# SECURITIES AND
EXCHANGE COMMISSION

Washington, D.C. 20549

# FORM 10-Q

# Quarterly Report
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

|                               |                
|------------------------------ | ---------------
|For the Quarterly Period Ended | Commission File
|September 30, 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: 513-579-2000

Indicate by check 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 (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X] No [ ]

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

Indicate the number of shares
outstanding of each of the issuers classes of common stock, as of the latest
practicable date: Common stock, without par value, outstanding at October 31, 2003 is
48,895,784.

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

(1)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES

INDEX TO QUARTERLY
REPORT

ON FORM 10-Q

|                                                                    |   
|------------------------------------------------------------------- | --
|PART I. FINANCIAL INFORMATION                                       |   
|ITEM 1. FINANCIAL STATEMENTS                                       
|Consolidated Balance Sheets                                         | 3 
|Consolidated Statements of Income                                   | 4 
|Consolidated Statements of Changes in Shareholders' Equity          | 5 
|Consolidated Statements of Cash Flows                               | 6 
|Notes to the Consolidated Financial Statements                      | 7 
|ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
|AND RESULTS OF OPERATIONS                                           | 20
|ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  | 48
|ITEM 4. CONTROLS AND PROCEDURES                                     | 49
|PART II. OTHER INFORMATION                                         
|ITEM 1. LEGAL PROCEEDINGS                                           | 50
|ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                            | 51
|SIGNATURE                                                           | 52
|                                                                   

(2)

---

PART I. FINANCIAL
INFORMATION

ITEM 1.  FINANCIAL
STATEMENTS

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES                                                CONSOLIDATED
BALANCE SHEETS

|(Dollars in Thousands)                               | September 30,
2003
(Unaudited) | December 31,
2002
|---------------------------------------------------- | ------------------------------ | -----------------
|ASSETS                                               |                                |                  
|Cash and Due from Banks                              | $      288,176                 | $      351,994   
|Federal Funds Sold and Reverse Repurchase Agreements | 341,833                        | 188,925          
|Trading Account Securities                           | 142,660                        | 127,848          
|Loans Held for Sale                                  | 494,804                        | 436,884          
|Investment Securities Available for Sale            
|(amortized cost - $4,758,704 and $4,158,511)         | 4,731,323                      | 4,215,238        
|Loans and Leases (Net of Unearned Income):          
|Corporate Lending:                                  
|Commercial                                           | 4,288,451                      | 4,482,373        
|Mortgage                                             | 992,619                        | 960,636          
|Construction                                         | 504,071                        | 510,331          
|Lease Financing                                      | 1,304,659                      | 1,273,901        
|Consumer Lending:                                   
|Installment                                          | 1,573,782                      | 1,306,761        
|Residential                                          | 26,812                         | 599,793          
|Lease Financing                                      | 320,866                        | -                
|                                                     |                                |                  
|Total Loans and Leases                               | 9,011,260                      | 9,133,795        
|Reserve for Loan and Lease Losses                    | (184,160)                      | (201,051)        
|                                                     |                                |                  
|Net Loans and Leases                                 | 8,827,100                      | 8,932,744        
|Leased Equipment                                     | 1,825,721                      | 2,350,356        
|Premises and Equipment                               | 99,561                         | 101,513          
|Goodwill                                             | 84,269                         | 82,651           
|Other Assets                                         | 772,186                        | 751,856          
|                                                     |                                |                  
|TOTAL ASSETS                                         | $ 17,607,633                   | $ 17,540,009     
|                                                     |                                |                  
|LIABILITIES AND SHAREHOLDERS' EQUITY                
|Liabilities:                                        
|Deposits:                                           
|Noninterest Bearing                                  | $   1,412,183                  | $   1,141,990    
|Interest Bearing                                     | 9,359,919                      | 8,706,989        
|                                                     |                                |                  
|Total Deposits                                       | 10,772,102                     | 9,848,979        
|Short-Term Debt                                      | 1,403,012                      | 1,925,005        
|Long-Term Debt                                       | 3,476,460                      | 3,842,657        
|Guaranteed Preferred Beneficial Interests in        
|Company's Junior Subordinated Debentures             | 451,389                        | 451,074          
|Minority Interest                                    | 160,966                        | 160,966          
|Accrued Interest and Other Liabilities               | 451,294                        | 430,957          
|                                                     |                                |                  
|Total Liabilities                                    | 16,715,223                     | 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, 48,884,612 and 48,760,462 Issued         | 14,492                         | 14,454           
|Capital Surplus                                      | 301,737                        | 298,025          
|Retained Earnings                                    | 634,018                        | 604,013          
|Accumulated Other Comprehensive Loss, Net            | (64,837)                       | (43,121)         
|                                                     |                                |                  
|Total Shareholders' Equity                           | 892,410                        | 880,371          
|                                                     |                                |                  
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY           | $ 17,607,633                   | $ 17,540,009     
|                                                     |                                |                  

See notes to consolidated
financial statements.

(3)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF INCOME (Unaudited)

|                                           | Three Months Ended
September 30, |  | Nine Months Ended
September 30, |        
|------------------------------------------ | -------------------------------- |  | ------------------------------- | -------
|
|Interest Income:                           |                                  |  |                                 |        
|Interest and Fees on Loans and Leases      |                                  |  | $                               | 129,923
|Interest on Investment Securities          |                                  |  |                                 | 43,025 
|Other Interest Income                      |                                  |  |                                 | 9,838  
|                                           |                                  |  |                                 |        
|Total Interest Income                      |                                  |  |                                 | 182,786
|Interest Expense:                          |                                  | 
|Interest on Deposits:                      |                                  | 
|Savings and Demand Deposits                |                                  |  |                                 | 10,936 
|Time Deposits                              |                                  |  |                                 | 43,169 
|                                           |                                  |  |                                 |        
|Total Interest on Deposits                 |                                  |  |                                 | 54,105 
|Interest on Short-Term Debt                |                                  |  |                                 | 7,542  
|Interest on Long-Term Debt                 |                                  |  |                                 | 42,525 
|Interest on Junior Subordinated Debentures |                                  |  |                                 | 4,491  
|                                           |                                  |  |                                 |        
|Total Interest Expense                     |                                  |  |                                 | 108,663
|                                           |                                  |  |                                 |        
|Net Interest Income                        |                                  |  |                                 | 74,123 
|Provision for Loan and Lease Losses        |                                  |  |                                 | 11,919 
|                                           |                                  |  |                                 |        
|Net Interest Income After Provision        |                                  | 
|for Loan and Lease Losses                  |                                  |  |                                 | 62,204 
|Noninterest Income:                        |                                  | 
|Service Charges on Deposit Accounts        |                                  |  |                                 | 12,933 
|Loan Servicing Fees                        |                                  |  |                                 | 6,925  
|Commercial Mortgage Banking Revenue        |                                  |  |                                 | 10,095 
|Other Service Charges and Fees             |                                  |  |                                 | 13,520 
|Leasing Income                             |                                  |  |                                 | 127,011
|Cash Gains on Sale of Loans                |                                  |  |                                 | 4,553  
|Warrant Gains                              |                                  |  |                                 | -      
|Net Security Gains                         |                                  |  |                                 | 5,077  
|Net Gain on Merchant Services Business     |                                  |  |                                 | -      
|Other                                      |                                  |  |                                 | 6,176  
|                                           |                                  |  |                                 |        
|Total Noninterest Income                   |                                  |  |                                 | 186,290
|Noninterest Expense:                       |                                  | 
|Salaries, Wages and Benefits               |                                  |  |                                 | 60,737 
|Charges and Fees                           |                                  |  |                                 | 7,404  
|Occupancy                                  |                                  |  |                                 | 6,224  
|Leasing Expense                            |                                  |  |                                 | 86,077 
|Equipment Expense                          |                                  |  |                                 | 6,398  
|Professional Services                      |                                  |  |                                 | 7,906  
|Minority Interest Expense                  |                                  |  |                                 | 3,197  
|Disposition Cost of Subprime Loans         |                                  |  |                                 | -      
|Other                                      |                                  |  |                                 | 30,167 
|                                           |                                  |  |                                 |        
|Total Noninterest Expense                  |                                  |  |                                 | 208,110
|                                           |                                  |  |                                 |        
|Income Before Income Taxes                 |                                  |  |                                 | 40,384 
|Applicable Income Taxes                    |                                  |  |                                 | 12,923 
|                                           |                                  |  |                                 |        
|Net Income                                 |                                  |  | $                               | 27,461 
|                                           |                                  |  |                                 |        
|Per Common Share:                          |                                  | 
|Basic Earnings Per Share                   |                                  |  | $                               | 0.56   
|Diluted Earnings Per Share                 |                                  |  |                                 | 0.54   
|Cash Dividends Paid                        |                                  |  |                                 | 0.24   

See notes to consolidated
financial statements.

(4)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES                                        CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                                               (Unaudited)

|(In Thousands)                 | Preferred
Stock | Common
Stock | Capital
Surplus | Retained
Earnings | Accumulated
Other
Comprehensive
Loss, Net | Total
|------------------------------ | --------------- | ------------ | --------------- | ----------------- | ----------------------------------------- | -----
|Balance at January 1, 2002     |                 |              | $               | 7,000             |                                           | $    
|Net Income                     |                 |              |                 |                   |                                           |      
|Other Comprehensive Income,    |                 |             
|Net of Tax:                    |                 |             
|Change in Unrealized           |                 |             
|Gains (Losses) on:             |                 |             
|Hedging Instruments            |                 |              |                 |                   |                                           |      
|Marketable Securities          |                 |              |                 |                   |                                           |      
|                               |                 |              |                 |                   |                                           |      
|Total Comprehensive Income     |                 |              |                 |                   |                                           |      
|Dividends Paid on:             |                 |             
|Preferred Stock                |                 |              |                 |                   |                                           |      
|Common Stock                   |                 |              |                 |                   |                                           |      
|Exercise of Stock Options and  |                 |             
|Accompanying Tax Benefits      |                 |              |                 |                   |                                           |      
|Benefit Plan Assets in         |                 |             
|Provident Stock                |                 |              |                 |                   |                                           |      
|Costs Associated with issuance |                 |             
|of PRIDES Securities           |                 |              |                 |                   |                                           |      
|Other                          |                 |              |                 |                   |                                           |      
|                               |                 |              |                 |                   |                                           |      
|Balance at September 30, 2002  |                 |              | $               | 7,000             |                                           | $    
|                               |                 |              |                 |                   |                                           |      
|Balance at January 1, 2003     |                 |              | $               | 7,000             |                                           | $    
|Net Income                     |                 |              |                 |                   |                                           |      
|Other Comprehensive Income,    |                 |             
|Net of Tax:                    |                 |             
|Change in Unrealized           |                 |             
|Gains (Losses) on:             |                 |             
|Hedging Instruments            |                 |              |                 |                   |                                           |      
|Marketable Securities          |                 |              |                 |                   |                                           |      
|                               |                 |              |                 |                   |                                           |      
|Total Comprehensive Income     |                 |              |                 |                   |                                           |      
|Dividends Paid on:             |                 |             
|Preferred Stock                |                 |              |                 |                   |                                           |      
|Common Stock                   |                 |              |                 |                   |                                           |      
|Exercise of Stock Options and  |                 |             
|Accompanying Tax Benefits      |                 |              |                 |                   |                                           |      
|Stock Options - Expensed       |                 |              |                 |                   |                                           |      
|Benefit Plan Assets in         |                 |             
|Provident Stock                |                 |              |                 |                   |                                           |      
|                               |                 |              |                 |                   |                                           |      
|Balance at September 30, 2003  |                 |              | $               | 7,000             |                                           | $    
|                               |                 |              |                 |                   |                                           |      

See notes to consolidated
financial statements.

(5)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES                                                CONSOLIDATED
STATEMENTS OF CASH FLOWS
                                                            (Unaudited)

|                                                    | Nine Months Ended September 30, | 
|--------------------------------------------------- | ------------------------------- | 
|
|Operating Activities:                               |                                 | 
|Net Income                                          |                                 | 
|Adjustments to Reconcile Net Income to              |                                 | 
|Net Cash Provided by Operating Activities:          |                                 | 
|Provision for Loan and Lease Losses                 |                                 | 
|Other Amortization and Accretion                    |                                 | 
|Depreciation of Leased Equipment                    |                                 | 
|Depreciation of Premises and Equipment              |                                 | 
|Impairment Charge on Mortgage Servicing Assets      |                                 | 
|Tax Benefit Received from Exercise of Stock Options |                                 | 
|Expensing of Stock Option Grants                    |                                 | 
|Realized Investment Security Gains                  |                                 | 
|Proceeds from Sale of Loans Held for Sale           |                                 | 
|Origination of Loans Held for Sale                  |                                 | 
|Realized Gains on Loans Held for Sale               |                                 | 
|Increase in Trading Account Securities              |                                 | 
|(Increase) Decrease in Interest Receivable          |                                 | 
|(Increase) Decrease in Other Assets                 |                                 | 
|Decrease in Interest Payable                        |                                 | 
|Increase in Other Liabilities                       |                                 | 
|                                                    |                                 | 
|Net Cash Provided By Operating Activities           |                                 | 
|                                                    |                                 | 
|Investing Activities:                               |                                 | 
|Investment Securities Available for Sale:           |                                 | 
|Proceeds from Sales                                 |                                 | 
|Proceeds from Maturities and Prepayments            |                                 | 
|Purchases                                           |                                 | 
|(Increase) Decrease in Loans and Leases             |                                 | 
|(Increase) Decrease in Operating Lease Equipment    |                                 | 
|Increase in Premises and Equipment                  |                                 | 
|                                                    |                                 | 
|Net Cash Used In Investing Activities               |                                 | 
|                                                    |                                 | 
|Financing Activities:                               |                                 | 
|Increase in Deposits                                |                                 | 
|Increase (Decrease) in Short-Term Debt              |                                 | 
|Principal Payments on Long-Term Debt                |                                 | 
|Proceeds From Issuance of Long-Term Debt            |                                 | 
|Proceeds From Issuance of Minority Interest,        |                                 | 
|Net of Transaction Costs                            |                                 | 
|Cash Dividends Paid                                 |                                 | 
|Proceeds from Exercise of Stock Options             |                                 | 
|Net Decrease in Other Equity Items                  |                                 | 
|                                                    |                                 | 
|Net Cash Provided By (Used In) Financing Activities |                                 | 
|                                                    |                                 | 
|Increase (Decrease) in Cash and Cash Equivalents    |                                 | 
|Cash and Cash Equivalents at Beginning of Period    |                                 | 
|                                                    |                                 | 
|Cash and Cash Equivalents at End of Period          |                                 | 
|                                                    |                                 | 
|Supplemental Disclosures of Cash Flow Information:  |                                 | 
|Cash Paid for:                                      |                                 | 
|Interest                                            |                                 | 
|Income Taxes                                        |                                 | 
|Non-Cash Activity:                                  |                                 | 
|Transfer of Loans and Leases to                     |                                 | 
|Other Nonperforming Assets                          |                                 | 

See notes to consolidated
financial statements.

(6)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

NOTE 1.  BASIS OF
PRESENTATION

The accompanying unaudited financial
statements reflect all adjustments, consisting of normal recurring accruals, which are, in
the opinion of management, necessary for a fair presentation of the financial position,
the results of operations, changes in shareholders equity and cash flows for the
periods presented. These financial statements have been prepared according to the rules
and regulations of the Securities and Exchange Commission pertaining to Form 10-Q and,
therefore, certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted in the
United States (GAAP) have been omitted. The results of operations for interim periods are
not necessarily indicative of the results to be expected for the full year.

The consolidated financial statements
include the accounts of Provident Financial Group, Inc. (Provident) and its subsidiaries.
Investment in companies in which Provident has significant influence over operating and
financing decisions (principally defined as owning a voting or economic interest of 20% to
50%) are accounted for by the equity method of accounting. All significant intercompany
balances and transactions have been eliminated.

In January 2003, the Financial
Accounting Standard Board (FASB) issued Interpretation No. 46 (FIN 46). FIN 46 provides
guidance as to consolidation by business enterprises where ownership interests in an
entity may vary over time or, in many cases, consolidation of special purpose entities.
FIN 46 applies immediately to variable interest entities created after January 31, 2003
and for periods ending after December 15, 2003 for variable interest entities created
prior to February 1, 2003. For further discussion of FIN 46, see Note 2. Recent
Accounting Pronouncements.

Certain reclassifications have been
made to conform to the current year presentation. These reclassifications had no effect on
net income.

The financial statements and notes
thereto appearing in Providents 2002 annual report on Form 10-K, which include
descriptions of significant accounting policies, should be read in conjunction with these
interim financial statements.

(7)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

NOTE 2.  RECENT
ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued FIN
46, Consolidation of Variable Interest Entities. FIN 46, which is an
interpretation of Accounting Research Bulletin No. 51 (ARB 51), Consolidated
Financial Statements, addresses consolidation by business enterprises where
ownership interests in an entity may vary over time or, in many cases, consolidation of
special-purpose entities (SPEs). To be consolidated for financial reporting, these
entities must have certain characteristics. ARB 51 requires that an enterprises
consolidated financial statements include subsidiaries in which the enterprise has a
controlling financial interest. FIN 46 requires existing unconsolidated variable interest
entities to be consolidated by their primary beneficiaries if the entities do not
effectively disperse risks among the parties involved. An enterprise that holds
significant variable interests in such an entity, but is not the primary beneficiary, is
required to disclose certain information regarding its interests in that entity. FIN 46
applies immediately to variable interest entities created after January 31, 2003, and to
variable interest entities in which an enterprise obtains an interest after that date. It
also applies in the first fiscal year or interim period beginning after June 15, 2003, to
variable interest entities in which an enterprise holds an interest that it acquired
before February 1, 2003. Subsequently, FASB Staff Position FIN 46-6 was issued deferring
the effective date for applying the provisions of FIN 46 to interests held in certain
variable interest entities until the end of the first interim or annual period ending
after December 15, 2003. As the securitization of its nonconforming residential, prime
home equities and equipment leases involve the use of qualified special purpose entities
as defined by Statement 140, Accounting for Transfers and Servicing of Financial
Assets and Extinguishment of Liabilities, which is excluded from FIN 46, these
securitization entities will continue to be excluded from consolidation.

Provident holds various investments
and is involved with various entities that, for purposes of FIN 46, are being evaluated to
determine whether consolidation or further disclosure as a significant interest holder is
required. Such interests subject to evaluation include low-income housing partnerships,
equity funds, direct investments of equity securities and trust preferred securities. The
adoption of FIN 46 is not expected to have a material impact on Providents results
of operations or financial condition.

In April 2003, FASB issued Statement
of Financial Accounting Standards 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 are already effective and should continue to be applied in
accordance with their prior respective effective dates. The adoption of Statement 149 did
not have a material impact on Providents results of operations or financial
condition.

(8)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

In May 2003, 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 is effective at the beginning of the first interim
period beginning after June 15, 2003. Restatement is not permitted. The adoption of
Statement 150 did not have a material impact on Providents results of operations or
financial condition.

NOTE 3.  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 4.5 million and 3.7 million shares of Common Stock were outstanding at
September 30, 2003 and 2002, 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. The PRIDES units were not included in
the computation of diluted earnings per share as these instruments had no dilutive impact.

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

|                                           | Three Months Ended
September 30, |  | Nine Months Ended
September 30, |       
|------------------------------------------ | -------------------------------- |  | ------------------------------- | ------
|
|Basic:                                     |                                  |  |                                 |       
|Net Income                                 |                                  |  | $                               | 27,461
|Less Preferred Stock Dividends             |                                  |  |                                 | (237  
|                                           |                                  |  |                                 |       
|Income Available to Common Shareholders    |                                  |  |                                 | 27,224
|Weighted-Average Common Shares Outstanding |                                  |  |                                 | 48,830
|                                           |                                  |  |                                 |       
|Basic Earnings Per Share                   |                                  |  | $                               | 0.56  
|                                           |                                  |  |                                 |       
|Diluted:                                   |                                  | 
|Net Income                                 |                                  |  | $                               | 27,461
|Weighted-Average Common Shares Outstanding |                                  |  |                                 | 48,830
|Benefit Plans Common Shares                |                                  |  |                                 | 718   
|Assumed Conversion of:                     |                                  | 
|Convertible Preferred Stock                |                                  |  |                                 | 988   
|Dilutive Stock Options                     |                                  |  |                                 | 349   
|                                           |                                  |  |                                 |       
|Dilutive Potential Common Shares           |                                  |  |                                 | 50,885
|                                           |                                  |  |                                 |       
|Diluted Earnings Per Share                 |                                  |  | $                               | 0.54  
|                                           |                                  |  |                                 |       
|                                           |                                  | 

(9)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

NOTE 4.
 GUARANTEED PREFERRED BENEFICIAL INTERESTS IN COMPANY'S JUNIOR SUBORDINATED DEBENTURES

Wholly-owned subsidiary trusts of
Provident have issued $462.5 million of preferred securities and, in turn, purchased
$462.5 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. Approximately
$373 million of the preferred securities qualify as Tier 1 capital and the remainder
qualifies as Tier 2 capital for bank regulatory purposes. The sole assets of the trusts
are the debentures. The junior subordinated debentures consisted of the following at
September 30, 2003:

|(Dollars in Thousands) | Stated
Rate | Effective
Rate (1) | Maturity
Date | Amount
|---------------------- | ----------- | ------------------ | ------------- | ------
|November 1996 Issuance |             |                    |               | 8.60  
|June 1999 Issuance     |             |                    |               | 8.75  
|November 2000 Issuance |             |                    |               | 10.25 
|March 2001 Issuance    |             |                    |               | 9.45  
|                       |             |                    |               |       
|Total                  |             |                    |               |       
|                       |             |                    |               |       
|                       |             |                   

|(1) | Effective
rate reflects interest rate after adjustment 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 5.
 COMPREHENSIVE INCOME

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) follows:

(10)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

|                                                               | Nine Months Ended
September 30, | 
|-------------------------------------------------------------- | ------------------------------- | 
|
|Accumulated Unrealized Gains/(Losses) on Securities Available  |                                 | 
|for Sale at January 1, Net of Tax                              |                                 | 
|Net Unrealized Gains/(Losses) for the Period, Net of Tax       |                                 | 
|Expense/(Benefit) of $(16,458) in 2003 and $26,411 in 2002     |                                 | 
|Reclassification Adjustment for Gains Included in Net Income,  |                                 | 
|Net of Tax Expense of $12,975 in 2003 and $450 in 2002         |                                 | 
|                                                               |                                 | 
|Effect on Other Comprehensive Income/(Loss) for the Year       |                                 | 
|                                                               |                                 | 
|Accumulated Unrealized Gains on Securities Available           |                                 | 
|for Sale at September 30, Net of Tax                           |                                 | 
|                                                               |                                 | 
|Accumulated Unrealized Losses on Derivatives Used in Cash      |                                 | 
|Flow Hedging Relationships at January 1, Net of Tax            |                                 | 
|Net Unrealized Gains/(Losses) for the Period, Net of Tax       |                                 | 
|Expense/(Benefit) of $8,880 in 2003 and $(18,475) in 2002      |                                 | 
|Reclassification Adjustment for Losses Included in Net Income, |                                 | 
|Net of Tax Benefit of $8,859 in 2003 and $16,389 in 2002       |                                 | 
|                                                               |                                 | 
|Effect on Other Comprehensive Income/(Loss) for the Year       |                                 | 
|                                                               |                                 | 
|Accumulated Unrealized Losses on Derivatives Used in Cash      |                                 | 
|Flow Hedging Relationships at September 30, Net of Tax         |                                 | 
|                                                               |                                 | 
|Accumulated Other Comprehensive Loss at January 1, Net of Tax  |                                 | 
|Other Comprehensive Income/(Loss), Net of Tax                  |                                 | 
|                                                               |                                 | 
|Accumulated Other Comprehensive Loss at September 30, Net of T |                                 | 
|                                                               |                                 | 

NOTE 6.  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 mortgage 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.

Condensed income statements and total
assets are provided below for Providents three major lines of business for the
three-month and nine-month periods ended September 30, 2003 and 2002. Corporate Center
represents income and expenses not allocated to the major business lines operational
activities, and gain/loss on the sale of investment securities.

(11)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

|(Dollars in Millions)                 | Commercial
Banking | Retail
Banking | Mortgage
Banking | Corporate
Center | Total
|------------------------------------- | ------------------ | -------------- | ---------------- | ---------------- | -----
|Three Months Ended September 30 2003: |                    |                |                  |                  |      
|Net Interest Income                   |                    |                | $                | 44.5             |      
|Provision for Loan Losses             |                    |                |                  | (9.9             | )    
|Noninterest Income                    |                    |                |                  | 46.5             |      
|Noninterest Expense                   |                    |                |                  | (59.2            | )    
|Income Taxes                          |                    |                |                  | (7.0             | )    
|                                      |                    |                |                  |                  |      
|Net Income                            |                    |                | $                | 14.9             |      
|                                      |                    |                |                  |                  |      
|Three Months Ended September 30 2002: |                    |                |                  |                  |      
|Net Interest Income                   |                    |                | $                | 55.2             |      
|Provision for Loan Losses             |                    |                |                  | (16.8            | )    
|Noninterest Income                    |                    |                |                  | 34.9             |      
|Noninterest Expense                   |                    |                |                  | (51.9            | )    
|Income Taxes                          |                    |                |                  | (7.3             | )    
|                                      |                    |                |                  |                  |      
|Net Income                            |                    |                | $                | 14.1             |      
|                                      |                    |                |                  |                  |      
|Nine Months Ended September 30 2003:  |                    |                |                  |                  |      
|Net Interest Income                   |                    |                | $                | 145.5            |      
|Provision for Loan Losses             |                    |                |                  | (30.6            | )    
|Noninterest Income                    |                    |                |                  | 133.7            |      
|Noninterest Expense                   |                    |                |                  | (177.7           | )    
|Income Taxes                          |                    |                |                  | (23.2            | )    
|                                      |                    |                |                  |                  |      
|Net Income                            |                    |                | $                | 47.7             |      
|                                      |                    |                |                  |                  |      
|Total Assets                          |                    |                | $                | 7,462            |      
|                                      |                    |                |                  |                  |      
|Nine Months Ended September 30 2002:  |                    |                |                  |                  |      
|Net Interest Income                   |                    |                | $                | 165.9            |      
|Provision for Loan Losses             |                    |                |                  | (48.8            | )    
|Noninterest Income                    |                    |                |                  | 109.0            |      
|Noninterest Expense                   |                    |                |                  | (156.1           | )    
|Income Taxes                          |                    |                |                  | (24.1            | )    
|                                      |                    |                |                  |                  |      
|Net Income                            |                    |                | $                | 45.9             |      
|                                      |                    |                |                  |                  |      
|Total Assets                          |                    |                | $                | 7,324            |      
|                                      |                    |                |                  |                  |      

NOTE 7.  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 cost 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
property is sold or another lease agreement is initiated.

Lease Financing: Corporate lease
financing includes the leasing of transportation, manufacturing, construction,
communication, data processing and office equipment. Consumer lease financing is the
leasing of automobiles. Automobile leases originated since February 1, 2003 are classified
as finance leases while those originated prior to that date are classified as operating
leases. The change in classification of the auto leases is the result of an alteration in
the structure of residual insurance that Provident obtains on its auto leases.

(12)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

The components of the net investment
in lease financing at September 30, 2003 were as follows:

|                          | Corporate Lease Financing | Consumer
Lease
|------------------------- | ------------------------- | --------------
|
|Rentals Receivable        |                           |               
|Estimated Residual Values |                           |               
|                          |                           |               
|                          |                           |               
|Less: Unearned Income     |                           |               
|                          |                           |               
|Net Carrying Value        |                           |               
|                          |                           |               

Leased Equipment: Leased equipment
are assets which are subject to operating leases. Operating leases are comprised of
transportation equipment, manufacturing equipment, data processing and office equipment to
corporate clients and automobiles to consumers.

Provident has entered into
sale-leaseback transactions utilizing its auto leases. At September 30, 2003,
approximately $1.1 billion of outstanding auto leases, which represent assets under
capital leases, were utilized in these transactions.

A summary of leased equipment at
September 30, 2003 follows:

|                         | Corporate Leased Equipment | Consumer
Leased | Total
Leased
|------------------------ | -------------------------- | --------------- | ------------
|
|Cost                     |                            |                 | $           
|Accumulated Depreciation |                            |                 |             
|                         |                            |                 |             
|Net Carrying Value       |                            |                 | $           
|                         |                            |                 |             

NOTE 8.  GOODWILL
AND OTHER INTANGIBLE ASSETS

Provident adopted the provisions of
Statements of Financial Accounting Standards 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. Other intangible assets deemed 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 determined that no impairment existed as of that date.

(13)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Changes in the carrying amount of
goodwill by business line for the nine months ended September 30, 2003 and 2002, are as
follows:

|(In Thousands)                              | Commercial
Banking | Retail
Banking | Total
|------------------------------------------- | ------------------ | -------------- | -----
|Balance at January 1, 2002                  |                    |                | $    
|Goodwill Acquired During the Year           |                    |                |      
|Goodwill Recorded as a Result of Contingent |                    |               
|Consideration being Recognized              |                    |                |      
|                                            |                    |                |      
|Balance at September 30, 2002               |                    |                | $    
|                                            |                    |                |      
|Balance at January 1, 2003                  |                    |                | $    
|Goodwill Recorded as a Result of Contingent |                    |               
|Consideration being Recognized              |                    |                |      
|                                            |                    |                |      
|Balance at September 30, 2003               |                    |                | $    
|                                            |                    |                |      

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, along with accumulated amortization, is
provided below:

|(In Thousands)                         | Gross
Carrying
Value | Accumulated
Amortization | Net
Carrying
Value
|-------------------------------------- | -------------------- | ------------------------ | ------------------
|Non-Contractual Customer Relationships |                      |                          | $                 
|Purchased Core Deposits                |                      |                          |                   
|                                       |                      |                          |                   
|Balance at September 30, 2003          |                      |                          | $                 
|                                       |                      |                          |                   

The estimated amortization of
intangible assets for the next five years is $1.2 million for the remainder of 2003; $4.4
million for 2004; $3.1 million for 2005; $0.7 million for 2006; and $0.2 million for 2007.

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 Sheets. 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. 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. The mortgage loan prepayment
rate is the most significant factor driving the value of mortgage net servicing assets.
Increases in mortgage loan prepayments reduce estimated future net servicing cash flows
because the life of the underlying loan is reduced.

(14)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

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

|                                         | Nine Months Ended
September 30 | 
|---------------------------------------- | ------------------------------ | 
|
|Mortgage Servicing Assets:               |                                | 
|Balance at Beginning of Period           |                                | 
|Additions                                |                                | 
|Amortization                             |                                | 
|                                         |                                | 
|Balance at End of Period                 |                                | 
|                                         |                                | 
|Valuation Allowance:                     |                                | 
|Balance at Beginning of Period           |                                | 
|Impairment Charges                       |                                | 
|                                         |                                | 
|Balance at End of Period                 |                                | 
|                                         |                                | 
|Net Carrying Value of Mortgage Servicing |                                | 
|Assets at End of Period                  |                                | 
|                                         |                                | 
|                                         |                                | 

As of September 30, 2003, total
mortgage loans serviced for others included $10.6 billion on commercial real estate
property and $11.0 billion on residential property. Net mortgage servicing assets relating
to commercial real estate loans and residential loans totaled $71.6 million and $74.9
million, respectively as of September 30, 2003. Impairment charges of $0.4 million were
incurred on the commercial real estate servicing assets and $3.7 million on residential
servicing assets during the third quarter of 2003. 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. Most of the
commercial real estate loans have lockout and prepayment penalties generally ranging from
5 to 9 years while the majority of the residential loans were acquired with interest rates
at or near current levels.

NOTE 10.  EQUITY
INVESTMENTS

Provident invests in low income
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 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
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. During the first quarter of 2003, certain equity investments
were determined to have incurred a total of $11.0 million of other than temporary
impairment in their valuation based upon information received from the general partners of
the equity funds and Providents internal analyses. This impairment charge was offset
against other realized security gains. As of September 30, 2003 and 2002, Provident held
equity investments with a carrying value of $60.8 million and $73.7 million, respectively.

(15)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

NOTE 11.  STOCK
OPTIONS

Statement of Financial Accounting
Standards 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 Bulletin
(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 the 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.

Provident recorded $890,000 ($741,000
after-tax) of stock-based compensation during the first nine months of 2003 while no
compensation cost was recognized for stock option grants during 2002. Had compensation
cost been determined 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:

|                                                | Three Months Ended
September 30 | Nine Months Ended
September 30 |  
|----------------------------------------------- | ------------------------------- | ------------------------------ | -
|
|Net Income as Reported                          |                                 |                                | $
|Plus Stock-Based Compensation Recognized for    |                                 |                               
|Options Granted in 2003, Net of Related Tax     |                                 |                                |  
|Less Total Stock-Based Compensation for Options |                                 |                               
|Granted Since 1994, Net of Related Tax          |                                 |                                |  
|                                                |                                 |                                |  
|Pro-forma Net Income                            |                                 |                                | $
|                                                |                                 |                                |  
|Earnings Per Share:                             |                                 |                               
|Basic - As Reported                             |                                 |                                | $
|Basic - Pro Forma                               |                                 |                                |  
|Diluted - As Reported                           |                                 |                                |  
|Diluted - Pro Forma                             |                                 |                                |  

(16)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

NOTE 12.
 RESTRICTED ASSETS

Provident formed the subsidiaries
listed below to account for and support the process of transferring, securitizing and/or
selling 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 September 30, 2003 follow:

|(In Thousands)                           | Total Assets
|---------------------------------------- | ------------
|Provident Auto Rental LLC 1999-1         |             
|Provident Auto Leasing Company           |             
|Provident Auto Rental LLC 2000-1         |             
|Provident Auto Rental LLC 2001-1         |             
|Provident Auto Rental LLC 2000-2         |             
|Provident Auto Rental Company LLC 1998-2 |             
|Provident Auto Rental Company LLC 1998-1 |             
|Provident Lease Receivables Company LLC  |             
|                                         |             

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

NOTE 13.
 COMMITMENTS AND CONTINGENCIES

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.

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. Generally, Provident
issues standby letters of credit for terms from six months to three years.

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

|(In Millions)                | September 30
2003 | December 31
2002
|---------------------------- | ----------------- | ----------------
|Commitments to Extend Credit |                   |                 
|Standby Letters of Credit    |                   |                 
|Commercial Letters of Credit |                   |                 

(17)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

The Provident Bank (the Bank), a
subsidiary of Provident, has issued a guarantee for Red Mortgage Capital, Inc. (Red
Mortgage), a subsidiary of the Bank, 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 participate in the loss sharing agreement, the 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 September 30, 2003, Red Mortgage serviced loans with outstanding principal balances
aggregating $3.6 billion under the DUS program. The guarantee will continue until such
time as the loss sharing agreement is amended or that Red Mortgage no longer participates
in the Fannie Mae DUS program. No liability is carried on the Banks balance sheet
for this guarantee as a liability has been established for estimated losses on Red
Mortgages balance sheet.

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 have
been 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
has also been 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.

(18)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

These actions have been 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.

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. All
proceedings in the derivative actions filed in state court have been indefinitely stayed
by agreement of the parties and their respective legal counsel.

NOTE 14.  SALE OF
LOANS AND BUSINESS UNIT

During the second quarter of 2003,
Provident completed the sale of $471 million of subprime residential mortgage loans and
related assets, and also sold its Merchant Services business, a payment solutions provider
for credit and debit card acceptance programs. The loans were sold at a $40 million net
discount, of which $6.9 million was recorded as disposition cost in noninterest expense.
The sale of the Merchant Services business resulted in a gain of $19 million.

NOTE 15.
 SUBSEQUENT EVENTS

During the second quarter of 2003,
Provident agreed to sell certain deposits, loans and bank branches to RBC Centura Bank, a
subsidiary of Royal Bank of Canada. Provident will sell its 13 Florida branches, along
with approximately $750 million of deposits and $350 million in loans which were primarily
originated at its Florida offices. The transaction, which has received regulatory
approval, is expected to close on November 21, 2003 and generate a pre-tax gain in excess
of $70 million or $0.93 per share.

During late October and November
2003, Provident sold approximately $50 million of loans and leases. The loans and leases,
which included approximately $38 million of nonperforming assets, were sold at a loss of
approximately $19 million, or $0.25 per share prior to the impact from reducing related
reserves.

(19)

---

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

ITEM 2.
 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

Provident is a bank holding company
headquartered in Cincinnati, Ohio. Provident operates bank and other financial service
subsidiaries principally in Ohio, northern Kentucky and southwest Florida. 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.

On July 10, 2003 Provident announced
a number of strategic actions taken late in the second quarter to further align its core
businesses with its corporate operating strategy. The Company further reduced its risk
profile through the sale of $471 million of subprime residential mortgage loans, and also
sold its Merchant Services business, a payment solutions provider for credit and debit
card acceptance programs. The Company has also agreed to sell its 13 Florida branches,
along with certain deposits and loans, primarily originated at these branches, to RBC
Centura Bank, a wholly owned subsidiary of Royal Bank of Canada. The transaction has been
approved by federal and state regulators and is expected to close in the fourth quarter of
this year.

Forward-Looking
Statements

This Form 10-Q 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.

(20)

---

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

RESULTS OF
OPERATIONS

Summary

The following table summarizes
earnings components, earnings per share and key financial ratios:

|(Dollars in Thousands,              | Three Months Ended
September 30, | Nine Months Ended
September 30, |   |        
|----------------------------------- | -------------------------------- | ------------------------------- | - | -------
|
|Income Statement Summary:           |                                  |                                 |   |        
|Net Interest Income                 |                                  |                                 | $ | 74,123 
|Noninterest Income                  |                                  |                                 |   | 186,290
|Total Revenue                       |                                  |                                 |   | 260,413
|Provision for Loan and Lease Losses |                                  |                                 |   | 11,919 
|Noninterest Expense                 |                                  |                                 |   | 208,110
|Net Income                          |                                  |                                 |   | 27,461 
|Diluted Earnings Per Common Share   |                                  |                                 |   | 0.54   
|Ratios Analysis:                    |                                  |                                
|Return on Average Equity            |                                  |                                 |   | 12.91  
|Return on Average Assets            |                                  |                                 |   | 0.62   

Third quarter 2003 earnings per
diluted share and net income were $0.54 and $27.5 million, respectively, compared with
$0.47 and $24.0 million in the third quarter of 2002. For the first nine months of 2003
earnings per diluted share and net income were $1.31 and $66.5 million, respectively,
compared with $1.36 and $68.8 million for the same period in 2002. Returns on average
equity and assets were 10.10% and 0.50%, respectively, for the first nine months of 2003
compared with 10.90% and 0.56% for the same period during 2002.

As noted earlier, during the second
quarter Provident completed the sale of subprime residential mortgage loans that had been
held in portfolio, and also sold its Merchant Services business. Management believes
presenting financial information excluding these sales might be beneficial to the reader
as it provides data that is more comparable to earlier periods contained in this document.
Excluding both sales, Providents net income and earnings per share would have been
$80.6 million and $1.59 for the first nine months of 2003. The following table presents
financial information removing the impact of the sales.

(21)

---

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

|                                           | As | Impact from Sale of | Excluding
|------------------------------------------ | -- | ------------------- | ---------
|
|For the Nine Months Ended September 30, 20 |    |                     |          
|Condensed Income Statement (In Thousands): |    |                    
|Net Interest Income                        |    |                     | $        
|Provision for Loan and Leases Losses       |    |                     |          
|Noninterest Income                         |    |                     |          
|Noninterest Expense                        |    |                     |          
|                                           |    |                     |          
|Income Before Income Taxes                 |    |                     |          
|Applicable Income Taxes                    |    |                     |          
|                                           |    |                     |          
|Net Income                                 |    |                     | $        
|                                           |    |                     |          
|Other Data:                                |    |                    
|Earnings Per Common Share - Diluted        |    |                     | $        
|Return on Assets                           |    |                     |          
|Return on Equity                           |    |                     |          
|Net Charge Offs                            |    |                     | $        
|Net Charge Offs to Average                 |    |                    
|Loans and Leases (annualized)              |    |                     |          

Net interest income was $74.1 million
and $77.6 million for the three months ended September 30, 2003 and 2002, respectively.
This quarters net interest income and net interest margin were both negatively
impacted by last quarters sale of $471.0 million of subprime residential mortgage
loans. Net interest income for the nine months ended September 30, 2003, increased $6.9
million, or 3%, compared to the first nine months of 2002. The increase in interest income
was due to an increase in average earning assets of $1.6 billion, or 12%. The increase in
average earning assets resulted primarily from the growth of home equity loans and
investment securities. The growth in earning assets was primarily funded by a
corresponding growth in demand and time deposits.

The provision for loan and lease
losses was $80.9 million and $81.3 million for the first nine months of 2003 and 2002,
respectively. Included in the provision for 2003 was approximately $33.2 million of
provision related to the sale of subprime residential mortgage loans that occurred in the
second quarter of 2003. The annualized net charge-off to average loans and leases ratio
was 1.44% for the first nine months of 2003 compared to 1.81% for the same period in 2002.
If the $49.2 million charge-off related to the residential mortgage loan sale were
excluded, the net charge-off ratio for the first nine months of 2003 would have been
0.71%. Nonperforming assets at September 30, 2003 were $132.0 million compared to $182.2
million and $193.5 million as of December 31, 2002 and September 30, 2002, respectively.
Nonperforming assets are at their lowest level in nearly two years due to management
actions and the sale of the subprime residential mortgages. Reserve for loan losses to
nonperforming assets was 139.56% as of September 30, 2003 compared to 110.34% and 105.84%
as of December 31, 2002 and September 30, 2002, respectively.

Noninterest income decreased $7.0
million for the first nine months of 2003 as compared to the same period in 2002.
Decreases in leasing income and lower warrant gains were offset by the gain on the sale of
the Merchant Servicing business and an increase in commercial mortgage banking revenue.
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.

(22)

---

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

Noninterest expense increased $7.0
million, or 1%, for the first nine months of 2003 as compared to the same period in 2002.
The increase in noninterest expense was primarily in the areas of salaries, professional
services, and expenses related to the disposal of the subprime residential mortgage loans.
These increases were partially offset by decreases in leasing and other real estate
expenses. Similar to leasing income, leasing expense decreased due to the decrease in auto
leasing activity, as well as auto leases originated since February 2003 being classified
as finance leases rather than operating leases.

Total assets increased $67.6 million
from December 31, 2002 to September 30, 2003 primarily as a result of an increase in
investment securities and home equity loans. Partially offsetting these increases were
reductions in nonconforming residential loans and commercial lending. The fluctuations in
the loan and lease balances reflect managements decision to reduce or exit loans
with higher credit risk while growing those with lower credit risk. Total deposits
increased $923 million during the first nine months of 2003. Average core deposits have
increased 10% since the third quarter of 2002.

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 three-month and nine-month
periods ended September 30, 2003 and 2002. Condensed income statements and total assets
are provided in Note 6 of the Notes to Consolidated Financial Statements.

|                   | Three Months Ended
September 30, | Nine Months Ended
September 30, |  
|------------------ | -------------------------------- | ------------------------------- | -
|
|Commercial Banking |                                  |                                 | $
|Retail Banking     |                                  |                                 |  
|Mortgage Banking   |                                  |                                 |  
|Corporate Center   |                                  |                                 |  
|                   |                                  |                                 |  
|                   |                                  |                                 | $
|                   |                                  |                                 |  

Key components of the management
reporting process follows:

|o |  | 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.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(23)

---

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

|o |  | 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.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | 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.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | Costs
Allocation: 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.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | 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
fluctuation analysis follows:

|o |  | 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 third quarters of 2003 and 2002 was $14.9 million
and $14.1 million, respectively, and for the first nine months of 2003 and 2002 was $47.7
million and $45.9 million, respectively. Contributing to the higher nine-month net income
for 2003 was an increase in noninterest income and lower provision expense, which was
partially offset by lower 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 nine months provided for an
increased demand for their services.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Average
asset balances for the first nine months of 2003 increased $347 million or 5% compared to
the same time period in 2002. However, net interest income for the first nine months of
2003 failed to keep pace with asset growth due to modest spread compression. Furthermore,
provision expense decreased in the first nine months of 2003 primarily due to an overall
improvement in credit quality of the commercial loan portfolio.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
cash management, technology-driven solutions and competitive product offerings
contributed to an increase in deposits for the third quarter of 2003. Average commercial
deposits for the third quarter of 2003 increased by $389 million, or 61% as compared to
the third quarter of 2002. The product offerings have attracted new relationships and
generated more business from the existing commercial customer base.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(24)

---

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

| | Management
continues to reposition this business line in order to develop and grow more predictable
earnings. Management has de-emphasized its higher credit risk areas of structured finance
lending and large leverage lease transactions while growing its lower credit risk areas
of middle market leasing and regional middle market commercial lending units.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | 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, call center, ATMs 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 increased $1.9 million and $4.2 million for the three-month and nine-month periods
ended September 30, 2003 as compared to the same periods in 2002. The increase in net
income for 2003 was primarily the result of growth within Retails lending business
units.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Retail
Banking continues to alter the composition of its consumer lending portfolio. Management
believes that growing its home equity portfolio while slowing auto lease originations
will result in an overall lower credit risk exposure.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Retail
Banking has experienced growth in transaction deposits of 24% in the third quarter of
2003 as compared to the third quarter of 2002. Total retail deposit growth had only
slight growth over the same time period, however, due to less aggressive pricing on
certificates of deposit. Provident plans to further enhance its distribution system to
improve customer acquisition and market penetration.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | 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 and broker channels and are sold on a
whole-loan basis. Whole-loan sales refer to the transfer of credit risk along with the
payment stream of the loan. Primary operating groups within Mortgage Banking include
Residential Mortgage Origination and Sales, Third-Party Loan Servicing and Warehouse
Lending Services.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(25)

---

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

| | Net
income for the third quarter of 2003 was $1.3 million as compared to $3.6 million for the
third quarter of 2002. For the first nine months of 2003, net income was $7.3 million
compared to $6.2 million for the same period in 2002. The decrease in net income for the
third quarter of 2003, as compared to 2002, was a result of lower gains recognized on the
sale of loans and an impairment charge on mortgage servicing assets. Gains on the sale of
nonconforming residential loans decreased from $4.9 million in the third quarter of 2002
to $2.3 million in the third quarter of 2003. An impairment charge of $3.7 million was
recorded in the third quarter of 2003, whereas no impairment charges were recognized
during 2002.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net
income for the first nine months of 2003 rose primarily from higher warehouse lending
production and growth in the sub-servicing portfolio. Warehouse lending production has
benefited from a favorable rate environment, which continues to generate loan
refinancing. Sub-servicing has also experienced significant growth as loans serviced for
others (excluding securitized mortgages) increased from $4.4 billion at September of 2002
to $9.5 billion at the end of this quarter.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | 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 $9.1 million
for the first nine months of 2003 resulted from an after-tax loss of $26.9 million from
the sale of subprime residential loans, net of after-tax gains of $12.7 million from the
sale of the Merchant Services business and $5.1 million from security sales. Net income
of $0.3 million for the first nine months of 2002 was from after-tax gains of $5.4
million from the sale of warrants and $0.8 million from security sales, net of an
after-tax loss of $5.9 million from the sale of subprime loans.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net Interest Income

Net interest income for the nine
months ended September 30, 2003, increased $6.9 million, or 3%, compared to the first nine
months of 2002. The increase in net interest income was due to an increase in average
earning assets of $1.6 billion, or 12%. The increase in average earning assets resulted
primarily from the growth of home equity loans and investment securities. The growth in
earning assets was primarily funded by a corresponding growth in demand and time deposits.

Net interest margin represents net
interest income as a percentage of total interest earning assets. For the first nine
months of 2003, the net interest margin, on a tax-equivalent basis, was 2.23% compared to
2.43% for the same period in 2002. This decrease was driven by changes in rates and
volumes of earning assets and the corresponding funding sources. The following table
details the components of the change in net interest income (on a tax-equivalent basis) by
major category of interest earning assets and interest bearing liabilities for the
three-month and nine-month periods ended September 30, 2003 and 2002.

(26)

---

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

|                               | Three Months Ended | Nine Months Ended |   |        | 
|------------------------------ | ------------------ | ----------------- | - | ------ | 
|
|
|Assets:                        |                    |                   |   |        | 
|Loans and Leases:              |                    |                  
|Corporate Lending:             |                    |                  
|Commercial                     |                    |                   | $ | 4,461  | 
|Mortgage                       |                    |                   |   | 980    | 
|Construction                   |                    |                   |   | 512    | 
|Lease Financing                |                    |                   |   | 1,247  | 
|                               |                    |                   |   |        | 
|Total Corporate Lending        |                    |                   |   | 7,200  | 
|Consumer Lending:              |                    |                  
|Installment                    |                    |                   |   | 1,519  | 
|Residential                    |                    |                   |   | 12     | 
|Lease Financing                |                    |                   |   | 234    | 
|                               |                    |                   |   |        | 
|Total Consumer Lending         |                    |                   |   | 1,765  | 
|                               |                    |                   |   |        | 
|Total Loans and Leases         |                    |                   |   | 8,965  | 
|Investment Securities          |                    |                   |   | 4,702  | 
|Federal Funds Sold and Reverse |                    |                  
|Repurchase Agreements          |                    |                   |   | 446    | 
|Other Short Term Investments   |                    |                   |   | 549    | 
|                               |                    |                   |   |        | 
|Total Earning Assets           |                    |                   |   | 14,662 | 
|Cash and Due From Banks        |                    |                   |   | 306    | 
|Leased Equipment               |                    |                   |   | 1,918  | 
|Other Assets                   |                    |                   |   | 791    | 
|                               |                    |                   |   |        | 
|Total Assets                   |                    |                   | $ | 17,677 | 
|                               |                    |                   |   |        | 
|Liabilities and                |                    |                  
|Shareholders' Equity:          |                    |                  
|Deposits:                      |                    |                  
|Demand Deposits                |                    |                   | $ | 1,266  | 
|Savings Deposits               |                    |                   |   | 1,553  | 
|Time Deposits                  |                    |                   |   | 6,700  | 
|                               |                    |                   |   |        | 
|Total Deposits                 |                    |                   |   | 9,519  | 
|Short-Term Debt:               |                    |                  
|Federal Funds Purchased and    |                    |                  
|Repurchase Agreements          |                    |                   |   | 1,168  | 
|Commercial Paper               |                    |                   |   | 250    | 
|                               |                    |                   |   |        | 
|Total Short-Term Debt          |                    |                   |   | 1,418  | 
|Long-Term Debt                 |                    |                   |   | 3,573  | 
|Junior Subordinated Debentures |                    |                   |   | 451    | 
|                               |                    |                   |   |        | 
|Total Interest Bearing         |                    |                  
|Liabilities                    |                    |                   |   | 14,961 | 
|Noninterest Bearing Deposits   |                    |                   |   | 1,388  | 
|Minority Interest              |                    |                   |   | 161    | 
|Other Liabilities              |                    |                   |   | 316    | 
|Shareholders' Equity           |                    |                   |   | 851    | 
|                               |                    |                   |   |        | 
|Total Liabilities and          |                    |                  
|Shareholders' Equity           |                    |                   | $ | 17,677 | 
|                               |                    |                   |   |        | 
|Net Interest Spread            |                    |                   |   |        | 
|                               |                    |                   |   |        | 
|Net Interest Margin            |                    |                   |   |        | 
|                               |                    |                   |   |        | 
|                               |                    |                  

Provision and
Reserve for Loan and Lease Losses and Credit Quality

Provident continues to benefit from
the enhanced Credit and Risk Management processes developed over the past two years. This
coupled with clear business and portfolio strategies allow for focused business
development and aggressive management of both non-strategic portfolios and problem loans.

Provident expanded and improved its
analytical and reporting capacity, which in turn improved the timeliness and value of
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. These risk ratings are assigned based upon individual credit analysis
and are aggregated for reporting to senior management on a regular basis. These same
analytics serve as the basis for refining the rating system, and establishing portfolio
wide targets and caution levels. Early trends and thresholds trigger changes in strategy
and tactics including the use of secondary market alternatives to liquidate and mitigate
problem exposures and portfolio segments.

(27)

---

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

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 reserves as well as the overall
credit quality of the off-balance sheet lending portfolio is provided in
Managements Discussion and Analysis of Financial Condition and Results of
Operations  Asset Securitization Activity and Fannie Mae DUS
Program. 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 loan and lease
losses given the conditions at the time. The reserve is increased by the provision for
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.

Provident lowered its loan loss
reserve to total loans by 24 basis points to 2.04% during the past twelve months. The
provision for loan and lease losses was $80.9 million and $81.3 million for the first nine
months of 2003 and 2002, respectively. The provision for the first nine months of 2003 was
negatively impacted by the sale of subprime residential mortgage loans during the second
quarter of 2003. Approximately $33.2 million of provision was recognized during the period
as a result of the loan sale. Nonperforming assets have decreased by $61.6 million since
the third quarter of 2002, with approximately $53 million of the decrease attributable to
the subprime residential mortgage loan sale. The sale of the subprime residential mortgage
loans and the decrease in nonperforming assets has lowered the level of problem loans. The
ratio of reserve for loan and lease losses to total loans was 2.04% and 2.28% at September
30, 2003 and 2002, respectively.

In addition to other loan and finance
lease types, the reserve methodology incorporates loss potential from credit events
related to the commercial airline portfolio. Risks in the commercial airline portfolio
arise from principal reliance on borrower credit quality and secondarily on equipment
value. Based upon previous peak outstandings, the majority of commercial airline loans and
leases are to borrowers considered to have better credit quality. Even within this
segment, shorter maturities have left Provident exposed to residual equipment values. Most
of the charge-offs and valuation adjustments have dealt with transactions related to
borrowers with weaker credit quality, which exposed Provident to depressed equipment
values. Future events could occur that may negatively impact our assessment of
borrowers credit quality and/or equipment values leading to higher reserves and
potential future losses.

(28)

---

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

The following table shows the
progression of the reserve for loan and lease losses and selected reserve ratios:

|                                    | Three Months Ended
September 30, | Nine Months Ended
September 30, |  
|----------------------------------- | -------------------------------- | ------------------------------- | -
|
|Balance at Beginning of Period      |                                  |                                 | $
|Provision for Loan and Lease Losses |                                  |                                 |  
|Loans and Leases Charged Off        |                                  |                                 |  
|Recoveries                          |                                  |                                 |  
|                                    |                                  |                                 |  
|Balance at End of Period            |                                  |                                 | $
|                                    |                                  |                                 |  
|Reserve for Loan and Lease Losses   |                                  |                                
|as a Percent of:                    |                                  |                                
|Nonaccrual Loans                    |                                  |                                 |  
|Nonperforming Assets                |                                  |                                 |  
|Total Loans and Leases              |                                  |                                 |  

Based upon the analysis of the
adequacy of the reserve and the continuing change in composition of the loan and lease
portfolio, the reserve for loan and lease losses has been allowed to decline over the past
twelve months. However, as a result of the decrease in nonperforming assets, both the
reserve to nonaccrual loans and nonperforming assets ratios have improved during this
period.

(29)

---

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

The following table presents the
distribution of net loan charge-offs by loan type for the three-month and nine-month
periods ended September 30, 2003 and 2002:

|                      | Three Months Ended
September 30, 2003 | Three Months Ended
September 30, 2002 |   |       
|--------------------- | ------------------------------------- | ------------------------------------- | - | ------
|
|Corporate Lending:    |                                       |                                       |   |       
|Commercial            |                                       |                                       | $ | 7,726 
|Mortgage              |                                       |                                       |   | -     
|Construction          |                                       |                                       |   | (56   
|Lease Financing       |                                       |                                       |   | 3,946 
|                      |                                       |                                       |   |       
|Net Corporate Lending |                                       |                                       |   | 11,616
|Consumer Lending:     |                                       |                                      
|Installment           |                                       |                                       |   | 1,118 
|Residential           |                                       |                                       |   | 2     
|Lease Financing       |                                       |                                       |   | 42    
|                      |                                       |                                       |   |       
|Net Consumer Lending  |                                       |                                       |   | 1,162 
|                      |                                       |                                       |   |       
|Net Charge-Offs       |                                       |                                       | $ | 12,778
|                      |                                       |                                       |   |       

|                      | Nine Months Ended
September 30, 2003 | Nine Months Ended
September 30, 2002 |   |       
|--------------------- | ------------------------------------ | ------------------------------------ | - | ------
|
|Corporate Lending:    |                                      |                                      |   |       
|Commercial            |                                      |                                      | $ | 26,966
|Mortgage              |                                      |                                      |   | 100   
|Construction          |                                      |                                      |   | (232  
|Lease Financing       |                                      |                                      |   | 8,954 
|                      |                                      |                                      |   |       
|Net Corporate Lending |                                      |                                      |   | 35,788
|Consumer Lending:     |                                      |                                     
|Installment           |                                      |                                      |   | 3,161 
|Residential           |                                      |                                      |   | 58,800
|Lease Financing       |                                      |                                      |   | 51    
|                      |                                      |                                      |   |       
|Net Consumer Lending  |                                      |                                      |   | 62,012
|                      |                                      |                                      |   |       
|Net Charge-Offs       |                                      |                                      | $ | 97,800
|                      |                                      |                                      |   |       
|                      |                                      |                                     

The decrease in net charge-offs for
commercial loans in the third quarter comparison was due primarily to a $12 million
charge-off to a single customer that occurred in the third quarter of 2002. The decrease
in residential charge-offs in the third quarter comparison was impacted by the sale of
subprime residential mortgage loans that occurred in the second quarter of 2003.

The decrease in net charge-offs for
commercial loans in the nine-month comparison was due primarily to the commercial loan
charge-off that occurred in the third quarter of 2002 combined with $10.6 million of
commercial airline loan charge-offs that occurred during the second quarter of 2002. The
decrease in net charge-offs for corporate lease financing in the nine-month comparison is
due primarily to $18.6 million of commercial airline lease charge-offs that occurred in
the second quarter of 2002. The increase in net charge-offs for residential was due
primarily to a $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.
During the second quarter of 2002, a charge-off of $9.1 million was taken with the sale of
$27 million of nonperforming residential loans. If the $49.2 million charge-off related to
the residential mortgage loan sale was excluded, the net charge-off to average loans ratio
for the nine months of 2003 would have been 0.71%.

(30)

---

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

Nonperforming assets at September 30,
2003 were $132.0 million compared to $182.2 million and $193.5 million as of December 31,
2002 and September 30, 2002, respectively. The decrease in nonaccrual corporate lending
during the third quarter of 2003 resulted from a combination of charge-offs, payments and
payoffs. The decrease in nonaccrual corporate lending during the second quarter of 2003
was due primarily to one large charge off. The decrease in nonaccrual residential mortgage
loans and other nonperforming assets during the second quarter of 2003 was due primarily
to the sale of subprime residential mortgage loans, which included loans that were on
nonaccrual status and foreclosed residential properties. The composition of nonperforming
assets over the past five quarters is provided in the following table.

|                           | 2003 | 2002 |  
|-------------------------- | ---- | ---- | -
|
|Nonaccrual Loans:          |      |      |  
|Corporate Lending:         |      |     
|Commercial                 |      |      | $
|Mortgage                   |      |      |  
|Construction               |      |      |  
|Lease Financing            |      |      |  
|                           |      |      |  
|Total Corporate Lending    |      |      |  
|Consumer Lending:          |      |     
|Installment                |      |      |  
|Residential                |      |      |  
|Lease Financing            |      |      |  
|                           |      |      |  
|Total Consumer Lending     |      |      |  
|                           |      |      |  
|Total Nonaccrual Loans     |      |      |  
|Other Nonperforming Assets |      |      |  
|                           |      |      |  
|Total Nonperforming Assets |      |      | $
|                           |      |      |  
|Loans 90 Days Past Due     |      |     
|Still Accruing             |      |      | $
|Nonaccrual Loans to        |      |     
|Total Loans and Leases     |      |      |  
|Nonperforming Assets to:   |      |     
|Total Loans, Leases and    |      |     
|Other Nonperforming Assets |      |      |  
|Total Assets               |      |      |  

(31)

---

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

Nonaccrual loans have decreased $42.7
million while other nonperforming assets have decreased $7.5 million during the first nine
months of 2003. The following table shows the progression of nonperforming assets during
the first nine months of 2003:

|                     | Corporate Lending | Consumer | Total | Other   | Total
|-------------------- | ----------------- | -------- | ----- | ------- | -----
|
|Balance at           |                   |          |       |         |      
|Beginning of Year    |                   |          | $     | 99,805  |      
|Additions            |                   |          |       | 68,830  |      
|Payments / Sales     |                   |          |       | (29,375 | )    
|Charge-Offs          |                   |          |       | (30,238 | )    
|Transfers to Other   |                   |         
|Nonperforming Assets |                   |          |       | -       |      
|Writedowns           |                   |          |       | -       |      
|Balance at           |                   |         
|                     |                   |          |       |         |      
|September 30, 2003   |                   |          | $     | 109,022 |      
|                     |                   |          |       |         |      

Noninterest Income

The following table details the
components of noninterest income and their change for the third quarter and nine-month
periods ended September 30, 2003 and 2002:

|                                       | Three Months Ended
September 30, | Nine Months Ended
September 30, |   |        
|-------------------------------------- | -------------------------------- | ------------------------------- | - | -------
|
|Service Charges on Deposit Accounts    |                                  |                                 | $ | 12,933 
|Loan Servicing Fees                    |                                  |                                 |   | 6,925  
|Commercial Mortgage Banking Revenue    |                                  |                                 |   | 10,095 
|Other Service Charges and Fees         |                                  |                                 |   | 13,520 
|Leasing Income                         |                                  |                                 |   | 127,011
|Cash Gains on Sale of Loans            |                                  |                                 |   | 4,553  
|Warrant Gains                          |                                  |                                 |   | -      
|Net Security Gains                     |                                  |                                 |   | 5,077  
|Net Gain on Merchant Services Business |                                  |                                 |   | -      
|Other                                  |                                  |                                 |   | 6,176  
|                                       |                                  |                                 |   |        
|Total Noninterest Income               |                                  |                                 | $ | 186,290
|                                       |                                  |                                 |   |        

Explanations for significant changes
in noninterest income by category follow:

|o |  | Service
charges on deposit accounts increased $1.3 million and $4.6 million in the quarterly and
nine-month comparisons due primarily to increases in service charges on corporate
accounts and overdraft fees.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | Loan
servicing fees decreased $2.1 million in the quarterly comparison due to a $4.1 million
impairment charge for mortgage servicing assets. In the nine-month comparison, fees
increased $1.6 million as a result of growth in the residential mortgage servicing
portfolios.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | Increases
in fees from both Red Capital Group and Capstone resulted in higher commercial mortgage
banking revenue for the three-month and nine-month comparisons.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

(32)

---

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

|o |  | Other
service charges and fees increased $2.8 million and $5.5 million in the quarterly and
nine-month comparisons. The quarterly increase was due primarily to increased fee income
generated by Commercial Banking and Trust Services. The nine-month increase also included
an increase in warehouse lending fees.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | Leasing
income decreased $23.1 million and $59.7 million in the quarterly and nine-month
comparisons due primarily to the decrease in size of the auto lease portfolio classified
as operating leases. Auto leases originated since February, 2003 have been classified as
finance leases in the loan category rather than operating leases.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | The
decrease in gain on sale of loans of $0.5 million for the third quarter of 2003 is due
primarily to lower gains recognized from the sale of nonconforming residential mortgage
loans. The nine-month comparison shows an increase of $4.5 million due to higher gains
recognized in the first half of 2003. Provident implemented the whole-loan sale strategy
during the third quarter of 2001.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | Providents
Commercial Banking business line from time to time acquires equity warrants as a part of
the lending fee structure established with customers. Warrants gains of $1.6 million were
recognized in the first nine months of 2003 compared to gains of $8.2 million in the
first nine months of 2002. There were no warrant gains recorded in the third quarter of
either year.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | As
part of its strategic repositioning, Provident sold its Merchant Services business in the
second quarter of 2003. This sale resulted in a gain of $19 million.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | An
increase in fees associated with investment portfolio management and other trading
related activities was the primary reason for the increase in other income for both the
three-month and nine-month comparisons.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Noninterest Expense

The following table details the
components of noninterest expense and their change for the third quarter and nine-month
periods ended September 30, 2003 and 2002:

|                                   | Three Months Ended
September 30, | Nine Months Ended
September 30, |   |        
|---------------------------------- | -------------------------------- | ------------------------------- | - | -------
|
|Salaries, Wages and Benefits       |                                  |                                 | $ | 60,737 
|Charges and Fees                   |                                  |                                 |   | 7,404  
|Occupancy                          |                                  |                                 |   | 6,224  
|Leasing Expense                    |                                  |                                 |   | 86,077 
|Equipment Expense                  |                                  |                                 |   | 6,398  
|Professional Services              |                                  |                                 |   | 7,906  
|Minority Interest Expense          |                                  |                                 |   | 3,197  
|Disposition Cost of Subprime Loans |                                  |                                 |   | -      
|Other                              |                                  |                                 |   | 30,167 
|                                   |                                  |                                 |   |        
|Total Noninterest Expense          |                                  |                                 | $ | 208,110
|                                   |                                  |                                 |   |        

(33)

---

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

Explanations for significant changes
in noninterest expense by category follow:

|o |  | Salaries,
wages and benefits increased $3.6 million and $16.3 million in the quarterly and
nine-month comparisons due primarily to increased commissions for commercial mortgage
banking activities and staffing increases in loan servicing, risk management and retail.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | The
decrease in leasing expense is a result of the decrease in size of the auto lease
portfolio classified as operating leases.
|- |  | -------------------------------------------------------------------------------------------------------------------------------

|o |  | Equipment
expense increased due primarily to increases in depreciation and equipment rental
expense.
|- |  | ----------------------------------------------------------------------------------------------------

|o |  | Professional
services increased $1.9 million and $6.4 million in the quarterly and nine-month
comparisons primarily as a result of increases in professional fees associated with the
restatements of operating results and an increase in legal fees for the Commercial
Banking area.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | 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 dividends are payable at an annualized rate of 7.75%.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | 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.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | The
three largest expenses within other noninterest expense for the three-month and
nine-month periods were marketing expense ($3.2 million and $9.3 million in 2003 and $2.6
million and $8.9 million in 2002), expenses incurred in the disposal of autos coming off
lease ($7.0 million and $16.9 million in 2003 and $2.4 million and $7.5 million in 2002)
and travel and entertainment expenses ($2.8 million and $7.9 million in 2003 and $2.0
million and $6.2 million in 2002).
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

FINANCIAL CONDITION

Short-Term
Investments and Investment Securities

Federal funds sold and reverse
repurchase agreements increased $153 million since December 31, 2002 primarily as a result
of proceeds received from the sale of the subprime residential mortgages and the Merchant
Services business late in the second quarter. These additional funds may be used in the
sale of the Florida deposits, loans and branches scheduled for the fourth quarter of 2003.

(34)

---

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

Trading account securities were $143
million and $128 million as of September 30, 2003 and December 31, 2002, respectively.
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 noninterest income.

Provident had $495 million of loans
classified as held for sale at September 30, 2003. This is an increase of $58 million from
the amount reported at December 31, 2002. These loans consist of $334 million of
multifamily loans, $154 million of nonconforming residential mortgage loans and $7 million
of conforming residential mortgage loans. Activities related to the multifamily loans held
for sale are predominately 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.

Securities purchased with the
intention of being held for indefinite periods of time are classified as investment
securities available for sale. These securities increased $516 million during the first
nine months of 2003. U.S. government agency mortgage-backed securities accounted for the
majority of the increase, as funds obtained from loan payments and the sale of other debt
securities were deployed into investment securities with higher credit quality and
increased liquidity.

Loans and Leases

As of September 30, 2003 total loans
and leases were $9.0 billion compared to $9.1 billion at December 31, 2002. Provident had
an additional $1.5 billion and $2.1 billion of off-balance sheet securitized loans and
leases as of September 30, 2003 and December 31, 2002, respectively. As a result of
earnings volatility, management has re-evaluated the risk/reward relationships in the
lending portfolio. During the second half of 2001, Provident implemented a whole-loan sale
strategy for nonconforming residential loans. During the second quarter of 2003, Provident
sold nearly all of the subprime residential mortgage loan portfolio. Also, management has
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. As a result of these actions, Providents lending
portfolio has a much lower concentration of subprime residential loans, a higher
concentration of middle-market corporate leases, and a lower risk profile of commercial
loans. Provident does not have a material exposure to foreign loans.

(35)

---

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 September 30, 2003:

|(Dollars in Millions)                                | Amount | % | Amount on
Nonaccrual
|---------------------------------------------------- | ------ | - | --------------------
|Mortgage Warehousing Lines                           |        |   | $                   
|Real Estate Operators/Developers/General Contractors |        |   |                     
|Banking and Finance                                  |        |   |                     
|Transportation                                       |        |   |                     
|Healthcare                                           |        |   |                     
|Retailing                                            |        |   |                     
|Tourism and Entertainment                            |        |   |                     
|Metals                                               |        |   |                     
|Business Services                                    |        |   |                     
|Machinery and Equipment                              |        |   |                     
|Automobile Dealers                                   |        |   |                     
|Commercial Aviation Related (1)                      |        |   |                     
|Construction                                         |        |   |                     
|Eating and Drinking Establishments                   |        |   |                     
|Financial Services                                   |        |   |                     
|Automotive Services/Parts                            |        |   |                     
|Chemicals                                            |        |   |                     
|Technology                                           |        |   |                     
|Other (includes 19 industry types)                   |        |   |                     
|                                                     |        |   |                     
|Total                                                |        |   | $                   
|                                                     |        |   |                     

(1)     Includes
$21 million of loans related to the commercial airline industry, and     aircraft used in
private, charter and corporate markets.

Mortgage warehousing lines decreased
$90 million during the first nine months to $550 million, consistent with reduced new loan
activity within the industry. All loans are underwritten to Provident and secondary market
standards as part of Providents control processes related to this activity.

At September 30, 2003, Provident had
loans and leases of $166 million to commercial airline carriers, including $21 million of
commercial loans and $145 million of finance and operating leases. As the events of
September 11, 2001 have had a significant financial impact upon the airline industry and
the re-sale value of aircraft, Provident recorded credit costs and other expenses of $34
million during 2002, which were related to secured commercial airline loans and leases.
Credit charges and other expenses of $1.4 million were incurred during the first nine
months of 2003.

At September 30, 2003, Provident had
approximately $744 million of commercial loans to borrowers who have shared national
credit loans as compared to $802 million at December 31, 2002. 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-one industry types, with the largest industry concentration
(real estate) accounting for approximately 17% of its total shared national credit loans.
The real estate category is comprised of loans to borrowers with different risk
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 $4.2 million.

(36)

---

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

The composition of the mortgage and
construction loan categories by property type at September 30, 2003 follows:

|(Dollars in Millions)       | Amount | % | Amount on
Nonaccrual
|--------------------------- | ------ | - | --------------------
|Office/Warehouse            |        |   | $                   
|Residential Development     |        |   |                     
|Shopping/Retail             |        |   |                     
|Apartments                  |        |   |                     
|Health Facilities           |        |   |                     
|Land                        |        |   |                     
|Hotels/Motels               |        |   |                     
|Industrial Plants           |        |   |                     
|Other Commercial Properties |        |   |                     
|                            |        |   |                     
|Total                       |        |   | $                   
|                            |        |   |                     

As of September 30, 2003, Provident had
$1.3 billion in commercial lease financing. 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
$573 million during the first nine months of 2003, due primarily 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 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 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 September 30, 2003:

|(Dollars in Millions) | Amount | %
|--------------------- | ------ | -
|Home Equity           |        |  
|Indirect Installment  |        |  
|Direct Installment    |        |  
|Other Consumer Loans  |        |  
|                      |        |  
|Total                 |        |  
|                      |        |  

(37)

---

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

Noninterest
Earning Assets

Leased equipment consists of $1.5
billion of auto leases and $0.3 billion of equipment leases. Total leased equipment
decreased $525 million, or 22%, during the first nine months of 2003 due primarily to a
reduction in the size of the automobile leasing portfolio classified as operating leases.
This decrease 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.

Other assets increased $20 million,
or 3%, during the first nine months of 2003. The increase was primarily due to increases
in mortgage servicing rights and unsettled security trades. These trades settled early in
the fourth quarter.

Deposits

Total deposits increased $923 million
during the first nine months of 2003. Since September 30, 2002, average core deposits have
grown 10% with significant contribution coming from commercial deposits. The following
table presents a summary of deposit types:

|                                 | September 30, | 
|-------------------------------- | ------------- | 
|
|Noninterest Bearing Deposits     |               | 
|Interest Bearing Demand Deposits |               | 
|Savings Deposits                 |               | 
|Certificates of Deposit          |               | 
|                                 |               | 
|Total Deposits                   |               | 
|                                 |               | 

Borrowed Funds

Short-term debt decreased $522
million during the first nine months of 2003. Decreases in federal funds purchased and
repurchase agreements were the primary reason for the decrease in short-term debt.

Long-term debt decreased $366
million, or 10%, during the first nine months of 2003 due primarily to payments on
subordinated notes and secured financings.

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. The 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 the 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.

(38)

---

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

Each PRIDES has a stated amount of
$25 per unit and is comprised of two components  a 3-year forward purchase
commitment (Purchase Contract) and PFGI Capital Preferred Stock.

Each 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:

|o |  | if
the market value of Provident  Common Stock is equal to or greater than $29.0598,  the
 settlement  rate will be .8603;
|- |  | --------------------------------------------------------------------------------------------------------------------------

|o |  | 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
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

Under the 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%.

Other Noninterest
Earning Liabilities

Other liabilities increased $20
million, or 5%, during the first nine months of 2003 due primarily to an increase in
amounts related to unsettled security trades. These trades settled early in the fourth
quarter.

Transactions with
Affiliates

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. A summary of significant transactions and the indebtedness of these
related parties may be found in Note 24 to Providents 2002 Annual Report as filed on
Form 10-K.

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 assets, representing the present value of future cash flows, were
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.

(39)

---

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

The securitization and sale of loans
and leases, during the period from 1996 through the first half of 2000, continues to
impact the current presentation of Providents financial condition, results of
operations and off-balance sheet market risks. The areas most significantly affected are
loans and leases, retained interest in securitized assets, credit enhancements and credit
risk.

Securitized Loans
and Leases

Securitized loans and leases that
have been treated as sales have been removed from the balance sheet. The following table
provides a summary of the outstanding balances of these off-balance sheet managed assets:

|                          | September 30, | 
|------------------------- | ------------- | 
|
|Nonconforming Residential |               | 
|Prime Home Equity         |               | 
|Equipment Leases          |               | 
|                          |               | 
|                          |               | 
|                          |               | 

Retained Interest
in Securitized Assets and Credit Enhancements

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 (RISA), was recorded as an
asset within the investment securities line item of the consolidated balance sheets.

Additionally, Provident initially
provided for credit enhancements to its securitizations structured as sales in the form of
cash in a demand deposit account. The credit enhancements are 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 (Trust).

During the fourth quarter of 2001,
Provident reached an agreement with the securitization insurer to release the demand
deposit cash credit enhancement for the nonconforming residential loan securitizations and
substitute an unfunded demand note backed by a AAA rated standby letter of credit.

In the third quarter of 2003, after
further review of the documents underlying the unfunded demand note credit enhancement
transaction, it was determined that this unfunded demand note was an asset of the Trust as
well as a liability of Provident. As such Provident recorded the fair value of the
unfunded demand note as a liability. As Provident owns the residual assets of the Trust, a
Due From Trust asset was recorded for the fair value of the demand note that the Trust
holds. The fair values of the asset and liability recorded at September 30, 2003 were each
approximately $119 million.

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. The carrying value of the
RISA was increased at September 30, 2003 by $15.0 million, with an after-tax increase to
other comprehensive income of $9.8 million.

(40)

---

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

The components of the RISA as of
September 30, 2003 follow:

|(In Thousands)                            | Nonconforming
Residential | Prime
Home Equity
|----------------------------------------- | ------------------------- | -----------------
|Estimated Cash Flows of Underlying Loans, |                           |                  
|Net of Payments to Certificate Holders    |                           |                  
|Less:                                     |                           |                  
|Estimated Credit Loss                     |                           |                  
|Servicing and Insurance Expense           |                           |                  
|Discount to Present Value                 |                           |                  
|                                          |                           |                  
|Carrying Value of Retained Interest in    |                           |                  
|Securitized Assets                        |                           |                  
|                                          |                           |                  

The carrying value of the
nonconforming residential RISA includes the Due From Trust asset of $118.8 million, the
amortized cost of the interest-only residual asset of $85.4 million, and the market value
adjustment under Statement of Financial Accounting Standards No. 115 for the interest-only
residual asset of $15.0 million. The prime home equity RISA includes only the carrying
value of the interest-only residual asset.

Providents credit enhancements
for its prime home equity and equipment leasing securitizations have not been impacted by
the revised accounting treatment as these cash collateral accounts have not been
re-structured. As such, the cash credit enhancements continue to be accounted for separate
from the RISA and loss reserves continue to be carried as a liability account. Detail of
these credit enhancements along with their loss reserves are provided below as of
September 30, 2003:

|(In Thousands)    | Carrying Value
of Credit
Enhancements | Loss
Reserves
|----------------- | ------------------------------------- | -------------
|Prime Home Equity |                                       |              
|Equipment Leases  |                                       |              
|                  |                                       |              
|                  |                                       |              
|                  |                                       |              

At September 30, 2003, management
believes the current carrying values of the RISA, credit enhancements and loss reserves
are properly stated.

(41)

---

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

Securitization
Credit Risk

The following table presents a
summary of various indicators of the credit quality of off-balance sheet securitized loans
and leases as of and for the nine months ended September 30, 2003:

|(Dollars in Thousands)                        | Nonconforming
Residential | Prime Home
Equity | Equipment
Leases
|--------------------------------------------- | ------------------------- | ----------------- | ----------------
|For the Nine Months Ended September 30, 2003: |                           |                   |                 
|Average Securitized Assets                    |                           |                   | $               
|Net Charge-Offs                               |                           |                   |                 
|Net Charge-Offs to Average                    |                           |                  
|Securitized Assets (Annualized)               |                           |                   |                 
|As of September 30, 2003:                     |                           |                  
|Securitized Assets                            |                           |                   | $               
|Delinquency Rates:                            |                           |                  
|30 to 89 Days                                 |                           |                   |                 
|90 or More                                    |                           |                   |                 

FANNIE MAE DUS
PROGRAM

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 $3.6
billion at September 30, 2003. Red Mortgage has established reserves of $10.5 million for
possible losses under this program. The reserve is determined by evaluating pools of
homogeneous loans and includes information based upon industry and historical loss
experience, as well as each underlying collaterals recent operating performance.
Management believes the reserve is maintained at a level that adequately provides for the
inherent losses within Red Mortgages portfolio of DUS loans. At September 30, 2003,
two DUS loans totaling $18.5 million in unpaid principal balance in Red Mortgages
loan servicing portfolio were 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.

DERIVATIVE AND
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS

In the normal course of business,
Provident uses derivative and off-balance sheet financial instruments to manage its
interest rate risk and to meet the financing needs of its customers. At September 30,
2003, these financial instruments consisted of letters of credit of $274 million,
commitments to extend credit of $4.4 billion, interest rate swaps of $6.6 billion and sold
interest rate caps of $2.6 billion.

(42)

---

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

During the course of their regular
examination, banking regulators requested that the Company confirm with the SEC staff its
accounting treatment for certain hedging activities related to its retained interests in
securitized mortgage assets. These hedging activities and the related accounting
treatment have been recently reviewed by the national office of our independent auditors
who have concluded the accounting treatment is appropriate.  The Company expects to
conclude this matter in the fourth quarter.

In order to mitigate credit risk
within the auto lease portfolio, Provident entered into credit risk transfer arrangements
during 2001 and 2000. Under the 2001 transaction, Provident transferred 97 1/2% of the
credit risk on an auto lease portfolio, while retaining a 2 1/2% first-loss position.
Under the 2000 transaction, Provident transferred 98% of the credit risk on an auto lease
portfolio, while retaining a 2% first-loss position. 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 September 30, 2003, the remaining unpaid auto lease
balances on the 2001 and 2000 transactions were $0.4 billion and $0.6 billion,
respectively.

CAPITAL RESOURCES
AND ADEQUACY

Total shareholders equity at
September 30, 2003 was $892 million compared to $880 million at December 31, 2002. The
change in the equity balance relates primarily to net income exceeding dividends by $30.1
million, an increase in the market value of cash flow hedging instruments of $32.9 million
(net of deferred taxes) and a decrease in the market value of investment securities of
$54.7 million (net of deferred taxes).

Capital expenditures planned by
Provident in 2003 for premises and equipment are currently estimated to be approximately
$30 million. Included in this amount are projected capital expenditures for the purchase
of data processing hardware and software, branch renovations and enhancements, facility
renovations and ATMs. Through September 30, 2003, approximately $20 million of these
expenditures had been made.

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

|                                                 | Nine Months Ended
September 30, 2003 | Year Ended
December 31, 2002
|------------------------------------------------ | ------------------------------------ | ----------------------------
|Average Shareholders' Equity to Average Assets   |                                      |                             
|Average Tangible Shareholders' Equity to         |                                      |                             
|Average Tangible Assets                          |                                      |                             
|Period End Shareholders' Equity to               |                                      |                             
|Period End Assets                                |                                      |                             
|Period End Tangible Shareholders' Equity to      |                                      |                             
|Period End Tangible Assets                       |                                      |                             
|Dividend Payout to Net Earnings                  |                                      |                             
|Tier 1 Capital to Risk-Weighted Assets           |                                      |                             
|Total Risk-Based Capital To Risk-Weighted Assets |                                      |                             
|Tier 1 Leverage Ratio                            |                                      |                             

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 risk-weighted assets, 8.00% for total risk-based capital to
risk-weighted assets, and 4.00% for Tier 1 capital to average assets. These guidelines
further define well-capitalized levels for Tier 1, total risk-based capital,
and leverage ratio purposes at 6.00%, 10.00% and 5.00%, respectively. As of September 30,
2003, both Provident and the Bank were categorized as well-capitalized for regulatory
purposes.

(43)

---

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

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 for the next twelve
months 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 the size
of the investment securities portfolio. Additional sources of liquidity include the
availability to borrow both short-term and long-term funds.

Funding for the sale of the Florida
deposits, loans and branches, which is scheduled to close on November 21, 2003, is
expected to come from proceeds from the second quarter sale of subprime residential
mortgage loans, repayments on and sales of investment securities, and from general
corporate funding.

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 the 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 major source of liquidity for
Provident on a parent-only basis is dividends paid to it by its subsidiaries. Pursuant to
Federal Reserve and state banking regulations, the maximum amount available for dividend
distribution to the Parent at September 30, 2003 by its banking subsidiary was
approximately $64.9 million. The Parent has received $50 million in dividends from its
banking subsidiary during the current year. During 2001, higher credit costs had an
unfavorable impact on net income. While credit costs have declined substantially in 2002
and 2003, if these costs were to rise again, this could impact Providents ability to
maintain the payment of its quarterly dividend at current rates.

(44)

---

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

CRITICAL
ACCOUNTING POLICIES

Note 1 to Providents 2002
annual report on Form 10-K discusses 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 adequacy of the reserve for loan and lease losses; the valuation of
retained interest in securitized assets and securitized credit enhancements; the valuation
of mortgage servicing assets; and the valuation of derivatives.

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  Asset Securitization
Activity and Fannie Mae DUS Program.

RISA and Securitized Credit
Enhancements: Prior to July 2000, Provident structured many of its securitization
transactions as sales. As such, Provident retained (a) future cash flows of the underlying
loans, net of payments due to investors of the securitization trust, servicing fees and
other fees (RISA), (b) servicing rights on the loans and leases, and (c) credit
enhancement accounts used to absorb credit losses on the loans securitized. Gain or loss
on the sale of the loans depended in part 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. However, quotes are generally
not available for assets retained, so 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.

(45)

---

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

Provident monitors the valuation of
the RISA 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 had an unfavorable impact on the nonconforming
residential RISA valuation. Additionally, the CPR was 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 average CPR currently running at 33.9%. If the
CPR stays at its current level, management estimates that there would be sufficient cash
flows to absorb lifetime losses up to 7.0%. If the CPR rises to 36%, there would be
sufficient cash flows to absorb lifetime losses up to 6.8%. Cumulative incurred losses
through September 30, 2003 are 4.9%, with estimated total lifetime losses expected to be
6.4%. On a worst case basis, management currently estimates that lifetime losses should
not exceed 6.9% assuming real estate values remain relatively stable. At September 30,
2003, management believes the current carrying value of the RISA is properly stated.

Valuation of 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
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. The mortgage loan
prepayment rate is the most significant factor driving the value of mortgage net servicing
assets. Increases in mortgage loan prepayments reduce estimated future net servicing cash
flows because the life of the underlying loan is reduced. Mortgage servicing assets are
tested quarterly to verify the market value equals or exceeds its carrying value. During
the third quarter of 2003, Provident recorded a $4.1 million 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.

(46)

---

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

Valuation of Derivatives: In
accordance with Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities, Provident carries the fair value of
derivative instruments on its consolidated balance sheets with changes in value recorded
in the income statement or as other comprehensive income. Although the value of the
derivatives are determined using 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.

(47)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES

ITEM 3.
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: decrease 3.70% for a 100 basis point decrease; increase 0.05 % for a 100
basis point increase; and decrease 0.22 % for a 200 basis point increase. Due to the
current 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.

(48)

---

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 4. 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 September 30, 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
September 30, 2003 that has materially affected, or is reasonably likely to materially
affect, Providents internal control over financial reporting.

(49)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES

PART II  OTHER
INFORMATION

ITEM 1. 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 have
been 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
has also been 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 have been 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.

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.

(50)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES

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. 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 6. EXHIBITS
AND REPORTS ON FORM 8-K

(a)                 Exhibits
filed:

| | Exhibit
31.1 - Section 302 of the Sarbanes-Oxley Act of 2002,       Certification of Principal
Executive Officer
| | ----------------------------------------------------------------------------------------------------------------

| | Exhibit
31.2 - Section 302 of the Sarbanes-Oxley Act of 2002,       Certification of Principal
Financial Officer
| | ----------------------------------------------------------------------------------------------------------------

| | Exhibit
32.1 - Section 906 of the Sarbanes-Oxley Act of 2002,       Certification of Principal
Executive Officer
| | ----------------------------------------------------------------------------------------------------------------

| | Exhibit
32.2 - Section 906 of the Sarbanes-Oxley Act of 2002,       Certification of Principal
Financial Officer
| | ----------------------------------------------------------------------------------------------------------------

(b)              Reports
on Form 8-K:

| | Form
8-K (Items 7 and 9) Announcement of sale of subprime residential mortgage loans, merchant
servicing business, and Florida deposits, loans and branches; filed on July 10, 2003.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Form
8-K (Items 7 and 9) Earnings release for second quarter; filed on July 16, 2003.
| | -------------------------------------------------------------------------------------

| | Form
8-K (Items 7 and 9) Slide show for second quarter investor conference call; filed on July
17, 2003.
| | --------------------------------------------------------------------------------------------------------

| | 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
| | ----------------------------------------------------------------------------------------------------------

All other items required in Part II
of this form have been omitted since they are not applicable or not required.

(51)

---

PROVIDENT FINANCIAL
GROUP, INC. AND SUBSIDIARIES

SIGNATURE

Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Provident Financial
Group, Inc. Registrant

Date: November 13, 2003

/s/Christopher J. Carey
                                               Christopher J. Carey  Executive Vice
President and                                                Chief Financial Officer

(52)