channels and are sold
      on a non-recourse whole-loan basis. Primary operating areas within
      Mortgage Banking include Residential Mortgage Origination and Sales,
      Third-Party Loan Servicing and Warehouse Lending Services.

      Net income for 2003 was $9.3 million as compared to net income of $9.5
      million for 2002 and net loss of $6.2 million for 2001. Positive trends
      within Mortgage Banking included the contributions of Warehouse Lending


                                       15
<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


      which funded loans of $12.7 billion in 2003 versus $7.8 billion in 2002.
      The servicing balance for third-party originators (excludes securitized
      loans) also continued to rise in 2003, increasing from $5.1 billion on
      December 31, 2002 to $10.1 billion on December 31, 2003. Gains recognized
      on the sale of loans was $11.9 million during 2003 compared to $13.8
      million for 2002.

      The net loss reported in 2001 was driven by the decision to change the
      structure of securitizations resulting in the elimination of gain-on-sale
      accounting. This decision resulted in no gain on sales of securitized
      loans being recognized in 2001 as compared to pre-tax gains of $30.3
      million being recognized during 2000.

      Mortgage Banking, following the overall company strategy of risk
      reduction, continues to implement strategic initiatives to reduce the
      business' risk profile. Nonconforming loan originations continue to be
      sold to investors on a whole-loan basis.

-     Corporate Center includes revenues and expenses not allocated to the
      primary business lines, including any item not related to their operating
      activity. The net loss of $8.3 million for 2003 and net income of $1.2
      million for 2002 resulted from the following actions taken by management:
      the sale of subprime loans, Merchant Services, Florida assets and
      liabilities, and classified loans and aircraft leases; the early
      retirement of higher interest rate debt; contract termination, severance
      and business exit costs; and the impairment of equity investments and
      aircraft lease residuals. Corporate Center also includes realized gains on
      security sales and certain warrant gains.

Related Party Transactions

Provident, in its normal course of business, has had transactions with its
directors, officers, principal shareholders and affiliates including American
Financial Group, Inc. and its subsidiaries. All such transactions are on terms
no less favorable to Provident than those which could be obtained with
non-affiliated parties. These transactions include the leasing of its corporate
headquarters and additional office space, insurance coverage, advertising,
tickets, suite rental, record retention services, guard services, extensions of
credit, and maintaining investments of commercial paper, repurchase agreements
and deposit accounts. For details concerning these transactions, see Note 22 of
the "Notes to Consolidated Financial Statements."

Net Interest Income

Net interest income for the year ended December 31, 2003, was essentially
unchanged compared to 2002. Interest income and interest expense declined
approximately $84 million each. Increases in the average balances of interest
earning assets and interest bearing liabilities were offset by lower average
interest rates.


                                       16
<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


Net interest margin represents net interest income as a percentage of average
interest earning assets. The net interest margin, on a tax-equivalent basis, was
2.18%, 2.41% and 2.19% for 2003, 2002 and 2001, respectively. Average loan
balances include nonperforming loans. This decrease was driven by changes in
rates and volumes of earning assets and the corresponding funding sources. The
net interest spread is the difference between the average yield earned on assets
and the average rate incurred on liabilities. The following table details the
components of the change in net interest income and expense (on a tax-equivalent
basis) by major category of interest earning assets and interest bearing
liabilities for the years ended December 31, 2003, 2002 and 2001.

<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                             -----------------------------------------------------------------------------------------
                                         2003                           2002                          2001
                             ----------------------------   ----------------------------  ----------------------------
                             Average    Income/    Avg.     Average    Income/     Avg.   Average    Income/    Avg.
(Dollars in Millions)        Balance    Expense    Rate     Balance    Expense     Rate   Balance    Expense    Rate
                             -------    -------   -------   -------    -------   -------  -------    -------   -------
<S>                          <C>        <C>       <C>       <C>        <C>       <C>      <C>        <C>       <C>
ASSETS
 Interest Earning Assets:
  Loans/Leases:
   Corporate Lending:
    Commercial               $ 4,388    $ 247.0      5.63%  $ 4,312    $ 273.4      6.34% $ 4,655    $ 377.2      8.10%
    Mortgage                     949       52.0      5.48       909       56.5      6.22      864       69.2      8.02
    Construction                 515       21.6      4.20       546       24.6      4.51      570       40.5      7.10
    Lease Financing            1,254      104.7      8.35     1,199      109.9      9.16      958       92.4      9.65
   Consumer Lending:
    Installment                1,487       67.7      4.55     1,054       65.4      6.21      774       68.7      8.87
    Residential                  266       29.6     11.12       737       70.6      9.59    1,008       99.9      9.91
    Lease Financing              192       12.6      6.56        --         --        --       --         --        --
                             -------    -------   -------   -------    -------   -------  -------    -------   -------
     Total Loans/Leases        9,051      535.2      5.91     8,757      600.4      6.86    8,829      747.9      8.47
  Investment Securities        4,514      186.5      4.13     3,882      217.7      5.61    3,158      204.5      6.47
  Federal Funds Sold and
   Reverse Repurchase
   Agreements                    395        7.0      1.76       125        3.4      2.71       92        4.2      4.59
  Other Short-Term
   Investments                   542       29.0      5.35       341       20.0      5.85      297       16.8      5.66
                             -------    -------   -------   -------    -------   -------  -------    -------   -------
 Total Earning Assets         14,502      757.7      5.22%   13,105      841.5      6.42%  12,376      973.4      7.86%
 Cash and Noninterest
  Bearing Deposits               301                            255                           255
 Leased Equipment              1,999                          2,477                         2,491
 Other Assets                    817                            701                           926
                             -------                        -------                       -------
  Total Assets               $17,619                        $16,538                       $16,048
                             =======                        =======                       =======
LIABILITIES AND
 SHAREHOLDERS' EQUITY
 Interest Bearing
  Liabilities:
  Deposits:
   Demand Deposits           $ 1,161       15.9      1.37%  $   696        9.8      1.40% $   484       12.1      2.50%
   Savings Deposits            1,517       26.2      1.73     1,472       29.0      1.97    1,548       56.5      3.65
   Time Deposits               6,643      173.5      2.61     6,134      223.4      3.64    5,828      317.8      5.45
                             -------    -------   -------   -------    -------   -------  -------    -------   -------
    Total Deposits             9,321      215.6      2.31     8,302      262.2      3.16    7,860      386.4      4.92
  Short-Term Debt:
   Federal Funds
    Purchased and
    Repurchase Agreements      1,206       28.0      2.32     1,182       30.3      2.56    1,156       46.8      4.05
   Commercial Paper              265        3.2      1.23       280        5.3      1.91      229        9.0      3.92
                             -------    -------   -------   -------    -------   -------  -------    -------   -------
    Total Short-Term Debt      1,471       31.2      2.12     1,462       35.6      2.44    1,385       55.8      4.03
  Long-Term Debt               3,609      176.6      4.89     3,990      204.7      5.13    3,877      230.1      5.93
  Junior Subordinated
   Debentures                    451       18.3      4.04       451       23.3      5.16      422       30.5      7.24
                             -------    -------   -------   -------    -------   -------  -------    -------   -------
 Total Interest Bearing
  Liabilities                 14,852      441.7      2.97%   14,205      525.8      3.70%  13,544      702.8      5.19%
 Noninterest Bearing
  Deposits                     1,327                            945                         1,220
 Other Liabilities               558                            541                           387
 Shareholders' Equity            882                            847                           897
                             -------    -------   -------   -------    -------   -------  -------    -------   -------
  Total Liabilities and
   Shareholders' Equity      $17,619                        $16,538                       $16,048
                             =======                        =======                       =======
Net Interest Income                     $ 316.0                        $ 315.7                       $ 270.6
                                        =======                        =======                       =======
Net Interest Margin                                  2.18%                          2.41%                         2.19%
                                                  =======                        =======                       =======
Net Interest Spread                                  2.25%                          2.72%                         2.67%
                                                  =======                        =======                       =======
</TABLE>


                                       17
<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


The following table shows the changes in net interest income on a tax equivalent
basis resulting from changes in volume and changes in rates. Changes not solely
due to volume or rate have been allocated proportionately.

<TABLE>
<CAPTION>
                                                       Year Ended December 31,
                                     ---------------------------------------------------------
                                        2003 Changes from              2002 Changes from
                                            2002 Due to                    2001 Due to
                                     -------------------------       -------------------------
(In Thousands)                        Volume           Rate            Volume          Rate
                                     ---------       ---------       ---------       ---------
<S>                                  <C>             <C>             <C>             <C>
Interest Earned On:
 Loans and Leases:
  Corporate Lending:
   Commercial                        $   4,747       $ (31,195)      $ (26,271)      $ (77,508)
   Mortgage                              2,416          (6,941)          3,449         (16,189)
   Construction                         (1,338)         (1,674)         (1,681)        (14,192)
   Lease Financing                       4,899         (10,058)         22,311          (4,845)
  Consumer Lending:
   Installment                          22,522         (20,272)         20,724         (23,977)
   Residential                         (50,915)          9,876         (26,138)         (3,179)
   Lease Financing                      12,632              --              --              --
                                     ---------       ---------       ---------       ---------
    Net Loans and Leases                (5,037)        (60,264)         (7,606)       (139,890)
 Investment Securities                  31,866         (63,074)         42,933         (29,647)
 Federal Funds Sold and
  Reverse Repurchase Agreements          5,112          (1,544)          1,217          (2,068)
 Short-Term Investments                 10,901          (1,829)          2,529             594
                                     ---------       ---------       ---------       ---------
     Total                              42,842        (126,711)         39,073        (171,011)
                                     ---------       ---------       ---------       ---------
Interest Paid On:
 Demand Deposits                         6,375            (229)          4,136          (6,441)
 Savings Deposits                          855          (3,608)         (2,643)        (24,864)
 Time Deposits                          17,328         (67,251)         15,968        (110,354)
                                     ---------       ---------       ---------       ---------
  Total Deposits                        24,558         (71,088)         17,461        (141,659)
 Short-Term Debt:
  Federal Funds Purchased
   and Repurchase Agreements               622          (2,942)          1,016         (17,567)
  Commercial Paper                        (278)         (1,813)          1,695          (5,321)
                                     ---------       ---------       ---------       ---------
   Total Short-Term Debt                   344          (4,755)          2,711         (22,888)
 Long-Term Debt                        (18,928)         (9,172)          6,560         (31,879)
 Junior Subordinated Debentures             23          (5,045)          1,974          (9,251)
                                     ---------       ---------       ---------       ---------
     Total                               5,997         (90,060)         28,706        (205,677)
                                     ---------       ---------       ---------       ---------
Net Interest Income                  $  36,845       $ (36,651)      $  10,367       $  34,666
                                     =========       =========       =========       =========
</TABLE>


Noninterest Income

The following table details the components of noninterest income and their
change since 2001:

<TABLE>
<CAPTION>
                                                                                                 Percentage
                                                                                            Increase (Decrease)
                                                                                          ------------------------
(Dollars in Thousands)                            2003          2002          2001         2003/02         2002/01
                                                --------      --------      --------      --------        --------
<S>                                             <C>           <C>           <C>           <C>             <C>
Service Charges on Deposit Accounts             $ 50,023      $ 45,184      $ 39,924            11%             13%
Loan Servicing Fees                               40,163        36,980        34,469             9               7
Commercial Mortgage Banking Revenue               44,791        25,354        29,490            77             (14)
Other Service Charges and Fees                    50,935        45,418        37,390            12              22
Leasing Income                                   510,109       605,887       584,065           (16)              4
Cash Gain on Sales of Loans                       20,333        15,691         6,311            30             149
Warrant Gains                                      1,636         8,186           412           (80)          1,887
Security Gains                                     6,307         2,596            --           143              --
Net Gain on Florida Assets and Liabilities        74,998            --            --            --              --
Net Gain on Merchant Services Business            19,000            --            --            --              --
Other                                             26,994        20,196        24,375            34             (17)
                                                --------      --------      --------
  Total Noninterest Income                      $845,289      $805,492      $756,436             5%              7%
                                                ========      ========      ========
</TABLE>


                                       18
<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


Explanations for significant changes in noninterest income by category follow:

-     Service Charges on Deposit Accounts: Increases in overdraft fees and
      service charges on corporate deposit accounts were the primary reasons for
      the increase in service charges on deposit accounts in both 2003 and 2002.

-     Loan Servicing Fees: In 2003, mortgage servicing fees increased for both
      residential and multi-family loans. Loan servicing fees increased during
      2002 as increases in fees from servicing multi-family loans and
      residential mortgage loans were partially offset by decreases in fees from
      servicing securitized residential mortgage and credit card portfolios.
      Total loans serviced for others at December 31, 2003, 2002 and 2001 were
      $21.1 billion, $17.5 billion and $12.5 billion.

-     Commercial Mortgage Banking Fees: Increases in fees from both Red Capital
      Group and Capstone resulted in higher commercial mortgage banking fees in
      2003. A decrease in commercial mortgage banking fees from Red Capital
      Group was the primary reason for the decrease in 2002.

-     Other Service Charges and Fees: During 2003, other service charges and
      fees increased due primarily to increased fees from commercial banking and
      trust services. These increases offset a decline in fees due to the sale
      of Provident's merchant services business in the second quarter of 2003.
      Other service charges and fees increased during 2002 due primarily to an
      increase in other fee income generated from Mortgage Banking and funds
      management fees, more than offsetting a decrease in credit card fees.

-     Leasing Income: The decrease in leasing income in 2003 was a result of
      amortization of the portfolio and because auto leases originated since
      February, 2003 have been classified as finance leases rather than
      operating leases. In February, 2003, Provident changed the structure of
      the residual insurance it obtains on its auto leases resulting in this
      type of lending being classified as a direct financing lease in the loan
      category and income being recorded as interest income. Leasing income
      increased during 2002 due primarily to increases in income from auto
      leases.

-     Gain on Sales of Loans and Leases: Gain on sales of loans and leases
      increased $4.6 million in 2003, due primarily to strong growth in the
      sales of home equity loans and lines of credit tempered by slower than
      expected production levels in mortgage whole-loan sales. The $9.4 million
      increase in 2002 was a result of gains recognized from the sale of
      nonconforming residential mortgage loans on a whole-loan basis, a strategy
      that Provident implemented during the third quarter of 2001. The following
      table provides detail of the gain on sales recognized during the past
      three years.

<TABLE>
<CAPTION>
(In Thousands)                                      2003         2002         2001
                                                  -------      -------      -------
<S>                                               <C>          <C>          <C>
Cash Gains -- Loan and Lease Sales:
  Nonconforming Residential Whole-Loan Sales      $11,912      $13,756      $ 3,177
  Home Equity Loan Sales                            7,293        1,253           --
  Conforming Residential Whole-Loan Sales             792          306        1,544
  Other Loan Sales                                    336          376        1,590
                                                  -------      -------      -------
                                                  $20,333      $15,691      $ 6,311
                                                  =======      =======      =======
</TABLE>


                                       19
<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


-     Warrant Gains: Provident's Commercial Banking business line from time to
      time acquires equity warrants as a part of the lending fee structure
      established with customers. Warrant gains totaled $1.6 million for 2003 as
      compared to $8.2 million for 2002 and $0.4 million for 2001.

-     As part of its strategic repositioning, Provident sold the Merchant
      Services business in the second quarter and Florida branches, deposits and
      loans in the fourth quarter of 2003. These sales resulted in gains of $19
      million and $75 million, respectively.

-     Other: An increase in fees associated with investment portfolio management
      and other trading activities was the primary reason for the increase in
      other income in 2003. The decrease in other income during 2002 was due
      primarily to a decrease in income from equity investments.

Noninterest Expense

The following table details the components of noninterest expense and their
change since 2001:

<TABLE>
<CAPTION>
                                                                                         Percentage
                                                                                     Increase (Decrease)
                                                                                  ------------------------
(Dollars in Thousands)                    2003          2002          2001         2003/02         2002/01
                                        --------      --------      --------      --------        --------
<S>                                     <C>           <C>           <C>           <C>             <C>
Salaries, Wages and Benefits            $253,399      $233,178      $201,715             9%             16%
Charges and Fees                          32,152        30,531        31,888             5              (4)
Occupancy                                 25,365        23,637        22,605             7               5
Leasing Expense                          365,408       416,508       402,372           (12)              4
Equipment Expense                         26,285        24,345        25,234             8              (4)
Professional Fees                         32,667        25,990        24,507            26               6
Minority Interest Expense                 12,788         7,069            --            81              --
Debt Retirement Charge                    25,584            --            --            --              --
Disposition Cost of Subprime Loans         6,914            --            --            --              --
Other                                    119,493       114,770       104,663             4              10
                                        --------      --------      --------
  Total Noninterest Expense             $900,055      $876,028      $812,984             3%              8%
                                        ========      ========      ========
</TABLE>

Components of noninterest expense, along with an explanation as to their
fluctuations, follow:

-     Salaries, Wages and Benefits: Salaries, wages and benefits increased $20.2
      million in 2003 due primarily to increased commissions for commercial
      mortgage banking activities and staffing increases in loan servicing, risk
      management and retail. Compensation increased in 2002 due primarily to
      increased staffing and incentive pay in areas where opportunities for
      growth exist, such as middle-market commercial lending, middle-market
      equipment leasing and mortgage servicing.

-     Charges and Fees: Charges and fees increased in 2003 due to a $3.5 million
      writedown of intangible assets, partially offset by a decrease in expenses
      related to credit risk transfer transactions. The decrease in 2002
      resulted from the decrease in goodwill amortization expense more than
      offsetting the increase in expenses related to credit risk transfer
      transactions. Details concerning goodwill amortization and credit transfer
      transactions are provided in Notes 8 and 20, respectively, included in
      "Notes to Consolidated Financial Statements."


                                       20
<PAGE>


                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


-     Occupancy: Increased rent expense along with depreciation expense for
      leased branches were the primary reasons for higher occupancy expense in
      2003. The increase in 2002 over 2001 was due to higher depreciation
      expense, guard services and utilities.

-     Leasing Expense: Similar to leasing income, leasing expense decreased in
      2003 due to auto leases originated since February 2003 being classified as
      finance leases rather than operating leases. An increase in auto lease
      depreciation expense was the primary reason for the increase in leasing
      expense for both 2002 and 2001.

-     Equipment Expense: Equipment expense increased in 2003 primarily due to
      increased depreciation expense and equipment rental expense, while the
      decrease in 2002 was due primarily to a reduction in depreciation expense.

-     Professional Fees: Professional fees increased in 2003 primarily as a
      result of increased legal fees for the Commercial Banking area and
      corporate litigation. Professional fees increased in 2002 due primarily to
      legal, consulting and other professional fees related to loan collections.

-     Minority Interest Expense: Minority interest expense relates to dividends
      payable on $165 million of Preferred Stock of PFGI Capital Corporation, a
      real estate investment trust that was formed late in the second quarter of
      2002. The expense for 2003 contains a full year of dividend payments. The
      dividends are payable at an annualized rate of 7.75%. Additional
      information on minority interest may be found on Note 13 of "Notes to
      Consolidated Financial Statements."

-     Debt Retirement Charge: In the fourth quarter of 2003, Provident recorded
      charges related to the early retirement of high-rate debt. The total debt
      retired amounted to $292.2 million.

-     Disposition Cost of Subprime Loans: Provident sold subprime residential
      mortgage loans and foreclosed properties during the second quarter of
      2003. Disposition costs of $6.9 million were recorded from the loss on
      sale of other real estate and other contingencies associated with the
      sale.

-     Other: Larger expenses included within other noninterest expense include
      marketing ($10.8 million, $11.0 million and $9.2 million in 2003, 2002,
      and 2001, respectively), travel ($10.4 million, $8.9 million and $9.0
      million in 2003, 2002 and 2001, respectively), franchise taxes ($8.5
      million, $7.0 million and $8.5 million in 2003, 2002 and 2001,
      respectively), data processing expense ($10.0 million, $7.8 million and
      $5.6 million in 2003, 2002 and 2001, respectively) and insurance expense
      ($14.8 million, $13.1 million and $10.4 million in 2003, 2002 and 2001,
      respectively).


                                       21

<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

FINANCIAL CONDITION

Short-Term Investments and Investment Securities

As of December 31, 2003 and 2002, federal funds sold and reverse repurchase
agreements outstanding were $253.3 million and $188.9 million, respectively. The
amount of federal funds sold changes daily as cash is managed to meet reserve
requirements and customer needs. After funds have been allocated to meet lending
and investment demands, any remainder is placed in overnight federal funds.

As of December 31, 2003 and 2002, Provident held $119.6 million and $127.8,
respectively, in trading account securities. Provident trades investment
securities with the intention of recognizing short-term profits. These
securities are carried at fair value with realized and unrealized gains and
losses reported in other noninterest income.

Provident classified $595.5 million and $436.9 million of loans as held for sale
at December 31, 2003 and 2002, respectively. At year-end 2003, these loans
consisted of $479.9 million of multifamily loans, $106.1 million of
nonconforming residential mortgage loans, $6.4 million of conforming residential
mortgage loans and $3.1 million of commercial leases. Activities related to the
multifamily loans held for sale are predominantly a part of the operations of
Red Capital Group. The multifamily loans are either insured by the Federal
Housing Association or subject to purchase contracts from Fannie Mae or Freddie
Mac. These loans are usually outstanding for sixty days or less. The remainder
of the activities related to the multifamily loans held for sale are part of the
operations of Capstone Realty Advisors. Nonconforming residential mortgage loans
are being sold on a whole-loan basis. This is part of an initiative started
during 2001 to reduce the risk profile of the Mortgage Banking business line.

Investment securities purchased with the intention of being held for indefinite
periods of time are classified as available for sale. These securities totaled
$4.5 billion and $4.2 billion as of December 31, 2003 and 2002, respectively.
During 2003, Provident actively changed its investment portfolio mix from
mortgage-backed pass-through securities to agency debt and collateralized
mortgage obligations. As a result, Provident was able to shorten the overall
duration of its investment portfolio, thereby reducing its interest rate risk
exposure to rising interest rates and also reducing the market value
fluctuations on the overall portfolio.



                                       22
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


The amortized cost and market value of investment securities available for sale
at the dates indicated are summarized in the following table:

<TABLE>
<CAPTION>

                                                    Amortized Cost at December 31,
                                              ----------------------------------------
(In Thousands)                                   2003           2002           2001
-----------------------------------------     ----------     ----------     ----------
<S>                                           <C>            <C>            <C>
US Treasury and Federal Agency Debentures     $  608,808     $  310,244     $  302,912
State and Political Subdivisions                   1,360          1,838          3,185
Mortgage-Backed Securities                     3,250,117      3,240,192      2,700,620
Other Securities                                 714,192        606,237        503,884
                                              ----------     ----------     ----------
    Total Securities                          $4,574,477     $4,158,511     $3,510,601
                                              ==========     ==========     ==========
</TABLE>

<TABLE>
<CAPTION>
                                                    Market Value at December 31,
                                              ----------------------------------------
(In Thousands)                                   2003           2002           2001
-----------------------------------------     ----------     ----------     ----------
<S>                                           <C>            <C>            <C>
US Treasury and Federal Agency Debentures     $  611,122     $  316,143     $  306,556
State and Political Subdivisions                   1,400          1,875          3,199
Mortgage-Backed Securities                     3,207,230      3,291,512      2,673,174
Other Securities                                 708,160        605,708        503,129
                                              ----------     ----------     ----------
    Total Securities                          $4,527,912     $4,215,238     $3,486,058
                                              ==========     ==========     ==========
</TABLE>



The following table shows the December 31, 2003 maturities and weighted average
yields for investment securities. Yields on equity securities that comprise the
fixed rate, due after 10 years classification of other securities have been
omitted from the table. A 35% tax rate was used in computing the tax equivalent
yield adjustment. The yields shown are calculated based on amortized cost and
effective yields weighted for the scheduled maturity of each security.
Securities are assigned to maturity categories based on their estimated average
lives.


<TABLE>
<CAPTION>

                                                     Fixed Rate                              Floating Rate
                                           ------------------------------           ------------------------------
                                                                                                         Weighted
                                                                                     Weighted             Average
                                                                                      Average            Yield On
                                           Amortized            Yield To             Amortized           Current
(Dollars in Thousands)                        Cost              Maturity               Cost            Coupon Rates
----------------------                        ----              --------               ----            ------------
<S>                                        <C>                 <C>                  <C>                <C>
US Treasury and Federal Agency
  Debentures:
    Due in one year or less                $  312,352             4.22%             $      749               1.06%
    Due after 1 through 5 years               174,819             3.41                      --
    Due after 10 years                             --                                  120,888               4.19
                                           ----------          -------              ----------            -------
      Total                                $  487,171             3.93%             $  121,637               4.17%
                                           ==========          =======              ==========            =======
State and Political Subdivisions:
    Due after 10 years                     $    1,360             7.66%             $       --                 --%
                                           ==========          =======              ==========            =======
Mortgage-Backed Securities:
    Due in one year or less                $   95,243             5.29%             $       --                 --%
    Due after 1 through 5 years             2,434,157             5.46                   2,625               2.64
    Due after 5 through 10 years              519,850             4.68                  11,798               2.85
    Due after 10 years                        165,437             6.58                  21,007               2.67
                                           ----------          -------              ----------            -------
      Total                                $3,214,687             5.39%             $   35,430               2.73%
                                           ==========          =======              ==========            =======
Other Securities:
    Due in one year or less                $       --               --%             $   31,698               1.37%
    Due after 1 through 5 years               172,768             6.49                 329,915               1.53
    Due after 5 through 10 years                   --               --                  21,383               2.32
    Due after 10 years                        118,428               --                  40,000               2.35
                                           ----------          -------              ----------            -------
      Total                                $  291,196             6.49%             $  422,996               1.64%
                                           ==========          =======              ==========            =======

</TABLE>


                                       23
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Loans and Leases

As of December 31, 2003 and 2002, total on-balance sheet loans and leases were
$8.9 billion and $9.1 billion, respectively. Provident had an additional $1.3
billion and $2.1 billion of off-balance sheet securitized loans and leases and
$3.8 billion and $3.0 billion of Fannie Mae DUS loans as of year-end 2003 and
2002, respectively. As a result of recent earnings volatility, management
re-evaluated the risk/reward relationships of its lending portfolio. During the
second half of 2001, Provident implemented a whole-loan sale strategy for its
nonconforming residential loans. During the second quarter of 2003, Provident
sold nearly all of the subprime residential mortgage loan portfolio. Also,
management decided to de-emphasize structured finance lending and large-ticket
equipment leasing while placing a greater focus on regional middle-market
commercial lending and middle-market equipment leasing. During the fourth
quarter of 2003, Provident sold approximately $112 million of commercial loans
and leases, many of which involved financing to the commercial airline industry.
As a result of these actions, Provident's lending portfolio has a much lower
concentration of subprime residential loans and commercial airline industry
loans, a higher concentration of middle-market corporate leases, and a lower
risk profile of commercial loans. Provident does not have material exposure to
foreign loans. The following table shows on-balance sheet loans and leases
outstanding at period end by type of loan:



<TABLE>
<CAPTION>
                                                          December 31,
                              ---------------------------------------------------------------------
(Dollars in Millions)            2003           2002           2001           2000           1999
-------------------------     ---------      ---------      ---------      ---------      ---------
<S>                           <C>            <C>            <C>            <C>            <C>
Dollar:
 Corporate Lending:
  Commercial                  $ 4,038.5      $ 4,482.4      $4,540.1      $4,580.2      $3,990.9
  Mortgage                        961.9          960.6         939.8         823.5         576.6
  Construction                    452.6          510.3         528.0         610.5         559.8
  Lease Financing               1,275.3        1,273.9       1,106.1         566.1         376.6
 Consumer Lending:
  Installment                   1,670.7        1,306.8         913.4         580.1         476.5
  Residential                      36.2          599.8         922.7         835.5         653.7
  Lease Financing                 460.3             --            --            --            --
                              ---------      ---------      --------      --------      --------
   Total Loans and Leases     $ 8,895.5      $ 9,133.8      $8,950.1      $7,995.9      $6,634.1
                              =========      =========      ========      ========      ========
Percentage:
 Corporate Lending:
  Commercial                       45.4%          49.1%         5.07%         57.3%         60.1%
  Mortgage                         10.8           10.5          10.5          10.3           8.7
  Construction                      5.1            5.6           5.9           7.6           8.4
  Lease Financing                  14.3           13.9          12.4           7.1           5.7
 Consumer Lending:
  Installment                      18.8           14.3          10.2           7.3           7.2
  Residential                       0.4            6.6          10.3          10.4           9.9
  Lease Financing                   5.2             --            --            --            --
                              ---------      ---------      ---------      --------      -------
   Total Loans and Leases         100.0%         100.0%        100.0%        100.0%        100.0%
                              =========      =========      =========      ========      =======

</TABLE>




                                       24
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


The following table shows the composition of the commercial loan category by
industry type at December 31, 2003, including loan amounts on which interest is
not being accrued:


<TABLE>
<CAPTION>
                                                                                             Amount on
(Dollars in Millions)                                              Amount        %           Nonaccrual
----------------------------------------------------          -------------     ----         ----------
<S>                                                           <C>               <C>          <C>
Real Estate Operators/Developers/General Contractors          $     494.3         12          $    8.8
Mortgage Warehousing Lines                                          493.5         12               4.6
Banking and Finance Activities                                      194.8          5              11.1
Transportation                                                      186.7          5               0.3
Healthcare                                                          175.7          4               0.6
Business Services                                                   157.7          4               8.6
Metals                                                              152.9          4               1.8
Retailing                                                           141.7          3               0.1
Tourism and Entertainment                                           139.2          3               0.1
Automobile Dealers                                                  121.5          3                --
Machinery and Equipment                                             114.4          3               4.5
Construction                                                        106.6          3               0.9
Commercial Aviation Related (1)                                     103.5          3              13.3
Eating and Drinking Establishments                                   96.6          2               0.2
Financial Services                                                   89.3          2               1.7
Automotive Services/Parts                                            76.7          2               2.8
Chemicals                                                            65.4          2                --
Technology                                                           63.7          2               3.3
Other (includes 20 industry types)                                1,064.3         26               7.6
                                                              -----------        ---          --------
   Total                                                      $   4,038.5        100          $   62.3
                                                              ===========        ===          ========
</TABLE>

(1)   Includes $20 million of loans related to the commercial airline industry,
      and aircraft used in private, charter and corporate markets



Consistent with lower activity within the industry, mortgage warehousing lines
decreased $146 million during 2003 to $494 million. All loans are underwritten
to Provident and secondary market standards as part of Provident's control
processes related to this activity.

At December 31, 2003, Provident had loans and leases of $97 million to
commercial airline carriers, including $20 million of commercial loans and $77
million of finance and operating leases. The $81 million decrease during 2003
was primarily as a result of the commercial loan and lease sales that occurred
in the fourth quarter of 2003. As the events of September 11, 2001 continued to
have a significant financial impact upon the airline industry and the resale
value of aircraft, Provident recorded credit costs and other expenses of $36
million and $34 million during 2003 and 2002, respectively, related to secured
commercial airline loans and leases.

At December 31, 2003, Provident had approximately $626 million of commercial
loans that are to borrowers who have shared national credit loans. Generally,
shared national credit loans are loans that have a commitment amount of at least
$20 million and involve three or more supervised financial institutions. In an
on-going effort to diversify its portfolio, the shared national credit loans in
which Provident participates are distributed across thirty-two industry types,
with the largest industry concentration (real estate) accounting for
approximately 14% of its total shared national credit loans. The real estate
category is comprised of loans to borrowers with different risks
characteristics, including single family home developers, commercial property
owner/operators, and commercial realtors and property managers. The average
outstanding balance of a shared national credit loan was $3.9 million.



                                       25
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


The following table shows the composition of commercial mortgage and
construction loans by property type at December 31, 2003:


<TABLE>
<CAPTION>
                               Commercial    Commercial                              Amount on
(Dollars in Millions)           Mortgage    Construction    Total      Percentage    Nonaccrual
---------------------           --------    ------------    -----      ----------    ----------

<S>                             <C>          <C>          <C>               <C>       <C>
Office / Warehouse              $  179.6     $   70.2     $  249.8          17.7%     $    5.6
Residential Development            126.7        108.5        235.2          16.6           3.3
Apartments                         166.5         57.1        223.6          15.8           1.2
Shopping / Retail                  124.5         43.4        167.9          11.9            --
Healthcare Facilities               98.1          6.5        104.6           7.4            --
Hotel / Motel                       83.1          2.8         85.9           6.1            .1
Land                                30.9         41.1         72.0           5.1            --
Industrial Plants                   27.7           --         27.7           1.9            --
Other Commercial Properties        124.8        123.0        247.8          17.5            .4
                                --------     --------     --------      --------      --------
                                $  961.9     $  452.6     $1,414.5         100.0%     $   10.6
                                ========     ========     ========      ========      ========
</TABLE>


Commercial and real estate construction loans outstanding at December 31, 2003
are shown in the following table by maturity, based on remaining scheduled
repayments of principal:


<TABLE>
<CAPTION>
                                                   After 1
                                       Within    but Through     After
(In Millions)                          1 Year      5 Years      5 Years        Total
-------------                          ------      -------      -------        -----
<S>                                   <C>          <C>          <C>          <C>
Commercial                            $1,713.9     $2,006.9     $  317.7     $4,038.5
Commercial Construction                  247.2        178.6         26.8        452.6
                                      --------     --------     --------     --------
   Total                              $1,961.1     $2,185.5     $  344.5     $4,491.1
                                      ========     ========     ========     ========

Loans Due After One Year:
  At predetermined interest rates                                            $  229.9
  At floating interest rates                                                  2,300.2
</TABLE>

As of December 31, 2003, Provident had $1.3 billion in commercial lease
financings. These leases were comprised of $1.1 billion of mid-ticket equipment
leases and $0.2 billion of large-ticket equipment leases.

Residential mortgage loans decreased $564 million during 2003, due to the sale
of subprime residential mortgage loans that occurred in the second quarter of
2003. Prior to the loan sale, residential mortgage loans had been declining due
to Provident's implementing a whole-loan sale strategy for its nonconforming
residential loans during the second half of 2001. The loan sale, which also
lowered the level of nonperforming assets, gives Provident a lower concentration
of nonconforming residential loans and allows it to concentrate more of its
resources on its strategic initiatives such as home equity, regional lending and
mid-ticket leasing portfolios.

The following table shows the composition of the installment loan category by
loan type at December 31:

<TABLE>
<CAPTION>
                                                   Percentage
                                                    Increase
(Dollars in Millions)      2003         2002       (Decrease)
---------------------      ----         ----       ----------
<S>                      <C>          <C>               <C>
Home Equity              $1,484.4     $1,110.7          33.6%
Indirect Installment        123.2        120.3           2.4
Direct Installment           46.1         60.1         (23.3)
Other Consumer Loans         17.0         15.7           8.3
                         --------     --------      --------
                         $1,670.7     $1,306.8          21.0%
                         ========     ========      ========
</TABLE>



                                       26
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS





Credit Risk Management

Over the past year, Provident executed its previously described portfolio
strategies, balanced with identifying and building upon key in-market
relationships. Clear business and portfolio strategies provided focus to
relationship marketing and aggressive disposition of non-strategic portfolios
and problem loans.

The year ended 2003 resulted in marked change in the portfolio's composition. A
balance of risk and return, reduced volatility, and portfolio and franchise
suitability were important drivers of the change. Provident completed its
desired reduction of cash flow lending, culminated by the fourth quarter
accelerated sale of non-performing loans, the fourth quarter sale of a
significant amount of commercial airline exposure and the second quarter sale of
the nonconforming residential mortgage portfolio. Provident continues to
emphasize growth in its regional middle-market commercial lending, middle-market
leasing and prime home equity businesses as management believes these loans will
generate more predictable future earnings streams.

Enhanced processes have improved management's understanding of the portfolios
and the value of the continuing businesses and relationships. Active use of an
independent Special Assets Division, Portfolio Risk Review, and an expanded
Senior Credit Officer network allow Provident to ensure independent oversight
and improved communication of issues and problems throughout the portfolio. In
addition, Credit and Risk Management is responsible for establishing and
overseeing Provident's credit risk policies addressing underwriting standards,
internal lending limits and methodologies for monitoring credit risk within the
various loan and lease portfolios. These policies have enhanced initial and
ongoing risk management and monitoring capabilities.

Provident's analytical and reporting capacity provides timely and valuable
portfolio information. Loans and leases are primarily monitored by closely
following changes and trends in risk characteristics. The characteristics are
analyzed using various techniques, including: credit scoring models for consumer
and small business loans and leases and risk ratings for larger commercial,
commercial mortgage and commercial construction loans and leases. Risk ratings
are assigned based upon individual credit analysis and are aggregated for
reporting to senior management on a regular basis. Various analytics are the
basis for establishing portfolio wide targets and caution levels. Early trends
and thresholds trigger modifications in strategy and tactics including the use
of secondary market alternatives to liquidate and mitigate problem exposures and
portfolio segments.

Provident maintains a reserve for loan and lease losses to absorb losses from
current outstandings and potential usage of unfunded commitments. Discussion and
analysis of the estimates of losses as well as the overall credit quality of the
off-balance sheet lending portfolio is provided in Note 3 of the "Notes to
Consolidated Financial Statements." The following paragraphs provide information
concerning its on-balance sheet credit portfolio and unused commitments.

The reserve for loan and lease losses is maintained at a level which management
considers adequate to absorb inherent loan and lease losses given the conditions
at the time. The reserve is increased by the provision for


                                       27
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS



loan and lease losses. Loans and leases deemed uncollectible are charged off and
deducted from the reserve while recoveries on loans and leases previously
charged off are added back to the reserve.

The adequacy of the reserve for loan and lease losses is monitored on a regular
basis and reflects management's evaluation of numerous factors. These factors
include the quality of the current loan portfolio, the trend in the loan
portfolio's risk ratings, current economic conditions, specific industry trends,
loan concentrations, evaluation of specific loss estimates for all significant
problem loans, payment histories, collateral valuations, historic charge-off and
recovery experience, estimates of charge-offs for the upcoming year and other
pertinent information. Based upon the analyses and the improved credit risk
profile of the loan portfolio, Provident lowered its loan loss reserve to total
loans by 40 basis points to 1.80% during 2003 after lowering the reserve ratio
by 49 basis points in 2002.

Unfavorable business conditions and difficulties experienced by the airline
industry have caused Provident to take large loan loss provisions during the
past several years. Late in the fourth quarter of 2000, Provident placed three
large loans, totaling $52 million, on nonaccrual status. Additionally, several
large commercial loan charge-offs were recorded at that time. Nonaccrual loans
and charge-offs increased during 2001 as the economic climate continued to
deteriorate, particularly with regard to the airline industry. During 2001,
Provident recorded charge-offs, write-downs and additional provision of $66
million on commercial airline loans and leases. Another $15 million of provision
was recorded for industries other than commercial airlines that were related to
the events of September 11, 2001. During 2002, Provident recorded an additional
$34 million of credit costs related to the airline industry. Although the
economy remained sluggish during 2002, credit-related volatility began to
stabilize. During 2003, nonperforming assets declined $98.1 million and the
overall credit quality of the loan and lease portfolio improved dramatically.
This was due primarily to several related strategic actions taken during 2003,
including the second quarter sale of nearly all the subprime residential
mortgage loan portfolio and a substantial portion of its foreclosed properties,
and the fourth quarter sale of approximately $112 million of commercial loans
and leases, many of which involved financing to the commercial airline industry.
Included in the fourth quarter sale were approximately $38 million of
nonperforming assets. Additionally, Provident recorded $36 million of credit
costs related to the airline industry. As a result of the decline in
nonperforming assets, both the reserve to nonaccrual loans and nonperforming
assets ratios improved during 2003.



                                       28
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS



The following table shows selected information relating to Provident's reserve
for loan and lease losses:


<TABLE>
<CAPTION>
                                                           December 31,
                                   ------------------------------------------------------------
(In Thousands)                       2003         2002         2001         2000         1999
------------------------------     --------     --------     --------     --------     --------
<S>                                <C>          <C>          <C>          <C>          <C>
Reserve for Loan and Lease
 Losses at Beginning of Period     $201,051     $241,143     $159,118     $ 95,181     $ 80,179
Provision Charged to Expense        115,979       99,549      215,545      133,477       46,110
Acquired Reserves                        --           --       10,003        2,377        1,263
Loans and Leases Charged Off:
 Corporate Lending:
  Commercial                         58,446       81,371      105,711       63,497       25,145
  Mortgage                            1,200          183          844           96          247
  Construction                          117          850           --           --           --
  Lease Financing                    48,131       48,501       26,622        2,892        6,736
 Consumer Lending:
  Installment                         8,185        7,727        7,557        7,535       10,159
  Residential                        61,006       27,229       14,846        8,022          759
  Lease Financing                        89           --           --           --           --
                                   --------     --------     --------     --------     --------
      Total Charge-Offs             177,174      165,861      155,580       82,042       43,046
                                   --------     --------     --------     --------     --------
Recoveries:
 Corporate Lending:
  Commercial                          7,314       10,274        2,675        3,406        2,742
  Mortgage                               38          137            8           20           42
  Construction                          297           21           --           --           --
  Lease Financing                     7,083        9,821        3,068        1,290        3,102
 Consumer Lending:
  Installment                         3,021        4,615        4,990        5,282        4,523
  Residential                         2,372        1,352        1,316          127          266
  Lease Financing                        19           --           --           --           --
                                   --------     --------     --------     --------     --------
      Total Recoveries               20,144       26,220       12,057       10,125       10,675
                                   --------     --------     --------     --------     --------
Net Loans and Leases
 Charged Off                        157,030      139,641      143,523       71,917       32,371
                                   --------     --------     --------     --------     --------
Reserve for Loan and Lease
 Losses at End of Period           $160,000     $201,051     $241,143     $159,118     $ 95,181
                                   ========     ========     ========     ========     ========
</TABLE>



On a percentage basis, the following table provides annual net charge-offs to
average total loans and leases by category:


<TABLE>
<CAPTION>

                                                       December 31,
                               ------------------------------------------------------------
                                 2003          2002         2001         2000         1999
                               -------       -------      -------      -------      -------
<S>                            <C>           <C>          <C>          <C>          <C>
Corporate Lending:
 Commercial                       1.17%         1.65%        2.21%        1.38%         .63%
 Mortgage                          .12           .01          .10          .01          .04
 Construction                     (.03)          .15           --           --           --
 Lease Financing                  3.27          3.23         2.46          .42         1.29
Consumer Lending:
 Installment                       .35           .30          .33          .44          .96
 Residential                     22.04          3.51         1.34         2.04          .05
 Lease Financing                   .04            --           --           --           --
                               -------       -------      -------      -------      -------
Net Charge-Offs to Average
 Total Loans and Leases           1.73%         1.59%        1.63%        1.04%         .51%
                               =======       =======      =======      =======      =======

</TABLE>



Explanation as to significant changes in charge-offs follows:

-     Commercial: Net charge-offs to average loans were 1.17%, 1.65% and 2.21%
      for 2003, 2002 and 2001, respectively. The decrease in charge-offs in both
      2003 and 2002 was due primarily to a decrease in net charge-offs in the
      structured finance area, which is being de-emphasized. The increase in
      charge-offs for 2001 was due primarily to the overall deterioration in the
      economy, particularly in the airline industry. The increase in charge-offs

                                       29
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


      in 2000 was due primarily to the decline in asset quality indicators
      combined with the uncertain economic environment.

-     Commercial Lease Financings: Net charge-offs to average leases were 3.27%,
      3.23% and 2.46% for 2003, 2002 and 2001, respectively. The higher level of
      net charge-off percentage during 2003 and 2002 was due primarily to an
      increase in charge-offs related to aircraft exposures.

-     Residential: Net charge-offs to average loans were 22.04%, 3.51% and 1.34%
      for 2003, 2002 and 2001, respectively. The increase in charge-offs for
      2003 was due primarily to the $49.2 million charge-off taken in
      conjunction with the sale of $471 million of subprime residential mortgage
      loans that occurred during the second quarter of 2003. The increase in
      charge-offs for 2002 was due primarily to the $9.1 million charge-off
      taken in conjunction with the sale of $27 million of nonperforming
      residential mortgage loans that took place during the second quarter of
      2002. The increase in charge-offs for 2001 and 2000 was a result of
      nonconforming residential loans originated during the second half of 2000
      and the first half of 2001 being kept on the balance sheet.

The following table shows the dollar amount of the reserve for loan and lease
losses, using management's estimate, by principal loan and lease category. While
amounts are allocated to various portfolio categories, the total reserve, less
the portion attributable to reserves as prescribed under provisions of Statement
No. 114, "Accounting by Creditors for Impairment of a Loan," is available to
absorb losses from any loan or lease category.

<TABLE>
<CAPTION>

                                               December 31,
                       ------------------------------------------------------------
(In Thousands)           2003         2002         2001         2000         1999
------------------     --------     --------     --------     --------     --------
<S>                    <C>          <C>          <C>          <C>          <C>
Corporate Lending:
 Commercial            $104,486     $132,286     $168,248     $107,713     $ 73,992
 Mortgage                11,784       12,337        5,837        8,291        4,645
 Construction             4,575        5,393        7,430        5,622        2,192
 Lease Financing         30,694       28,690       26,303       13,407        4,344
                       --------     --------     --------     --------     --------
                        151,539      178,706      207,818      135,033       85,173
Consumer Lending:
 Installment              3,919        1,490        5,696        9,089        8,245
 Residential              3,298       20,855       27,629       14,996        1,763
 Lease Financing          1,244           --           --           --           --
                       --------     --------     --------     --------     --------
                          8,461       22,345       33,325       24,085       10,008
                       --------     --------     --------     --------     --------
                       $160,000     $201,051     $241,143     $159,118     $ 95,181
                       ========     ========     ========     ========     ========
</TABLE>

The reserves related to both corporate lending and consumer lending declined
during 2003 due to the reduction in nonperforming assets and improvement in the
risk profile of the lending portfolio. The changes in the corporate lending
reserves and their distribution between 2001 and 2002 resulted from numerous
factors, including: (1) the anticipated use of the reserves established as of
December 31, 2001 to absorb potential charge-offs in the commercial portfolio
stemming from the commercial airline industry as well as several unrelated
potential charge-offs in other industries; (2) the implementation of an enhanced
commercial-related reserve methodology; and (3) the transfer of several
commercial construction loans to commercial mortgage loan status. Additionally,
the reserves related to consumer lending declined due to the sale of higher risk
assets.



                                       30
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


The reserve levels are tested under various scenarios, primarily reflecting
different portfolio migration and roll rates. The rates used reflect those
experienced during periods of varied economic conditions. As would be expected,
the results indicate additional provision may be required to maintain adequate
reserves if the downside scenarios were to materialize.

The following table presents a summary of various indicators of credit quality:
<TABLE>
<CAPTION>
                                                              December 31,
                                    ----------------------------------------------------------------
(Dollars In Thousands)                2003          2002          2001          2000          1999
-------------------------------     --------      --------      --------      --------      --------
<S>                                 <C>           <C>           <C>           <C>           <C>
Nonaccrual Loans:
 Corporate Lending:
  Commercial                        $ 62,288      $ 99,805      $116,663      $ 74,401      $ 43,452
  Mortgage                             8,146        11,783         1,929         1,712         3,003
  Construction                         2,469         1,746         2,699            --           216
  Lease Financing                        514         4,008         7,986         6,503         1,309
                                    --------      --------      --------      --------      --------
                                      73,417       117,342       129,277        82,616        47,980
 Consumer Lending:
  Installment                             --            --            --            --            48
  Residential                          6,442        49,091        47,579        13,404         7,640
                                    --------      --------      --------      --------      --------
                                       6,442        49,091        47,579        13,404         7,688
                                    --------      --------      --------      --------      --------
 Total Nonaccrual Loans               79,859       166,433       176,856        96,020        55,668
Other Nonperforming Assets             4,299        15,780        20,907         8,805         3,870
                                    --------      --------      --------      --------      --------
Total Nonperforming Assets          $ 84,158      $182,213      $197,763      $104,825      $ 59,538
                                    ========      ========      ========      ========      ========
Loans 90 Days Past Due -
 Still Accruing                     $ 12,702      $ 29,918      $ 30,326      $ 28,203      $ 14,943
Loan and Lease Loss Reserve to:
  Total Loans and Leases                1.80%         2.20%         2.69%         1.99%         1.43%
  Nonaccrual Loans                    200.35        120.80        136.35        165.71        170.98
  Nonperforming Assets                190.12        110.34        121.94        151.79        159.87
Nonaccrual Loans to

 Total Loans and Leases                  .90          1.82          1.98          1.20           .84
Nonperforming Assets to:
  Total Loans, Leases and

   Other Nonperforming Assets            .95          1.99          2.20          1.31           .90
  Total Assets                           .49          1.04          1.19           .70           .50

</TABLE>



Loans and leases are generally placed on nonaccrual status when the payment of
principal and/or interest is past due 90 days or more. However, installment
loans and consumer finance leases are not placed on nonaccrual status because
they are charged off in the month the loans and leases reach 120 days past due.
In addition, loans that are well secured and in the process of collection are
not placed on nonaccrual status. When a loan is placed on nonaccrual status, any
interest income previously recognized that has not been received is reversed
from income. Future interest income is recorded only when a payment is received
and collection of principal is considered reasonably assured.

Although loans and leases may be classified as nonaccrual, many continue to pay
interest irregularly or at less than the original contractual rates. The gross
amount of interest income recognized during 2003 with respect to these loans and
leases was $0.9 million compared to $12.5 million that would have been
recognized had the loans and leases remained current in accordance with their
original terms.



                                       31
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Loans and leases that have been placed on nonaccrual status are further
evaluated for potential losses based upon review and discussion among Credit,
Portfolio Risk Review, lending officers, collection associates, and senior
management. Factors considered include the market value of collateral associated
with a specific loan or lease, cash flows generated by the borrower, third-party
guarantees, the general economic climate and any specific industry trends that
may affect an individual loan or lease. Total nonaccrual loans at December 31,
2003 were $79.9 million. In addition, $50.5 million of performing loans were
being closely monitored due to possible credit problems.

Nonaccrual loans decreased $86.6 million and other nonperforming assets
decreased $11.5 million during 2003 while nonaccrual loans decreased $10.4
million and other nonperforming assets decreased $5.1 million during 2002. The
following table shows the progression of nonaccrual loans and other
nonperforming assets during these time periods:



<TABLE>
<CAPTION>
                                     Corporate Lending
                          ---------------------------------------       Consumer        Total         Other            Total
                                            Real          Lease       Residential     Nonaccrual   Nonperforming   Nonperforming
(In Thousands)            Commercial       Estate       Financing      Mortgages        Loans          Assets        Assets
--------------            ----------       ------       ---------      ---------        -----          ------        ------
<S>                       <C>            <C>            <C>           <C>             <C>          <C>             <C>
Balance at
 January 1, 2002          $ 116,663      $   4,628      $   7,986      $  47,579      $ 176,856      $  20,907      $ 197,763
Additions                   108,021         12,147         15,757         75,133        211,058          4,012        215,070
Payments / Sales            (51,503)        (2,023)        (5,136)       (27,376)       (86,038)       (20,345)      (106,383)
Charge-Offs                 (73,076)        (1,033)       (14,599)       (23,055)      (111,763)        (4,481)      (116,244)
Transfers to Other
 Nonperforming Assets          (300)          (190)            --        (23,190)       (23,680)        23,680             --
Write-Downs                      --             --             --             --             --         (7,993)        (7,993)
                          ---------      ---------      ---------      ---------      ---------      ---------      ---------
Balance at
 December 31, 2002           99,805         13,529          4,008         49,091        166,433         15,780        182,213

Additions                    60,653          6,450          1,194         35,613        103,910          9,629        113,539
Payments / Sales            (44,220)        (7,819)        (1,718)       (51,838)      (105,595)       (34,848)      (140,443)
Charge-Offs                 (53,858)        (1,317)        (1,570)        (8,073)       (64,818)        (3,103)       (67,921)
Transfers to Other
 Nonperforming Assets           (92)          (228)        (1,400)       (18,351)       (20,071)        20,071             --
Write-Downs                      --             --             --             --             --         (3,230)        (3,230)
                          ---------      ---------      ---------      ---------      ---------      ---------      ---------
Balance at
 December 31, 2003        $  62,288      $  10,615      $     514      $   6,442      $  79,859      $   4,299      $  84,158
                          =========      =========      =========      =========      =========      =========      =========
</TABLE>


Noninterest Earning Assets

Leased equipment includes the leasing of automobiles to consumers and equipment
to commercial customers. As of December 31, 2003 and 2002, the cost of
automobiles, net of depreciation, was $1.4 billion and $2.1 billion,
respectively, and the cost of equipment, net of depreciation, was $245 million
and $266 million, respectively. The decrease in auto leases is due to the
amortization of the portfolio. Also, auto leases originated since February 2003
are classified as direct financing leases in the loan category as Provident
changed the structure of the residual insurance it obtains on its auto leases.
The sale of equipment leases is the primary reason for the decrease in equipment
leases.

Goodwill totaled $82 million and $83 million as of December 31, 2003 and 2002,
respectively. Goodwill represents the excess of the purchase price over net
identifiable tangible and intangible assets acquired in a purchase business
combination. Provident adopted the provisions of Statement of Financial
Accounting Standards (Statement) No. 141, "Business Combinations," and No. 142,
"Goodwill and Other Intangible Assets," on January 1, 2002. Under the new rules,
goodwill and intangible assets deemed to have indefinite lives are no longer
amortized but are subject to annual impairment tests in accordance with
Statement 142. Management performed an impairment test on its


                                       32
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


goodwill assets as of January 1, 2003 and determined that no impairment existed
as of that date. Other intangible assets continue to be amortized over their
useful lives. Additional information on goodwill and other intangibles is
provided in Note 8 of the "Notes to Consolidated Financial Statements."

Other assets decreased $67 million during 2003 and increased $41 million during
2002. The decrease in 2003 was primarily due to a decrease in the amount of
market value adjustments recorded in relation to Statement No. 133 "Accounting
for Derivative Instruments and Hedging Activities." The increase in 2002 was due
primarily to an increase in the amount of market value adjustments recorded in
relation to Statement No. 133.

Deposits

Deposits increased $487 million and $995 million during 2003 and 2002,
respectively. Deposits increased during 2003 despite a reduction of
approximately $883 million from the sale of Provident's Florida deposits that
occurred during the fourth quarter of 2003. Excluding the sale of Florida
deposits, average retail and commercial deposits increased 10% during 2003.
During 2002, commercial deposits increased 68% to $1.1 billion at December 31,
2002 from $637 million at December 31, 2001. The following table presents a
summary of period end deposit balances:

<TABLE>
<CAPTION>

                                                         December 31,
                                                --------------------------------
(In Millions)                                    2003        2002        2001
-------------                                    ----        ----        ----
<S>                                             <C>         <C>         <C>
Noninterest Bearing Deposits                    $ 1,491     $ 1,142     $   995
Interest Bearing Demand Deposits                    902       1,017         523
Savings Deposits                                  1,639       1,460       1,544
Certificates of Deposit Less than $100,000        1,828       2,621       2,551
Certificates of Deposit of $100,000 or More       4,476       3,609       3,241
                                                -------     -------     -------
                                                $10,336     $ 9,849     $ 8,854
                                                =======     =======     =======
</TABLE>

At December 31, 2003, maturities on certificates of deposit of $100,000 or more
were as follows (in millions):




<TABLE>
<S>                          <C>
3 months or less             $  307
Over 3 through 6 months         159
Over 6 through 12 months        273
Over 12 months                3,737
                             ------
  Total                      $4,476
                             ======
</TABLE>

Included in certificates of deposit of $100,000 or more at December 31, 2003,
2002 and 2001 were brokered deposits of $3.8 billion, $2.7 billion and $2.0
billion, respectively.

Provident issues brokered certificates of deposit with embedded call options
combined with interest rate swaps with matching call dates as part of its
certificate of deposit program. Provident has the right to redeem the
certificates of deposit on specific dates prior to their stated maturity while
the interest rate swaps are callable at the option of the swap counterparty. The
terms and conditions of the call options embedded in the interest rate swaps
match those of the certificates of deposit, offsetting any option risk exposure
to Provident. At December 31, 2003, Provident had $2.1 billion of brokered
callable certificates of deposit.



                                       33
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Borrowed Funds

Borrowed funds are an important component of total funds necessary to support
earning assets. In 2003, short-term debt decreased $482 million (25%) while
long-term debt decreased $544 million (14%). A decrease in federal funds
purchased and repurchase agreements was the primary reason for the decrease in
short-term debt. Prepayment of Federal Home Loan Bank borrowing and payments on
subordinated debt and debt issued as secured financings were the primary reasons
for the decrease in long-term debt. In 2002, short-term debt increased $40
million (2%) while long-term debt decreased $239 million (6%). An increase in
commercial paper borrowing was the primary reason for the increase in short-term
debt. Payments on medium-term notes and debt issued as secured financing were
the primary reasons for the decrease in long-term debt.

Minority Interest

During June 2002, Provident and its consolidated subsidiary, PFGI Capital
Corporation (PFGI Capital), issued 6.6 million of equity units (PRIDES) to
outside investors for $165 million. Provident Bank owns all of the $165 million
of Common Stock of PFGI Capital. The principal business objective of PFGI
Capital is to hold and manage commercial mortgage loan assets and other
authorized investments acquired from Provident Bank that will generate net
income for distribution to its stockholders. PFGI Capital has elected to be
treated as a real estate investment trust (REIT) for federal income tax
purposes.

Each PRIDES is comprised of two components - a 3-year forward purchase contract
and PFGI Capital Preferred Stock. Each forward purchase contract obligates the
holder to buy, on August 17, 2005, for $25, a number of newly issued shares of
Provident Common Stock equal to the "settlement rate." The PRIDES qualify as
Tier 1 Capital for regulatory capital purposes. Additional information
concerning the PRIDES instruments is provided in Note 13 of the "Notes to
Consolidated Financial Statements."

OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

Asset Securitization Activity

From 1996 through the second quarter of 2000, the structure of some of
Provident's securitizations resulted in the transactions being accounted for as
sales through the use of special purpose entities. As such, gains or losses were
recognized, loans and leases were removed from the balance sheet and residual
interest, representing the present value of future cash flows, was recorded.
During the third quarter of 2000, management decided to structure all future
securitizations as secured financings thereby eliminating the use of
gain-on-sale accounting and leaving all debt on the balance sheet.



                                       34
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


In December 2003, revised FASB Interpretation No. 46, "Consolidation of Variable
Interest Entities" (FIN 46R) was issued. FIN 46R addresses consolidation by
business enterprises of variable interest entities (VIEs). A VIE exists when (1)
the equity investment at risk is not sufficient to permit the entity to finance
its activities without additional subordinated financial support; (2) equity
investors do not have the ability to make decisions about the entity's
activities through voting rights or do not have the obligation/right to absorb
expected losses/residual returns of the entity; or (3) equity investors have
voting rights that are not proportionate to their economic interests and the
activities of the entity are conducted on behalf of an investor with a
disproportionately small voting interest. FIN 46R requires VIEs to be
consolidated by their primary beneficiaries. The primary beneficiary of a VIE is
the party that absorbs a majority of the entity's expected losses and/or
receives a majority of its expected residual returns as a result of holding
variable interests.

FIN 46R does not apply to qualifying special purpose entities (QSPE) as
described in Statement 140, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities." The securitization trusts created as
a result of these securitization transactions, with the exception of Provident
Bank Home Equity Loan Trust 1996-1 and 1996-2 (PCFS 96-1 and PCFS 96-2), meet
the applicable QSPE criteria under Statement 140.

As loans were sold to the PCFS 96-1 and PCFS 96-2 securitization trusts prior to
the effective date of Statement No. 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities," the securitization
trusts do not meet the definition of a QSPE and are now required to be
consolidated in Provident's financial statements as of December 31, 2003 based
on the provisions of FIN 46R. The consolidation of PCFS 96-1 and 96-2
securitization trusts resulted in an additional $14.1 million in loans being
recorded on Provident's balance sheet and an after-tax cumulative effect of
changes in accounting principles of $1.2 million being charged against earnings.

Securitization trusts created from 1997 to 2000 have not been consolidated. As
such, loans and leases sold to these securitization trusts are not included on
Provident's balance sheet. The following table provides a summary of the
outstanding balances of these off-balance sheet managed assets:


<TABLE>
<CAPTION>
                                            December 31,
                              ----------------------------------------
(In Thousands)                   2003           2002           2001
-------------------------     ----------     ----------     ----------
<S>                           <C>            <C>            <C>
Nonconforming Residential     $1,169,763     $1,779,127     $2,627,332
Prime Home Equity                133,472        194,775        303,527
Equipment Leases                  41,363         94,408        207,131
                              ----------     ----------     ----------
                              $1,344,598     $2,068,310     $3,137,990
                              ==========     ==========     ==========
</TABLE>



In connection with the sale of these loans and leases, Provident recorded
retained interest in securitized assets (RISAs), issued an unfunded secured
demand note and established credit enhancing collateral accounts. RISAs
represent the rights to future cash flows arising after the investors of the
securitization trusts have received the return for which they contracted. RISAs
are subordinate to investors of the securitization trust with its value subject
to prepayment risks, interest rate risks and credit risks on the transferred
assets. As of December 31, 2003, Provident's nonconforming residential RISAs
totaled $213.0 million, which included the fair value of


                                       35
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


the unfunded note of $97.6 million, and its Prime Home Equity RISAs totaled $6.4
million.

Provident has provided a liquidity commitment to its nonconforming residential
securitizations, treated as sales for financial reporting purposes, in the form
of an unfunded secured demand note backed by a AAA rated standby letter of
credit. The commitment is maintained in order to improve the credit grade of the
securitization and thereby reduce the rate paid to investors of the
securitization trust. As of December 31, 2003, the secured demand note could be
drawn up to $181 million.

Estimates of future losses on nonconforming residential securitizations are
$60.1 million which are considered in estimating the fair value and carrying
value of the RISA balance. Information concerning valuation analyses of the
RISAs, may be found in "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Critical Accounting Policies." Information
concerning the credit quality of the off-balance sheet loans and leases, as well
as additional details of the RISAs and credit collateral accounts is provided in
Note 3 of "Notes to Consolidated Financial Statements."

Provident's prime home equity and equipment lease securitizations, also treated
as sales, provide for the maintenance of cash collateral within the
securitization structure as additional collateral for investors. The collateral
is maintained at a significantly higher balance than the level of estimated
credit losses to improve the credit grade of the securitization and thereby
reduce the rate paid to investors of the securitization trust. As of December
31, 2003, $67.8 million of cash was being held in deposit accounts for this
purpose of which $34.5 million is held at Provident and is included in deposit
liabilities. As of year-end 2003, Provident estimates future losses of $833,000
will arise in the home equity and equipment leasing securitizations.

Fannie Mae DUS Program

Red Mortgage Capital, Inc. (Red Mortgage), a member of Red Capital Group, is an
approved Fannie Mae Delegated Underwriting and Servicing (DUS) mortgage lender.
Under the Fannie Mae DUS program, Red Mortgage underwrites, funds and sells
mortgage loans on multifamily rental projects. Red Mortgage then services these
mortgage loans on Fannie Mae's behalf. Participation in the Fannie Mae DUS
program requires Red Mortgage to share the risk of loan losses with Fannie Mae.
The substance of this loss sharing arrangement is that Red Mortgage and Fannie
Mae split losses with one-third of all losses assumed by Red Mortgage and
two-thirds of all losses assumed by Fannie Mae.

Red Mortgage services multifamily mortgage loans under the DUS program with
outstanding principal balances aggregating approximately $3.8 billion and $3.0
billion at December 31, 2003 and 2002, respectively. Red Mortgage has
established reserves of approximately $10.9 million and $8.7 million as of
December 31, 2003 and 2002, respectively, for possible losses under this
program. The reserve is determined by evaluating pools of homogenous loans and
includes information based upon property type and historical loss experience, as
well as the underlying collateral's recent operating performance. Management
believes the reserve is maintained at a level that adequately provides for the
inherent losses that would accrue to Red


                                       36
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Mortgage through its portfolio of DUS loans. At December 31, 2003, one DUS loan
with $13.1 million in unpaid principal balance, was in payment default. The
employees and management team of Red Mortgage have originated and serviced the
existing Fannie Mae DUS loan servicing portfolio since 1995 without any
charge-offs relating to the DUS loans.

Interest Rate Swaps and Caps

At December 31, 2003, Provident held $5.4 billion in interest rate swaps on
which it receives payments at fixed interest rates while making payments at
variable interest rates. These instruments are used primarily as a hedge to
offset time deposit accounts and debt where Provident must pay interest at fixed
rates. These derivatives essentially convert long-term fixed rate instruments
into shorter repricing instruments.

Provident also had $1.5 billion in interest rate swaps that it receives payments
at floating interest rates while making payments at fixed interest rates. The
primary use of these instruments is for off-balance sheet securitizations.
Provident is required to pay investors of these securitizations interest at a
floating rate, however, many of the underlying loans pay interest to Provident
at fixed or longer-term adjustable rates. The use of these interest rate swaps
allows Provident to offset the floating interest rate payments to the investors
with floating interest rates payments received from the interest rate swaps. The
fixed or longer-term adjustable interest rate payments received from the
underlying loans are used to offset the fixed rate interest payments required on
these interest rate swaps.

Provident has simultaneously purchased and sold approximately $2.5 billion in
interest rate caps, predominantly related to off-balance sheet mortgage
securities. Interest rate caps protect against the impact of rising interest
rates on interest-bearing financial instruments. When interest rates go above a
cap's strike rate, the cap provides for receipt of payments based on its
notional amounts.

The fair value of these interest rate swaps and caps are recorded on the
consolidated balance sheet as either other assets (derivatives with a positive
fair value) or as other liabilities (derivatives with a negative fair value) as
prescribed by Statement No. 133, "Accounting for Derivative Instruments and
Hedging Activities." For further details concerning Provident's interest rate
swaps and caps, see Note 19 of "Notes to Consolidated Financial Statements."

Forward Delivery Commitments

Provident enters into forward delivery contracts for the future delivery of
commercial real estate and residential mortgage loans at a specified interest
rate to reduce the interest rate risk associated with loans held for sale. As of
December 31, 2003, Provident had $74 million in forward delivery contracts.

Credit Risk Transfer Instruments

During 2001 and 2000, Provident entered into two credit risk transfer
transactions related to its auto lease originations. Both transactions are
designed to reduce Provident's exposure to credit losses. Under the 2000

                                       37
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


transaction, Provident transferred a substantial part of credit-related losses,
beyond a retained first loss piece, related to the then outstanding auto lease
pool. Similarly, the 2001 transaction enabled Provident to transfer a large
portion of its credit risk exposure related to its auto lease pool originated
during that year. As a result of these transactions, Provident was able to lower
its credit concentration in auto leasing while reducing its regulatory capital
requirements. As of December 31, 2003, the remaining unpaid auto lease balances
on the 2001 and 2000 credit risk transfer transactions were $0.4 billion and
$0.6 billion, respectively.

Credit Commitments, Standby Letters of Credit and Guarantees

Commitments to extend credit are financial instruments in which Provident agrees
to provide financing to customers based on predetermined terms and conditions.
Since many of the commitments to extend credit are expected to expire without
being drawn upon, the total commitment amounts do not necessarily represent
future cash requirements. As of December 31, 2003 and 2002, credit commitments
totaled $4.6 billion and $2.9 billion, respectively.

Standby letters of credit are primarily issued to support public and private
borrowing arrangements, including commercial paper, bond financing, and similar
transactions. The credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loan facilities to customers.
Provident had $248 million and $274 million in standby letters of credit as of
December 31, 2003 and 2002, respectively.

Provident Bank has issued a guarantee for a subsidiary to assist in its business
activities. This guarantee was made to Fannie Mae for the benefit of Red
Mortgage. Red Mortgage is an approved Fannie Mae Delegated Underwriting and
Servicing (DUS) mortgage lender. Participation in the Fannie Mae DUS program
requires Red Mortgage to share the risk of loan losses with Fannie Mae. For Red
Mortgage to participate in the Fannie Mae DUS program, Provident Bank provided a
guarantee to Fannie Mae that it would fulfill all payments required of Red
Mortgage under the loss sharing arrangement if Red Mortgage fails to meet its
obligations. The guarantee will continue until such time as the loss sharing
agreement is amended or Red Mortgage no longer shares the risk of loan losses
with Fannie Mae. The fair value of the guarantee, in the form of reserves for
losses under the Fannie Mae DUS program, has been established on Red Mortgage's
balance sheet. Additional information concerning the Fannie Mae DUS program may
be found under "Management Discussion and Analysis of Financial Condition and
Results of Operations - Fannie Mae DUS Program."

Liquidity

Adequate liquidity is necessary to meet the borrowing needs and deposit
withdrawal requirements of customers as well as to satisfy liabilities, fund
operations, support asset growth and pay dividends to shareholders. Management
forecasts that the largest liquidity needs during 2004 will come from growth in
the lending portfolio, maturing of retail and brokered certificates of deposit
and scheduled principal payments on long-term debt. Provident has a variety of
sources to meet these liquidity demands. First, management expects to issue new
certificates of deposit along with renewing many of its maturing certificates of
deposit. Management also projects growth within retail deposits and a decrease
in federal funds sold and reverse


                                       38
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


repurchase agreements. Additional sources of liquidity include the secured
financing of commercial and consumer loans and leases, whole-loan sales of
nonconforming residential loans and home equity loans and the availability to
borrow both short-term and long-term funds.

The following table represents Provident's estimated contractual obligations,
excluding short-term obligations, at December 31, 2003:


<TABLE>
<CAPTION>
                                  Less Than   From 1 to   From 3 to   More Than
(In Millions)                      1 Year      3 Years     5 Years     5 Years      Total
-------------                      ------      -------     -------     -------      -----
<S>                                <C>         <C>         <C>         <C>         <C>
Certificates of Deposit            $ 1,372     $ 1,617     $   975     $ 2,340     $ 6,304
Long-Term Debt                         498       1,725         402         674       3,299
Junior Subordinated Debentures          --          --          --         466         466
Rental Obligations                      15          27          22          50         114
                                   -------     -------     -------     -------     -------
                                   $ 1,885     $ 3,369     $ 1,399     $ 3,530     $10,183
                                   =======     =======     =======     =======     =======
</TABLE>




Provident does not have a significant amount of purchase obligations.
Information about Provident's off-balance sheet obligations, which cannot be
forecast as to dollar or time interval of payment, is discussed in the sections
titled "Asset Securitization Activity," "Interest Rate Swaps and Caps," "Forward
Delivery Commitments" and "Credit Commitments, Standby Letters of Credit and
Guarantees."

Consistent with Provident's contingent funding plan, management monitors the
potential impact of changes in its corporate ratings on existing and new
business transactions. Ratings related liquidity events may include reduced
availability of short-term federal funds, reduced availability to the surety
bond market that supports Provident Bank's Public Funds program and other
commitments provided to third parties in related business transactions. If such
ratings events are anticipated, management will take actions to enhance balance
sheet liquidity positions to meet liquidity needs. Such actions to enhance
liquidity positions were taken in connection with Provident's March 5, 2003
announcement related to the restatement of its earnings. In anticipation of
potential ratings downgrades, management took actions to enhance liquidity
positions, including issuance of additional brokered certificates of deposits.
Additional term liquidity reduces reliance on short-term funding and increases
the availability of collateral in the investment portfolio. Management will
continue to monitor events as the need may arise for further liquidity
enhancements in the future.

The parent company's primary liquidity needs during 2004 will be the payment of
dividends to its preferred and common shareholders, funds for activity of the
commercial paper operations and interest payments on junior subordinated
debentures. The major source of liquidity for the parent company is dividends
and interest paid to it by its subsidiaries. Provident received dividends of $65
million, $45 million and $15 million in 2003, 2002 and 2001, respectively. The
amount of dividends available for payment in 2004 by Provident Bank is
approximately $95.1 million, plus 2004 net income.

The parent company also received interest payments of $24.2 million, $25.4
million and $24.9 million for the years ended December 31, 2003, 2002 and 2001,
respectively, from its subsidiaries. These interest payments were primarily the
result of $249.5 million of subordinated debt loaned to Provident Bank. The
subordinated debt matures during 2009 and 2010. Management believes that
dividends and interest payments from Provident Bank


                                       39
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


will be sufficient to meet the parent company's liquidity requirements in 2004.

Funding for the sale of the Florida deposits, loans and branches, which occurred
in the fourth quarter of 2003, came from proceeds from the second quarter sale
of subprime residential mortgage loans, repayments on and sales of investment
securities, and from general corporate funding.

CAPITAL RESOURCES

Total stockholders' equity at December 31, 2003 and 2002 was $899 million and
$880 million, respectively. The change in the equity balance relates primarily
to net income exceeding dividends by $48 million, an increase in the market
value of cash flow hedging instruments of $30 million (net of deferred taxes)
and a decrease in the market value of investment securities of $67 million, (net
of deferred taxes).

Provident's capital expenditure program typically includes the purchase of
computer equipment and software, branch additions and enhancements, ATM
additions and office building renovations. Capital expenditures for 2004 are
estimated to be approximately $31 million and include the purchase of data
processing hardware and software, branch additions, renovations and
enhancements, facility renovations and ATMs. Management believes that currently
available funds and funds provided by normal operations will be sufficient to
meet these capital expenditure requirements.

The following table of ratios is important for an analysis of capital adequacy:


<TABLE>
<CAPTION>
                                                              Year Ended December 31,
                                                         -------------------------------
                                                           2003        2002        2001
                                                         -------     -------     -------
<S>                                                      <C>         <C>         <C>
Average Shareholders' Equity to Average Assets              5.00%       5.12%       5.59%
Average Tangible Shareholders' Equity to
  Average Tangible Assets                                   4.49        4.55        5.00
Period End Shareholders' Equity to Period End Assets        5.28        5.02        4.84
Period End Tangible Shareholders' Equity to
  Period End Tangible Assets                                4.79        4.49        4.26
Dividend Payout to Net Earnings                            50.16       50.64         n/m
Tier 1 Capital to Risk-Weighted Assets                     10.59        9.40        7.95
Total Risk-Based Capital To Risk-Weighted Assets           12.44       11.42       10.71
Tier 1 Leverage Ratio                                       8.13        7.81        6.65
</TABLE>

----------
n/m - not meaningful



Risk-based capital guidelines established by the Federal Reserve Board set
minimum capital requirements and require institutions to calculate risk-based
capital ratios by assigning risk weightings to assets and off-balance sheet
items. Provident is required to maintain minimum ratios of 4.00% for Tier 1
capital to average assets, 4.00% for Tier 1 capital to risk-weighted assets, and
8.00% for total risk-based capital to risk-weighted assets. These guidelines
further define "well-capitalized" levels for Tier 1, total risk-based capital,
and leverage ratio purposes at 6%, 10% and 5%, respectively. Provident has
consistently maintained regulatory capital ratios at or above the
well-capitalized standards. For further detail on capital ratios, see Note 15 of
the "Notes to Consolidated Financial Statements."



                                       40
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


As noted in earlier sections of this report, during the second quarter of 2002,
Provident issued $165 million of PRIDES in connection with the formation of PFGI
Capital. These equity units qualify as Tier 1 Capital in Provident's calculation
of regulatory capital ratios.

CRITICAL ACCOUNTING POLICIES

Note 1 to the "Notes to Consolidated Financial Statements" lists significant
accounting policies used in the development and presentation of Provident's
financial statements. However, four of these accounting policies are considered
to be critical due to the level of sensitivity and subjectivity of their
underlying accounting estimates. These critical accounting policies concern the
reserve for loan and lease losses; securities; mortgage servicing assets; and
derivative financial instruments.

Adequacy of the Reserve for Loan and Lease Losses: Provident maintains a reserve
to absorb potential loan and lease losses inherent in its lending portfolio.
Management's determination of the adequacy of the loan loss reserve is based on
an assessment of the potential losses given the conditions at the time. This
assessment consists of certain loans and leases being evaluated on an individual
basis, as well as all loans and leases being categorized based on common credit
risk attributes and being evaluated as a group. Management evaluates numerous
factors including the credit quality of the current loan portfolio, the trend in
the loan portfolio's risk ratings, current economic conditions, specific
industry trends, loan concentrations, evaluation of specific loss estimates for
all significant problem loans, payment histories, collateral valuations,
historical charge-off and recovery experience, estimates of charge-offs for the
upcoming year and other relevant information.

Loans and leases that have been placed on classified and/or nonaccrual status
are further evaluated for potential losses based upon review and discussion
among Credit, Portfolio Risk Review, lending officers, collection associates,
and senior management. Factors considered include the market value of collateral
or real estate associated with a specific loan or lease, cash flows generated by
the borrower, third-party guarantees, the general economic climate and any
specific industry trends that may affect an individual loan or lease.

Additional loss estimates associated with securitized assets and loans sold
under the Fannie Mae DUS Program are provided for separately from the reserve
for loan and lease losses. For more information on credit exposures on these
off-balance sheet assets, see "Management Discussion and Analysis of Financial
Condition and Results of Operations - Off-Balance Sheet and Derivative
Arrangements" and Note 20 of the "Notes to Consolidated Financial Statements."

Valuation of Securities: Securities are accounted for in accordance with
Statement No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." Provident classifies its securities as available for sale or
trading. Securities classified as available for sale are intended to be held for
indefinite periods of time. These securities are stated at fair value with
unrealized gains and losses (net of taxes) reported as a separate component of
shareholders' equity. Securities purchased with the intention of selling them in
the near term are classified as trading. These securities are


                                       41
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


carried at fair value with unrealized gains and losses included in noninterest
income.

The fair value of securities are based on quoted market prices, where available.
If quoted market prices are not available, fair values are based on quoted
market prices of comparable instruments.

Included within securities available for sale are retained interest in
securitized assets. As quoted market prices are not available for RISAs,
Provident estimates the fair value based on key assumptions, including
prepayment speeds, credit losses, forward yield curves, and discount rates
commensurate with the risks involved.

Provident monitors the valuation of the RISAs on a monthly basis. The valuation
centers primarily around two estimates: total life-time credit losses and the
constant prepayment rate (CPR). During 2002 and 2003, both of these factors
trended upward which has had an unfavorable impact on the nonconforming
residential RISA valuation. Additionally, the CPR has also been impacted by
management's decision to accelerate the liquidation of other real estate
associated with the securitized nonconforming residential portfolio. Provident
models a CPR range from 30% to 36% with the actual trailing three-month CPR
currently running at 31.4%. If the CPR stays at its current level, management
estimates that there would be sufficient cash flows to absorb lifetime losses up
to 7.1%. If the CPR rises to 36%, there would be sufficient cash flows to absorb
lifetime losses up to 6.7%. Cumulative incurred losses through December 31, 2003
are 5.6%, with estimated total lifetime losses expected to be 6.5%. At December
31, 2003, management believes the current carrying value of the RISAs are
properly stated. Additional sensitivity analyses is provided in Note 3 of the
"Notes to Consolidated Financial Statements."

Valuation of Mortgage Servicing Rights: Provident recognizes the rights to
service mortgage loans it does not own but services for others within Other
Assets of its balance sheet. Mortgage servicing assets are carried at the lower
of the initial carrying value, adjusted for amortization, or estimated fair
value. Estimated fair value is based on projected discounted cash flows which
take into consideration estimated servicing fees, prepayment speeds, discount
rates, earnings on deposit of escrow funds and other assumptions. The mortgage
loan prepayment rate is the most significant factor driving the value of
mortgage servicing assets. Increases in mortgage loan prepayments reduce
estimated future servicing cash flows because the life of the underlying loan is
reduced. Mortgage servicing rights are tested quarterly to verify the market
value equals or exceeds its carrying value. During 2003, Provident recorded a
$1.8 million net impairment charge to its mortgage servicing assets. Impairment
charges result in an increase to the mortgage servicing valuation allowance.

Other-than-temporary impairment is recognized when the recoverability of a
recorded valuation allowance is determined to be remote, taking into
consideration historical and projected interest rates and loan payoff activity.
When this situation occurs, the unrecoverable portion of the valuation allowance
is applied as a direct write-down to the carrying value of mortgage servicing
assets. Unlike a valuation allowance, a direct write-down permanently reduces
the carrying value of mortgage servicing assets and the valuation allowance,
precluding subsequent recoveries. During 2003,


                                       42
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Provident incurred $0.3 million in other-than-temporary impairment. Additional
information on mortgage servicing assets is provided in Note 9 of the "Notes to
Consolidated Financial Statements."

Valuation of Derivative Financial Instruments: Derivative Financial Instruments
are accounted for using the provisions of Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities." Statement 133 requires that
derivatives be recognized as either assets or liabilities in the balance sheet
and that those instruments be measured at fair value. The accounting for the
gain or loss resulting from the change in fair value depends on the intended use
of the derivative. For a derivative used to hedge changes in fair value of a
recognized asset or liability, or an unrecognized firm commitment, the gain or
loss on the derivative will be recognized in earnings together with the
offsetting loss or gain on the hedged item. This results in earnings recognition
only to the extent that the hedge is ineffective in achieving offsetting changes
in fair value. For a derivative used to hedge changes in cash flows associated
with forecasted transactions, the gain or loss on the effective portion of the
derivative will be deferred, and reported as accumulated other comprehensive
income, a component of shareholders' equity, until such time the hedged
transaction affects earnings. For derivative instruments not accounted for as
hedges, changes in fair value are required to be recognized in earnings. Note 19
of the "Notes to Consolidated Financial Statements" provides additional detail
on the accounting for financial derivative instruments and hedging activities.

The valuation of the financial derivative instruments is based on third-party
valuations. These valuations use discounted cash flow modeling techniques, which
require the use of assumptions concerning the amount and timing of future cash
flows. These estimates have a significant impact on the valuation of the
derivatives.



                                       43
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The responsibility of monitoring and managing market and liquidity risk is
assigned to the Asset Liability Committee (ALCO). The main component of market
risk is the risk of loss in the value of financial instruments that may result
from the changes in interest rates. ALCO is bound to guidelines stated in the
relevant policies approved by the Board of Directors.

In addition to the natural balance sheet hedges, ALCO utilizes derivative
instruments to manage interest rate risk on and off its balance sheet. Interest
rate swaps and caps are the most widely used tools to manage interest rate risk.

Provident uses an earnings simulation model to analyze net interest income
sensitivity to movements in interest rates. The model evaluates the effect of
changes in interest rates on net interest income by running various interest
rate scenarios up and down from a flat rate scenario. As a basis for strategic
interest rate risk management, the ALCO group periodically analyzes the impact
of additional interest rate scenarios on net interest income in addition to the
standard scenarios used for policy measurement. These rate scenarios are
established by ALCO and incorporate changes to the slope of the yield curve. The
balance sheet assumptions, including loan growth, funding mix, and prepayment
speeds primarily on mortgage related products, are adjusted for each rate
scenario. Market-based prepayment speeds are incorporated into the analysis,
particularly for mortgage related products, including investment portfolio
securities. Faster prepayments during low interest rate environments such as the
current levels negatively impact interest rate margins due to lower reinvestment
yields.

Provident's policy limit stipulates that the negative impact on net interest
income from a +/-200 basis points, 12 month gradual parallel ramp rate scenario
as compared to the flat rate scenario cannot exceed 10 percent over the next 12
month period. These tests are performed on a monthly basis, and the results are
presented to the Board of Directors. Based on the results of the simulation
model, net interest income would change by the following over the next 12-month
period:


<TABLE>
<CAPTION>
                                 2003          2002
                                -----         -------
<S>                             <C>           <C>
100 Basis Points Decrease       (3.74%)       (3.92%)
100 Basis Points Increase        0.54%         0.55%

200 Basis Points Decrease         n/a           n/a
200 Basis Points Increase        0.03%        (0.52%)
</TABLE>




Due to the current low interest rate environment, nothing beyond a 100 basis
point decrease was simulated.

Although primarily classified as leased equipment, Provident continues to
include all of its auto leases in its interest sensitivity analysis.

ALCO regularly incorporates discussions and analyses of market risk embedded in
off-balance sheet activities as well as on non-interest income items such as
loan sale premiums. ALCO actively monitors the impact of related market risk
since these premiums are sensitive to changes in interest rates.



                                       44
<PAGE>
         PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES

All transaction accounts are regularly analyzed for embedded market risk. These
accounts are evaluated with respect to their repricing characteristics as well
as their expected average lives. ALCO actively monitors the behavioral
characteristics of these products. Managed account rates adjust slower and at
smaller increments than short-term rates due to the competitive environment.
During the current low rate environment, such price rigidities negatively impact
interest rate margins in the short run; however, the long-term profitability and
liquidity characteristics of these accounts are very attractive.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S>                                                                <C>
Report of Ernst & Young LLP, Independent Auditors ............     46

Financial Statements:

Provident Financial Group, Inc. and Subsidiaries

    Consolidated Balance Sheets ..............................     47
    Consolidated Statements of Income ........................     48
    Consolidated Statements of Changes in Shareholders' Equity     49
    Consolidated Statements of Cash Flows ....................     50
    Notes to Consolidated Financial Statements ...............     51

Supplementary Data:

Quarterly Consolidated Results of Operations (unaudited) .....     92


</TABLE>







                                       45
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


                REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors and Shareholders
Provident Financial Group, Inc.

We have audited the accompanying consolidated balance sheets of Provident
Financial Group, Inc. and subsidiaries as of December 31, 2003 and 2002, and the
related consolidated statements of income, changes in shareholders' equity and
cash flows for each of the three years in the period ended December 31, 2003.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Provident Financial Group, Inc. and subsidiaries at December 31, 2003 and 2002,
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended December 31, 2003, in conformity with
accounting principles generally accepted in the United States.

As discussed in Note 3 to the consolidated financial statements, on December 31,
2003, Provident Financial Group, Inc. changed its method of consolidation in
accordance with FASB Interpretation No. 46, "Consolidation of Variable Interest
Entities." Also, as discussed in Note 8 to the consolidated financial
statements, in 2002 Provident Financial Group, Inc. changed its method of
accounting for goodwill in accordance with Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets."




                                             /s/ ERNST & YOUNG LLP



Cincinnati, Ohio
January 17, 2004
Except for Note 24, as to which the date is
February 17, 2004


                                       46





<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  December 31,
                                                          -----------------------------
(Dollars in Thousands)                                        2003             2002
------------------------------------------------------    ------------     ------------
<S>                                                       <C>              <C>
ASSETS
  Cash and Due from Banks                                 $    273,299     $    351,994
  Federal Funds Sold and Reverse Repurchase Agreements         253,273          188,925
  Trading Account Securities                                   119,646          127,848
  Loans and Leases Held for Sale                               595,505          436,884
  Investment Securities Available for Sale
   (amortized cost - $4,574,477 and $4,158,511)              4,527,912        4,215,238
  Loans and Leases:
    Corporate Lending:
      Commercial                                             4,038,545        4,482,373
      Mortgage                                                 961,939          960,636
      Construction                                             452,581          510,331
      Lease Financing                                        1,275,255        1,273,901
    Consumer Lending:
      Installment                                            1,670,667        1,306,761
      Residential                                               36,241          599,793
      Lease Financing                                          460,302                -
                                                          ------------     ------------
        Total Loans and Leases                               8,895,530        9,133,795
      Reserve for Loan and Lease Losses                       (160,000)        (201,051)
                                                          ------------     ------------
        Net Loans and Leases                                 8,735,530        8,932,744
  Leased Equipment                                           1,653,264        2,350,356
  Premises and Equipment                                        92,837          101,513
  Goodwill                                                      81,801           82,651
  Other Assets                                                 684,438          751,856
                                                          ------------     ------------
TOTAL ASSETS                                              $ 17,017,505     $ 17,540,009
                                                          ============     ============

LIABILITIES AND SHAREHOLDERS' EQUITY
  Liabilities:
    Deposits:
      Noninterest Bearing                                 $  1,491,473     $  1,141,990
      Interest Bearing                                       8,844,245        8,706,989
                                                          ------------     ------------
        Total Deposits                                      10,335,718        9,848,979
    Short-Term Debt                                          1,443,438        1,925,005
    Long-Term Debt                                           3,298,930        3,842,657
    Junior Subordinated Debentures                             465,799                -
    Guaranteed Preferred Beneficial Interests in
     Company's Junior Subordinated Debentures                        -          451,074
    Minority Interest                                          160,966          160,966
    Accrued Interest and Other Liabilities                     413,600          430,957
                                                          ------------     ------------
        Total Liabilities                                   16,118,451       16,659,638
  Shareholders' Equity:
    Preferred Stock, 5,000,000 Shares Authorized:
     Series D, 70,272 Issued                                     7,000            7,000
    Common Stock, No Par Value, 110,000,000 Shares
     Authorized, 49,039,997 and 48,760,462 Issued               14,538           14,454
    Capital Surplus                                            305,632          298,025
    Retained Earnings                                          652,206          604,013
    Accumulated Other Comprehensive Loss                       (80,322)         (43,121)
                                                          ------------     ------------
        Total Shareholders' Equity                             899,054          880,371
                                                          ------------     ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                $ 17,017,505     $ 17,540,009
                                                          ============     ============
</TABLE>


See notes to consolidated financial statements.


                                       47
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                        Year Ended December 31,
                                                 ------------------------------------
(In Thousands, Except Per Share Data)               2003          2002        2001
---------------------------------------------    ---------     ---------    ---------
<S>                                              <C>           <C>          <C>
Interest Income:
 Interest and Fees on Loans and Leases           $ 535,158     $ 600,460    $ 747,930
 Interest on Investment Securities                 186,427       217,595      204,304
 Other Interest Income                              35,973        23,333       21,061
                                                 ---------     ---------    ---------
   Total Interest Income                           757,558       841,388      973,295
Interest Expense:
 Interest on Deposits:
  Savings and Demand Deposits                       42,140        38,748       68,559
  Time Deposits                                    173,501       223,424      317,810
                                                 ---------     ---------    ---------
   Total Interest on Deposits                      215,641       262,172      386,369
 Interest on Short-Term Debt                        31,231        35,642       55,819
 Interest on Long-Term Debt                        176,642       204,742      230,061
 Interest on Junior Subordinated Debentures         18,252        23,274       30,551
                                                 ---------     ---------    ---------
  Total Interest Expense                           441,766       525,830      702,800
                                                 ---------     ---------    ---------
   Net Interest Income                             315,792       315,558      270,495
Provision for Loan and Lease Losses                115,979        99,549      215,545
                                                 ---------     ---------    ---------
 Net Interest Income After Provision for
  Loan and Lease Losses                            199,813       216,009       54,950
Noninterest Income:
 Service Charges on Deposit Accounts                50,023        45,184       39,924
 Loan Servicing Fees                                40,163        36,980       34,469
 Commercial Mortgage Banking Revenue                44,791        25,354       29,490
 Other Service Charges and Fees                     50,935        45,418       37,390
 Leasing Income                                    510,109       605,887      584,065
 Cash Gain on Sales of Loans and Leases             20,333        15,691        6,311
 Warrant Gains                                       1,636         8,186          412
 Net Security Gains                                  6,307         2,596            -
 Net Gain on Florida Assets and Liabilities         74,998             -            -
 Net Gain on Merchant Services Business             19,000             -            -
 Other                                              26,994        20,196       24,375
                                                 ---------     ---------    ---------
  Total Noninterest Income                         845,289       805,492      756,436
Noninterest Expense:
 Salaries, Wages and Benefits                      253,399       233,178      201,715
 Charges and Fees                                   32,152        30,531       31,888
 Occupancy                                          25,365        23,637       22,605
 Leasing Expense                                   365,408       416,508      402,372
 Equipment Expense                                  26,285        24,345       25,234
 Professional Fees                                  32,667        25,990       24,507
 Minority Interest Expense                          12,788         7,069            -
 Debt Retirement Charge                             25,584             -            -
 Disposition Cost of Subprime Loans                  6,914             -            -
 Other                                             119,493       114,770      104,663
                                                 ---------     ---------    ---------
  Total Noninterest Expenses                       900,055       876,028      812,984
                                                 ---------     ---------    ---------
   Income (Loss) Before Income Taxes and
   Cumulative Effect of Changes in
   Accounting Principles                           145,047       145,473       (1,598)
Applicable Income Taxes                             47,145        50,022         (595)
                                                 ---------     ---------    ---------
   Income (Loss) Before Cumulative Effect
   of Changes in Accounting Principles              97,902        95,451       (1,003)
Cumulative Effect of Changes in
   Accounting Principles                            (1,202)            -            -
                                                 ---------     ---------    ---------
  Net Income (Loss)                              $  96,700     $  95,451    $  (1,003)
                                                 =========     =========    =========
Before Cumulative Effect of Changes in
   Accounting Principles:
     Basic Earnings (Loss) Per Common Share      $    1.99     $    1.94    $    (.04)
     Diluted Earnings (Loss) Per Common Share         1.92          1.88         (.04)
After Cumulative Effect of Changes in
   Accounting Principles:
     Basic Earnings (Loss) Per Common Share      $    1.96     $    1.94    $    (.04)
     Diluted Earnings (Loss) Per Common Share         1.90          1.88         (.04)

Cash Dividends Paid Per Common Share                   .96           .96          .96
</TABLE>


See notes to consolidated financial statements.


                                       48
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                                     Accumulated
                                                    Common                                              Other
(In Thousands,                    Preferred   ---------------------      Capital       Retained     Comprehensive
 Except Per Share Data)             Stock      Shares       Stock        Surplus       Earnings       Loss, Net        Total
-------------------------------   ---------   --------   ----------   ------------   ------------   -------------   -----------
<S>                               <C>         <C>        <C>          <C>            <C>            <C>             <C>
Balance at January 1, 2001            7,000    48,814       14,469        314,895        605,923        (17,929)       924,358
Net Loss                                                                                  (1,003)                       (1,003)
Other Comprehensive
 Income, Net of Tax:
 Cumulative Effect of a Change
  in Accounting Principle                                                                               (28,332)       (28,332)
 Change in Unrealized
  Gains (Losses) on:
   Hedging Instruments                                                                                  (54,411)       (54,411)
   Marketable Securities                                                                                  1,976          1,976
                                                                                                                    -----------
    Total Comprehensive Loss                                                                                           (81,770)
Cash Dividends Declared on:
 Common Stock ($.96/share)                                                               (47,053)                      (47,053)
 Preferred Stock ($13.50/share)                                                             (949)                         (949)
Exercise of Stock Options and
 Accompanying Tax Benefits                        375          113          6,477                                        6,590
Distribution of Contingent
 Shares for Prior Year
 Acquisition                                       28            8            822                                          830
Stock Purchased and Cancelled                     (11)          (3)          (243)                                        (246)
Other                                                                          73                                           73
                                  ---------   --------   ----------   ------------   ------------   ------------    -----------
Balance at December 31, 2001          7,000    49,206       14,587        322,024        556,918        (98,696)       801,833
Net Income                                                                                95,451                        95,451
Other Comprehensive
 Income, Net of Tax:
 Change in Unrealized
  Gains (Losses) on:
   Hedging Instruments                                                                                    2,813          2,813
   Marketable Securities                                                                                 52,762         52,762
                                                                                                                    -----------
    Total Comprehensive Income                                                                                         151,026
Cash Dividends Declared on:
 Common Stock ($.96/share)                                                               (47,385)                      (47,385)
 Preferred Stock ($13.50/share)                                                             (949)                         (949)
Exercise of Stock Options and
 Accompanying Tax Benefits                        336          101          5,200                                        5,301
Benefit Plan Assets in
 Provident Stock                                 (781)        (234)       (22,258)           (22)                      (22,514)
Costs and Present Value of
 Contract Payments of
 PRIDES Securities                                                         (6,917)                                      (6,917)
Stock Purchased and Cancelled                      (1)                        (24)                                         (24)
                                  ---------   --------   ----------   ------------   ------------   ------------    -----------
Balance at December 31, 2002        $ 7,000    48,760     $ 14,454      $ 298,025      $ 604,013      $ (43,121)     $ 880,371
Net Income                                                                                96,700                        96,700
Other Comprehensive
 Income, Net of Tax:
 Change in Unrealized
  Gains (Losses) on:
   Hedging Instruments                                                                                   29,824         29,824
   Marketable Securities                                                                                (67,025)       (67,025)
                                                                                                                    -----------
    Total Comprehensive Income                                                                                          59,499
Cash Dividends Declared on:
 Common Stock ($.96/share)                                                               (47,554)                      (47,554)
 Preferred Stock ($13.50/share)                                                             (949)                         (949)
Exercise of Stock Options and
 Accompanying Tax Benefits                        336          101          7,831                                        7,932
Benefit Plan Assets in
 Provident Stock                                  (56)         (17)        (1,267)            (4)                       (1,288)
Expensing of Stock Options,
 Net of Tax                                                                 1,043                                        1,043
                                  ---------   --------   ----------   ------------   ------------   ------------    -----------
Balance at December 31, 2003        $ 7,000    49,040     $ 14,538      $ 305,632      $ 652,206      $ (80,322)     $ 899,054
                                  =========   ========   ==========   ============   ============   ============    ===========
</TABLE>


See notes to consolidated financial statements.


                                       49
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
                                                          -------------------------------------------
(In Thousands)                                               2003            2002            2001
------------------------------------------------------    -----------     -----------     -----------
<S>                                                       <C>             <C>             <C>
Operating Activities:
 Net Income (Loss)                                        $    96,700     $    95,451     $    (1,003)
 Adjustments to Reconcile Net Income to Net Cash
  Provided by (Used in) Operating Activities:
   Provision for Loan and Lease Losses                        115,979          99,549         215,545
   Other Amortization and Accretion                            71,101          26,654           4,400
   Depreciation of Leased Equipment                           366,731         419,438         387,235
   Depreciation of Premises and Equipment                      23,764          22,088          22,482
   Impairment Charge on Mortgage Servicing Assets               1,844             539               -
   Tax Benefit Received from Exercise of Stock Options          1,570           1,069           2,706
   Expensing of Stock Option Grants                             1,259               -               -
   Gain on Sale of Florida Assets and Liabilities             (74,998)              -               -
   Gain on Sale of Merchant Services                          (19,000)              -               -
   Realized Investment Security Gains                          (6,307)         (2,596)              -
   Proceeds From Sale of Loans Held for Sale                4,464,905       3,065,139       2,825,184
   Origination of Loans Held for Sale                      (4,610,822)     (3,270,407)     (2,834,074)
   Realized Gains on Loans Held for Sale                      (12,704)        (13,702)         (2,856)
   (Increase) Decrease in Trading Account Securities            8,202         (11,368)        (59,207)
   (Increase) Decrease in Interest Receivable                 (22,389)          1,171           4,402
   Increase in Other Assets                                   (13,514)         (6,250)       (144,760)
   Decrease in Interest Payable                                (5,886)         (4,745)         (4,099)
   Increase (Decrease) in Deferred Income Taxes                53,316          22,550         (12,249)
   Increase (Decrease) in Other Liabilities                   (71,048)        (62,728)         57,930
                                                          -----------     -----------     -----------
    Net Cash Provided by Operating Activities                 368,703         381,852         461,636
                                                          -----------     -----------     -----------
Investing Activities:
 Investment Securities Available for Sale:
  Proceeds from Sales                                       3,018,207       1,423,825       2,264,759
  Proceeds from Maturities and Prepayments                  1,794,394       1,282,271       1,120,965
  Purchases                                                (5,087,300)     (3,347,912)     (3,367,243)
 Net Increase in Loans and Leases                            (288,422)       (320,208)     (1,085,819)
 Net (Increase) Decrease in Leased Equipment                  330,361        (118,400)       (652,695)
 Net Increase in Premises and Equipment                       (21,657)        (20,516)        (21,648)
 Net Cash Paid in Sale of Florida Operations
    and Merchant Services                                    (410,287)              -               -
                                                          -----------     -----------     -----------
  Net Cash Used in Investing Activities                      (664,704)     (1,100,940)     (1,741,681)
                                                          -----------     -----------     -----------
Financing Activities:
 Net Increase in Deposits                                   1,436,516         882,968          43,254
 Net Increase (Decrease) in Short-Term Debt                  (481,567)         39,696       1,246,286
 Principal Payments on Long-Term Debt                        (631,154)       (366,959)       (259,041)
 Proceeds from Issuance of Long-Term Debt and
  Junior Subordinated Debentures                                    -          86,239         426,032
 Proceeds from Issuance of Minority Interest                        -         160,966               -
 Cash Dividends Paid                                          (48,503)        (48,334)        (48,002)
 Repurchase of Common Stock                                         -             (24)           (246)
 Proceeds from Exercise of Stock Options                        6,362           4,232           3,884
 Net Increase in Other Equity Items                                 -               -              73
                                                          -----------     -----------     -----------
  Net Cash Provided by Financing Activities                   281,654         758,784       1,412,240
                                                          -----------     -----------     -----------
   Increase (Decrease) in Cash and Cash Equivalents           (14,347)         39,696         132,195
Cash and Cash Equivalents at Beginning of Period              540,919         501,223         369,028
                                                          -----------     -----------     -----------
   Cash and Cash Equivalents at End of Period             $   526,572     $   540,919     $   501,223
                                                          ===========     ===========     ===========
Supplemental Disclosures of Cash Flow Information:
 Cash Paid for:
  Interest                                                $   447,652     $   464,821     $   634,239
  Income Taxes                                                  2,786           6,318          20,044
 Non-Cash Activity:
  Transfer of Loans and Premises and Equipment
   to Other Real Estate                                        20,071          23,680          22,444
</TABLE>


See notes to consolidated financial statements.


                                       50
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - ACCOUNTING POLICIES: The following is a summary of significant
accounting policies:

NATURE OF OPERATIONS: Provident Financial Group, Inc. (Provident) is a bank
holding company headquartered in Cincinnati, Ohio. Provident operates bank and
other financial service subsidiaries principally in Ohio and northern Kentucky.
Principal products and services provided by Provident include commercial
lending, lease financing, cash management, retail lending, deposit accounts,
mortgage banking, brokerage services, investment products and trust services.

BASIS OF PRESENTATION: The accounting and reporting policies of Provident
conform with accounting principles generally accepted in the United States.
Certain estimates are required to be made by management in the preparation of
the consolidated financial statements. Actual results may differ from those
estimates. The consolidated financial statements include the accounts of
Provident and its subsidiaries. All significant intercompany balances and
transactions have been eliminated. Certain reclassifications have been made to
conform to the current year presentation.

Special purpose entities (SPEs) have been formed for many of Provident's
securitization transactions. These SPEs are not operating entities, have no
employees, and have a limited life. The basic SPE structure involves Provident
transferring loans or leases to the SPE. The SPE funds the purchase of these
assets by issuing debt securities to investors. The legal documents governing
the SPE transactions describe how the cash earned on the assets held in the SPE
must be allocated to the investors and other parties that have rights to these
cash flows. SPEs can be structured to be bankruptcy remote, thereby insulating
investors from the impact of the creditors of other entities, including the
seller of the assets. SPEs are critical to the functioning of several
significant markets, including the asset-backed securities, mortgage-backed
securities and commercial paper.

Generally, Provident's securitization transactions from 1997 through the second
quarter of 2000 involved loans and equipment leases being transferred to SPEs.
These transactions meet the applicable qualifying special-purpose entity (QSPE)
criteria under Statement No. 140 "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities," and are not consolidated
on Provident's balance sheet.

Provident also sold nonconforming residential loans through securitizations
during 1996. As these transactions occurred prior to the issuance of Statement
No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," the SPEs formed in these transactions do not
meet the definition of a QSPE and are now consolidated in Provident's financial
statements as of December 31, 2003. Additional details regarding these
securitization trusts are provided in Note 3.

STATEMENTS OF CASH FLOWS: For cash flow purposes, cash equivalents include
amounts due from banks and federal funds sold and reverse repurchase agreements.
Generally, federal funds sold and reverse repurchase agreements are purchased
and sold for one-day periods.

REVERSE REPURCHASE AGREEMENTS AND REPURCHASE AGREEMENTS: Securities purchased
under agreements to resell (reverse repurchase agreements) and securities sold
under agreements to repurchase (repurchase agreements) are treated as


                                       51
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


collateralized financing transactions and are recorded at the amounts at which
the securities were acquired or sold plus accrued interest. Securities,
generally U.S. government, federal agency and agency mortgage-backed securities,
pledged as collateral under these financing arrangements cannot be sold or
repledged by the secured party. The fair value of collateral either received
from or provided to a third party is continually monitored by Provident.

SECURITIES: Securities are classified as available for sale or trading.
Securities classified as available for sale are intended to be held for
indefinite periods of time. These securities are stated at fair value with
unrealized gains and losses (net of taxes) reported within Accumulated Other
Comprehensive Loss of shareholders' equity.

Securities purchased with the intention of selling them in the near term are
classified as trading. These securities are carried at fair value with
unrealized gains and losses included in noninterest income. The specific
identification method is used for determining gains and losses from securities
transactions.

LOANS AND LEASES: Loans are generally stated at the principal amount
outstanding. Loans that are intended to be sold within a short period of time
are classified as held for sale. Loans held for sale are reported at the lower
of aggregate cost or market value. Interest on loans is computed on the
outstanding principal balance. The portion of loan fees which exceeds the direct
costs to originate the loan is deferred and recognized as interest income over
the estimated lives of the related loans using the interest method. Loan
commitment fees are generally deferred and amortized into interest income on a
straight-line basis over the commitment period. Any premium or discount
applicable to specific loans purchased is amortized over the remaining lives of
such loans using the interest method. Loans are generally placed on nonaccrual
status when the payment of principal or interest is past due 90 days or more.
However, installment loans are not placed on nonaccrual status because they are
charged off in the month the loans reach 120 days past due. In addition, loans
that are well secured and in the process of collection are not placed on
nonaccrual status. When a loan is placed on nonaccrual status, any interest
income previously recognized that has not been received is reversed. Future
interest income is recorded only when a payment is received and collection of
principal is considered reasonably assured. Income on impaired loans is
generally recognized on a cash basis.

Leases are classified as either direct financing leases or operating leases,
based on the terms of the lease arrangement. To be classified as a direct
financing lease, the lease must have at least one of the following four
characteristics: (1) the lease transfers ownership of the property to the lessee
by the end of the lease term; (2) the lease contains a bargain purchase option;
(3) the lease term is equal to 75% or more of the estimated economic life of the
leased property; or (4) the present value of the lease payments and the
guaranteed residual value are at least 90% of the cost of the leased property.
Leases that do not meet any of these four criteria are classified as Leased
Equipment. The accounting policies for these financial instruments are discussed
later in this Note.

An important factor in determining the classification of Provident's auto lease
portfolio is the form of its residual value insurance. From 1994 to January
2003, Provident obtained residual value insurance for its auto leases


                                       52
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


on a pool basis by year of origination. The insurance is commonly referred to as
"capped" insurance. This type of insurance coverage, while effective in removing
residual risk, does not result in direct financing lease classification for its
auto leases. As residual value insurance for auto leases originated in February
2003 and later does not have this capped feature, but rather provides lease by
lease coverage, these auto leases are accounted for as direct financing leases.

When a lease is classified as a direct financing lease, the sum of the aggregate
rentals receivable and the estimated residual value of leased equipment less
unearned income and third party debt on leveraged leases are recorded as an
asset under Loans and Leases. Unearned income on direct financing leases is
amortized over the terms of the leases resulting in an approximate level rate of
return on the net investment in the leases. Income from leveraged lease
transactions is recognized using a method that yields a level rate of return in
relation to Provident's net investment in the lease. Commercial leases are
generally placed on nonaccrual status when payments are past due 90 days or more
while consumer leases are generally charged off in the month the leases reach
120 days past due.

Residual values on commercial lease assets are reviewed regularly for
impairment. When impairment exists, the carrying value of the residual is
reduced to the estimated fair value with the write-down recorded as a reduction
to the reserve for loan and lease losses. Regarding consumer leases, Provident's
residual value insurance covers the difference between the residual value and
the market value of the automobile at the end of the lease term. The market
value is determined as the greater of the proceeds received from the sale of the
automobile or the Black Book Used Car Market Guide Monthly valuations. This
insurance, however, does not cover residual losses when the automobile may be
sold for below Black Book Used Car Market Guide Monthly value, which may arise
when the automobile has excess wear and tear and/or excess mileage, not
reimbursed by the lessee.

RESERVE FOR LOAN AND LEASE LOSSES: The reserve for loan and lease losses is
maintained at a level that management estimates as necessary to absorb losses
inherent in the lending portfolio. The reserve is increased by charges to
earnings, as provisions for loan and lease losses. Loans and leases are charged
off when deemed uncollectible and deducted from the reserve, while recoveries of
previous charge-offs are added back to the reserve.

Management's determination of the adequacy of the reserve is based on an
assessment of the inherent loss potential given the conditions at the time.
Loans and leases reviewed on an individual basis include large non-homogeneous
credits and higher risk loans where the internal credit rating is at or below a
predetermined classification.

Corporate loans and leases not individually reviewed are segmented by the
characteristics related to the reserve factors. Corporate loan and lease reserve
factors are based upon quantitative migration analysis resulting in estimated
default frequencies and loss in the event of default parameters. These factor
estimates are reviewed and updated to reflect actual experience as needed.

Provident considers a corporate loan to be an impaired loan when it is probable
that all amounts due will not be collected according to the contractual terms of
the loan agreement. Provident measures the value of an impaired loan based on
the present value of expected future cash flows


                                       53
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


discounted at the loan's effective interest rate or, if more practical, at the
loan's observable market price, or the fair value of the collateral if the loan
is collateral dependent. These value estimates result in specific reserve
allocations.

Consumer loans are segmented by retail product. Forecast models for the consumer
products are generally based on recent delinquency trends, credit score and
loan-to-value distributions, and static pool analysis, or a combination of the
three.

LOAN AND LEASE SECURITIZATIONS: Provident has securitized loans and leases in
accordance with the provisions of Statement 140. Loans and leases securitized by
Provident include nonconforming residential loans, equipment leases and home
equity loans and lines of credit. Securitizations have provided Provident with
immediate cash flows to fund additional loan and lease originations and
purchases. Prior to June 30, 2000, Provident's securitizations were generally
treated as sales, resulting in the removal of the loans and leases from the
balance sheet and the recognition of gains or losses on the income statement.
Since June 30, 2000, Provident's securitizations have been treated as secured
financings, resulting in additional debt on the balance sheet and no recognition
of gains or losses on the income statement. The change to a secured financing
structure does not affect the total profit Provident will recognize over the
life of a loan, but rather impacts the timing of income recognition. Secured
financing transactions, on a comparative basis, cause reported earnings from
securitized loans to be lower in the initial periods and higher in later
periods, as interest is earned on the loans.

In a mortgage related securitization, Provident transfers a pool of loans to a
trust. The trust funds the purchase of these assets by issuing debt securities
to investors. The legal documents governing the trust describe how the cash
earned on the assets held in the trust must be allocated to the investors and
other parties that have rights to these cash flows. Generally, Provident's
current value of these estimated excess cash flows include future cash flows of
the underlying loans, net of payments due to investors of the securitization
trust, credit losses, servicing fees and other fees (referred to as retained
interest in securitized assets or RISAs), and servicing rights on the loans.
Gain or loss on the sale of the loans, which was recorded in noninterest income,
depended in portion on the previous carrying amount of the financial assets
involved in the transfer, allocated between the assets sold and the assets
retained based on their relative fair value at the date of transfer.

As the RISAs are classified as available for sale investment securities, the
assets are stated at fair value with unrealized gains and losses (net of taxes)
reported within shareholders' equity. Fair value is based on management's best
estimates of the valuation assumptions, including credit losses, prepayment
speeds, forward yield curves, and discount rates commensurate with the risks
involved.

LEASED EQUIPMENT: Leases that do not qualify for direct finance lease treatment
are accounted for as operating leases and are classified as leased equipment on
the balance sheet. Rental income for leased equipment is recognized on a
straight-line basis as scheduled. Related depreciation expense is recorded on
the straight-line basis over the life of the lease based upon the estimated
residual value. On a periodic basis, a review is undertaken to determine if the
leased equipment is impaired. An impairment


                                       54
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


loss is recognized if the carrying amount of the leased equipment is not
recoverable and exceeds its fair value. The carrying amount of the leased
equipment is not recoverable if it exceeds the sum of the undiscounted cash
flows expected to result from the lease payments and the eventual disposition of
the assets. Auto lease receivables are written off in the month the leases reach
120 days past due while equipment leases are written off when deemed
uncollectible.

PREMISES AND EQUIPMENT: Premises and equipment are stated at cost less
depreciation and amortization that are computed principally on the straight-line
method over the estimated useful lives of the assets.

GOODWILL: Goodwill is the excess of the purchase price over net identifiable
tangible and intangible assets acquired in a purchase business combination.
Provident adopted the provisions of Statement No. 141, "Business Combinations,"
and No. 142, "Goodwill and Other Intangible Assets," on January 1, 2002. Under
the new rules, goodwill and intangible assets deemed to have indefinite lives
will no longer be amortized but will be subject to annual impairment tests in
accordance with the Statements. Other intangible assets determined to have
limited lives continue to be amortized over their useful lives.

MORTGAGE SERVICING ASSETS: Provident recognizes the rights to service mortgage
loans it does not own but services for others within Other Assets of its balance
sheet. Mortgage servicing assets may be recognized (1) when mortgage loans are
sold with servicing retained or (2) when mortgage loan servicing is purchased.
When mortgage loans are sold, the carrying value of the loans is allocated
between the loans sold and servicing assets retained based on the relative fair
values of each. Mortgage servicing assets, when purchased, are initially
recorded at cost. Mortgage servicing assets are carried at the lower of the
initial carrying value, adjusted for amortization, or estimated fair value.
Estimated fair value is based on projected discounted cash flows which takes
into consideration estimated servicing fees, prepayment speeds, discount rates,
earnings on deposit of escrow funds and other assumptions. Mortgage servicing
assets are tested quarterly to verify the market value equals or exceeds its
carrying value. Impairment charges result in an increase to the mortgage
servicing valuation allowance and an offsetting charge against loan servicing
fees.

Other-than-temporary impairment is recognized when the recoverability of a
recorded valuation allowance is determined to be remote taking into
consideration historical and projected interest rates and loan payoff activity.
When this situation occurs, the unrecoverable portion of the valuation allowance
is applied as a direct write-down to the carrying value of mortgage servicing
assets. Unlike a valuation allowance, a direct write-down permanently reduces
the carrying value of mortgage servicing assets and the valuation allowance,
precluding subsequent recoveries.

EQUITY INVESTMENTS: Provident invests in affordable housing partnerships, equity
funds and directly in equity securities, which are collectively referred to
herein as equity investments. Equity investments, which are reported within
Investment Securities Available for Sale and Other Assets, are carried at
estimated fair value with changes in fair value recognized in other noninterest
income. The fair value of publicly traded investments are determined using
quoted market prices less liquidity discounts. Liquidity discounts take into
account the fact that Provident may not immediately realize such market prices
due to regulatory, corporate and contractual sales


                                       55
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


restrictions. The estimated fair value of equity investments that are not
publicly traded approximates cost including other than temporary valuation
adjustments considered appropriate by management. As of December 31, 2003 and
2002, Provident held equity investments with a carrying value of $60.2 million
and $72.1 million, respectively.

OTHER REAL ESTATE AND EQUIPMENT: Other real estate and equipment acquired
through partial or total satisfaction of loans is recorded at the lower of cost
or fair value and is included in Other Assets of the consolidated balance sheet.
Provident's policy is to include the unpaid balance of applicable loans in the
cost of other real estate and equipment. However, in no case is the carrying
value of other real estate and equipment greater than fair value. At December
31, 2003 and 2002, the carrying value of other real estate and equipment owned
was $4.3 million and $15.8 million, respectively.

STOCK-BASED COMPENSATION: Statement No. 123, "Accounting for Stock-Based
Compensation" encourages, but does not require, adoption of a fair value-based
accounting method for stock-based employee compensation plans. Provident adopted
the provisions of Statement 123 as of January 1, 2003. Under these rules,
compensation expense is recognized over the vesting period equal to the fair
value of stock-based compensation as of the date of grant. As Provident has
elected to use the Prospective Method of expense recognition according to the
transition rules of Statement No. 148, "Accounting for Stock-Based Compensation
- Transition and Disclosure," the adoption of Statement 123 applies only to
options granted after December 31, 2002. Prior to January 1, 2003, Provident
accounted for stock-based employee compensation plans in accordance with
Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued
to Employees," whereby no compensation expense is recognized for the granting of
stock options when the exercise price of the option equals the market price of
the underlying stock at date of grant.

For purposes of providing pro forma disclosures as if Statement 123 had been
adopted as of its effective date (grants issued in fiscal years that begin after
December 15, 1994), the fair value of stock options was estimated at the date of
grant using a Black-Scholes option pricing model. The Black-Scholes option
pricing model was developed for use in estimating the fair value of traded
options that have no vesting restrictions and are fully transferable. In
addition, option valuation models require the input of subjective assumptions
including the expected stock price volatility.

The following weighted-average assumptions were used in the option pricing model
for 2003, 2002 and 2001 respectively: risk-free interest rates of 3.46%, 4.50%
and 4.72%; dividend yields of 3.50%, 3.50% and 3.00%; volatility factors of the
expected market price of Provident's Common Stock of 29.2%, 29.1% and 28.8% and
an expected life of the option of 7 years for each year. Based on these
assumptions, the weighted-average fair value of options granted in 2003, 2002
and 2001 was $6.45, $5.89 and $8.35, respectively.


                                       56
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Provident recorded $1.3 million ($1.0 million after-tax) of stock-based
compensation for 2003 while no compensation cost was recognized for stock option
grants during 2002 and 2001. Had compensation cost been expensed for stock
option awards based on the fair values at grant dates as discussed above,
Provident's net income and earnings per share would have been as follows:

<TABLE>
<CAPTION>
                                                              Year Ended December 31,
                                                   ----------------------------------------------
(In Thousands, Except Per Share Data)                  2003             2002             2001
-----------------------------------------------    ------------     ------------     ------------
<S>                                                <C>              <C>              <C>
Net Income as Reported                             $     96,700     $     95,451     $     (1,003)
Plus Stock-Based Compensation Recognized for
 Options Granted in 2003, Net of Related Tax              1,043                -                -
Less Total Stock-Based Compensation Determined
 under Fair Value Based Methods, Net of Related
 Tax Effects                                             (6,965)          (9,662)          (7,181)
                                                   ------------     ------------     ------------
Pro-forma Net Income                               $     90,778     $     85,789     $     (8,184)
                                                   ============     ============     ============
Earnings Per Share:
  Basic - As Reported                              $       1.96     $       1.94     $      (0.04)
  Basic - Pro Forma                                        1.84             1.74            (0.19)
  Diluted - As Reported                                    1.90             1.88            (0.04)
  Diluted - Pro Forma                                      1.81             1.72            (0.19)
</TABLE>

INCOME TAXES: Provident files a consolidated federal income tax return that
includes all of its subsidiaries. Subsidiaries provide for income taxes on a
separate-return basis and remit to Provident amounts determined to be currently
payable.

DERIVATIVE FINANCIAL INSTRUMENTS: Provident employs derivatives such as interest
rate swaps, caps and floors to manage the interest sensitivity of certain on and
off-balance sheet assets and liabilities. The net interest income or expense on
interest rate swaps and caps is accrued and recognized as an adjustment to the
interest income or expense of the associated on and off-balance sheet asset or
liability.

Provident adopted the provisions of Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended, on January 1, 2001.
Statement 133 requires that derivatives be recognized as either assets or
liabilities in the balance sheet and that those instruments be measured at fair
value. The accounting for the gain or loss resulting from the change in fair
value depends on the intended use of the derivative. For a derivative used to
hedge changes in fair value of a recognized asset or liability, or an
unrecognized firm commitment, the gain or loss on the derivative will be
recognized in earnings together with the offsetting loss or gain on the hedged
item. This results in earnings recognition only to the extent that the hedge is
ineffective in achieving offsetting changes in fair value. For a derivative used
to hedge changes in cash flows associated with forecasted transactions, the gain
or loss on the effective portion of the derivative will be deferred, and
reported as accumulated other comprehensive income, a component of shareholders'
equity, until such time the hedged transaction affects earnings. For derivative
instruments not accounted for as hedges, changes in fair value are required to
be recognized in earnings. Note 19 provides additional detail on the accounting
for derivative instruments and hedging activities held by Provident.

NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS: In December 2002, Statement No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure" was
issued. Statement 148 amends Statement No. 123, "Accounting for Stock-Based
Compensation", to provide alternative methods of transition to Statement 123's
fair value based method of accounting for stock-based employee compensation.
Statement 148 also amends the disclosure provisions of Statement 123 and APB
Opinion No. 28, "Interim Financial Reporting," to require disclosure in the
summary of significant accounting policies of the effects of an entity's
accounting policy with respect to stock-based


                                       57
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


employee compensation on reported net income and earnings per share in annual
and interim financial statements. While the Statement does not amend Statement
123 to require companies to account for employee stock options using the fair
value method, the disclosure provisions of Statement 148 are applicable to all
companies with stock-based employee compensation, regardless of whether they
account for that compensation using the fair value method of Statement 123 or
the intrinsic value method of APB Opinion No. 25. As discussed in Note 1,
Provident adopted the provisions of Statement 123 using the Prospective Method
of expense recognition according to Statement 148. Provident recorded $1.3
million ($1.0 million after-tax) of stock-based compensation for 2003 as of a
result of adopting Statement 123.

In April 2003, the FASB issued Statement No. 149 "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." Statement 149 amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities under Statement 133 "Accounting for Derivative Instruments
and Hedging Activities." Statement 149 amends Statement 133 for decisions made
(1) as part of the Derivatives Implementation Group process that effectively
required amendments to Statement 133, (2) in connection with other FASB projects
dealing with financial instruments, and (3) in connection with implementation
issues raised in relation to the application of the definition of a derivative.
Statement 149 is effective for contracts entered into or modified after June 30,
2003, and hedging relationships designated after June 30, 2003. However, the
provisions of Statement 149 that merely represent the codification of previous
Derivatives Implementation Group decisions were already effective and were
applied in accordance with their prior respective effective dates. The adoption
of this Statement did not have any significant impact on Provident's results of
operations or financial condition.

In May 2003, the FASB issued Statement 150 "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." Statement 150
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability. Many of those instruments were previously classified as equity.
Statement 150 is effective for financial instruments entered into or modified
after May 31, 2003, and otherwise became effective as of July 1, 2003. The
adoption of this Statement did not have any significant impact on Provident's
results of operations or financial condition.

In December 2003, the FASB issued revised FASB Interpretation No. 46,
"Consolidation of Variable Interest Entities" (FIN 46R). FIN 46R, which is an
interpretation of Accounting Research Bulletin No. 51, "Consolidated Financial
Statements," addresses consolidation by business enterprises of variable
interest entities (VIEs). A VIE exists when (1) the equity investment at risk is
not sufficient to permit the entity to finance its activities without additional
subordinated financial support; (2) equity investors do not have the ability to
make decisions about the entity's activities through voting rights or do not
have the obligation/right to absorb expected losses/residual returns of the
entity; or (3) equity investors have voting rights that are not proportionate to
their economic


                                       58
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


interests and the activities of the entity are conducted on behalf of an
investor with a disproportionately small voting interest. FIN 46R requires VIEs
to be consolidated by their primary beneficiaries. The primary beneficiary of a
VIE is the party that absorbs a majority of the entity's expected losses and/or
receives a majority of its expected residual returns as a result of holding
variable interests. FIN 46R becomes effective for entities that have interest in
special purpose entities (SPEs) for periods ending after December 15, 2003, and
for all other types of VIEs for periods ending after March 15, 2004. As of
December 31, 2003, Provident adopted the provisions of FIN 46R for SPEs. This
resulted in additional assets of $28.5 million and an after-tax charge to
earnings of $1.2 million. See Note 3 for further discussions of VIEs.

NOTE 3 - INVESTMENTS IN VARIABLE INTEREST ENTITIES: As discussed in Note 2, FASB
issued revised FASB Interpretation No. 46, "Consolidation of Variable Interest
Entities" (FIN 46R) in December 2003. As a result of FIN 46R, Provident
consolidated two securitization trusts (PCFS 96-1 and PCFS 96-2) and
de-consolidated four other trusts (Provident Capital Trust I, II, III and IV).

From 1996 to 2000, Provident securitized and sold loans and equipment leases
through the creation of securitization trusts (also referred to as special
purpose entities or SPEs). These securitization trusts are not operating
entities, have no employees, and have a limited life. The basic securitization
structure involves Provident transferring loans or leases to the securitization
trust. The securitization trust funds the purchase of these assets by issuing
debt securities to investors. The legal documents governing the securitization
trust transactions describe how the cash earned on the assets held in the SPE
must be allocated to the investors and other parties that have rights to these
cash flows. Securitization trusts can be structured to be bankruptcy remote,
thereby insulating investors from the impact of the creditors of other entities,
including the seller of the assets.

Provident accounted for these securitization transactions according to
Statements No. 125 and No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." Under these Statements, a
transfer of financial assets in which the transferor surrenders control over
those assets is accounted for as a sale to the extent that consideration other
than beneficial interests in the transferred assets is received in exchange.
Accordingly, the loans and equipment leases sold to these securitization trusts
were removed from Provident's balance sheet and the securitization trusts were
not consolidated. Statement No. 140 provides specific criteria for determining
when an SPE meets the definition of a qualifying special-purpose entity (QSPE).
The securitization trusts, with the exception of PCFS 96-1 and PCFS 96-2, meet
the applicable QSPE criteria under Statement 140.

As loans were sold to the PCFS 96-1 and PCFS 96-2 securitization trusts prior to
the effective date of Statement No. 125, the securitization trusts do not meet
the definition of a QSPE and are now required to be consolidated in Provident's
financial statements as of December 31, 2003 based on the provisions of FIN 46R.
The consolidation of PCFS 96-1 and 96-2 securitization trusts resulted in an
additional $14.1 million in loans being recorded on Provident's balance sheet
and an after-tax cumulative effect of changes in accounting principles of $1.2
million being charged against earnings.


                                       59
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Between 1996 and 2001, Provident formed Provident Capital Trust I, II, III and
IV, collectively referred to as Provident Capital Trusts. Provident Capital
Trusts issued a total of $462.5 million of preferred securities to outside
investors and $14.3 million of common securities to Provident. Proceeds from the
issuance of these capital securities were invested in Provident's Junior
Subordinated Debentures. Generally, the Junior Subordinated Debentures qualify
as Tier I capital for bank regulatory purposes.

FIN 46R states that an enterprise shall consolidate a variable interest entity
if that enterprise has a variable interest that will absorb a majority of the
entity's expected losses, receive a majority of the entity's expected residual
returns, or both. Provident will not absorb a majority of Provident Capital
Trusts expected losses or receive a majority of their expected residual returns.
As of December 31, 2003, Provident's consolidated financial statements no longer
include the Provident Capital Trusts entities.

As the capital securities of Provident Capital Trusts are mandatorily redeemable
upon the maturity of the Debentures, Provident had been reporting the preferred
securities of Provident Capital Trusts similar to long-term debt within its
financial statements. As a result of the de-consolidation, Provident recorded
its $14.3 million common stock investment in Provident Capital Trusts as equity
investments within Other Assets and as additional borrowings within Junior
Subordinated Debentures of its balance sheet, whereas in prior periods, this
common stock investment had been eliminated within consolidation. The
de-consolidation of Provident Capital Trusts had no impact on earnings.

Provident has evaluated the applicability of FIN 46R on other various
investments and interests, including affordable housing partnerships, equity
investments, small business commercial real estate partnerships, leverage
leasing structures, customer trust accounts and securitization trusts. It was
determined that certain of these investments and interests were variable
interest entities, however, as Provident was not the primary beneficiary, these
entities were not consolidated.

Provident's involvement with affordable housing partnerships has been from the
aspect of receiving investment tax credits as a limited partner and receiving
fees for forming investment partnerships as a general partner. Provident's
investment in affordable housing partnerships at December 31, 2003 was $18
million which is also Provident's maximum exposure to loss.

Provident has also acquired interest in other entities by purchasing limited
partner interests in equity funds and directly investing in other entities'
common and preferred stock. The objective for these investments may be either
strategic or non-strategic. Strategic investments are made to companies that
provide services or expand markets in traditional banking business. The primary
purpose for non-strategic investments is to achieve an economic return, with
secondary consideration given to matters, such as providing financing
opportunities, other banking relationships, and potential advisory fee income
for capital raising and buy/sell engagements. Provident's total investment in
these equity funds and direct equity investments as of December 31, 2003 totaled
$42 million which is also Provident's potential exposure to loss.


                                       60
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Securitization trusts, which were formed as a result of securitization
transactions accounted for as sales from 1997 to 2000, are not within the scope
of FIN 46R and therefore have not been consolidated. As such, loans and leases
sold within these transactions have been removed from the balance sheet. The
following table provides a summary of the outstanding balances of these
off-balance sheet loans and leases:

<TABLE>
<CAPTION>
                                                           December 31,
                                                  ------------------------------
(In Thousands)                                       2003                2002
----------------------------------------          ----------          ----------
<S>                                               <C>                 <C>
Nonconforming Residential                         $1,169,763          $1,779,127
Prime Home Equity                                    133,472             194,775
Equipment Leases                                      41,363              94,408
                                                  ----------          ----------
                                                  $1,344,598          $2,068,310
                                                  ==========          ==========
</TABLE>

In connection with the recognition of non-cash gains on securitizations
accounted for as sales, the present value of future cash flows, referred to as
retained interest in securitized assets, was recorded as an asset within
Investment Securities Available For Sale.

Additionally, Provident provides for a liquidity commitment to its nonconforming
residential securitizations, treated as sales, in the form of an unfunded demand
note backed by a AAA rated standby letter of credit. The commitment is
maintained to improve the credit grade of the securitization and thereby reduce
the rate paid to investors of the securitization trust. The unfunded demand note
is an asset of the securitization trust as well as a liability of Provident. As
such, Provident records the amount of the unfunded demand note as a liability.
As Provident owns the residual interest of the securitization trust, the
estimate of the fair value of the interest includes an estimate of the amount of
the demand note which will be returned to Provident at the end of the
securitization transaction.

The components of the estimated fair value of the RISA as of December 31, 2003
follow:

<TABLE>
<CAPTION>
                                                    Nonconforming        Prime
(In Thousands)                                       Residential     Home Equity
------------------------------------------------    -------------    -----------
<S>                                                 <C>              <C>
Estimated Cash Flows of Underlying Loans,
  Net of Payments to Certificate Holders,
  and Servicing and Insurance Expense                 $ 386,804       $   7,835
Less:
  Estimated Credit Loss                                 (60,087)              -
  Discount to Present Value                            (113,753)         (1,444)
                                                      ---------       ---------
Carrying Value of RISA                                $ 212,964       $   6,391
                                                      =========       =========
</TABLE>

As the RISA is classified as an available for sale investment security, it has
been adjusted to its fair value with the change in fair value recorded in other
comprehensive income. As of December 31, 2003 the fair value of the RISA exceeds
the amortized cost basis by $25.7 million, with resulted in an after-tax
increase to other comprehensive income of $16.7 million. The amortized cost
basis of the nonconforming residential RISA is $187.3 million.

Provident's prime home equity and equipment leasing securitizations are credit
enhanced in the form of cash collateral accounts that are maintained inside the
securitization vehicle. Detail of the cash collateral balances


                                       61
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


held by the Trusts and the estimates of future losses are provided below as of
December 31, 2003:

<TABLE>
<CAPTION>
                                                  Carrying Value      Estimates
                                                     of Credit        of Future
(In Thousands)                                     Enhancements        Losses
----------------------------------------------     ------------     ------------
<S>                                                <C>              <C>
Prime Home Equity                                  $     34,520     $        365
Equipment Leases                                         33,236              468
                                                   ------------     ------------
                                                   $     67,756     $        833
                                                   ============     ============
</TABLE>

At December 31, 2003, management believes the current carrying values of the
RISA, credit enhancements and estimates of future losses are properly stated.

The following sensitivity table provides the effects of an immediate 10% and 20%
adverse change to key economic assumptions on RISAs and loss estimates as of
December 31, 2003:

<TABLE>
<CAPTION>
                                                    Nonconforming         Prime          Equipment
(Dollars in Millions)                                Residential       Home Equity        Leasing
------------------------------------------------    ------------      ------------      ------------
<S>                                                 <C>               <C>               <C>
Peak Prepayment Speed Assumption (Annual Rate)           33% CPR           30% CPR               n/a
 Impact on Fair Value of 10% Adverse Change         $      (11.5)     $       (0.7)              n/a
 Impact on Fair Value of 20% Adverse Change         $      (22.9)     $       (1.3)              n/a

 Estimated Credit Loss Assumption
  (Percentage of Original Balance)                          6.47%             1.00%             5.76%
 Impact on Fair Value of 10% Adverse Change         $       (6.0)              $ -      $       (0.1)
 Impact on Fair Value of 20% Adverse Change         $      (12.0)     $       (0.1)     $       (0.2)

 RISA Discount Rate                                         9.47%             6.25%              n/a
 Impact on Fair Value of 10% Adverse Change         $       (2.8)     $       (0.1)              n/a
 Impact on Fair Value of 20% Adverse Change         $       (5.6)     $       (0.1)              n/a
</TABLE>

These sensitivities are hypothetical and should be used with caution. The effect
of a variation in a particular assumption on the fair value of the RISA and loss
estimates is calculated without changing any other assumption; in reality,
changes in one factor may result in changes in another, which might magnify or
counteract the sensitivities.

The following table presents quantitative information about delinquencies, net
credit losses and components of securitized and portfolio loans and leases:

<TABLE>
<CAPTION>
                                                   2003                                         2002
                                -------------------------------------------  -------------------------------------------
                                                              Middle Market                                Middle Market
                                Nonconforming   Prime Home      Equipment    Nonconforming   Prime Home      Equipment
(Dollars in Thousands)           Residential      Equity         Leases       Residential      Equity         Leases
-----------------------------    ----------     ----------     ----------     ----------     ----------     ----------
<S>                             <C>             <C>           <C>            <C>             <C>           <C>
 Average Assets:
  Securitized and Sold           $1,471,661     $  162,310     $   66,378     $2,190,684     $  246,163     $  150,562
  Portfolio and Held for sale       405,822      1,519,339      1,047,555        808,822        853,860        957,835
                                 ----------     ----------     ----------     ----------     ----------     ----------
   Total Managed Assets          $1,877,483     $1,681,649     $1,113,933     $2,999,506     $1,100,023     $1,108,397
                                 ==========     ==========     ==========     ==========     ==========     ==========
 Year-End Assets:
  Securitized and Sold           $1,169,763     $  133,472     $   41,363     $1,779,127     $  194,775     $   94,408
  Portfolio and Held for Sale       122,518      1,484,376      1,130,314        657,204      1,110,728      1,046,640
                                 ----------     ----------     ----------     ----------     ----------     ----------
   Total Managed Assets          $1,292,281     $1,617,848     $1,171,677     $2,436,331     $1,305,503     $1,141,048
                                 ==========     ==========     ==========     ==========     ==========     ==========
 Net Charge-Offs on
  Total Managed Assets           $  147,290     $    2,290     $   18,069     $  131,462     $    3,422     $   20,184
                                 ==========     ==========     ==========     ==========     ==========     ==========
 Net Charge-Offs to
  Average Managed Assets               7.85%          0.14%          1.62%          4.38%          0.31%          1.82%
                                 ==========     ==========     ==========     ==========     ==========     ==========
 90 Days or More
  Delinquencies to
  Year-End Managed Assets             27.68%          0.19%          0.04%         17.85%          0.19%          0.38%
                                 ==========     ==========     ==========     ==========     ==========     ==========
</TABLE>


                                       62
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4 - INVESTMENT SECURITIES: EITF Issue No. 03-1, "The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments,"
requires certain quantitative and qualitative disclosures for debt and equity
securities that are impaired at the balance sheet date but for which an
other-than-temporary impairment has not been recognized. The following table
provides amortized cost and estimated market values of securities available for
sale at year-end. December 31, 2003 balances are segregated by investments that
have been in a continuous unrealized loss position for more than twelve months
from investments that have been in an unrealized loss position for less than
twelve months or have unrealized gains.

<TABLE>
<CAPTION>
                                                               Gross            Gross          Estimated
                                             Amortized      Unrealized       Unrealized         Market
(In Thousands)                                 Cost            Gains           Losses            Value
---------------------------------------    ------------    ------------     ------------     ------------
<S>                                        <C>             <C>              <C>              <C>
2003 - Investments with an Unrealized
  Gain Position or Unrealized Loss
  Position for Less Than Twelve Months:
   U.S. Treasury and Federal Agency
    Debentures                             $    608,808    $      3,599     $     (1,285)    $    611,122
   State and Political Subdivisions               1,360              40                -            1,400
   Mortgage-Backed Securities                 3,199,805          26,344          (46,418)       3,179,731
   Other Securities                             691,560              10           (5,140)         686,430
                                           ------------    ------------     ------------     ------------
                                           $  4,501,533    $     29,993     $    (52,843)    $  4,478,683
                                           ============    ============     ============     ============
2003 - Investments with a Continuous
  Unrealized Loss Position for More
  Than Twelve Months:
   Mortgage-Backed Securities              $     50,312             $ -     $    (22,813)    $     27,499
   Other Securities                              22,632               -             (902)          21,730
                                           ------------    ------------     ------------     ------------
                                           $     72,944             $ -     $    (23,715)    $     49,229
                                           ============    ============     ============     ============
2002 - All Investments:
   U.S. Treasury and Federal Agency
    Debentures                             $    310,244    $      5,974     $        (75)    $    316,143
   State and Political Subdivisions               1,838              40               (3)           1,875
   Mortgage-Backed Securities                 3,240,192          70,043          (18,723)       3,291,512
   Other Securities                             606,237              10             (539)         605,708
                                           ------------    ------------     ------------     ------------
                                           $  4,158,511    $     76,067     $    (19,340)    $  4,215,238
                                           ============    ============     ============     ============
</TABLE>

Mortgage-backed securities with a continuous unrealized loss for over one year
are comprised of two securities. Both securities are comprised of securitized
pools of residential and commercial mortgage loans and bonds. The market value
deterioration resulted from a combination of i) significant increases in
prepayment speeds on the underlying mortgage loans during the declining rate
environment since 2000; and ii) credit default issues within the underlying
component loans and bonds that comprise these securities. However, these
securities are rated "AAA", and are guaranteed to have the principal repaid by
other components of the securities which are U.S. Treasury and Agency Strips.
While Provident anticipates the market value deterioration experienced since the
securities' purchase in 1998 and 2000 to continue, no principal loss is expected
due to the securities' credit enhanced structure. In a worst case scenario,
these securities will mature in 2021 and 2030 at their par value. The company
has the intent and ability to hold these securities until the market value has
substantially recovered.

Other securities with a continuous unrealized loss for over twelve months is the
company's seed investment in a proprietary fixed income mutual fund family. The
net asset value loss is the result of the effect of interest rate movements on
the underlying fixed income investments in the fund. The company has the intent
and ability to hold these securities until the value has substantially
recovered.


                                       63
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Investment securities with a carrying value of approximately $2.8 billion and
$2.6 billion at December 31, 2003 and 2002, respectively, were pledged as
collateral to secure public and trust deposits, repurchase agreements,
extensions of credit by the Federal Home Loan Bank, interest rate derivatives
and for other purposes.

In 2003, 2002 and 2001 gross gains of $48.5 million, $9.2 million and $10.3
million and gross losses of $3.0 million, $6.6 million and $10.3 million,
respectively, were realized on the sale of securities available for sale. In
addition, Provident recognized RISA and equity investment write-downs of $39.2
million during 2003.

Securities are shown below based on their estimated average lives at December
31, 2003. Expected maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or without call
or prepayment penalties.

<TABLE>
<CAPTION>
                                      Amortized           Estimated
(In Thousands)                           Cost            Market Value
--------------                        ---------          ------------
<S>                                   <C>                <C>
Due in one year or less               $  440,042          $  441,335
Due after 1 through 5 years            3,114,284           3,104,650
Due after 5 through 10 years             553,031             541,529
Due after 10 years                       467,120             440,398
                                      ----------          ----------
   Total                              $4,574,477          $4,527,912
                                      ==========          ==========
</TABLE>


NOTE 5 - LEASING: Provident originates leases which are classified as either
finance leases or operating leases, based on the terms of the lease arrangement.
When a lease is classified as a finance lease, the future lease payments, net of
unearned income, and the estimated residual value of the leased property at the
end of the lease term are recorded as an asset under Loans and Leases. The
amortization of the unearned income is recorded as interest income. When a lease
is classified as an operating lease, the costs of the leased property, net of
depreciation, is recorded as Leased Equipment. Rental income is recorded as
noninterest income while the depreciation on the leased property is recorded as
noninterest expense. At the expiration of a lease, the leased property is sold
or another lease agreement is initiated.

Lease Financing: Lease financing includes the leasing of transportation,
manufacturing, construction, communication, data processing, medical, office
equipment and vehicles. These leases are classified as direct financing leases,
with expiration dates over the next 1 to 9 years. Rentals receivable at December
31, 2003 and 2002 include $57 million and $81 million, respectively, for
leveraged leases, which is net of principal and interest on the nonrecourse
debt. The residual values on the leveraged leases that were entered into are
estimated to be approximately $66 million and $110 million in total at December
31, 2003 and 2002, respectively.


                                       64
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The components of the net investment in lease financing at December 31 were as
follows:

<TABLE>
<CAPTION>
                                                 2003                                      2002
                                   ---------------------------------           --------------------------
(In Thousands)                     Commercial              Consumer             Commercial       Consumer
--------------                     -----------           -----------           -----------       --------
<S>                                <C>                   <C>                   <C>               <C>
Rentals Receivable                 $ 1,352,071           $   322,460           $ 1,322,470        $   --
Estimated Residual Values              132,267               194,263               171,482            --
                                   -----------           -----------           -----------        ------
                                     1,484,338               516,723             1,493,952            --
Less:  Unearned Income                (209,083)              (56,421)             (220,051)           --
                                   -----------           -----------           -----------        ------
 Net Investment                    $ 1,275,255           $   460,302           $ 1,273,901        $   --
                                   ===========           ===========           ===========        ======
</TABLE>


The following is a schedule by year of future minimum lease payments to be
received on lease financing for the next five years as of December 31, 2003:


<TABLE>
<CAPTION>
(In Thousands)           Commercial           Consumer
--------------           ----------          ----------
<S>                      <C>                 <C>
2004                     $  493,514          $   76,421
2005                        357,870              75,685
2006                        212,300              74,644
2007                        112,353              61,208
2008                         72,704              30,931
Thereafter                  103,330               3,571
                         ----------          ----------
   Total                 $1,352,071          $  322,460
                         ==========          ==========
</TABLE>

Leased Equipment: Leased equipment includes assets which are subject to
operating leases. Operating leases are comprised of transportation equipment,
manufacturing equipment, data processing, medical and office equipment to
commercial clients and vehicles, some of which are accounted for as assets under
a capital lease.

Provident, utilizing its auto leases, has entered into sale-leaseback
transactions. At December 31, 2003 and 2002, respectively, approximately $0.9
billion and $1.5 billion of auto leases which were utilized in these
transactions were outstanding and represent assets under capital leases included
in Leased Equipment.

A summary of leased equipment at December 31 follows:

<TABLE>
<CAPTION>
                                                  2003                                        2002
                                  ---------------------------------           ---------------------------------
(In Thousands)                     Commercial             Consumer             Commercial             Consumer
--------------                    -----------           -----------           -----------           -----------
<S>                               <C>                   <C>                   <C>                   <C>
Cost                              $   355,880           $ 2,205,913           $   366,982           $ 2,905,969
Accumulated Depreciation             (111,070)             (797,459)             (100,885)             (821,710)
                                  -----------           -----------           -----------           -----------
                                      244,810             1,408,454               266,097             2,084,259
                                  ===========           ===========           ===========           ===========
</TABLE>


The future gross minimum rentals, by year, under noncancelable leases for the
rental of leased equipment follows:

<TABLE>
<CAPTION>
(In Thousands)                      Commercial           Consumer
--------------                      ----------           --------
<S>                                 <C>                  <C>
2004                                $  59,540            $ 314,327
2005                                   46,390              220,151
2006                                   28,113              117,138
2007                                   13,319               38,759
2008                                    5,122                4,567
Thereafter                              2,462                  137
                                    ---------            ---------
     Total                          $ 154,946            $ 695,079
                                    =========            =========
</TABLE>


                                       65
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In 2003, 2002 and 2001, respectively, Provident incurred impairment charges of
$0.3 million, $1.9 million and $5.7 million on uninsured auto residuals.
Impairment is determined on an individual unit basis. Since 1994, except for a
five-month period during 1998, when it self-insured, Provident has maintained
insurance on its auto lease residuals in amounts necessary to effectively remove
residual risk.

NOTE 6 - RESERVE FOR LOAN AND LEASE LOSSES: The changes in the loan and lease
loss reserve for the years ended December 31 were as follows:

<TABLE>
<CAPTION>
(In Thousands)                                 2003                 2002                2001
--------------                               ---------           ---------           ---------
<S>                                          <C>                 <C>                 <C>
Balance at Beginning of Period               $ 201,051           $ 241,143           $ 159,118
Provision for Loan and Lease Losses
  Charged to Earnings                          115,979              99,549             215,545
Acquired Reserves                                   --                  --              10,003
Recoveries Credited to the Reserve              20,144              26,220              12,057
                                             ---------           ---------           ---------
                                               337,174             366,912             396,723
Losses Charged to the Reserve                 (177,174)           (165,861)           (155,580)
                                             ---------           ---------           ---------
  Balance at End of Period                   $ 160,000           $ 201,051           $ 241,143
                                             =========           =========           =========
</TABLE>


The following table shows Provident's investment in impaired loans as defined
under Statement 114 as amended by Statement 118:

<TABLE>
<CAPTION>
(In Thousands)                                                2003              2002
--------------                                              --------          --------
<S>                                                         <C>               <C>
Impaired Loans Requiring a Valuation Allowance of
 $15.0 Million in 2003 and $29.4 Million in 2002            $ 54,247          $ 91,053
Impaired Loans Not Requiring a Valuation Allowance             8,391             8,272
                                                            --------          --------
   Total Impaired Loans                                     $ 62,638          $ 99,325
                                                            ========          ========
Average Impaired Loans for the Year                         $105,583          $102,241
                                                            ========          ========
</TABLE>

The decrease in impaired loans reflects the sale of non-performing loans that
occurred in the fourth quarter of 2003. The largest impaired loan relates to the
commercial airline industry. The remaining impaired loans are distributed among
14 industries. Impaired loans are reviewed on an individual basis to estimate
potential future losses. As of December 31, 2003, reserves established for
impaired loans are believed to be sufficient to absorb future potential losses.

Interest income recognized on impaired loans during 2003 or 2002 was $0 and $0.2
million, respectively. The valuation allowance recorded on impaired loans is
included in the reserve for loan losses.

Loans and leases on nonaccrual status at December 31, 2003, 2002 and 2001 were
$79.9 million, $166.4 million and $176.9 million, respectively. Loans and leases
which were ninety days or more past due and still accruing totaled $12.7
million, $29.9 million and $30.3 million at December 31, 2003, 2002 and 2001,
respectively. No loans or leases had been renegotiated to provide a reduction or
deferral of interest or principal as of December 31, 2003, 2002 and 2001.


                                       66
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - PREMISES AND EQUIPMENT: The following is a summary of premises and
equipment at December 31:

<TABLE>
<CAPTION>
(In Thousands)                                 2003                 2002
--------------                              ---------           ---------
<S>                                         <C>                 <C>
Land                                        $  10,301           $  11,921
Buildings                                      38,954              40,698
Leasehold Improvements                         19,448              19,092
Furniture and Fixtures                        189,528             179,016
                                            ---------           ---------
                                              258,231             250,727
Less Depreciation and Amortization           (165,394)           (149,214)
                                            ---------           ---------
  Total                                     $  92,837           $ 101,513
                                            =========           =========
</TABLE>

Rent expense for all bank premises and equipment leases was $17.0 million, $15.2
million and $15.1 million in 2003, 2002 and 2001, respectively. The future gross
minimum rentals, by year, under noncancelable leases for the rental of premises
and equipment are $14.3 million in 2004, $13.3 million in 2005, $12.6 million in
2006, $10.7 million in 2007, $10.3 million in 2008 and $50.4 million thereafter.

NOTE 8 - GOODWILL AND OTHER INTANGIBLE ASSETS: Provident adopted the provisions
of Statement No. 141, "Business Combinations," and No. 142, "Goodwill and Other
Intangible Assets," on January 1, 2002. Under these rules, goodwill and
intangible assets deemed to have indefinite lives are not amortized but are
subject to annual impairment tests in accordance with Statement 142. Other
intangible assets determined to have limited lives continue to be amortized over
their useful lives. Management performed an impairment test on its goodwill
assets as of January 1, 2003 and 2002 and determined that no impairment existed
as of those dates.

As a result of adopting Statement 142, Provident did not incur any goodwill
amortization during 2003 and 2002, whereas during 2001, Provident recorded
goodwill amortization. The following table provides net income and earnings per
share for the year ended December 31, 2001 on a pro forma basis excluding
goodwill amortization.

<TABLE>
<CAPTION>
                                                      Year Ended
                                                     December 31,
(In Thousands, Except Per Share Amounts)                 2001
----------------------------------------             ------------
<S>                                                  <C>
Net Income (Loss):
 As Reported                                          $ (1,003)
 Add Back: After-Tax Goodwill Amortization               2,806
                                                      --------
 Pro-Forma Net Income                                 $  1,803
                                                      ========
Basic Earnings (Loss) Per Common Share:
 As Reported                                          $  (0.04)
 Add Back: After-Tax Goodwill Amortization                0.06
                                                      --------
 Pro-Forma Basic Earnings Per Common Share            $   0.02
                                                      ========
Diluted Earnings (Loss) Per Common Share:
 As Reported                                          $  (0.04)
 Add Back: After-Tax Goodwill Amortization                0.06
                                                      --------
 Pro-Forma Diluted Earnings Per Common Share          $   0.02
                                                      ========
</TABLE>


                                       67
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Changes in the carrying amount of goodwill by business line for the years ended
December 31, 2003 and 2002, are as follows:

<TABLE>
<CAPTION>
                                                    Commercial          Retail
(In Thousands)                                       Banking           Banking              Total
--------------                                      ----------         --------           --------
<S>                                                 <C>                <C>                <C>
Balance at January 1, 2002                           $ 39,825          $ 40,824           $ 80,649
Goodwill Acquired During the Year                          --               189                189
Goodwill Recorded as a Result of Contingent                                  --
 Consideration being Recognized                         1,594               219              1,813
                                                     --------          --------           --------
Balance at December 31, 2002                           41,419            41,232             82,651

Goodwill Recorded as a Result of Contingent
 Consideration being Recognized                         1,329               289              1,618
Goodwill Included in the Sale of Florida
 Assets and Liabilities                                    --            (2,468)            (2,468)
                                                     --------          --------           --------
Balance at December 31, 2003                         $ 42,748          $ 39,053           $ 81,801
                                                     ========          ========           ========
</TABLE>

As all of Provident's other intangible assets have been determined to have
limited lives, these assets have continued to be amortized as in the past.
Intangible assets, consisting of non-contractual customer relationships, had a
gross carrying value of $16.0 million and accumulated amortization of $9.4
million resulting in a net carrying value of $6.6 million as of December 31,
2003. Amortization of intangible assets was $4.4 million, $4.7 million and $3.4
million for the years ended December 31, 2003, 2002 and 2001, respectively. The
estimated amortization of intangible assets for the next five years is $3.2
million for 2004; $2.1 million for 2005; $0.7 million for 2006; $0.2 million for
2007; and $0.2 million for 2008.

NOTE 9 - MORTGAGE SERVICING ASSETS: Provident recognizes the rights to service
mortgage loans it does not own but services for others within Other Assets of
its balance sheet. Mortgage servicing assets may be recognized (1) when mortgage
loans are sold with servicing retained or (2) when mortgage loan servicing is
purchased. When mortgage loans are sold with servicing retained, the carrying
value of the loans is allocated between the loans sold and servicing assets
retained based on the relative fair values of each. Mortgage servicing assets,
when purchased, are initially recorded at cost. Mortgage servicing assets are
carried at the lower of the initial carrying value, adjusted for amortization,
or estimated fair value. Mortgage servicing assets are evaluated quarterly for
impairment based on the fair value of those assets, using a disaggregated
approach based on interest rates and product types. The fair value of the
mortgage servicing assets is determined by estimating the present value of
future net cash flows, taking into consideration loan prepayments speeds,
discount rates, servicing costs and other economic factors.


                                       68
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Changes in the net carrying value of mortgage servicing assets follows:

<TABLE>
<CAPTION>
                                                            Year Ended
                                                           December 31,
                                                  -----------------------------
(In Thousands)                                       2003                2002
--------------                                    ---------           ---------
<S>                                               <C>                 <C>
Mortgage Servicing Assets:
 Balance at Beginning of Period                   $ 112,229           $  84,267
 Capitalized                                         85,452              46,139
 Amortization                                       (34,579)            (17,098)
 Sales / Loan Payoffs                                (3,932)             (1,079)
 Permanent Impairment Write-Off                        (304)                 --
                                                  ---------           ---------
 Balance at End of Period                         $ 158,866           $ 112,229
                                                  =========           =========
Valuation Allowance:
 Balance at Beginning of Period                   $    (539)          $      --
 Servicing Valuation Provision                       (1,844)               (539)
 Permanent Impairment Write-Off                         304                  --
                                                  ---------           ---------
 Balance at End of Period                         $  (2,079)          $    (539)
                                                  =========           =========
Net Carrying Value of Mortgage Servicing          ---------           ---------
 Assets at End of Period                          $ 156,787           $ 111,690
                                                  =========           =========
</TABLE>

As of December 31, 2003, total mortgage loans serviced for others included $11.3
billion on residential property and $9.7 billion on commercial real estate
property. Net mortgage servicing assets relating to residential loans and
commercial real estate loans totaled $82.1 million and $74.7 million,
respectively as of December 31, 2003. Net impairment charges of $1.1 million and
$0.5 million were incurred on the residential servicing assets in 2003 and 2002,
respectively. In 2003, impairment charges of $0.7 million were incurred on the
commercial real estate assets. Impairment charges on mortgage servicing assets
have been less significant for Provident than at some other mortgage servicers
due to characteristics of the underlying loans being serviced. The majority of
the residential loans were acquired with interest rates at or near current
levels while most of the commercial real estate loans have lockout and
prepayment penalties generally ranging from 5 to 9 years.

NOTE 10 - SHORT-TERM DEBT: Short-term debt was as follows:


<TABLE>
<CAPTION>
(Dollars in Thousands)                                          2003                 2002                 2001
----------------------                                       ----------           ----------           ----------
<S>                                                          <C>                  <C>                  <C>
Year End Balance:
  Federal Funds Purchased and Repurchase Agreements          $1,182,385           $1,653,736           $1,644,738
  Commercial Paper                                              261,053              271,269              240,571
Weighted Average Interest Rate at Year End:
  Federal Funds Purchased and Repurchase Agreements                2.35%                1.98%                2.28%
  Commercial Paper                                                 0.96                 1.49                 1.67
Maximum Amount Outstanding at Any Month End:
  Federal Funds Purchased and Repurchase Agreements          $1,861,603           $1,701,716           $1,925,001
  Commercial Paper                                              298,755              310,029              273,898
</TABLE>


                                       69
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 - LONG-TERM DEBT: Long-term debt consisted of the following:



<TABLE>
<CAPTION>
                                                                                                              December 31,
                                             Stated            Effective           Maturity        ------------------------------
(Dollars in Thousands)                      Rate (1)            Rate (2)             Date              2003                2002
----------------------                      --------           ---------           --------        ----------          ----------
<S>                                         <C>                <C>                 <C>             <C>                 <C>
Provident (Parent Company):
 Fixed Rate Senior                             8.38%               3.49%               2032        $   75,000          $   75,000
 Miscellaneous Notes                        Various             Various             Various               120                 239
                                                                                                   ----------          ----------
                                                                                                       75,120              75,239
                                                                                                   ----------          ----------
Subsidiaries:
 Notes Payable to
  Federal Home Loan Bank:
   Fixed Rate                                  5.84                5.84                2009           252,933             253,076
   Fixed Rate                                  5.96                5.96                2010           280,000             420,000
   Fixed Rate                               Various             Various             Various            48,563              55,589
 Subordinated Notes:
   Fixed Rate                                   n/a                 n/a                2003                --              74,998
   Fixed Rate                                  6.38                1.49                2004            99,997              99,932
 Secured Debt Financings:
   Secured by Auto Leases (3)                   n/a                 n/a                2003                --             125,354
   Secured by Auto Leases (3)                   n/a                 n/a                2003                --              42,325
   Secured by Auto Leases (3)                  5.76                 .43                2004            38,863              55,029
   Secured by Auto Leases (3)                  5.22                5.22                2004           100,901             244,585
   Secured by Auto Leases (3)                  5.96                5.96                2005            19,419              24,515
   Secured by Auto Leases (3)                  5.27                5.27                2005           107,496             130,263
   Secured by Auto Leases (3)                  6.37                6.37                2006           536,095             474,504
   Secured by Auto Leases (3)                  5.39                5.39                2007            22,717              26,700
   Secured by Auto Leases (3)                  6.00                6.00                2007           356,403             388,869
   Secured by Auto Leases (3)                  4.70                7.16                2007           215,847             249,020
   Secured by Residential Properties           4.12                4.12                2004            10,775                  --
   Secured by Residential Properties           1.50                2.05                2005           991,585             986,536
   Secured by Equipment Leases                 1.50                1.50                2005            19,433              43,073
 Miscellaneous Notes                        Various             Various             Various           122,783              73,050
                                                                                                   ----------          ----------
                                                                                                    3,223,810           3,767,418
                                                                                                   ----------          ----------
      Total                                                                                        $3,298,930          $3,842,657
                                                                                                   ==========          ==========
</TABLE>

(1)   Stated rate reflects interest rate on notes as of December 31, 2003.

(2)   Effective rate reflects interest rate paid as of December 31, 2003 after
      adjustments for notes issued at discount or premium, capitalized fees
      associated with the issuance of the debt and interest rate swap agreements
      entered to alter the payment characteristics.

(3)   Capital lease obligations incurred under sale-leaseback arrangement.

During the third quarter of 2002, Provident issued $75 million of senior
unsecured notes. These notes mature on July 15, 2032, however, they may be
called in whole or in part at any time on or after July 15, 2007.

The notes payable to the Federal Home Loan Bank are collateralized by investment
securities with a book value of $611 million. They are subordinated to the
claims of depositors and other creditors of Provident and are not insured by the
FDIC.

During 2003 Provident retired $140 million of Federal Home Loan Bank debt and
approximately $152 million of secured debt financing. Costs of $25.6 million
were associated with the retirement of this debt. Subordinated notes of $75
million matured during 2003.

Many of Provident's securitizations of loans and leases have been structured to
account for the transactions as secured financings. In connection with these
transactions, Provident has pledged $1.4 billion in auto leases, $1.1 billion in
residential and home equity loans, $110 million in cash and $27 million in
equipment leases.


                                       70
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2003, scheduled principal payments on long-term debt for the
following five years were as follows:

<TABLE>
<CAPTION>
(In Thousands)                         2004                2005                2006                2007                2008
--------------                      ----------          ----------          ----------          ----------          ----------
<S>                                 <C>                 <C>                 <C>                 <C>                 <C>
Provident (Parent Company)          $      120          $       --          $       --          $       --          $       --
Subsidiaries                           498,317           1,276,186             449,025             376,224              26,053
</TABLE>

NOTE 12 - JUNIOR SUBORDINATED DEBENTURES AND GUARANTEED PREFERRED BENEFICIAL
INTERESTS IN COMPANY'S JUNIOR SUBORDINATED DEBENTURES: Provident Capital Trust
I, II, III and IV, combined, were formed through the issuance of $14.3 million
of common stock and $462.5 million of preferred stock. The common stock was
purchased by Provident while the preferred stock was purchased by outside
investors. The proceeds of these stock sales were used to purchase $476.8
million of newly-authorized Provident junior subordinated debentures. The
debentures provide interest and principal payments to fund the trusts'
obligations. Provident fully and unconditionally guarantees the preferred
securities. The preferred securities qualify as either Tier 1 or Tier 2 capital
for bank regulatory purposes. The sole assets of the trusts are the debentures.

As a result of new accounting rules implemented by FASB Interpretation No. 46,
"Consolidation of Variable Interest Entities," Provident de-consolidated the
trusts as of December 31, 2003. This resulted in Provident recording an
investment in the Provident Capital Trust companies, which is included in Other
Assets, and recording additional debt equal to the common stock purchased by
Provident as of December 31, 2003. The junior subordinated debentures consisted
of the following at December 31:

<TABLE>
<CAPTION>
                                                                                        December 31,
                                   Stated         Effective     Maturity         --------------------------
(Dollars in Thousands)              Rate           Rate (1)       Date             2003              2002
----------------------             ------         ---------    ---------         --------          --------
<S>                                <C>            <C>          <C>               <C>               <C>
November 1996 Issuance              8.60%           8.67%      12/01/26          $102,137          $ 99,003
June 1999 Issuance                  8.75%           2.46%      06/30/29           125,519           121,522
November 2000 Issuance             10.25%           3.83%      12/31/30           112,853           109,257
March 2001 Issuance                 9.45%           4.11%      03/30/31           125,290           121,292
                                                                                 --------          --------
      Total                                                                      $465,799          $451,074
                                                                                 ========          ========
</TABLE>

(1)   Effective rate reflects interest rate paid as of December 31, 2003 after
      adjustments for notes issued at discount or premium, capitalized fees
      associated with the issuance of the debt and interest rate swap agreements
      entered to alter the payment characteristics.

NOTE 13 - MINORITY INTEREST: During June 2002, Provident and its consolidated
subsidiary, PFGI Capital Corporation (PFGI Capital), issued 6.6 million equity
units (PRIDES) to outside investors for $165 million. Provident Bank owns all of
the $165 million of Common Stock of PFGI Capital. The principal business
objective of PFGI Capital is to hold and manage commercial mortgage loan assets
and other authorized investments acquired from Provident Bank that will generate
net income for distribution to its stockholders. PFGI Capital has elected to be
treated as a real estate investment trust (REIT) for federal income tax
purposes.

Each PRIDES has a stated amount of $25 per unit and is comprised of two
components - a 3-year forward purchase contract and PFGI Capital Preferred
Stock.


                                       71
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Each forward purchase contract obligates the holder to buy, on August 17, 2005,
for $25, a number of newly issued shares of Provident Common Stock equal to the
"settlement rate." The settlement rate will be calculated as follows:

- if the market value of Provident Common Stock is equal to or greater than
  $29.0598, the settlement rate will be 0.8603;

- if the market value of Provident Common Stock is between $29.0598 and $24.42,
  the settlement rate will be equal to the $25 stated amount divided by the
  applicable market value; and

- if the applicable market value is less than or equal to $24.42, the settlement
  rate will be 1.0238.

"Applicable market value" is defined as the average of the closing price per
share of Provident Common Stock on each of the twenty consecutive trading days
ending on the fifth trading day immediately preceding August 17, 2005.

The following table illustrates how the settlement rate impacts the total number
of shares of Provident Common Stock that will be issued under the forward
purchase contract and the calculated price per share:

<TABLE>
<CAPTION>
 Applicable Market Value             Less Than                                                        Greater Than
of Provident Common Stock             $24.42                $25.00                $28.00                $29.0598
-------------------------          ------------          ------------          ------------          --------------
<S>                                <C>                   <C>                   <C>                   <C>
Settlement Rate                    (25.00/24.42)         (25.00/25.00)         (25.00/28.00)         (25.00/29.0598)
                                         1.0238                1.0000                0.8929                0.8603
Total Purchased Contracts
 Outstanding                          6,600,000             6,600,000             6,600,000             6,600,000
                                   ------------          ------------          ------------          ------------
Shares of Provident
 Common Stock Purchased               6,757,080             6,600,000             5,893,140             5,677,980
                                   ============          ============          ============          ============

Total Proceeds Received
 From PFGI Preferred
 Stock Issuance                    $165,000,000          $165,000,000          $165,000,000          $165,000,000
Shares of Provident
 Common Stock Purchased               6,757,080             6,600,000             5,893,140             5,677,980
                                   ------------          ------------          ------------          ------------
Price Paid Per Share of
 Provident Common Stock            $      24.42          $      25.00          $      28.00          $      29.06
                                   ============          ============          ============          ============
</TABLE>

Under the forward purchase contract, Provident will also make quarterly contract
adjustment payments to the PRIDES holders at the rate of 1.25% of the stated
amount per year. The present value of this obligation has been recorded as a
liability and as a reduction to shareholders' equity.

The PFGI Capital Preferred Stock has a liquidation preference of $25 and an
initial non-cumulative dividend rate of 7.75%. Under certain regulatory
circumstances, the PFGI Capital Preferred Stock will be automatically exchanged
for Provident Bank Preferred Stock.


                                       72
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Concurrent with the fulfillment of the forward purchase contract, Provident has
engaged a remarketing agent to remarket the PFGI Capital Preferred Stock on
behalf of the holders, at which time the PFGI Capital Preferred Stock is
permanently detached from the forward purchase contract. Once the forward
purchase contract is fulfilled, there will be two separate and distinct
securities outstanding: PFGI Capital Preferred Stock and Provident Common Stock.
The number of common shares to be issued will be from 5,677,980 to 6,757,080,
depending on the market value of the Common Stock. The proceeds received from
the remarketing will be used by the holders of PFGI Capital Preferred Stock to
fulfill their commitment under the terms of the forward purchase contract.
Provident intends to use such proceeds for the redemption of the remarketed PFGI
Capital Preferred Stock ninety days after the remarketing.

As discussed in Note 24 of the "Notes to Consolidated Financial Statements,"
Provident will merge with National City Corporation (National City) subject to
regulatory and stockholder approvals. National City will be required to
expressly assume Provident's obligations under the forward purchase contract and
certain related agreements. As Provident shareholders will be receiving 1.135
shares of National City Common Stock for each share of Provident Common Stock,
the settlement rate of the forward purchase contract will be calculated as
follows:

-     if the market value of National City Common Stock is equal to or greater
      than $25.6033, the settlement rate will be 0.9764;

-     if the market value of National City Common Stock is between $25.6033 and
      $21.5154, the settlement rate will be equal to the $25 stated amount
      divided by the applicable market value; and

-     if the applicable market value is less than or equal to $21.5154, the
      settlement rate will be 1.1620.

NOTE 14 - STOCKHOLDERS' EQUITY: In 1991, Provident issued 371,418 shares of
Non-Voting Convertible Preferred Stock to American Financial Group as partial
consideration for the acquisition of Hunter Savings Association. During 1995,
301,146 shares of the Preferred Stock were converted into 4,234,865 shares of
Common Stock. As of December 31, 2003 and 2002, 70,272 shares of Preferred Stock
remain outstanding. These shares have a stated value and liquidation value of
$100 per share and a conversion ratio of 14.0625 shares of Provident's Common
Stock for each share of Convertible Preferred Stock.


                                       73
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Comprehensive income represents the changes in equity during a period except
those resulting from investments by shareholders and distributions to
shareholders. For Provident, components of comprehensive income include the
unrealized gains/losses on securities available for sale and unrealized
gains/losses on cash flow hedging derivatives (collectively known as other
comprehensive income), as well as net income. A summary of activity in
accumulated other comprehensive income (loss) within Shareholders' Equity
follows:

<TABLE>
<CAPTION>
(In Thousands)                                                            2003               2002
--------------                                                          --------           --------
<S>                                                                     <C>                <C>
Accumulated Unrealized Losses on Securities Available
 for Sale at January 1, Net of Tax                                      $ 36,809           $(15,953)
Net Unrealized Gains (Losses) for the Period, Net of Tax
 (Benefit) Expense of ($22,509) in 2003 and $29,319 in 2002              (41,803)            54,449
Reclassification Adjustment for Gains Included in Net Income,
 Net of Tax Expense of $13,581 in 2003 and $909 in 2002                  (25,222)            (1,687)
                                                                        --------           --------
Effect on Other Comprehensive Income (Loss) for the Year                 (67,025)            52,762
                                                                        --------           --------
Accumulated Unrealized Gains (Losses) on Securities Available
 for Sale at December 31, Net of Tax                                    $(30,216)          $ 36,809
                                                                        ========           ========

Accumulated Unrealized Losses on Derivatives Used in Cash
 Flow Hedging Relationships at January 1, Net of Tax                    $(79,930)          $(82,743)
Net Unrealized Gains (Losses) for the Period, Net of Tax
 (Benefit) Expense of $4,864 in 2003 and ($13,117) in 2002                 9,033            (24,360)
Reclassification Adjustment for Losses Included in Net Income,
 Net of Tax Benefit of $11,195 in 2003 and $14,632 in 2002                20,791             27,173
                                                                        --------           --------
Effect on Other Comprehensive Income (Loss) for the Year                  29,824              2,813
                                                                        --------           --------
Accumulated Unrealized Losses on Derivatives Used in Cash
 Flow Hedging Relationships at December 31, Net of Tax                  $(50,106)          $(79,930)
                                                                        ========           ========
Accumulated Other Comprehensive Income (Loss) at
 January 1, Net of Tax                                                  $(43,121)          $(98,696)
Other Comprehensive Income (Loss), Net of Tax                            (37,201)            55,575
                                                                        --------           --------
Accumulated Other Comprehensive Income (Loss) at
 December 31, Net of Tax                                                $(80,322)          $(43,121)
                                                                        ========           ========
</TABLE>

NOTE 15 - REGULATORY CAPITAL REQUIREMENTS: Provident and its banking subsidiary,
Provident Bank, are subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a direct
material effect on Provident's financial statements. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, Provident
and Provident Bank must meet specific capital guidelines that involve
quantitative measures of its assets, liabilities and certain off-balance sheet
items as calculated under regulatory accounting practices. Capital amounts and
classification are also subject to qualitative judgments by the regulators about
components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require Provident and Provident Bank to maintain minimum ratios of 4.00% for
Tier 1 capital to average assets, 4.00% for Tier 1 capital to risk-weighted
assets, and 8.00% for total risk-based capital to risk-weighted assets. As of
December 31, 2003, Provident and Provident Bank meet all capital requirements to
which they are subject.


                                       74
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2003, Provident and Provident Bank's capital ratios were
categorized as "well capitalized" for regulatory purposes. To be categorized as
well capitalized, Provident and Provident Bank must maintain minimum ratios of
5.00% for Tier 1 capital to average assets, 6.00% for Tier 1 capital to
risk-weighted assets, and 10.00% for total risk-based capital to risk-weighted
assets. There have been no subsequent conditions or events which management
believes have changed the institutions' status.

The following table presents Provident and Provident Bank's regulatory capital
information at December 31:

<TABLE>
<CAPTION>
                                                        2003                                            2002
                                          ---------------------------------           ---------------------------------
                                                                 Provident                                   Provident
(Dollars in Thousands)                     Provident               Bank                Provident                Bank
----------------------                    -----------           -----------           -----------           -----------
<S>                                       <C>                   <C>                   <C>                   <C>
Tier 1 Capital                            $ 1,411,771           $ 1,207,005           $ 1,337,158           $ 1,151,075
Average Assets                             17,369,271            17,246,757            17,119,102            16,996,303
  Tier 1 Leverage Ratio                          8.13%                 7.00%                 7.81%                 6.77%

Tier 1 Capital                            $ 1,411,771           $ 1,207,005           $ 1,337,158           $ 1,151,075
Risk-Weighted Assets                       13,333,797            13,234,462            14,225,716            14,059,727
  Tier 1 Capital Ratio                          10.59%                 9.12%                 9.40%                 8.19%

Total Risk-Based Capital                  $ 1,658,388           $ 1,622,015           $ 1,625,270           $ 1,596,938
Risk-Weighted Assets                       13,333,797            13,234,462            14,225,716            14,059,727
  Total Risk-Based Capital Ratio                12.44%                12.26%                11.42%                11.36%
</TABLE>


Provident's Tier 1 capital is comprised of total shareholders' equity plus
qualifying minority interest and junior subordinated debentures, less unrealized
gains and losses within accumulated other comprehensive loss, intangible assets,
and a valuation related to mortgage servicing rights. Total risk-based capital
consists of Tier 1 capital plus qualifying reserves for loan and lease losses
and junior subordinated debentures which did not qualify for Tier 1 treatment.

For purposes of computing the leverage ratio, average assets represents average
assets for the fourth quarter less assets not qualifying for total risk-based
capital including intangibles and non-qualifying mortgage servicing assets and
reserve for loan and lease losses.

NOTE 16 - BENEFIT PLANS: Provident has a Retirement Plan for the benefit of its
employees. Included under this plan is a Profit Sharing Plan and a Personal
Investment Election Plan (PIE Plan). Provident also maintains a Deferred
Compensation Plan (DCP) and stock option plans.

The Profit Sharing Plan covers all employees who are qualified as to age and
length of service. It is a trusteed plan with the entire cost borne by
Provident. All fund assets are allocated to the participants. Provident's
contributions are discretionary by the directors of Provident. Provident
contributed approximately $5.5 million and $4.6 million for 2003 and 2002,
respectively. Contributions of $4.1 million were made to an Employee Stock
Ownership Plan (ESOP) for 2001. The Profit Sharing Plan, which replaced the
ESOP, differs from the ESOP in that participants may diversify contributions,
which were formerly in Provident Stock, to other kinds of investments. In
addition, participants may diversify up to 25% of their year-end 2002 ESOP
balance each year into other investment options.


                                       75
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The PIE Plan, a tax deferred retirement plan, covers all employees who are
qualified as to age and length of service. Employees who wish to participate in
the PIE Plan may contribute from 1% to 10% (15% beginning in 2003) of their
pre-tax salaries (to a maximum prescribed by the Internal Revenue Service) to
the plan as voluntary contributions. Provident will make a matching contribution
equal to 25% of the pre-tax voluntary contributions made by the employees on the
first 8% of their pre-tax salaries during the plan year. The contribution made
by Provident is charged against earnings as the employees' contributions are
made. Provident incurred expense of $1.9 million, $1.7 million and $1.5 million
for this retirement plan for 2003, 2002 and 2001, respectively.

The DCP permits participants, selected by the Compensation Committee of the
Board of Directors, to defer compensation in a manner that aligns their
interests with those of Provident shareholders through the investment of
deferred compensation in Provident Common Stock. The DCP allows participants to
postpone the receipt of 5% to 50% of compensation until retirement. Amounts
deferred are invested in a Provident Bank Stock Account or a Self-Directed
Account. Provident will credit the Stock Account with an amount dependent upon
Provident's pre-tax earnings per share, for each share of Provident Common Stock
in the account. The calculated credit is charged against earnings by Provident
annually. Under the DCP, Provident paid $0 $195,000 and $0 for 2003, 2002 and
2001, respectively.

Provident has Employee Stock Option Plans, an Advisory Directors' Stock Option
Plan and Outside Directors' Stock Option Plans. The options are to be granted,
with exercise prices at market value, as of the date of grant. Options become
exercisable beginning one year from date of grant generally at the rate of 20%
per year. The Employee Stock Option Plans, Advisory Directors' Stock Option Plan
and Outside Directors' Stock Option Plans authorized the issuance of 13,342,373,
427,500 and 193,750 options, respectively. As of December 31, 2003, the number
of options remaining available for future issuance under all of the stock option
plans is 2.3 million.

The following table summarizes option activity for the three years ended
December 31, 2003:

<TABLE>
<CAPTION>
                                    2003                              2002                               2001
                    ---------------------------------  ---------------------------------  ---------------------------------
                      Weighted                           Weighted                           Weighted
                       Average                           Average                            Average
                      Exercise          Number of        Exercise         Number of         Exercise         Number of
                        Price            Options          Price            Options           Price            Options
                    --------------   ----------------  -------------  ------------------  -------------   -----------------
<S>                 <C>              <C>               <C>            <C>                 <C>             <C>
Outstanding at
 Beginning of Year     $29.12            7,127,235        $29.92          6,143,359          $28.84           5,480,365
  Granted               27.55            1,144,240         23.08          1,660,200           29.17           1,407,432
  Exercised             19.09             (335,718)        12.59           (336,295)          10.37            (374,567)
  Canceled              29.25             (459,930)        30.33           (340,029)          30.82            (369,871)
                                      -------------                    -------------                       -------------
Outstanding at
 End of Year           $28.54            7,475,827        $29.12          7,127,235          $29.92           6,143,359
                                      =============                    =============                       =============
</TABLE>


                                       76
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At December 31, 2003, 2002 and 2001, there were 3,965,812, 3,297,934 and
2,825,462 options exercisable, respectively, having a weighted average option
price per share of $30.23, $31.27 and $28.61, respectively. The following table
summarizes information about stock options outstanding at December 31, 2003:

<TABLE>
<CAPTION>
                                      Options Outstanding                                 Options Exercisable
                 --------------------------------------------------------------  --------------------------------------
                                              Weighted
                                              Average             Weighted                                 Weighted
    Range of                                 Remaining             Average                                 Average
    Exercise           Number               Contractual           Exercise             Number              Exercise
     Prices          Outstanding           Life in Years            Price            Exercisable            Price
---------------  --------------------   ---------------------  ----------------  --------------------   ---------------
<S>              <C>                    <C>                    <C>               <C>                    <C>
$13.00 - $19.00         301,202                  1.4               $15.17               301,202            $15.17
$19.01 - $28.00       4,184,727                  7.0                25.11             1,678,100             25.05
$28.01 - $41.00       2,423,835                  6.0                31.93             1,421,047             33.01
$41.01 - $55.00         566,063                  4.0                46.58               565,463             46.59
</TABLE>

As of January 1, 2003, Provident elected to adopt the provisions of Statement
No. 123, "Accounting for Stock-Based Compensation" using the Prospective Method
of expense recognition according to the transition rules of Statement No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure." Under
Statement 123, compensation expense is recognized over the vesting period equal
to the fair value of stock-based compensation as of the date of grant. Provident
recorded $1.3 million ($1.0 million after-tax) of stock-based compensation for
2003 while no compensation cost has been recognized for stock option grants
during 2002 and 2001. Pro forma net income and earnings per share information is
provided in Note 1 as if compensation cost had been determined for stock awards
for all years based on the fair values at grant dates.

NOTE 17 - INCOME TAXES: The composition of income tax expense follows:

<TABLE>
<CAPTION>
(In Thousands)                                     2003         2002         2001
-------------------------------------------      --------      -------     --------
<S>                                              <C>           <C>         <C>
Current:
  Federal                                        $ (8,318)     $24,786     $ 11,704
  State                                             2,147        2,686          (50)
                                                 --------      -------     --------
                                                   (6,171)      27,472       11,654
Deferred                                           53,316       22,550      (12,249)
                                                 --------      -------     --------
    Total                                        $ 47,145      $50,022     $   (595)
                                                 ========      =======     ========
</TABLE>

The effective tax rate differs from the statutory rate applicable to
corporations as a result of permanent differences between accounting and taxable
income. The reconciliation between income tax expense and the amount computed by
applying the statutory federal income tax rate was as follows:

<TABLE>
<CAPTION>
(In Thousands)                                       2003          2002         2001
--------------------------------------------     --------      --------      -------
<S>                                              <C>           <C>           <C>
Tax at Statutory Rate (35%)                      $ 50,766      $ 50,915      $  (557)
State Income Tax, Net of Federal Tax Benefit        1,396         1,746          (32)
Tax Effect of:
  Non-Taxable Interest Income                      (3,392)       (3,388)        (512)
  Securitization Activity                          (2,788)        1,950          227
  Tax Credits                                      (2,306)       (2,638)      (1,113)
  Non-Deductible Amortization of Goodwill             864           258        1,257
  Other - Net                                       2,605         1,179          135
                                                 --------      --------      -------
    Applicable Income Taxes                      $ 47,145      $ 50,022      $  (595)
                                                 ========      ========      =======
</TABLE>


                                       77
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition to the above income tax expense related to operations, an income tax
benefit of $0.6 million has been allocated to the cumulative effect of changes
in accounting principles.

At December 31, 2003, for income tax purposes, Provident had a federal net
operating loss carryforward of $133.8 million available, which expires in the
year 2021.

At December 31, 2003, Provident had a federal tax credit carryforward of $2.7
million available, which $0.4 million and $2.3 million expires in 2022 and 2023,
respectively.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
Provident's deferred tax liabilities and assets as of December 31 are as
follows:

<TABLE>
<CAPTION>
(In Thousands)                                   2003         2002         2001
------------------------------------------     --------     --------     --------
<S>                                            <C>          <C>          <C>
Deferred Tax Liabilities:
  Excess Lease and Partnership Income          $244,921     $194,679     $143,267
  Securitizations                                52,386      109,585       58,433
  Deferred Loan Costs                            26,955       23,308       30,485
  Other                                          30,918       23,829       19,225
                                               --------     --------     --------
    Total Deferred Tax Liabilities              355,180      351,401      251,410
                                               --------     --------     --------
Deferred Tax Assets:
  Reserve for Loan and Lease Losses              94,928       94,462       87,769
  Federal Net Operating Loss Carryforward        46,815      109,482       36,044
  Unrealized Loss on Investment Securities       43,473       23,414       53,150
  Deferred Compensation                          11,019       10,808        9,210
  Other                                          32,680       20,020       24,335
                                               --------     --------     --------
    Total Deferred Tax Assets                   228,915      258,186      210,508
                                               --------     --------     --------
      Net Deferred Tax Liabilities             $126,265     $ 93,215     $ 40,902
                                               ========     ========     ========
</TABLE>

NOTE 18 - EARNINGS PER SHARE: Basic earnings per share is calculated by dividing
net income, less dividend requirements on convertible preferred stock, by the
weighted average number of common shares outstanding for the period. Diluted
earnings per share takes into consideration the pro forma dilution assuming the
convertible preferred shares and the in-the-money outstanding stock options were
converted or exercised into common shares. It also takes into consideration the
dilutive impact of shares held in benefit plans and of forward purchase
contracts required to be settled in Provident Stock. Net income is not adjusted
for preferred dividend requirements.

Stock options to purchase approximately 2.4 million, 4.6 million and 5.1 million
shares of Common Stock were outstanding at December 31, 2003, 2002 and 2001,
respectively, but were not included in the computation of diluted earnings per
share because the options' exercise price was not in-the-money and, therefore,
the effect would be anti-dilutive.


                                       78
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth the computation of basic and diluted earnings per
common share:

<TABLE>
<CAPTION>
                                                                       Year Ended December 31,
                                                                   --------------------------------
(In Thousands Except Per Share Data)                                 2003        2002       2001
-----------------------------------------------------------------  ---------   ---------  ---------
<S>                                                                <C>         <C>        <C>
Basic:
 Income Before Cumulative Effect of Changes in
  Accounting Principles                                            $ 97,902    $ 95,451   $ (1,003)
 Less Preferred Stock Dividends                                        (949)       (949)      (949)
                                                                   --------    --------   --------
  Income Available to Common Shareholders Before
   Cumulative Effect of Changes in Accounting Principles             96,953      94,502     (1,952)
 Cumulative Effect of Changes in Accounting Principles               (1,202)         --         --
                                                                   --------    --------   --------
  Net Income Available to Common Shareholders                        95,751      94,502     (1,952)
 Weighted-Average Common Shares Outstanding                          48,830      48,806     49,011
                                                                   --------    --------   --------
 Basic Earnings (Loss) Per Share:
  Before Cumulative Effect of Changes in Accounting Principles     $   1.99    $   1.94   $  (0.04)
                                                                   ========    ========   ========
  After Cumulative Effect of Changes in Accounting Principles      $   1.96    $   1.94   $  (0.04)
                                                                   ========    ========   ========
Diluted:
 Income Before Cumulative Effect of Changes in
  Accounting Principles                                            $ 97,902    $ 95,451   $ (1,003)
 Less Preferred Stock Dividends  (1)                                    n/a         n/a       (949)
                                                                   --------    --------   --------
  Income Available to Common Shareholders Before

   Cumulative Effect of Changes in Accounting Principles             97,902      95,451     (1,952)
 Cumulative Effect of Changes in Accounting Principles               (1,202)         --         --
                                                                   --------    --------   --------
  Net Income Available to Common Shareholders                        96,700      95,451     (1,952)
 Weighted-Average Common Shares Outstanding                          48,830      48,806     49,011
 Benefit Plans Common Shares                                            710         497         --
 Assumed Conversion of:
  Convertible Preferred Stock (1)                                       988         988        n/a
  Dilutive Stock Options (1)                                            364         452        n/a
  Dilutive Impact of PRIDES Securities                                   57          --         --
                                                                   --------    --------   --------
  Dilutive Potential Common Shares                                   50,949      50,743     49,011
                                                                   --------    --------   --------
 Diluted Earnings (Loss) Per Share:
  Before Cumulative Effect of Changes in Accounting Principles         1.92        1.88      (0.04)
                                                                   ========    ========   ========
  After Cumulative Effect of Changes in Accounting Principles          1.90        1.88      (0.04)
                                                                   ========    ========   ========
</TABLE>

(1)   The conversion of preferred securities and stock options were not included
      in the diluted earnings (loss) per share calculation for 2001 as these are
      anti-dilutive.

NOTE 19 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES: Provident uses
derivative instruments to manage its interest rate risk. These instruments
include interest rate swaps and interest rate caps. In addition, forward
delivery commitments are entered to assist with the issuance of mortgage-backed
securities.

Interest rate swaps are agreements between two parties to exchange periodic
interest payments that are calculated on a notional principal amount. Provident
enters into swaps to synthetically alter the repricing characteristics of
specific assets, liabilities and off-balance sheet loan securitizations. As only
interest payments are exchanged, cash requirements and credit risk are
significantly less than the notional amounts.

Interest rate caps protect against the impact of rising interest rates on
interest-bearing financial instruments. When interest rates go above a cap's
strike rate, the cap provides for receipt of payments based on its notional
amount.

Interest rate derivative instruments have a credit risk component based on the
ability of a counterparty to meet the obligations to Provident under the terms
of the instruments. Notional principal amounts express the volume of the
transactions, but Provident's potential exposure to credit risk is limited only
to the market value of the instruments. Provident manages its credit risk in
these instruments through counterparty credit policies. At December 31, 2003,
Provident had bilateral collateral agreements in place


                                       79
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

with its counterparties, against which Provident has pledged investment
securities with a carrying value of $102 million as collateral. There were no
past due amounts on any instruments as of December 31, 2003. Provident has never
experienced a credit loss related to these instruments.

Provident adopted the provisions of Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities," on January 1, 2001. Pursuant to
Statement 133, derivatives are carried at fair value and are recorded within
Other Assets or Accrued Interest and Other Liabilities in the balance sheet. The
accounting for the gain or loss resulting from the change in fair value depends
on the intended use of the derivative. For a derivative used to hedge changes in
fair value of a recognized asset or liability, or an unrecognized firm
commitment, the gain or loss on the derivative will be recognized in earnings
together with the offsetting loss or gain on the hedged item. This results in
earnings recognition only to the extent that the hedge is ineffective in
achieving offsetting changes in fair value. For a derivative used to hedge
changes in cash flows associated with forecasted transactions, the gain or loss
on the effective portion of the derivative will be deferred and reported as
accumulated other comprehensive income, a component of shareholders' equity,
until such time the hedged transaction affects earnings. For derivative
instruments not accounted for as hedges, changes in fair value are required to
be recognized in earnings.

Fair Value Hedging Strategy: Provident uses interest rate swaps to assist in the
management of its interest rate risk. The interest rate swaps effectively modify
Provident's exposure to interest rate risk by converting fixed rate liabilities,
generally time deposits and long-term debt, to a floating rate. These interest
rate swaps involve the receipt of fixed rate amounts in exchange for floating
rate interest payments over the life of the agreements without an exchange of
the underlying principal amounts.

As the changes in fair value of the hedged items offset the changes in fair
value of the derivatives, no material gain or loss has been recognized in 2003,
2002 or 2001.

Cash Flow Hedging Strategy: Provident has also entered into interest rate swap
agreements to reduce the impact of interest rate changes on future interest
payments of on and off-balance sheet financing. These interest rate swaps
convert floating rate debt to a fixed rate basis. These interest rate swaps have
generally been used to hedge interest payments involving floating rate debt and
off-balance sheet securitization transactions with maturities up to December
2014.

For the years ended December 31, 2003 and 2002, Provident recorded gains of
$29.8 million and $2.8 million, respectively, in accumulated other comprehensive
income. No significant gains or losses were recognized during 2003, 2002 or 2001
as a result of ineffective cash flow hedges. During the next twelve months,
management expects to reclassify $33.4 million of net losses on derivative
instruments from accumulated other comprehensive income to earnings which it
believes will be offset by improved cash flows of the hedged items associated
with these derivative instruments.


                                       80
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


A summary of the notional amount of the interest rate derivatives at December 31
is as follows:

<TABLE>
<CAPTION>
                                         Interest Rate Swaps
                                         ---------------------
                                                                    Interest Rate Caps
                                          Receive        Pay      -----------------------
(In Millions)                             Fixed         Fixed     Purchased         Sold
-------------------------------          ------         ------    ---------        ------
<S>                                      <C>            <C>         <C>            <C>
At December 31, 2003:
  Certificates of Deposit                $4,302         $ --        $ --           $ --
  Long-Term / Subordinated Debt           1,047            498       1,010          1,010
  Off-Balance Sheet Securitizations          59            671       1,510          1,510
  Premium Index Deposits                   --              195        --             --
  Loans                                    --               66        --             --
  For Customers' Purposes                  --               59          45           --
                                         ------         ------      ------         ------
    Totals                               $5,408         $1,489      $2,565         $2,520
                                         ======         ======      ======         ======
At December 31, 2002:

  Certificates of Deposit                $2,812         $ --        $ --           $ --
  Long-Term / Subordinated Debt             838            622       1,010          1,010
  Off-Balance Sheet Securitizations         139          1,265       1,736          1,736
  Premium Index Deposits                   --              195        --             --
  Loans                                    --               51        --             --
  For Customers' Purposes                  --               37          13           --
                                         ------         ------      ------         ------
    Totals                               $3,789         $2,170      $2,759         $2,746
                                         ======         ======      ======         ======
</TABLE>

Summary information with respect to the interest rate derivatives used to manage
Provident's interest rate sensitivity at December 31, 2003 follows:


<TABLE>
<CAPTION>
                                                                   Interest Rate Swaps
                                                            -----------------------------
                                                                                                    Interest Rate Caps
                                                               Receive            Pay         -------------------------------
(Dollars in Millions)                                           Fixed            Fixed          Purchased          Sold
----------------------------------------------------------  ---------------  --------------   --------------   --------------
<S>                                                         <C>              <C>              <C>             <C>
Notional Amount                                             $   5,408        $   1,489        $   2,565       $   2,520
Positive Fair Value Adjustment                                     75             --                 29            --
Negative Fair Value Adjustment                                    (50)             (88)            --               (29)
Weighted Average:
  Receive Rate                                                   5.07%            1.26%             n/a             n/a
  Pay Rate                                                       1.50%            6.02%             n/a             n/a
  Strike Rate                                                     n/a              n/a             8.97%           8.98%
  Life (in years)                                                 9.6              5.8             11.1            11.3
</TABLE>


The expected notional maturities of Provident's interest rate derivative
portfolio at December 31, 2003 are as follows:

<TABLE>
<CAPTION>
                                                 Interest Rate Swaps
                                            ------------------------------
                                                                                          Interest Rate Caps
                                               Receive            Pay         ----------------------------------------------
(In Millions)                                   Fixed            Fixed          Purchased         Sold            Total
------------------------------------------  --------------   --------------   --------------  -------------   --------------
<S>                                         <C>              <C>              <C>             <C>             <C>
Less than 1 Year                            $   509            $   195            $    12         $  --           $   716
From 1 to 5 Years                             1,685                454                 33            --             2,172
From 5 to 10 Years                              899                672               --              --             1,571
From 10 to 15 Years                           1,291                154              2,520           2,520           6,485
More than 15 Years                            1,024                 14               --              --             1,038
                                            -------            -------            -------         -------         -------
  Total                                     $ 5,408            $ 1,489            $ 2,565         $ 2,520         $11,982
                                            =======            =======            =======         =======         =======
</TABLE>


Provident also enters into forward delivery contracts for the future delivery of
commercial real estate and residential mortgage loans at a specified interest
rate to reduce the interest rate risk associated with loans held for sale. As of
December 31, 2003, Provident had $74 million in forward delivery contracts.

                                       81
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20 - CREDIT RISK TRANSFER INSTRUMENTS, CREDIT COMMITMENTS AND GUARANTEES:
During 2001 and 2000, Provident entered into two credit risk transfer
transactions related to its auto lease originations. Both transactions are
designed to reduce Provident's exposure to credit losses. Under the 2000
transaction, Provident transferred a substantial part of credit-related losses,
beyond a retained first loss piece, related to the then outstanding auto lease
pool. Similarly, the 2001 transaction enabled Provident to transfer a large
portion of its credit risk exposure related to its auto lease pool originated
during that year. As a result of these transactions, Provident was able to lower
its credit concentration in auto leasing while reducing its regulatory capital
requirements. As of December 31, 2003, the remaining unpaid auto lease balances
on the 2001 and 2000 credit risk transfer transactions were $0.4 billion and
$0.6 billion, respectively.

Commitments to extend credit are financial instruments in which Provident agrees
to provide financing to customers based on predetermined terms and conditions.
Since many of the commitments to extend credit are expected to expire without
being drawn upon, the total commitment amounts do not necessarily represent
future cash requirements. Provident evaluates each customer's creditworthiness
on a case-by-case basis. The amount of collateral obtained if deemed necessary
by Provident upon extension of credit is based on management's credit evaluation
of the counterparty. Collateral held varies but may include accounts receivable,
inventory, property, plant and equipment, and income-producing commercial
properties.

A standby letter of credit is an irrevocable guarantee whereby Provident
guarantees the performance of a customer to a third party in a borrowing
arrangement. They are primarily issued to support public and private borrowing
arrangements, including commercial paper, bond financing, and similar
transactions. The credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loan facilities to customers.
Collateral is obtained based on management's credit assessment of the customer.
Generally, Provident issues standby letters of credit for terms from six months
to three years. As of December 31, 2003 and 2002, the carrying value of the
guarantee liability related to the standby letters of credit was $1.1 million
and $1.2 million, respectively.

Provident's commitments to extend credit and letters of credit which are not
reflected in the balance sheet at December 31 are as follows:

<TABLE>
<CAPTION>
(In Millions)                      2003        2002
------------------------------    ------      ------
<S>                               <C>         <C>
Commitments to Extend Credit      $4,633      $2,887
Standby Letters of Credit            248         274
Commercial Letters of Credit           3          11
</TABLE>

Provident Bank has issued a guarantee for Red Mortgage to assist in its business
activities. This guarantee was made to Fannie Mae. Red Mortgage is an approved
Fannie Mae Delegated Underwriting and Servicing (DUS) mortgage lender. Under the
Fannie Mae DUS program, Red Mortgage underwrites, funds and sells mortgage loans
on multifamily rental projects. Red Mortgage then services these mortgage loans
on Fannie Mae's behalf. Participation in the Fannie Mae DUS program requires Red
Mortgage to share the risk of loan losses with Fannie Mae. Under the loss
sharing arrangement, Red Mortgage and Fannie Mae split losses with one-third of
all losses assumed by Red Mortgage and two-thirds of all losses assumed by
Fannie Mae. For Red Mortgage to

                                       82
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

participate in the Fannie Mae DUS program, Provident Bank provided a guarantee
to Fannie Mae that it would fulfill all payments required of Red Mortgage under
the loss sharing arrangement if Red Mortgage fails to meet its obligations. As
of December 31, 2003, Red Mortgage serviced loans with outstanding principal
balances aggregating $3.8 billion under the DUS program. The guarantee will
continue until such time as the loss sharing agreement is amended or Red
Mortgage no longer shares the risk of losses with Fannie Mae. The fair value of
the guarantee, in the form of reserves for losses under the Fannie Mae DUS
program, has been established on Red Mortgage's balance sheet.

NOTE 21 - LINE OF BUSINESS REPORTING: Provident's three major business lines,
referred to as Commercial Banking, Retail Banking and Mortgage Banking, are
based on the products and services offered. Commercial Banking offers a broad
range of commercial lending and financial products and services to corporate
businesses. Retail Banking provides consumer lending, deposit accounts, trust,
brokerage and investment products and services to consumers and small
businesses. Mortgage Banking offers conforming and nonconforming residential
loans to consumers, and also provides fee-based loan processing, loan
warehousing and servicing for third party originators.

Financial results are determined based on an assignment of balance sheet and
income statement items to each business line. Equity allocations are made based
on various risk measurements of the business line. A matched funded transfer
pricing process is used to allocate interest income and expense among the
business lines. Provision for loan and lease losses is charged to each business
line based on its level of net charge-offs and the size and risk of its lending
portfolio. Activity-based costing is used to allocate expenses for centrally
provided services.

                                       83
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Condensed income statements and total assets are provided below for Provident's
three major lines of business for the past three years. Corporate Center
includes revenues and expenses not allocated to the primary business lines,
including any item not related to their operating activity. The net loss of $8.3
million for 2003 and net income of $1.2 million for 2002 resulted from the
following actions taken by management: the sale of subprime loans, Merchant
Services, Florida assets and liabilities, and classified loans and aircraft
leases; the early retirement of higher interest rate debt; contract termination,
severance and business exit costs; and the impairment of equity investments and
aircraft lease residuals. Corporate Center also includes realized gains on
security sales and certain warrant gains.

<TABLE>
<CAPTION>
                                   Commercial       Retail        Mortgage      Corporate
(In Millions)                       Banking        Banking        Banking        Center          Total
                                   ---------      ---------      ---------      ---------      ---------
<S>                                <C>            <C>            <C>            <C>            <C>
Year Ended December 31, 2003:
  Net Interest Income              $   191.3      $    63.6      $    60.9      $    --        $   315.8
  Provision for Loan Losses            (39.8)          (8.8)          (9.2)         (58.2)        (116.0)
  Noninterest Income                   186.2          512.1           49.6           97.4          845.3
  Noninterest Expense                 (234.9)        (527.9)         (87.4)         (51.7)        (901.9)
  Income Taxes                         (33.4)         (12.7)          (4.6)           4.2          (46.5)
                                   ---------      ---------      ---------      ---------      ---------
  Net Income                       $    69.4      $    26.3      $     9.3      $    (8.3)     $    96.7
                                   =========      =========      =========      =========      =========
  Total Assets                     $   7,390      $   4,610      $     789      $   4,229      $  17,018
                                   =========      =========      =========      =========      =========

Year Ended December 31, 2002:
  Net Interest Income              $   216.7      $    32.6      $    66.3      $    --        $   315.6
  Provision for Loan Losses            (62.0)          (8.0)         (20.6)          (9.0)         (99.6)
  Noninterest Income                   150.0          603.6           41.1           10.8          805.5
  Noninterest Expense                 (216.9)        (586.8)         (72.3)          --           (876.0)
  Income Taxes                         (30.1)         (14.3)          (5.0)           (.6)         (50.0)
                                   ---------      ---------      ---------      ---------      ---------
  Net Income                       $    57.7      $    27.1      $     9.5      $     1.2      $    95.5
                                   =========      =========      =========      =========      =========
  Total Assets                     $   7,554      $   4,854      $   1,646      $   3,486      $  17,540
                                   =========      =========      =========      =========      =========

Year Ended December 31, 2001:
  Net Interest Income              $   206.7      $     3.4      $    60.4      $    --        $   270.5
  Provision for Loan Losses           (155.9)         (27.9)         (31.7)          --           (215.5)
  Noninterest Income                   166.8          563.5           26.1           --            756.4
  Noninterest Expense                 (218.9)        (529.4)         (64.7)          --           (813.0)
  Income Taxes                            .5           (3.6)           3.7           --               .6
                                   ---------      ---------      ---------      ---------      ---------
  Net Income                       $    (0.8)     $     6.0      $    (6.2)     $    --        $    (1.0)
                                   =========      =========      =========      =========      =========
  Total Assets                     $   7,115      $   4,785      $   1,799      $   2,862      $  16,561
                                   =========      =========      =========      =========      =========
</TABLE>

NOTE 22 - TRANSACTIONS WITH AFFILIATES: At December 31, 2003, Carl H. Lindner,
Jr., members of his immediate family and trusts for their benefit, owned 42% of
American Financial Group's Common Stock. This group, along with entities
controlled by them, or established for their benefit, owned 42% of Provident's
Common Stock at year-end 2003. Provident leases its home office space and other
office space from a trust, for the benefit of a subsidiary of American Financial
Group. Rentals and renovations charged by American Financial Group and
affiliates for the years ended December 31, 2003, 2002 and 2001 amounted to $3.3
million, $3.8 million and $3.1 million, respectively. Provident paid $184,000,
$612,000 and $0 to a subsidiary of American Financial Group for insurance
coverage during 2003, 2002, and 2001, respectively. Payments of $0, $114,000 and
$28,000 were made to American Financial Group and affiliates for record
retention services for the years ended December 31, 2003, 2002 and 2001,
respectively. Approximately $100,000 was also paid to American Financial Group
for guard services in each of the past three years. During 2003, Provident paid
$871,000 to the Cincinnati Reds

                                       84
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

for advertising, tickets and suite rental. Carl H. Lindner, Jr. is chief
executive officer and part owner of the Reds. During 2003, 2002 and 2001,
Provident received $270,000, $150,000 and $245,000, respectively, from American
Financial Group in connection with an expense sharing arrangement for a
cafeteria operated by Provident for the employees of both companies. In 2003,
Provident received a loan payment and fees of $3,442,000 from a customer as a
result of an investment in preferred stock and warrants for common stock of the
customer by AFG.

Provident has had certain transactions with various executive officers,
directors and principal holders of equity securities of Provident and its
subsidiaries and entities in which these individuals are principal owners.
Various loans and leases have been made as well as the sale of commercial paper
and repurchase agreements to these persons. Such loans and leases to these
persons aggregated approximately $27.6 million and $25.6 million at December 31,
2003 and 2002, respectively. During 2003, new loans and leases aggregating $14.2
million were made to such parties and loans and leases aggregating $12.2 million
were repaid. All of the loans and leases were made at market interest rates and,
in the opinion of management, all amounts are fully collectible. At December 31,
2003 and 2002, these persons held Provident's commercial paper amounting to $0.4
million and $17.3 million, respectively. Additionally, repurchase agreements in
the amount of $14.2 million and $5.8 million had been sold to these persons at
December 31, 2003 and 2002, respectively. All of these transactions were at
market interest rates.

                                       85
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 23 - FAIR VALUE OF FINANCIAL INSTRUMENTS: Carrying values and estimated
fair values for certain financial instruments as of December 31 are shown in the
following table. In cases where quoted market prices are not available, fair
values are based on estimates using present value or other valuation techniques.
Those techniques are significantly affected by the assumptions used, including
the discount rate and estimates of future cash flows. Because no secondary
market exists for many of Provident's assets and liabilities, the derived fair
values are calculated estimates, and the fair values provided herein do not
necessarily represent the actual values which may be realized in the disposition
of these instruments. The aggregate fair value amounts presented do not
represent the underlying value of Provident. What is presented below is a
point-in-time valuation that is affected, in part, by unrealized gains and
losses resulting from management's implementation of its program to manage
overall interest rate risk. It is not management's intention to immediately
dispose of a significant portion of its financial instruments. As a result, the
following fair value information should not be interpreted as a forecast of
future earnings and cash flows.

<TABLE>
<CAPTION>
                                              2003                                  2002
                                  -------------------------------       -------------------------------
                                    Carrying            Fair              Carrying            Fair
(In Thousands)                       Value              Value               Value             Value
----------------------------      ------------       ------------       ------------       ------------
<S>                               <C>                <C>                <C>                <C>
Financial Assets:
  Cash and Cash Equivalents       $    526,572       $    526,572       $    540,919       $    540,919
  Trading Account Securities           119,646            119,646            127,848            127,848
  Loans Held for Sale                  595,505            595,505            436,884            436,884
  Investment Securities              4,527,912          4,527,912          4,215,238          4,215,238
  Loans and Leases                   8,895,530          8,898,690          9,133,795          9,184,892
  Less: Reserve for Losses            (160,000)              --             (201,051)              --
                                  ------------       ------------       ------------       ------------
    Net Loans and Leases             8,735,530          8,898,690          8,932,744          9,184,892
Financial Liabilities:
  Deposits                          10,335,718         10,204,765          9,848,979          9,818,970
  Short-Term Debt                    1,443,438          1,443,438          1,925,005          1,925,005
  Long-Term Debt and Junior
    Subordinated Debentures          3,764,729          3,973,023          4,293,731          4,447,041
  Standby and Commercial
    Letters of Credit                    1,128              1,128              1,188              1,188
Derivative Instruments:
  Interest Rate Swaps                  (62,877)           (62,877)             7,985              7,985
  Interest Rate Caps                        49                 49               --                 --
</TABLE>

The following methods and assumptions were used by Provident in estimating its
fair value disclosures for financial instruments:

-        Cash and cash equivalents: The carrying amounts reported in the balance
         sheet for cash and short-term instruments approximate those assets'
         fair values.

-        Trading account securities and investment securities: Fair values for
         trading account securities and investment securities are based on
         quoted market prices, where available. If quoted market prices are not
         available, fair values are based on quoted market prices of comparable
         instruments. Retained interest in securitized assets are valued using
         discounted cash flow techniques. Significant assumptions used in the
         valuation are presented in Note 3.

-        Loans and leases: For variable-rate loans that reprice frequently and
         with no significant change in credit risk, fair values are based on
         carrying values. The fair values for certain residential mortgage loans
         and other consumer loans are based on quoted market prices of similar
         loans sold in conjunction with securitization transactions, adjusted
         for differences in loan characteristics. The fair values for other
         loans and leases are estimated using discounted cash flow analyses and
         interest rates currently being offered for loans and leases with
         similar terms to borrowers of

                                       86
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         similar credit quality. The fair values disclosed for loans held for
         sale are equal to their carrying amounts.

-        Deposits: The fair values disclosed for demand deposits are equal to
         their carrying amounts. The carrying amounts for variable-rate,
         fixed-term money market accounts and certificates of deposit
         approximate their fair values at the reporting date. Fair values for
         fixed-rate certificates of deposit are estimated using a discounted
         cash flow calculation that applies interest rates currently being
         offered on certificates to a schedule of aggregated expected monthly
         maturities on time deposits.

-        Short-term debt: The carrying amounts of federal funds purchased,
         borrowings under repurchase agreements, and other short-term borrowings
         approximate their fair values.

-        Long-term debt and junior subordinated debentures: The fair values of
         long-term borrowings that are traded in the markets are equal to their
         quoted market prices. The fair values of other long-term borrowings
         (other than deposits) are estimated using discounted cash flow
         analyses, based on Provident's current incremental borrowing rates for
         similar types of borrowing arrangements.

-        Derivative instruments: The fair value of derivative instruments has
         been recognized as either assets or liabilities in the balance sheet in
         accordance to Statement No. 133, "Accounting for Derivative Instruments
         and Hedging Activities." The fair value of derivative instruments is
         based upon current market quotes.

NOTE 24 - SUBSEQUENT EVENT: On February 17, 2004, Provident announced that it
had signed a definitive agreement to merge with National City Corporation.
National City Corporation is a financial holding company headquartered in
Cleveland, Ohio. Under terms of the agreement, Provident shareholders will
receive 1.135 shares of National City Corporation common stock for each share of
Provident common stock in a tax-free exchange. Subject to regulatory and
stockholder approvals, the transaction is expected to close in the second
quarter of 2004.

NOTE 25 - ADDITIONAL INFORMATION:

LEGAL MATTERS: Provident and its subsidiaries are not parties to any pending
legal proceedings other than routine litigation incidental to their business
except for the following matters related to the restatements announced March 5,
2003, and April 15, 2003. The restatement of previously reported operating
results announced on March 5, 2003, was attributed to unintentional errors in
the accounting for nine auto lease financing transactions originated between
1997 and 1999.

Provident's audit committee, through legal counsel, engaged the auditing firm of
PricewaterhouseCoopers LLP for the purpose of conducting a review of the
Company's March 5, 2003 restatement. Provident's management affirmed, based upon
the review of its advisors, its prior conclusion that the accounting errors that
led to the restatement were unintentional.

Several purported class-actions were filed against Provident, its President,
Robert L. Hoverson, its Chief Financial Officer, Christopher J. Carey, and their
predecessors in those positions, on behalf of all purchasers of Provident
securities from March 30, 1998 through March 5, 2003. Litigation was also filed
against Provident, its President, Robert L. Hoverson and its Chief Financial
Officer, Christopher J. Carey plus PFGI Capital Corporation, a Provident
subsidiary, and others on behalf of all purchasers of PRIDES in

                                       87
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

or traceable to a June 6, 2002 offering of those securities registered with the
Securities and Exchange Commission and extending to March 5, 2003. That action
alleges violations of securities laws by the defendants in Provident's financial
disclosures during the period from March 30, 1998 through March 5, 2003 and in
the June 2002 offering. These actions are based upon circumstances involved in
the restatement of earnings announced by Provident on March 5, 2003 and allege
violations of federal securities laws by the defendants in Provident's financial
disclosures during the period from March 30, 1998 through March 5, 2003. They
seek an unspecified amount of damages and, in two cases, reimbursement of all
executive bonuses received during that period.

These actions were consolidated before Judge S. Arthur Spiegel of the United
States District Court for the Southern District of Ohio under the caption,
Merzin v. Provident Financial Group, Inc., consolidated Civil Action Master File
No. C-1-03-165. The Amended Consolidated Complaint was filed on August 22, 2003.
Provident and the other Defendants filed a Motion to Dismiss the Complaint on
November 5, 2003. The motion was granted on March 9, 2004 and the Court
dismissed all claims except those relating to the June 6, 2002 offering of
6,600,000 PRIDE securities. However, the Court's order confined any later
finding of damages to $0.70 per PRIDE security.

Several derivative actions have also been filed in federal and state courts on
behalf of Provident versus Provident's directors and others. These suits were
also concerned with the restatements of earnings and allege that the defendants
breached fiduciary duties owed to Provident and are responsible for the
conditions that led to the restatements and failed to ensure that the accounting
errors were prevented or detected. These actions seek recovery from the
defendants of an unspecified amount of damages and reimbursement of all
executive bonuses and stock options.

The derivative actions filed in federal court are pending before Chief Judge
Walter Herbert Rice of the United States District Court for the Southern
District of Ohio under the captions, Plumbers & Pipefitters Local 572 Pension
Fund v. Jack Cook, et al., Case No. C-1-03-168, and Peter Berg v. Jack M. Cook,
et al., Case No. C-1-03-196. Motions to dismiss the federal court derivative
actions were filed on behalf of all of the defendants on September 2, 2003.
Plaintiffs have opposed the motions. All proceedings in the derivative actions
filed in state court have been indefinitely stayed by agreement of the parties
and their respective legal counsel.

RESTRICTIONS ON CASH AND NONINTEREST BEARING DEPOSITS: Federal Reserve Board
regulations require that Provident Bank maintain certain minimum reserve
balances. The average amount of those reserve balances for the year ended
December 31, 2003, was approximately $82.6 million.

                                       88
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RESTRICTED ASSETS: Provident formed the subsidiaries listed below to account for
and support the process of transferring, securitizing and/or selling of vehicle
and equipment leases. These subsidiaries are separate legal entities and each
maintains books and records with respect to its assets and liabilities. The
assets of these subsidiaries, which are included in the consolidated financial
statements, are not available to secure financing or otherwise satisfy claims of
creditors of Provident or any of its other subsidiaries.

The subsidiaries and their total assets as of December 31, 2003 and 2002 follow
(in thousands):

<TABLE>
<CAPTION>
                                                   December 31,
                                              ----------------------
Subsidiary                                     2003           2002
----------------------------------------      --------      --------
<S>                                           <C>           <C>
Provident Auto Rental LLC 1999-1              $660,794      $723,901
Provident Auto Leasing Company                 479,968       617,371
Provident Auto Rental LLC 2000-1               329,150       350,500
Provident Auto Rental LLC 2001-1               281,887       314,339
Provident Auto Rental LLC 2000-2               141,139       150,401
Provident Auto Rental Company LLC 1998-2       130,889       152,986
Provident Auto Rental Company LLC 1998-1       124,199       141,300
Provident Lease Receivables Company LLC         78,476       115,460
</TABLE>

The above amounts include items which are eliminated in the Consolidated
Financial Statements.

RESTRICTIONS ON TRANSFER OF FUNDS FROM SUBSIDIARIES TO PARENT: The transfer of
funds by Provident Bank to the parent as dividends, loans or advances is subject
to various laws and regulations that limit the amount of such transfers. The
amount of dividends available for payment in 2004 by Provident Bank to the
parent company is approximately $95.1 million, plus 2004 net income. Pursuant to
Federal Reserve and State regulations, the maximum amount available to be loaned
to affiliates (as defined), including its Parent, by Provident Bank, was
approximately $162.8 million to any single affiliate, and $325.7 million to all
affiliates combined of which $70.4 million was loaned at December 31, 2003.

                                       89
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PARENT COMPANY FINANCIAL INFORMATION: Parent Company only condensed financial
information for Provident Financial Group, Inc. is as follows:

                          BALANCE SHEETS (PARENT ONLY)

<TABLE>
<CAPTION>
                                                            December 31,
                                                     --------------------------
(In Thousands)                                          2003            2002
---------------------------------------------        ----------      ----------
<S>                                                  <C>             <C>
ASSETS
  Cash and Cash Equivalents                          $  265,070      $  243,000
  Trading Account Securities                             12,065          10,470
  Investment Securities Available for Sale              278,762         299,024
  Investment in Subsidiaries:
    Banking                                           1,063,164       1,056,278
    Non-Banking                                          17,753          18,287
  Accounts Receivable from Banking Subsidiaries          28,266          18,552
  Other Assets                                           86,873         103,222
                                                     ----------      ----------
TOTAL ASSETS                                         $1,751,953      $1,748,833
                                                     ==========      ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
  Liabilities:
    Accounts Payable and Accrued Expenses            $   50,927      $   56,575
    Commercial Paper                                    261,053         271,269
    Long-Term Debt and
     Junior Subordinated Debentures                     540,919         540,618
                                                     ----------      ----------
      Total Liabilities                                 852,899         868,462
  Shareholders' Equity                                  899,054         880,371
                                                     ----------      ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY           $1,751,953      $1,748,833
                                                     ==========      ==========
</TABLE>


                    STATEMENTS OF INCOME (PARENT ONLY)

<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                                        -------------------------------------
(In Thousands)                                            2003           2002          2001
-------------------------------------------             --------       --------      --------
<S>                                                     <C>            <C>           <C>
Income:
  Dividends from Banking Subsidiaries                   $ 65,000       $ 45,000      $ 15,000
  Interest Income from Banking Subsidiaries               24,169         25,394        24,944
  Other Interest Income                                      538          1,261         1,469
  Noninterest Income                                     (11,453)         1,080         7,492
                                                        --------       --------      --------
                                                          78,254         72,735        48,905
Expenses:
  Interest Expense                                        29,229         32,125        40,762
  Noninterest Expense                                      6,962          1,705         2,842
                                                        --------       --------      --------
                                                          36,191         33,830        43,604
                                                        --------       --------      --------
Income Before Taxes and Equity in Undistributed

  Net Income of Subsidiaries                              42,063         38,905         5,301
Applicable Income Tax Credits                             10,141          5,571         7,936
                                                        --------       --------      --------
Income Before Equity in Undistributed Net Income
  of Subsidiaries                                         52,204         44,476        13,237
Equity in Undistributed Net Income of Subsidiaries        44,496         50,975       (14,240)
                                                        --------       --------      --------
Net Income (Loss)                                       $ 96,700       $ 95,451      $ (1,003)
                                                        ========       ========      ========
</TABLE>

                                       90
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                  STATEMENTS OF CASH FLOWS (PARENT ONLY)

<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                                     -----------------------------------------
(In Thousands)                                         2003             2002           2001
-------------------------------------------          ---------       ---------       ---------
<S>                                                  <C>             <C>             <C>
Operating Activities:
 Net Income (Loss)                                   $  96,700       $  95,451       $  (1,003)
 Adjustment to Reconcile Net Income to Net Cash
  Provided by (Used in) Operating Activities:
   Equity in Undistributed Net Income
    of Subsidiaries                                    (44,496)        (50,975)         14,240
   Amortization and Accretion                              821             453           1,066
   Tax Benefit Received from Exercise
    of Stock Options                                     1,570           1,069           2,706
   Expensing of Stock Option Grants                      1,259            --              --
   Realized Investment Security (Gains) Losses          13,860              11             (72)
   (Increase) Decrease in Interest Receivable              (18)            (48)            177
   (Increase) Decrease in Other Assets                   1,047         (22,754)          3,783
   Increase (Decrease) in Interest Payable               1,070           1,163            (261)
   Decrease in Other Liabilities                        (6,934)        (15,584)        (20,821)
                                                     ---------       ---------       ---------
    Net Cash Provided by (Used In)
     Operating Activities                               64,879           8,786            (185)
                                                     ---------       ---------       ---------
Investing Activities:
 Investment Securities Available for Sale:
  Proceeds from Sales                                   10,960          24,159          19,379
  Proceeds from Maturities and Prepayments               5,806          11,664          15,234
  Purchases                                             (3,655)        (19,883)        (50,671)
                                                     ---------       ---------       ---------
   Net Cash Provided by (Used In)
    Investing Activities                                13,111          15,940         (16,058)
                                                     ---------       ---------       ---------
Financing Activities:
 Net Increase (Decrease) in Commercial Paper           (10,216)         30,698          53,481
 Principal Payments on Long-Term Debt                     (120)           (120)           (391)
 Proceeds from Issuance of Long-Term Debt and
  Junior Subordinated Debentures                          --            75,000         124,432
 Cash Dividends Paid                                   (48,503)        (48,334)        (48,002)
 Repurchase of Common Stock                               --               (24)           (246)
 Proceeds from Exercise of Stock Options                 6,362           4,232           3,884
 Contribution to Subsidiaries                           (3,443)           (346)        (54,986)
 Net Increase in Other Equity Items                       --              --               903
                                                     ---------       ---------       ---------
  Net Cash Provided by (Used In)
   Financing Activities                                (55,920)         61,106          79,075
                                                     ---------       ---------       ---------
Increase in Cash and Cash Equivalents                   22,070          85,832          62,832
Cash and Cash Equivalents at Beginning of Year         243,000         157,168          94,336
                                                     ---------       ---------       ---------
 Cash and Cash Equivalents at End of Year            $ 265,070       $ 243,000       $ 157,168
                                                     =========       =========       =========
</TABLE>

                                       91
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               SUPPLEMENTARY DATA

Quarterly Consolidated Results of Operations - (Unaudited)

The following are quarterly consolidated results of operations for the two years
ended December 31, 2003.

<TABLE>
<CAPTION>
                                                Fourth           Third          Second           First
(In Thousands Except Per Share Data)            Quarter         Quarter         Quarter         Quarter
-----------------------------------------      ---------       ---------       ---------       ---------
<S>                                            <C>             <C>             <C>             <C>
2003:

 Total Interest Income                         $ 174,777       $ 182,786       $ 198,253       $ 201,742
 Total Interest Expense                         (100,561)       (108,663)       (113,759)       (118,783)
                                               ---------       ---------       ---------       ---------
  Net Interest Income                             74,216          74,123          84,494          82,959
 Provision for Loan and Lease Losses             (35,070)        (11,919)        (52,469)        (16,521)
                                               ---------       ---------       ---------       ---------
  Net Interest Income After Provision
   for Loan and Lease Losses                      39,146          62,204          32,025          66,438
 Noninterest Income                              253,557         185,471         212,974         193,287
 Noninterest Expense                            (246,274)       (207,291)       (225,294)       (221,196)
                                               ---------       ---------       ---------       ---------
   Income (Loss) Before Income Taxes and
      Cumulative Effect of Changes in
      Accounting Principles                       46,429          40,384          19,705          38,529
Applicable Income Taxes                          (15,005)        (12,923)         (6,502)        (12,715)
                                               ---------       ---------       ---------       ---------
   Income (Loss) Before Cumulative Effect of
      Changes in Accounting Principles            31,424          27,461          13,203          25,814
Cumulative Effect of Changes in
   Accounting Principles                          (1,202)           --              --              --
                                               ---------       ---------       ---------       ---------
  Net Income                                   $  30,222       $  27,461       $  13,203       $  25,814
                                               =========       =========       =========       =========
 Net Earnings Per Common Share:
  Before Cumulative Effect of Changes in
      Accounting Principles:
    Basic                                      $     .63       $     .56       $     .27       $     .52
    Diluted                                          .61             .54             .26             .51
  After Cumulative Effect of Changes in
      Accounting Principles:

    Basic                                      $     .61       $     .56       $     .27       $     .52
    Diluted                                          .59             .54             .26             .51
    Cash Dividends                                   .24             .24             .24             .24


2002:

 Total Interest Income                         $ 208,391       $ 208,250       $ 211,331       $ 213,416
 Total Interest Expense                         (127,482)       (130,624)       (132,603)       (135,121)
                                               ---------       ---------       ---------       ---------
  Net Interest Income                             80,909          77,626          78,728          78,295
 Provision for Loan and Lease Losses             (18,237)        (23,532)        (33,575)        (24,205)
                                               ---------       ---------       ---------       ---------
  Net Interest Income After Provision
   for Loan and Lease Losses                      62,672          54,094          45,153          54,090
 Noninterest Income                              204,287         198,397         206,578         196,230
 Noninterest Expense                            (226,700)       (216,079)       (216,637)       (216,612)
                                               ---------       ---------       ---------       ---------
  Income Before Income Taxes                      40,259          36,412          35,094          33,708
 Applicable Income Taxes                         (13,630)        (12,376)        (11,924)        (12,092)
                                               ---------       ---------       ---------       ---------
  Net Income                                   $  26,629       $  24,036       $  23,170       $  21,616
                                               =========       =========       =========       =========
 Net Earnings Per Common Share:
  Basic                                        $     .54       $     .49       $     .47       $     .43
  Diluted                                            .52             .47             .46             .43
  Cash Dividends                                     .24             .24             .24             .24
</TABLE>

Quarterly earnings per share numbers do not necessarily add to the year-to-date
amounts due to rounding.

                                       92
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of
management, including the principal executive and financial officers, of the
effectiveness of the design and operation of Provident's disclosure controls and
procedures as of December 31, 2003. Based on that evaluation, management,
including the principal executive and financial officers, concluded that
Provident's disclosure controls and procedures were effective with no
significant weaknesses noted. There has been no change in Provident's internal
control over financial reporting that occurred during Provident's quarter ended
December 31, 2003 that has materially affected, or is reasonably likely to
materially affect, Provident's internal control over financial reporting.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following are Provident's directors and executive officers:

Jack M. Cook has been a director since 1992. Since 2002, Mr. Cook has been
associated with Compass Group, Inc. and Breakout Solutions, L.L.C., healthcare
consulting companies. In April of 2001, Mr. Cook retired as President and Chief
Executive Officer of Health Alliance of Greater Cincinnati, which includes
Christ, University, Fort Hamilton, Jewish and St. Luke Hospitals. Mr. Cook
serves on the Audit and Nominating Committees. Age: 59

Thomas D. Grote, Jr. has been a director since 1991. Mr. Grote has been
President of Grote Enterprises, LLC, a management consulting firm providing
consulting services to the construction and real estate industries, since
January, 1998. Mr. Grote serves on the Audit, Compensation and Nominating
Committees. Age: 48

Robert L. Hoverson has been a director since 1998. Mr. Hoverson has been
President and Chief Executive Officer of Provident and The Provident Bank since
May, 1998. Mr. Hoverson was Senior Vice President of Provident from August, 1992
to May, 1998, and was Executive Vice President of The Provident Bank from
September, 1985 to May, 1998. Mr. Hoverson serves as Chairman of the Executive
Committee. Age: 61

Joseph A. Pedoto has been a director since 1980. Mr. Pedoto has been President
of JLM Financial, Inc., a financial consulting firm, since 1990. Mr. Pedoto
serves on the Executive and Nominating Committees and is Chairman of the
Compensation Committee. Mr. Pedoto's service as a Director of Provident was
interrupted from September, 1991 to August, 1993. Age: 61

Sidney A. Peerless has been a director since 1980. Dr. Peerless is a retired
physician and surgeon specializing in diseases of the ear, nose and throat. Dr.
Peerless is Chief Emeritus of the Otolaryngology Department of The Jewish

                                       93
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES

Hospital, Cincinnati, Ohio. Dr. Peerless serves on the Compensation and
Nominating Committees. Age: 82

Joseph A. Steger has been a director since 1992. Dr. Steger is the President
Emeritus of the University of Cincinnati, having served as President of the
University from 1984 to October of 2003. He also serves as a Director of
Milacron, Inc. Dr. Steger serves as Chairman of the Audit Committee and on the
Executive and Nominating Committees. Age: 67

Christopher J. Carey joined Provident as Executive Vice President and Chief
Financial Officer on November 19, 1998. For the five-year period prior to
joining Provident, Mr. Carey served as Senior Vice President and Controller of
Corestates Financial Corp. and Chief Financial Officer of Corestates Bank. Age:
49

James L. Gertie joined Provident on December 10, 2001 as Executive Vice
President and Chief Credit and Risk Officer of The Provident Bank. He has served
as Executive Vice President and Chief Credit and Risk Officer of Provident since
April 25, 2002. Prior to joining Provident, Mr. Gertie served as Executive
Credit Officer-Debt and Equity Capital Markets and Portfolio Management of
FleetBoston Financial Corporation from September of 1999 to December 2001 and
Director-Risk Management, Risk Measurement, Information, Analysis and Capital
Markets for BankBoston Corporation from April of 1995 to September of 1999. Age:
47

Anthony M. Stollings has served as Controller and Chief Accounting Officer of
Provident since July of 2002. He has been Controller since October of 1991,
Senior Vice President since August of 1998 and Chief Accounting Officer since
December 2002 of The Provident Bank. Age: 49

James R. Whitaker joined Provident as Vice President, General Counsel and
Assistant Secretary on December 2, 2002. For the five-year period prior to
joining Provident, Mr. Whitaker was a partner in the Cincinnati, Ohio law firm
of Keating, Muething & Klekamp, P.L.L. Age: 57


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires Provident's
executive officers, directors and persons who own more than 10% of a registered
class of Provident's equity securities to file reports of ownership and changes
in ownership. Based on a review of the copies of such forms and written
representations received by it, Provident believes that during the last fiscal
year, all of its executive officers, directors and ten percent stockholders
complied with the Section 16(a) reporting requirements with the exception that
Messrs. Carey, Gertie, Hoverson and Stollings each failed to timely file one
report involving the purchase of 20, 61, 65 and 4 shares, respectively, by the
Deferred Compensation Plan Trustee, which purchases were not reported to them in
a timely manner by the Trustee. In addition, Mr. Hoverson also failed to timely
file one report involving the purchase of 125 shares for his minor son on August
30, 2000.

CORPORATE GOVERNANCE

Provident's Board has established an Audit Committee composed of three members,
namely, Jack M. Cook, Thomas D. Grote, Jr. and Joseph A. Steger,

                                       94
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES

each of whom meet the requirements for Audit Committee members established by
the Securities Exchange Act of 1934 and Nasdaq listing standards.

Provident's Board has determined that Directors Cook and Steger are audit
committee financial experts under rules issued by the Securities and Exchange
Commission.

Provident's Board of Directors has established a Nominating Committee whose
function is to consider and nominate persons for election to Provident's Board
of Directors. The nominating Committee is composed of Messrs. Cook, Grote,
Pedoto, Peerless and Steger each of whom meet the independence requirements for
members established by Nasdaq. The Nominating Committee will consider
recommendations by security holders. Shareholders desiring to submit
recommendations for nominations by the Committee should direct them in care of
Provident's Secretary at the address on the cover page of this report. The
recommendation should include relevant information concerning the qualifications
of the person recommended. The Committee will evaluate these recommendations in
the same manner as any others received.

Provident's Board has also established a Compensation Committee composed of
Messrs. Pedoto, Grote and Peerless, each of whom meet the requirements for
independence established by Nasdaq listing standards. The Committee's activities
are described in the Compensation Committee report contained in Item 11.

Provident has adopted a Code of Ethics and Business Conduct that applies to its
CEO, CFO, principal accounting officer and persons performing similar functions
and undertakes to provide a copy of such Code of Ethics to any person without
charge, upon written request to Provident's Secretary at the address on the
cover page of this report.

                                       95




<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


ITEM 11. EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                                   Annual Compensation

                                             --------------------------------
                                                                                  Securities     All Other
                                                                                  Underlying    Compensation
                                                        Salary         Bonus        Options         (1)
      Name and Principal Position            Year         ($)           ($)           (#)           ($)
-----------------------------------------    ----       -------       -------     ----------     ------------
<S>                                          <C>        <C>           <C>         <C>            <C>
Robert L. Hoverson                           2003       664,262       425,000        90,000        44,280
President and Chief Executive Officer (2)    2002       640,985       400,000       200,000        48,053
                                             2001       616,154             0        90,000        47,396

Christopher J. Carey                         2003       353,736       265,000        50,000        26,259
Executive Vice President and Chief           2002       317,391       240,000        70,000        31,377
Financial Officer (2)                        2001       305,154       180,000        30,000        39,084

James L. Gertie(3), Executive Vice           2003       358,462       335,000        50,000        28,738
President and Chief Credit and Risk          2002       350,000       300,000             0       144,008
Officer (2)

Anthony M. Stollings, Controller and         2003       179,154        35,000         5,000        12,487
Chief Accounting Officer (2)                 2002       159,148        55,000        10,000        12,491

James R. Whitaker, Vice President and        2003       250,000       150,000             0             0
General Counsel (2)
</TABLE>

(1)   For 2003, Messrs. Hoverson, Carey, Gertie and Stollings each received
      contributions of $8,179, pursuant to the Provident Retirement Plan.
      Employer contributions made pursuant to other benefit plans were as
      follows: 401(k) Plan: Messrs. Hoverson, Carey, Gertie and Stollings,
      $3,000; the Excess Benefit Deferred Compensation Plan: Mr. Hoverson,
      $28,765; Mr. Carey, $12,806; Mr. Gertie, $9,755; and Mr. Stollings,
      $1,097; the Deferred Compensation Plan: Mr. Hoverson, $4,336; Mr. Carey,
      $2,274; Mr. Gertie, 7,804; and Mr. Stollings, $210.


(2)   Messrs. Hoverson, Carey, Gertie, Stollings and Whitaker entered into
      executive retention agreements with Provident in February of 2004. These
      agreements provide that if, during the one-year period following a change
      in control of Provident, the executive's employment is terminated without
      cause (as defined in the agreement) or he terminates his employment for
      reason (as defined in the agreement) he will receive:


                                       96
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


      -     base salary up to the date of termination and any previously
            deferred compensation and accrued vacation pay;

      -     a severance amount equal to the sum of (i) his highest base salary
            during the 12 month period prior to the change in control and during
            the 12 month period prior to his date of termination and (ii) his
            highest bonus paid during the 3 calendar years prior to the change
            in control times a multiplier; and

      -     continued health insurance coverage and other benefits for a
            specified period following the date of termination.

      For Messrs. Hoverson, Carey, Gertie and Whitaker, the multiplier is 3.0
      and each will receive health insurance and other benefits for 36 months
      following the date of termination. For Mr. Stollings the multiplier is 2.0
      and he will receive health insurance and other benefits for 24 months
      following the date of termination.

      In addition, Messrs. Hoverson, Carey, Gertie and Whitaker will be credited
      with three years of additional service for purposes of Provident's
      Supplemental Executive Retirement Plan.

      For Messrs. Hoverson, Carey and Whitaker, a merger in which Provident is
      not the surviving entity is deemed to constitute "good reason" within the
      meaning of the agreement and therefore the foregoing benefits will be paid
      if such person terminates his employment during the one-year period
      following a merger.

      If the payments of the benefits described above to any of the executives
      described above constitute a "parachute payment" under Sections 280G and
      4999 of the Internal Revenue Code, the surviving company will be obligated
      to pay to each such executive a lump sum cash payment sufficient to put
      each of them in the same net after-tax position he would have been in had
      the benefit not been subject to the excise tax under Section 4999.

                        OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                    % of Total
                        Number of     Options                  Market                   Grant
                       Securities   Granted to                Price on                  Date
                       Underlying    Employees    Exercise     Grant                   Present
                         Options     in Fiscal     Price        Date     Expiration   Value($)
        Name           Granted(1)      2003      ($/Share)   ($/Share)      Date         (2)
--------------------   ----------   ----------   ---------   ---------   ----------   --------
<S>                    <C>          <C>          <C>         <C>         <C>          <C>
Robert L. Hoverson        90,000       7.93%       27.66       27.66       2/9/13      581,598

Christopher J. Carey      50,000       4.41%       27.66       27.66       2/9/13      323,110

James L. Gertie           50,000       4.41%       27.66       27.66       2/9/13      323,110

Anthony M. Stollings       5,000       0.44%       27.66       27.66       2/9/13       32,311
</TABLE>

(1) The right to exercise the options shown vests at 20% per year.


                                       97
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


(2) Valued using the Black-Scholes option pricing model. The assumptions used
    for the variables in the model were: risk-free interest rate of 3.45%,
    dividend yield of 3.50%, volatility factor of 29.10% and an expected life of
    the option of 7 years.

         FISCAL 2003 OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
                                                                                    Value of Unexercised
                           Shares                                                  In-the-Money Options at
                          Acquired       Value        Underlying Unexercised               FY-End
                             On        Realized          Options at FY-End        Exercisable/Unexercisable
       Name               Exercise        ($)        Exercisable/Unexercisable               ($)
---------------------     --------     --------      -------------------------    -------------------------
<S>                       <C>          <C>           <C>                          <C>
Robert L. Hoverson         22,500       386,100           438,000/349,000            1,888,128/2,130,860

Christopher J. Carey            0             0           84,000/136,000                222,980/ 827,420

James L. Gertie                 0             0           40,000/110,000                346,434/ 735,652

Anthony M. Stollings            0             0           19,250/ 18,000                 64,160/ 108,232

James R. Whitaker               0             0           6,000/ 24,000                 36,060/  144,240
</TABLE>

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

<TABLE>
<CAPTION>
                                          Pension Plan Table
                 -------------------------------------------------------------------
                                           Years of Service
                 -------------------------------------------------------------------
Remuneration        5             10              15             20            25
------------     -------        -------        -------         -------       -------
<S>              <C>            <C>            <C>             <C>           <C>
  $ 50,000       $22,500        $45,000        $52,500         $60,000       $67,500

   250,000        37,500         75,000         87,500         100,000       112,500

   400,000        60,000        120,000        140,000         160,000       180,000

   500,000        75,000        150,000        175,000         200,000       225,000

   600,000        90,000        180,000        210,000         240,000       270,000

   800,000       120,000        240,000        280,000         320,000       360,000

 1,000,000       150,000        300,000        350,000         400,000       450,000

 1,200,000       180,000        360,000        420,000         480,000       540,000

 1,400,000       210,000        420,000        490,000         560,000       630,000

 1,600,000       240,000        480,000        560,000         640,000       720,000
</TABLE>

In November, 1993, the Board of Directors adopted a Supplemental Executive
Retirement Plan ("SERP") to provide a supplemental retirement benefit to key
management or highly compensated employees of the Company who may be designated
from time to time by the Compensation Committee.


                                       98
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


The purpose of the SERP is to assure that each participant receives an annual
retirement benefit starting at age 65, based on years of service, of up to 50%
of the average of his or her highest five years' annual compensation (which
relates to the salary and bonus columns of the Summary Compensation Table in
Item 11) during the ten years preceding the participant's retirement,
disability, termination of employment or removal from the SERP. When a
participant retires, or if a participant's employment is terminated or a change
in control occurs, the SERP benefit is calculated, and then funds from the
following sources are deducted to determine the payment due from the Company
under the SERP; (i) one half of the participant's monthly social security
insurance benefit (except if there is a change in control) and (ii) the
participant's accrued benefits attributable to employer contributions to the
Company's Employee Stock Ownership Plan, 401 (k) Plan, Excess Benefit Plan,
Deferred Compensation Plan, Profit Sharing Plan and any other qualified or
non-qualified pension or deferred compensation plans maintained by the Company.
If the sum of these payments exceeds the participant's benefit computed under
the SERP, then no payment will be due from the Company under the SERP.

The table above shows the assumed actuarial value of the retirement plan
benefits plus the SERP payment which, when taken together, will result in a
total retirement payment based on average compensation and years of service.
Assuming retirement at age 65, the number of years of service for the
individuals named in the Summary Compensation Table participating in the SERP
would be: Christopher J. Carey, 21 years; James L. Gertie, 20 years; Robert L.
Hoverson, 22 years; and James R. Whitaker, 10 years. Assuming a change in
control during June of 2004, the number of years of service for the individuals
named in the Summary Compensation Table participating in the SERP would be:
Christopher J. Carey, 9 years; James L. Gertie, 6 years; Robert L. Hoverson, 22
years; and James R. Whitaker, 5 years.

DIRECTOR COMPENSATION

Non-employee directors receive $25,000 per year for serving as a director and as
a member of committees of the Board. They also receive $1,500 for each Board
meeting attended and $1,000 for each committee meeting attended, with committee
chairs receiving $2,000 for each committee meeting. Directors who are employees
of Provident are not separately compensated for serving as directors.
Non-employee directors may postpone the receipt of from 5% to 100% of their
Board compensation. Amounts deferred may be invested in a Provident Common Stock
Account, in which case the Account is credited annually with a percentage of
Provident's pre-tax earnings per share for each share of Provident Common stock
in the Account, with the percentage to be credited depending upon Provident's
return on equity.

Each non-employee director is also granted a non-qualified option to purchase
2,000 shares of Common Stock at the time of election or re-election to the Board
of Directors, with the exercise price being the average of the closing bid and
ask prices on the last trading date immediately prior to the date of grant.
Non-employee directors with ten years of service as a director receive annual
retirement benefits equal to the fees paid during the 12 months immediately
preceding the retirement date, with payments to commence at retirement or 65th
birthday, whichever is later. Retirement benefits will be paid for a period of
years equal to the number of the director's years of service, divided by three.


                                       99
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors establishes salaries,
bonuses and stock option awards for executive officers on an annual basis. The
Committee's policy is to encourage and motivate Provident's executive officers
to achieve both short-term and long-term business, financial and community
goals, and thereby build shareholder value on a steady basis. The Committee
believes it is important to provide competitive levels of compensation that will
enable Provident to attract and retain the most qualified executives and to
provide incentive plans that emphasize stock ownership, thus aligning more
closely the interests of management with those of shareholders.

The Committee has established three primary components which it utilizes in
setting annual compensation levels, namely:

-     Base Compensation

-     Annual Bonuses

-     Stock Option Grants

In establishing compensation levels for 2003, the Committee utilized executive
compensation surveys which the Committee believes are appropriate and an
analysis prepared by compensation consultants to the Committee. In addition, the
Committee reviewed compensation levels for financial institutions of similar
asset size.

Compensation in excess of $1,000,000 per year paid to the Chief Executive
Officer of a company as well as to each of the other executive officers listed
in the compensation table is not deductible for Federal income tax purposes
unless it is "performance-based" and approved by shareholders. The Committee
does not believe these limitations should interfere with the application of
policies which guide its compensation decisions.

Base Compensation

In establishing base salaries for 2003 the Committee took into account each
particular executive officer's level of responsibility and potential for future
responsibilities, salary levels of competitors for similar functions and
Provident's performance for 2002. The Committee also took into account the
recommendations of the President for executive officers other than himself in
establishing base salaries.

Bonuses and Stock Options

Bonuses for 2003 were based on the Committee's review of bonus awards paid by
the financial institutions included in the surveys, the Committee's evaluation
of Provident's performance and the relative contributions to that performance by
the executive officers to whom bonuses were awarded and recommendations made by
the President. While the bonus awards were based on Provident's performance,
they were not tied to specific performance objectives.


                                      100
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


Awards of stock options are made by the Committee to motivate long-term future
performance and as a reward for past performance, consistent with the purposes
set forth in Provident's 1997 Stock Option Plan.

Chief Executive Officer

In determining the compensation paid to Robert L. Hoverson, who served as
Provident's President and Chief Executive Officer in 2003, the Committee
utilized each of the components described above for executive officers. In this
regard, the Committee established Mr. Hoverson's salary level for 2003 based on
its evaluation of not only Provident's financial performance, but also on the
Committee's evaluation of Mr. Hoverson's strategic and leadership abilities in
planning for and leading Provident during 2002. The Committee similarly made its
own evaluation of Mr. Hoverson's contributions to Provident on a subjective
basis in establishing the amount of his bonus payment and stock option awards.
While the compensation for Mr. Hoverson was based on Provident's performance, it
was not tied to specific performance objectives.

Compensation Committee:

Joseph A. Pedoto, Chairman
Thomas D. Grote, Jr.
Sidney A. Peerless


FINANCIAL PERFORMANCE

The graph below summarizes the cumulative return experienced by Provident's
shareholders over the years 1998 through 2003, compared to the Nasdaq Index and
the Keefe, Bruyette & Woods 50 Bank Index which is a market-capitalization
weighted bank stock index that includes all money-center banks and most major
regional bank holding companies, and is a widely available index. The number of
companies comprising the KBW 50 Index allows ready comparisons of Provident's
stock with an industry standard. Provident is not included in the KBW 50 Index.


                                      101
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


                             TOTAL RETURN ANALYSIS
                  PROVIDENT FINANCIAL GROUP VS. MARKET INDICES


                                  (LINE GRAPH)


 Peer Group is Comprised of Institutions Represented in the Keefe, Bruyette and
                              Woods 50 Bank Index

<TABLE>
<CAPTION>
                              1998     1999     2000     2001     2002     2003
                              ----     ----     ----     ----     ----     ----
<S>                           <C>      <C>      <C>      <C>      <C>      <C>
Provident Financial Group     $100     $ 97     $104     $ 77     $ 79     $ 97
Nasdaq Market Index            100      185      112       89       61       92
Peer Group                     100       97      116      111      103      138

</TABLE>


                                      102

<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

PRINCIPAL SHAREHOLDERS

The following persons are the only shareholders known by Provident to own
beneficially more than 5% of its outstanding Common Stock as of February 20,
2004:

<TABLE>
<CAPTION>
                                         Amount and Nature
                                                 of
              Name and Address of            Beneficial      Percent of Class
             Beneficial Owner (a)            Ownership             (g)
--------------------------------------   -----------------   ----------------
<S>                                      <C>                 <C>
American Financial Group, Inc. ("AFG")     7,117,675  (b)         14.2

Carl H. Lindner                            2,268,642  (c)          4.6

Carl H. Lindner III                        3,042,576  (d)          6.2

S. Craig Lindner                           3,437,500  (e)          7.0

Keith E. Lindner                           3,473,548  (f)          7.1
</TABLE>

(a)   The address of each of these parties is One East Fourth Street,
      Cincinnati, Ohio 45202.

(b)   Includes 6,129,475 shares held by AFG subsidiaries and 988,200 shares
      issuable upon conversion of Provident's Series D Convertible Preferred
      stock held by an AFG subsidiary. AFG has agreed with the Board of
      Governors of the Federal Reserve System not to exercise voting control
      over more than 4.9% of Provident's voting shares. As a result, the number
      of shares of Provident Common Stock beneficially owned by AFG, and which
      exceed 4.9% of Provident's outstanding voting shares, have been voted in
      strict proportion with all other (non-AFG held) outstanding Provident
      voting shares.

(c)   Includes 1,729,844 shares held by his spouse and 391,242 shares held by a
      foundation over which he has voting and dispositive power. Excludes
      1,130,183 shares held in a trust for the benefit of his family for which a
      third party acts as trustee with voting and dispositive power.

(d)   Includes 8,285 shares held by his spouse individually or as trustee.
      Includes 56,064 shares held by one of his children and 1,160,802 shares
      which are held in various trusts for the benefit of his children for which
      Keith E. Lindner acts as trustee with voting and dispositive power.

(e)   Includes 51,700 shares held by his spouse individually or as trustee,
      181,480 shares held by his spouse as custodian for their children and
      35,126 shares held by a foundation over which he has voting and
      dispositive power. Includes 181,480 shares held by two of his children and
      50,000 shares which are held in trusts for the benefit of his children for
      which Keith E. Lindner acts as trustee with voting and dispositive power.
      Also includes 1,315,794 shares held in two trusts for the benefit of his
      family for which third parties hold voting power.


                                      103
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


      Excludes 7,900 shares held in a trust for the benefit of his family for
      which a third party acts as a trustee with voting and dispositive power.

(f)   Includes 3,433 shares held in trust for the benefit of his spouse, 681
      shares held by his spouse individually, 27,008 shares he holds as
      custodian for his children and 340,381 shares held in trusts for the
      benefit of his children, over which he or his spouse have shared voting
      and dispositive power. This number excludes 1,210,802 shares (described in
      footnotes (d) and (e) above), which are held in trusts for the benefit of
      the children of his brothers, Carl H. Lindner III and S. Craig Lindner
      over which Keith E. Lindner has voting and dispositive power but no
      financial interest. Also includes 1,050,819 shares held in a trust for the
      benefit of his family for which a third party acts as a trustee with
      voting power.

(g)   The percentages of outstanding shares of Common Stock beneficially owned
      (within the meaning of Rule 13d-3 under the Securities Exchange Act of
      1934) by Carl H. Lindner III, S. Craig Lindner and Keith E. Lindner are
      3.8%, 6.9% and 9.5%, respectively, after attributing the shares held in
      various trusts for the benefit of the children of Carl H. Lindner III and
      S. Craig Lindner (for which Keith E. Lindner acts as trustee with voting
      and dispositive power) to Keith E. Lindner.

DIRECTORS AND EXECUTIVE OFFICERS

This table lists the executive officers and directors of Provident and shows how
much common stock each owned on February 20, 2004. Except as described in the
footnotes to the table, each person has sole investment and voting power over
the shares shown.

<TABLE>
<CAPTION>
                                                                                          Common Stock
                                                                                       Beneficially Owned
                                                                                  -------------------------------
                                                                                                      Percent of
           Name                                  Position                         Amount (1)           Class(2)
--------------------------  ----------------------------------------------------  ----------          -----------
<S>                         <C>                                                   <C>                 <C>
Robert L. Hoverson          President, Chief Executive Officer and Director       777,152                1.6%

Jack M. Cook                Director                                               22,320                 *

Thomas D. Grote, Jr.        Director                                               24,206                 *

Joseph A. Pedoto            Director                                               40,873                 *

Sidney A. Peerless          Director                                               47,799                 *

Joseph A. Steger            Director                                               22,201                 *

Christopher J. Carey        Executive Vice President and Chief Financial          138,695                 *
                            Officer

James L. Gertie             Executive Vice President and Chief Credit and Risk     58,316                 *
                            Officer
</TABLE>


                                      104
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


<TABLE>
<CAPTION>
                                                                                            Common Stock
                                                                                         Beneficially Owned
                                                                                  -------------------------------
                                                                                                      Percent of
           Name                                   Position                        Amount (1)           Class(2)
--------------------------  ----------------------------------------------------  ----------          -----------
<S>                         <C>                                                   <C>                 <C>
Anthony M. Stollings        Controller and Chief Accounting Officer                  43,151                 *

James R. Whitaker           Vice President and General Counsel                        8,145                 *

All Directors and Executive
Officers as a Group                                                               1,182,858                2.4%
</TABLE>

(1)   Including options to purchase common stock currently exercisable or
      exercisable within 60 days from February 20, 2004 as follows: Mr.
      Hoverson, 543,000 shares; Mr. Carey, 120,000 shares; Mr. Cook, 13,500
      shares; Mr. Gertie, 50,000 shares; Mr. Grote, 15,570 shares; Mr. Pedoto,
      15,750 shares; Dr. Peerless, 13,500 shares; Dr. Steger, 15,750 shares; Mr.
      Stollings, 24,850 shares; and Mr. Whitaker, 6,000 shares. Includes shares
      held in Provident's 401(k) Plan, Deferred Compensation Plan and Outside
      Director Deferred Compensation Plan, over which such persons do not have
      voting power, collectively, as follows: Mr. Hoverson, 91,144 shares; Mr.
      Carey, 13,958 shares; Mr. Gertie, 5,218 shares; Mr. Stollings, 11,674
      shares; Mr. Whitaker, 995 shares; Mr. Cook, 7,133 shares; Mr. Grote, 4,364
      shares; Mr. Pedoto, 1,857 shares; Dr. Steger, 4,983 shares.


(2)   Ownership of less than 1% is indicated by an asterisk (*).


                                      105
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


             DECEMBER 31, 2003 EQUITY COMPENSATION PLAN INFORMATION

<TABLE>
<CAPTION>
                                         Number of
                                      securities to be                         Future issuance
                                        issued upon       Weighted-average       under equity
                                        exercise of        exercise price        compensation
                                        outstanding        of outstanding      plan (excluding
                                          options,            options,            securities
                                        warrants and        warrants and         reflected in
                                           rights              rights            column (a))
           Plan Category                    (a)                 (b)                  (c)
----------------------------------    ----------------    ----------------     ---------------
<S>                                   <C>                 <C>                  <C>
Equity compensation plans approved       7,254,207             $29.49           1,927,638 (2)
by security holders(1)

Equity compensation plans not              957,410             $28.20             395,436 (4)
approved by security holders(3)

Total                                    8,211,617             $29.33             2,323,074
</TABLE>

(1)   1988 Stock Option Plan
      1992 Outside Directors' Stock Option Plan
      1997 Stock Option Plan
      1993 Deferred Compensation Plan

(2)   The number of shares available for future issuance under the 1993 Deferred
      Compensation Plan depends on levels of participation in the Plan and on
      the investment elections by the participants.

(3)   1996 Non-Executive Officer Stock Option Plan. Provides for the grant of
      stock options to employees of Provident, other than executive officers.
      Options are granted at an exercise price not less than 95% of fair market
      value at the time of grant, for a term of up to 10 years. Options vest as
      determined by the Compensation Committee. 216,700 options outstanding.

      2000 Employee Stock Option Plan. Provides for the grant of stock options
      to employees of Provident, other than executive officers. The Plan has
      been used to grant options to all employees of Provident who have not
      received options under other Provident stock option plans. Options are
      granted at an exercise price of not less than 95% of fair market value at
      the time of grant, for a term of up to 10 years. Options vest as
      determined by the Compensation Committee. 667,980 options outstanding.

      2002 Outside Directors Stock Option Plan. Provides for the automatic grant
      of 2,000 options to each non-employee director upon election to the Board
      and upon each subsequent annual election. The options are granted at an
      exercise price equal to fair market value, for a term of 10 years and vest
      six months after the date of grant. 20,000 options outstanding.


                                      106
<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


      1997 Fidelity Financial of Ohio Stock Option Plan. Assumed by Provident in
      the February 2000 acquisition of Fidelity Financial of Ohio, Inc. No
      further options may be granted under this plan. Outstanding options were
      granted at fair market value, having a term of 10 years and vested 20%
      annually. 1,028 options outstanding.

      Excess Benefit Deferred Compensation Plan. Provides for the contribution
      by Provident for each participant of the amount that could not be
      contributed for such participant to the Provident Retirement Plan because
      such contribution would have resulted in a violation of Section 415(c) or
      401(a)(17) of the Internal Revenue Code. Amounts contributed to the Plan
      are invested as directed by the participant. 25,258 Provident common
      shares are held in the Plan.

      Outside Directors Deferred Compensation Plan. Outside directors may defer
      up to 100% of their Board fees. Amounts deferred are invested either in
      Provident common stock or other investments chosen by the director.
      Provident common shares held in the Plan are credited annually with a
      percentage of Provident's pre-tax earnings per share for the first four
      years such shares are held in the Plan, with the percentage credited
      depending on Provident's return on equity. 21,444 Provident common shares
      are held in the Plan.

(4)   191,000 shares remain available for issuance under the 1996 Non-Executive
      Officer Stock Option Plan. 195,880 shares remain available for issuance
      under the 2000 Employee Stock Option Plan. 5,000 shares remain available
      for future issuance under the 2002 Outside Directors Stock Option Plan.
      3,556 shares remain available for future issuance under the Outside
      Directors Deferred Compensation Plan. The number of shares available for
      issuance under the Excess Benefit Deferred Compensation Plan depends on
      the investment elections by the participants.

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Provident and its subsidiaries, in their normal course of business have had, and
to the extent permitted by applicable regulations and other regulatory
restrictions expect to continue to have, transactions with Provident's
directors, officers, principal shareholders and affiliates of such persons
including American Financial Group, Inc. ("AFG") and its subsidiaries. All such
transactions are and will be on terms no less favorable to Provident than those
which could be obtained with non-affiliated parties.

In 2003, Provident received $270,000 from AFG in connection with an expense
sharing arrangement for a cafeteria operated by Provident for the employees of
both companies. AFG provides security guard and surveillance services at
Provident's main office for which Provident was charged $100,000 in 2003. In
2003, AFG provided property and liability insurance for which Provident was
charged $184,000. Provident leases its main banking and corporate offices from a
trust for the benefit of a subsidiary of AFG. Provident was charged rent under
the leases of $3,254,000 in 2003. During 2003, Provident paid $871,000 to the
Cincinnati Reds for advertising, tickets and suite rental. Carl H. Lindner is
chief executive officer and part owner of the Reds.

Certain of the principal shareholders, directors and executive officers of
Provident maintain investments in Provident commercial paper and repurchase


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                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


agreements. The average month-end commercial paper balances for such persons
(including commercial paper held by corporations they control, members of their
immediate families and trusts for their benefit) for 2003 were as follows: Carl
H. Lindner, $3,309,000; Keith E. Lindner, $1,603,000; and siblings of Carl H.
Lindner, $399,000. The average repurchase agreement balances for such persons
for 2003 were as follows: AFG, $6,133,000.

Loans and lines of credit were extended by Provident Bank in 2003 to certain of
Provident's executive officers, directors, principal shareholders, affiliates of
such persons and to members of their families. Management believes that such
loans and lines of credit were made in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons and do not
involve more than the normal risk of collectibility or present other unfavorable
features. During 2003, the highest month-end outstanding balances of loans to
principal shareholders of Provident and their related interests were as follows:
AFG, $1,136,000; Carl H. Lindner, $855,000; siblings of Carl H. Lindner,
$9,157,000; and S. Craig Lindner, $2,550,000. In addition, Provident Bank had
loans outstanding to three companies in which AFG or members of the Lindner
family held minority ownership interests during 2003. The highest month-end
outstanding balances of these loans during 2003 were $39,952,000.

In 2003, Provident received a loan payment and fees of $3,442,000 from a
customer as a result of an investment in preferred stock and warrants for common
stock of the customer by AFG.

ITEM 14.      PRINCIPAL ACCOUNTANT FEES AND SERVICES

Provident paid fees to Ernst & Young LLP during 2003 and 2002 as follows:

<TABLE>
<CAPTION>
                        2002                  2003
<S>                    <C>                 <C>
Audit Fees             $576,000            $1,006,000
Audit Related Fees      535,000               190,000
Tax Fees                179,000                56,000
All Other Fees          136,000                 7,000
</TABLE>

Audit related fees include fees for audits of subsidiaries, audits of employee
benefit plans and consents and other procedures related to registration
statements filed by Provident. Tax fees include tax consulting services and tax
return review for Provident and its subsidiaries. All other fees relate to
accounting consultation for Provident. The Audit Committee has determined that
the provision of the foregoing non-audit services is compatible with maintaining
the independence of Ernst & Young LLP.

The Audit Committee has adopted policies that require its approval for any audit
and non-audit services to be provided to Provident. The Audit Committee
delegated authority to the members of the Committee to approve certain non-audit
services. Pursuant to these procedures and delegation of authority, the Audit
Committee was informed of and approved all of the audit and other services
described above. No services were provided with respect to the de minimus waiver
process provided by rules of the Securities and Exchange Commission.


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<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)   1.    See Index to Financial Statements on page 45 for a list of all
            financial statements filed as a part of this report.

      2.    Schedules to the consolidated financial statements required by
            Article 9 of Regulation S-X have been omitted as they are not
            required, not applicable or the information required thereby is set
            forth in the related financial statements.

      3.    Exhibits:

<TABLE>
<CAPTION>
           Number         Exhibit Description              Filing Status
           ------         -------------------              -------------
<S>                       <C>                              <C>
           3.1            Articles of Incorporation        Incorporated by reference to Form
                                                           10-Q for quarter ending June 30,
                                                           1997.

           3.2            Code of Regulations              Incorporated by reference to
                                                           Proxy Statement for the 1994
                                                           Annual Meeting of Shareholders.

           4.1            Instruments defining the         Provident has no outstanding
                          rights of security               issue of indebtedness exceeding
                          holders                          10% of the assets of Provident
                                                           Financial and Consolidated
                                                           Subsidiaries. A copy of the
                                                           instruments defining the rights
                                                           of security holders will be
                                                           furnished to the Commission
                                                           upon request.

           4.2            Plan of Reorganization           Incorporated by reference to Form
                          relating to Series D,            10-K for 1995.
                          Non-Voting Convertible
                          Preferred Stock

           10.1           Junior Subordinated              Incorporated by reference to
                          Indenture, dated as of           Exhibit 4.1 on Form 8-K dated
                          November 27, 1996, between       November 27, 1996.
                          Provident and the Bank
                          of New York, as Indenture
                          Trustee

           10.2           Amended and Restated             Incorporated by reference to
                          Declaration of Trust of          Exhibit 4.3 on Form 8-K dated
                          Provident Capital Trust I,       November 27, 1996.
                          dated as of November 27,
                          1996

           10.3           Form of Guarantee Agreement      Incorporated by reference to
                          entered into by Provident        registration statement number
                          and The Bank of New York,        333-20769.
                          as Guarantee Trustee
</TABLE>


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<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


<TABLE>
<CAPTION>
           Number         Exhibit Description              Filing Status
           ------         -------------------              -------------
<S>                       <C>                              <C>
           10.4           Provident 1990 Employee          Incorporated by reference to
                          Stock Purchase Plan(1)           Post-Effective Amendment No. 1
                                                           to Form S-8 (File No. 33-34904).

           10.5           Provident Retirement Plan        Incorporated by reference to
                          (As amended)(1)                  Form S-8 (File No. 33-90792).

           10.6           Provident 1992 Advisory          Incorporated by reference to Form
                          Directors' Stock Option Plan     8-K filed October 22, 1992, and
                          (As amended)(1)                  Form S-8 (File No. 33-62707).

           10.7           Provident 1992 Outside           Incorporated by reference to Form
                          Directors' Stock Option          S-8 (File No. 33-51230).
                          Plan(1)

           10.8           Provident Restricted             Incorporated by reference to Form
                          Stock Plan(1)                    S-2 (File No. 33-44641).

           10.9           Registration of Preferred        Incorporated by reference to Form
                          Capital Securities, between      S-3 (File No. 333-80231).
                          Provident Capital Trust II,
                          Provident and Chase
                          Manhattan Bank

           10.10          Agreement and Plan of            Incorporated by reference to Form
                          Reorganization between           S-4 (File No. 333-88723).
                          Provident and Fidelity
                          Financial of Ohio, Inc.

           10.11          Registration of Preferred        Incorporated by reference to Form
                          Capital Securities of            S-3 as amended by Form S-3/A File
                          Provident Capital Trust          No. 333-93603).
                          III and IV

           10.12          Registration of Glenway          Incorporated by reference to Form
                          Financial Corporation 1990       S-8 (File No. 333-96503) and Form
                          Stock Option and Incentive       S-8 (File No. 333-55698).
                          Plan, Fidelity Federal Savings
                          Bank 1992 Stock Incentive
                          Plan, Fidelity Financial of
                          Ohio, Inc. 1997 Stock Option
                          Plan, and OHSL Financial Corp.
                          1992 Stock Option and
                          Incentive Plan

           10.13          Separation agreement between     Incorporated by reference to Form
                          Provident and Philip R. Myers    10-Q for the second quarter
                          (1)                              of 2001.

           10.14          Provident Dividend               Incorporated by reference to Form
                          Reinvestment Plan                S-3 (File No. 333-67754).
</TABLE>


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<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


<TABLE>
<CAPTION>
           Number         Exhibit Description              Filing Status
           ------         -------------------              -------------
<S>                       <C>                              <C>
           10.15          Employment agreement between     Incorporated by reference to Form
                          Provident and James L. Gertie    8-K (File No. 02672034).
                          (1)

           10.16          Employment agreement between     Incorporated by reference to
                          Provident and Christopher J.     Form 10-K for 2002.
                          Carey(1)

           10.17          Employment agreement between     Incorporated by reference to
                          Provident and James R.           Form 10-K for 2002.
                          Whitaker(1)

           10.18          Provident 1988 Stock Option      Incorporated by reference to.
                          Plan (As amended)(1)             Form 10-K for 2002.

           10.19          Provident 1996 Non-Executive     Incorporated by reference to
                          Officer Stock Option Plan        Form 10-K for 2002.
                          (As amended)(1)

           10.20          Provident 1997 Stock Option      Incorporated by reference to
                          Plan (As amended)(1)             Form 10-K for 2002.

           10.21          Provident 2000 Stock Option      Incorporated by reference to
                          Plan (As amended)(1)             Form 10-K for 2002.

           10.22          Provident Deferred               Incorporated by reference to
                          Compensation Plan (As            Form 10-K for 2002.
                          Amended)(1)

           10.23          Provident 2002 Outside           Incorporated by reference to
                          Directors Stock Option Plan(1)   Form 10-K for 2002.

           10.24          Provident Outside Directors      Incorporated by reference to
                          Deferred Compensation Plan       Form 10-K for 2002.
                          (As Amended)(1)

           10.25          Provident Supplemental           Incorporated by reference to
                          Executive Retirement Plan        Form 10-K for 2002.
                          (As Amended)(1)

           10.26          Agreement and Plan of Merger     Incorporated by reference to
                          By and Between National City     Form 8-K filed by National
                          Corporation and Provident        City Corporation on
                          Financial Group, Inc. Dated      February 17, 2004.
                          As of February 16, 2004.

           10.27          Employment agreement between     Filed herewith.
                          Provident and Robert L.
                          Hoverson (1)

           10.28          Employment agreement between     Filed herewith.
                          Provident and Christopher J.
                          Carey (1)
</TABLE>


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<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


<TABLE>
<CAPTION>
           Number         Exhibit Description              Filing Status
           ------         -------------------              -------------
<S>                       <C>                              <C>
           10.29          Employment agreement between     Filed herewith.
                          Provident and James R.
                          Whitaker(1)

           10.30          Employment agreement between     Filed herewith.
                          Provident and Anthony
                          Stollings (1)

           10.31          Employment agreement between     Filed herewith.
                          Provident and James L.
                          Gertie (1)

           14             Code of Ethics                   Incorporated by reference to
                                                           the investor relations page
                                                           of Provident's web site at
                                                           http://www.providentbank.com.

           21             Subsidiaries of Provident        Filed herewith.

           23             Consent of Independent           Filed herewith.
                          Auditors

           31.1           Rule 13a-14(a)/15d-14(a)
                          Certification of Principal       Filed herewith.
                          Executive Officer

           31.2           Rule 13a-14(a)/15d-14(a)
                          Certification of Principal       Filed herewith.
                          Financial Officer

           32.1           Section 1350
                          Certification of Principal       Filed herewith.
                          Executive Officer

           32.2           Section 1350
                          Certification of Principal       Filed herewith.
                          Financial Officer
</TABLE>


            (1) Management Compensatory Agreements


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<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


(b)   Reports on Form 8-K:

      Form 8-K (Items 7 and 12) Earnings release for third quarter; filed on
      October 15, 2003.
      Form 8-K (Items 7 and 12) Slide show for third quarter investor conference
      call; filed on October 16, 2003.
      Form 8-K (Items 7 and 12) Earnings release for fourth quarter and full
      year; filed on January 21, 2004.
      Form 8-K (Items 7 and 12) Slide show for fourth quarter investor
      conference call; filed on January 22, 2004.
      Form 8-K (Items 5 and 7) Announcement of Plan of Merger between National
      City Corporation and Provident Financial Group, Inc.; filed on February
      17, 2004.


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<PAGE>
                PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES


                                   SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, Provident Financial Group, Inc. has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                              Provident Financial Group, Inc.


                                                   /s/Robert L. Hoverson
                                              -------------------------------
                                                      Robert L. Hoverson
                                                           President
                                                        March 12, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Provident Financial
Group, Inc. and in the capacities and on the dates indicated.

       Signature                      Capacity                    Date
-----------------------     -----------------------------    --------------


/s/Robert L. Hoverson       Director and President           March 12, 2004
-----------------------     (Principal Executive Officer)
   Robert L. Hoverson

/s/Jack M. Cook             Director                         March 12, 2004
------------------------
   Jack M. Cook

/s/Thomas D. Grote, Jr.     Director                         March 12, 2004
-----------------------
   Thomas D. Grote, Jr.

/s/Joseph A. Pedoto         Director                         March 12, 2004
-----------------------
   Joseph A. Pedoto

/s/Joseph A. Steger         Director                         March 12, 2004
-----------------------
   Joseph A. Steger

/s/Christopher J. Carey     Executive Vice President         March 12, 2004
-----------------------     and Chief Financial Officer
   Christopher J. Carey


                                      114