Press Release

Provident Financial Holdings Reports Second Quarter of Fiscal 2020 Results

Company Release - 1/27/2020 6:00 AM ET

Net Income Increases by 22% in the December 2019 Quarter in Comparison to the December 2018 Quarter

Net Interest Margin Expands Five Basis Points to 3.59% in the December 2019 Quarter in Comparison to the December 2018 Quarter

Loans Held for Investment Increase 7% to $941.7 Million from June 30, 2019

Non-Performing Assets Decrease 45% to $3.4 Million at December 31, 2019 in Comparison to $6.2 Million at June 30, 2019

RIVERSIDE, Calif., Jan. 27, 2020 (GLOBE NEWSWIRE) -- Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the holding company for Provident Savings Bank, F.S.B. (“Bank”), today announced second quarter earnings results for the fiscal year ending June 30, 2020.

For the quarter ended December 31, 2019, the Company reported net income of $2.40 million, or $0.31 per diluted share (on 7.66 million average diluted shares outstanding), up 22 percent from the net income of $1.96 million, or $0.26 per diluted share (on 7.60 million average diluted shares outstanding), in the comparable period a year ago. Compared to the same quarter last year, the increase in earnings was primarily attributable to lower non-interest expenses, partly offset by lower non-interest income.

“I am pleased with our financial results for the December 2019 quarter.  We continue to demonstrate reasonable growth in our loan portfolio, our credit quality metrics are very good, operating expenses are under control, and our capital levels are strong,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company.  “We look forward to 2020 and believe we are well-positioned for growth by serving the communities of the Inland Empire,” Mr. Blunden concluded.

Return on average assets for the second quarter of fiscal 2020 was 0.87 percent compared to 0.69 percent for the same period of fiscal 2019; and return on average stockholders’ equity for the second quarter of fiscal 2020 was 7.81 percent compared to 6.42 percent for the comparable period of fiscal 2019.

On a sequential quarter basis, the $2.40 million net income for the second quarter of fiscal 2020 reflects a $164,000 or six percent decrease from $2.56 million in the first quarter of fiscal 2020. The decrease in earnings for the second quarter of fiscal 2020 compared to the first quarter of fiscal 2020 was primarily attributable to higher non-interest expenses (primarily due to the $296,000 partial reversion of a previously expensed legal settlement, which was recognized during the prior sequential quarter and not replicated this quarter) and a lower recovery from the allowance for loan losses, partly offset by higher non-interest income (primarily due to higher loan servicing and other fees). Diluted earnings per share for the second quarter of fiscal 2020 were $0.31 per share, down six percent from the $0.33 per share during the first quarter of fiscal 2020. Return on average assets was 0.87 percent for the second quarter of fiscal 2020 compared to 0.95 percent in the first quarter of fiscal 2020; and return on average stockholders’ equity for the second quarter of fiscal 2020 was 7.81 percent, compared to 8.46 percent for the first quarter of fiscal 2020.

For the six months ended December 31, 2019 net income increased $1.18 million, or 31 percent, to $4.96 million from $3.78 million in the comparable period ended December 31, 2018; and diluted earnings per share for the six months ended December 31, 2019 increased 30 percent to $0.65 per share (on 7.65 million average diluted shares outstanding) from $0.50 per share (on 7.58 million average diluted shares outstanding) for the comparable six month period last year. Compared to the same period last year, the increase in earnings was primarily attributable to a $7.79 million decrease in non-interest expense; partly offset by a $5.52 million decrease in the gain on sale of loans.

Net interest income decreased $192,000, or two percent, to $9.64 million in the second quarter of fiscal 2020 from $9.83 million for the same quarter of fiscal 2019, attributable to a lower average interest-earning assets balance, partly offset by an increase in the net interest margin.  The average balance of interest-earning assets decreased by $35.7 million, or three percent, to $1.07 billion in the second quarter of fiscal 2020 from $1.11 billion in the same quarter last year. The average balance of interest-bearing liabilities decreased by $36.1 million, or four percent, to $964.6 million in the second quarter of fiscal 2020 from $1.00 billion in the same quarter last year. The net interest margin during the second quarter of fiscal 2020 increased five basis points to 3.59 percent from 3.54 percent in the same quarter last year, primarily due to an increase in the average yield of interest-earning assets, partly offset by a slight increase in the average cost of interest-bearing liabilities. The average yield on interest-earning assets increased by six basis points to 4.18 percent in the second quarter of fiscal 2020 from 4.12 percent in the same quarter last year; while the average cost of interest-bearing liabilities increased by one basis point to 0.65 percent in the second quarter of fiscal 2020 from 0.64 percent in the same quarter last year.

The average balance of loans receivable (including loans held for sale in the prior year) decreased by $7.1 million, or one percent, to $934.1 million in the second quarter of fiscal 2020 from $941.2 million in the same quarter of fiscal 2019, primarily due to a decrease in the average balance of loans held for sale, partly offset by an increase in loans held for investment. There were no loans held for sale during the second quarter of fiscal 2020. The average yield on loans receivable increased by three basis points to 4.42 percent in the second quarter of fiscal 2020 from an average yield of 4.39 percent in the same quarter of fiscal 2019.  The increase in the average yield on loans receivable was primarily attributable to a $378,000 deferred loan fee that was recognized in interest income as a result of a loan payoff in the second quarter of fiscal 2020 from a previously classified non-performing loan that had been upgraded to pass as compared to $159,000 of deferred interest payments that was recognized from two non-performing loans that were paid off in the same quarter last year.  Total loans originated and purchased for investment in the second quarter of fiscal 2020 were $81.6 million, up 108 percent from $39.3 million in the same quarter of fiscal 2019. Loan principal payments received in the second quarter of fiscal 2020 were $65.2 million, up 58 percent from $41.2 million in the same quarter of fiscal 2019.

The average balance of investment securities decreased by $6.4 million, or seven percent, to $87.1 million in the second quarter of fiscal 2020 from $93.5 million in the same quarter of fiscal 2019. The average yield on investment securities increased 70 basis points to 2.60 percent in the second quarter of fiscal 2020 from 1.90 percent for the same quarter of fiscal 2019. The increase in the average yield was primarily attributable to a lower premium amortization ($97,000 vs. $224,000) and purchases of mortgage-backed securities during the last 12 months which had higher average yields than the existing portfolio.

In the second quarter of fiscal 2020, the Federal Home Loan Bank – San Francisco (“FHLB”) distributed a $145,000 cash dividend to the Bank on its FHLB stock, down from $278,000 in the same quarter last year, which included a $133,000 special cash dividend received on FHLB San Francisco stock last year, not replicated this quarter.

The average balance of the Company’s interest-earning deposits, primarily cash with the Federal Reserve Bank of San Francisco, decreased $22.3 million, or 33 percent, to $45.5 million in the second quarter of fiscal 2020 from $67.8 million in the same quarter of fiscal 2019. The average yield earned on interest-earning deposits in the second quarter of fiscal 2020 was 1.62 percent, down 61 basis points from 2.23 percent in the same quarter of fiscal 2019 largely as a result of three 25 basis point decreases in the targeted Federal Funds Rate in the first and second quarters of fiscal 2020.

Average deposits decreased $56.0 million, or six percent, to $833.6 million in the second quarter of fiscal 2020 from $889.6 million in the same quarter of fiscal 2019, primarily due to a managed run-off of higher cost time deposits consistent with the reduction in the Bank’s funding needs resulting from no loans originated for sale during the first and second quarters of fiscal 2020.  The average cost of deposits improved, decreasing by three basis points to 0.37 percent in the second quarter of fiscal 2020 from 0.40 percent in the same quarter last year.

Transaction account balances or “core deposits” decreased slightly to $647.8 million at December 31, 2019 from $648.1 million at June 30, 2019, while time deposits decreased $7.2 million, or four percent, to $185.9 million at December 31, 2019 from $193.1 million at June 30, 2019.

The average balance of borrowings, which consisted of FHLB advances, increased $20.0 million, or 18 percent, to $131.1 million while the average cost of borrowings decreased 12 basis points to 2.43 percent in the second quarter of fiscal 2020, compared to an average balance of $111.1 million with an average cost of 2.55 percent in the same quarter of fiscal 2019. The increase in the average balance of borrowings was primarily due to the new long-term borrowings with a lower average cost obtained during the first quarter of fiscal 2020 (sequential quarter).

During the second quarter of fiscal 2020, the Company recorded a recovery from the allowance for loan losses of $22,000, as compared to a recovery of $217,000 recorded during the same period of fiscal 2019 and a recovery of $181,000 recorded in the first quarter of fiscal 2020 (sequential quarter).

Non-performing assets, with underlying collateral located in California, decreased $2.8 million, or 45 percent, to $3.4 million, or 0.31 percent of total assets, at December 31, 2019, compared to $6.2 million, or 0.57 percent of total assets, at June 30, 2019. The non-performing loans at December 31, 2019 are comprised of 16 single-family loans ($3.4 million) and one commercial business loan ($37,000).  At both December 31, 2019 and June 30, 2019, there was no real estate owned.

Net loan recoveries for the quarter ended December 31, 2019 were $14,000 or 0.01 percent (annualized) of average loans receivable, compared to net loan recoveries of $123,000 or 0.05 percent (annualized) of average loans receivable for the quarter ended December 31, 2018 and net loan recoveries of $34,000 or 0.02 percent (annualized) of average loans receivable for the quarter ended September 30, 2019 (sequential quarter).

Classified assets at December 31, 2019 were $13.7 million, comprised of $9.4 million of loans in the special mention category, $4.3 million of loans in the substandard category and no real estate owned; while classified assets at June 30, 2019 were $16.2 million, comprised of $8.6 million of loans in the special mention category, $7.6 million of loans in the substandard category and no real estate owned.

For the quarter ended December 31, 2019, no new loans were restructured from their original terms and classified as restructured loans. The outstanding balance of restructured loans at December 31, 2019 was $1.8 million (six loans), down 53 percent from $3.8 million (eight loans) at June 30, 2019. As of December 31, 2019, all of the restructured loans were classified as substandard non-accrual. As of December 31, 2019, 49% or $888,000 of the restructured loans have a current payment status.

The allowance for loan losses was $6.9 million at December 31, 2019, or 0.73 percent of gross loans held for investment, compared to $7.1 million at June 30, 2019, or 0.80 percent of gross loans held for investment. Management believes that, based on currently available information, the allowance for loan losses is sufficient to absorb potential losses inherent in loans held for investment at December 31, 2019.

Non-interest income decreased by $2.26 million, or 63 percent, to $1.34 million in the second quarter of fiscal 2020 from $3.60 million in the same period of fiscal 2019, primarily as a result of no loan sales during the current quarter. The gain on sale of loans last year, during the second quarter of fiscal 2019, was $2.26 million. On a sequential quarter basis, non-interest income increased $274,000, or 26 percent, primarily as a result of an increase in loan servicing and other loan fees. There were no loans originated for sale during the current or sequential quarters.

Non-interest expenses decreased $3.33 million, or 31 percent, to $7.55 million in the second quarter of fiscal 2020 from $10.88 million in the same quarter last year.  The decrease was due primarily to lower salaries and employee benefits expenses resulting from fewer employees and consistent with the scaling back of saleable single-family mortgage loan originations. On a sequential quarter basis, non-interest expenses increased $316,000 or four percent from $7.24 million. The increase in non-interest expenses for the sequential quarter was primarily due to the $296,000 partial reversion of a previously expensed legal settlement, which was recognized in other non-interest expense during the quarter ended September 30, 2019 and not replicated this quarter.

The Company’s efficiency ratio in the second quarter of fiscal 2020 was 69 percent, an improvement from 81 percent in the same quarter last year but a slight increase from 68 percent in the first quarter of fiscal 2020 (sequential quarter).

The Company’s provision for income tax was $1.05 million for the second quarter of fiscal 2020, up 30 percent from $810,000 in the same quarter last year. The effective tax rate in the second quarter of fiscal 2020 was 30.51% as compared to 29.26% in the same quarter of fiscal 2019. The Company believes that the tax provision recorded in the second quarter of fiscal 2020 reflects its current federal and state income tax obligations.

The Company repurchased 2,361 shares of its common stock during the quarter ended December 31, 2019 at an average cost of $21.84 per share. As of December 31, 2019, a total of 71,284 shares or 19 percent of the April 2018 stock repurchase plan have been purchased at an average cost of $19.97 per share, leaving 301,716 shares available for future purchases.

The Bank currently operates 13 retail/business banking offices in Riverside County and San Bernardino County (Inland Empire).

The Company will host a conference call for institutional investors and bank analysts on Tuesday, January 28, 2020 at 9:00 a.m. (Pacific) to discuss its financial results.  The conference call can be accessed by dialing 1-844-721-7239 and referencing access code number 1069003.  An audio replay of the conference call will be available through Tuesday, February 4, 2020 by dialing 1-866-207-1041 and referencing access code number 2689092.

For more financial information about the Company please visit the website at www.myprovident.com and click on the “Investor Relations” section.

Safe-Harbor Statement

This press release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements relate to the Company’s financial condition, liquidity, results of operations, plans, objectives, future performance or business. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors which could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements include, but are not limited  to increased competitive pressures; changes in the interest rate environment; secondary market conditions for loans and our ability to originate for sale and sell loans in the secondary market; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (“SEC”) - which are available on our website at www.myprovident.com and on the SEC’s website at www.sec.gov. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements whether as a result of new information, future events or otherwise. These risks could cause our actual results for fiscal 2020 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of us and could negatively affect our operating and stock price performance.

Contacts:
     
Craig G. Blunden
Chairman and Chief Executive Officer     

Donavon P. Ternes                                             
President, Chief Operating Officer, 
and Chief Financial Officer                          

(951) 686-6060

    
PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Financial Condition
(Unaudited –In Thousands, Except Share Information)

 December 31,
  September 30, June 30, March 31,
 December 31,   
  2019  2019
 2019  2019
 2018  
Assets          
Cash and cash equivalents $  48,233 $     54,515 $  70,632 $  61,458 $  67,359 
Investment securities – held to maturity, at cost  77,161  85,088  94,090  102,510  84,990 
Investment securities - available for sale, at fair value 5,237  5,517  5,969  6,294  6,563 
Loans held for investment, net of allowance for loan losses of $6,921; $6,929; $7,076; $7,080 and $7,061, respectively; includes $4,173; $4,386; $5,094; $5,239 and $4,995 at fair value, respectively  

941,729
   

924,314
  

879,925
   

883,554
   

875,413
 
Loans held for sale, at fair value  -  -  -  30,500  57,562 
Accrued interest receivable  3,292  3,380  3,424  3,386  3,156 
Real estate owned, net -  -  -  -  - 
FHLB – San Francisco stock 8,199  8,199  8,199  8,199  8,199 
Premises and equipment, net  10,967  11,215  8,226  8,395  8,601 
Prepaid expenses and other assets  12,569  13,068  14,385  15,099  15,327 
           
Total assets$1,107,387 $1,105,296 $1,084,850 $1,119,395 $1,127,170 
           
Liabilities and Stockholders’ Equity          
Liabilities:          
Non interest-bearing deposits $  85,846 $     85,338 $  90,184 $  90,875 $  78,866 
Interest-bearing deposits  747,804  746,398  751,087  786,009  794,018 
Total deposits 833,650  831,736  841,271  876,884  872,884 
           
Borrowings  131,085  131,092  101,107  101,121  111,135 
Accounts payable, accrued interest and other liabilities  

18,876
   

20,299
   

21,831
   

20,181
   

20,474
 
Total liabilities 983,611  983,127  964,209  998,186  1,004,493 
           
Stockholders’ equity:          
Preferred stock, $.01 par value (2,000,000 shares authorized; none issued and outstanding)- - - -  - 
     
Common stock, $.01 par value (40,000,000 shares authorized; 18,097,615; 18,091,865; 18,081,365; 18,064,365and 18,053,115 shares issued, respectively; 7,483,071; 7,479,682; 7,486,106; 7,497,357 and 7,506,855 shares outstanding, respectively)181 181 181  181  181 
 
 
Additional paid-in capital  95,118  94,795  94,351  96,114  95,913 
Retained earnings  193,704  192,354  190,839  191,103  192,306 
Treasury stock at cost (10,614,544; 10,612,183; 10,559,259; 10,567,008 and 10,546,260 shares, respectively)  (165,360) (165,309) (164,891) (166,352) (165,892)
Accumulated other comprehensive income, net of tax  133  148  161  163  169 
           
Total stockholders’ equity  123,776  122,169  120,641  121,209  122,677 
           
Total liabilities and stockholders’ equity$1,107,387 $1,105,296 $1,084,850 $1,119,395 $1,127,170 



PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(Unaudited - In Thousands, Except Earnings Per Share)
 
 Quarter Ended Six Months Ended
 December 31, December 31,
  2019  2018  2019  2018 
Interest income:        
Loans receivable, net$10,320 $10,331 $20,395 $20,505 
Investment securities  567  444  1,181  789 
FHLB – San Francisco stock  145  278  288  421 
Interest-earning deposits 189  387  435  725 
Total interest income 11,221  11,440  22,299  22,440 
         
Interest expense:        
Checking and money market deposits  117  117  227  225 
Savings deposits 131  147  265  298 
Time deposits 530  630  1,062  1,251 
Borrowings 804  715  1,524  1,478 
Total interest expense  1,582  1,609  3,078  3,252 
         
Net interest income  9,639  9,831  19,221  19,188 
Recovery from allowance for loan losses (22) (217) (203) (454
Net interest income, after recovery from allowance for loan losses 9,661 10,048 19,424 19,642 
         
Non-interest income:        
Loan servicing and other fees 367  277  500  601 
Gain (loss) on sale of loans, net (43) 2,263  (129) 5,395 
Deposit account fees 451  509  898  1,014 
Loss on sale and operations of real estate owned acquired in the settlement of loans  -  (7) -  (6)
Card and processing fees  371  392  761  790 
Other 198  161  384  350 
Total non-interest income 1,344  3,595  2,414  8,144 
         
Non-interest expense:        
Salaries and employee benefits 4,999  7,211  9,984  15,461 
Premises and occupancy 880  1,274  1,758  2,619 
Equipment 262  495  541  916 
Professional expenses 331  411  739  858 
Sales and marketing expenses 212  253  329  422 
Deposit insurance premiums and regulatory        
assessments  59 172 43 337
Other 811  1,059  1,398  1,966 
Total non-interest expense 7,554  10,875  14,792  22,579 
         
Income before taxes  3,451  2,768  7,046  5,207 
Provision for income taxes  1,053  810  2,086  1,426 
  Net income $2,398 $1,958 $4,960 $3,781 
         
Basic earnings per share $0.32 $0.26 $0.66 $0.51 
Diluted earnings per share $0.31 $0.26 $0.65 $0.50 
Cash dividends per share $0.14 $0.14 $0.28 $0.28 


PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Operations – Sequential Quarters
(Unaudited – In Thousands, Except Share Information)
  
    Quarter Ended 
 December 31,
  September 30, June 30, March 31,
 December 31,
 
  2019
  2019
 2019 2019
 2018
 
Interest income:         
Loans receivable, net $10,320 $10,075 $9,576 $10,011 $10,331 
Investment securities  567  614  661  592  444 
FHLB – San Francisco stock  145  143  142  144  278 
Interest-earning deposits  189  246  426  386  387 
Total interest income  11,221  11,078  10,805  11,133  11,440 
           
Interest expense:          
Checking and money market deposits  117  110  101  102  117 
Savings deposits  131  134  135  139  147 
Time deposits  530  532  530  600  630 
Borrowings  804  720  669  680  715 
Total interest expense  1,582  1,496  1,435  1,521  1,609 
           
Net interest income  9,639  9,582  9,370  9,612  9,831 
Provision (recovery) for loan losses  (22) (181) (25) 4  (217)
Net interest income, after provision (recovery) for loan losses 9,661 9,763 9,395 9,608 10,048 
           
Non-interest income:          
Loan servicing and other fees  367  133  188  262  277 
Gain (loss) on sale of loans, net  (43) (86) 21  1,719  2,263 
Deposit account fees  451  447  443  471  509 
Gain (loss) on sale and operations of real estate owned acquired in the settlement of loans, net -  -  -  2  (7)
Card and processing fees  371  390  405  373  392 
Other  198  186  258  225  161 
Total non-interest income 1,344  1,070  1,315  3,052  3,595 
           
Non-interest expense:          
Salaries and employee benefits  4,999  4,985  5,396  9,292  7,211 
Premises and occupancy  880  878  1,133  1,286  1,274 
Equipment  262  279  1,141  417  495 
Professional expenses  331  408  493  513  411 
Sales and marketing expenses  212  117  312  246  253 
Deposit insurance premiums and regulatory assessments  59   (16) 129  124  172 
Other  811  587  1,053  1,122  1,059 
Total non-interest expense  7,554  7,238  9,657  13,000  10,875 
           
Income (loss) before taxes  3,451  3,595  1,053  (340) 2,768 
Provision (benefit) for income taxes  1,053  1,033  266  (189) 810 
Net income (loss)$2,398 $2,562 $787 $(151)$1,958 
           
Basic earnings (loss) per share$0.32 $0.34 $0.10   $ (0.02)$0.26 
Diluted earnings (loss) per share $0.31 $0.33 $0.10   $ (0.02)$0.26 
Cash dividends per share $0.14 $0.14 $0.14   $ 0.14 $0.14 

 

PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands)
    
 Quarter Ended Six Months Ended
December 31,December 31,
  2019   2018   2019   2018
 
SELECTED FINANCIAL RATIOS:       
Return on average assets  0.87%  0.69%  0.91%  0.66% 
Return on average stockholders’ equity  7.81%  6.42%  8.13%  6.22% 
Stockholders’ equity to total assets  11.18%  10.88%  11.18%  10.88% 
Net interest spread  3.53%  3.48%  3.55%  3.36% 
Net interest margin  3.59%  3.54%  3.61%  3.42% 
Efficiency ratio  68.78%  81.00%  68.37%  82.61% 
Average interest-earning assets to average interest-bearing liabilities  111.43%  110.98%  111.52%  110.92% 
         
SELECTED FINANCIAL DATA:        
Basic earnings per share $0.32  $0.26  $0.66  $0.51  
Diluted earnings per share $0.31  $0.26  $0.65  $0.50  
Book value per share $16.54  $16.34  $16.54  $16.34  
Shares used for basic EPS computation  7,482,300   7,506,106   7,482,367   7,468,537  
Shares used for diluted EPS computation  7,658,050   7,601,759   7,651,441   7,579,414  
Total shares issued and outstanding  7,483,071   7,506,855   7,483,071   7,506,855  
         
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:         
Mortgage Loans:        
Single-family$52,671  $24,180  $86,300  $41,396  
Multi-family  20,164   10,068   76,640   22,777  
Commercial real estate  6,479   3,175   8,898   8,480  
Construction  2,313   1,863   3,209   3,343  
Consumer loans  1   -   1   -  
Total loans originated and purchased for  investment $81,628  $39,286  $175,048  $75,996  
         
LOANS ORIGINATED FOR SALE:         
Retail originations $-  $87,913  $-  $215,046  
Wholesale originations  -   58,504   -   127,692  
Total loans originated for sale $-  $146,417  $-  $342,738  
         
LOANS SOLD:        
Servicing released $-  $165,484  $-  $376,534  
Servicing retained  -   2,026   -   2,784  
Total loans sold $-  $167,510  $-  $379,318  


PROVIDENT FINANCIAL HOLDINGS, INC. 
Financial Highlights 
(Unaudited - Dollars in Thousands, Except Share Information) 
 
 Quarter Quarter Quarter Quarter Quarter
EndedEndedEndedEndedEnded
 12/31/19 9/30/19 6/30/19 3/31/19 12/31/18
SELECTED FINANCIAL RATIOS:         
Return (loss) on average assets  0.87%  0.95%  0.29%  -0.05%  0.69%
Return (loss) on average stockholders’ equity 7.81%  8.46%  2.60%  -0.49%  6.42%
Stockholders’ equity to total assets  11.18%  11.05%  11.12%  10.83%  10.88%
Net interest spread  3.53%  3.58%  3.46%  3.46%  3.48%
Net interest margin  3.59%  3.64%  3.52%  3.53%  3.54%
Efficiency ratio  68.78%  67.95%  90.38%  102.65%  81.00%
Average interest-earning assets to average interest-bearing liabilities  111.43%  111.61%  111.45%  111.28%  110.98%
          
SELECTED FINANCIAL DATA:         
Basic earnings (loss) per share $0.32  $0.34  $0.10  $  (0.02 $0.26 
Diluted earnings (loss) per share $0.31  $0.33  $0.10  $  (0.02 $0.26 
Book value per share $16.54  $16.33  $16.12  $16.17  $16.34 
Average shares used for basic EPS  7,482,300   7,482,435   7,496,457   7,506,770   7,506,106 
Average shares used for diluted EPS  7,658,050   7,647,763   7,626,661   7,506,770   7,601,759 
Total shares issued and outstanding  7,483,071   7,479,682   7,486,106   7,497,357   7,506,855 
          
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:         
Mortgage Loans:         
Single-family$52,671  $33,629  $31,982  $15,288  $24,180 
Multi-family  20,164   56,476   14,513   21,546   10,068 
Commercial real estate 6,479   2,419   2,882   5,197   3,175 
Construction  2,313   896   1,846   1,970   1,863 
Consumer loans 1   -   -   -   - 
Total loans originated and purchased for investment $81,628  $93,420  $51,223  $44,001  $39,286 
          
LOANS ORIGINATED FOR SALE:         
Retail originations $-  $-  $9,593  $72,353  $87,913 
Wholesale originations  -   -   4,057   38,353   58,504 
Total loans originated for sale $-  $-  $13,650  $110,706  $146,417 
          
LOANS SOLD:         
Servicing released $-  $-  $40,956  $134,264  $165,484 
Servicing retained  -   -   2,003   2,409   2,026 
Total loans sold $-  $-  $42,959  $136,673  $167,510 


PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands)
          
   As of   As of   As of   As of   As of
 12/31/19 09/30/19 06/30/19 03/31/19 12/31/18
ASSET QUALITY RATIOS AND DELINQUENT LOANS:         
Recourse reserve for loans sold $  250  $  250  $  250  $  250  $  250 
Allowance for loan losses $6,921  $6,929  $7,076  $7,080  $7,061 
Non-performing loans to loans held for investment, net  0.36%  0.57%  0.71%  0.69%  0.69%
Non-performing assets to total assets 0.31%  0.47%  0.57%  0.55%  0.54%
Allowance for loan losses to gross loans held for investment  0.73%  0.74%  0.80%  0.79%  0.80%
Net loan charge-offs (recoveries) to average  loans receivable (annualized) (0.01)%  (0.02)%  (0.01)%  (0.01)%  (0.05)%
Non-performing loans$3,427  $5,230  $6,218  $6,115  $6,062 
Loans 30 to 89 days delinquent $  986  $  990  $  665  $  699  $  2 


 Quarter
Ended
 Quarter
Ended
 Quarter
Ended
 Quarter
Ended
 Quarter
Ended
  
 12/31/19 09/30/19 06/30/19 03/31/19 12/31/18  
Provision (recovery) for loan losses $  (22)$ (181)$ (25)$  4 $ (217) 
Net loan charge-offs (recoveries)$  (14)$  (34)$ (21)$ (15)$ (123) 
           
   As of   As of   As of   As of   As of 
 12/31/19 09/30/19 06/30/19 03/31/19 12/31/18 
REGULATORY CAPITAL RATIOS (BANK): 
Tier 1 leverage ratio 10.24% 10.21% 10.50% 10.17% 9.96% 
Common equity tier 1 capital ratio16.62% 16.32% 18.00% 17.24% 17.17% 
Tier 1 risk-based capital ratio16.62% 16.32% 18.00% 17.24% 17.17% 
Total risk-based capital ratio 17.65% 17.37% 19.13% 18.34% 18.26% 
           
 As of December 31, 
 2019 2018 
 Balance Rate(1) Balance Rate(1) 
INVESTMENT SECURITIES:          
Held to maturity:          
Certificates of deposit $  800 2.63% $  600 2.32% 
U.S. SBA securities2,816 2.35  2,939 2.60  
U.S. government sponsored enterprise MBS 73,545 2.85  81,451 2.51  
Total investment securities held to maturity$ 77,161 2.83% $ 84,990 2.51% 
           
Available for sale (at fair value):          
U.S. government agency MBS $  3,246 3.77% $  3,942 3.49% 
U.S. government sponsored enterprise MBS 1,760 4.51  2,311 4.28  
Private issue collateralized mortgage obligations 231 4.63  310 3.95  
Total investment securities available for sale$  5,237 4.06% $  6,563 3.79% 
  
Total investment securities$ 82,398 2.91% $ 91,553 2.60% 
         
(1) The interest rate described in the rate column is the weighted-average interest rate or yield of all instruments, which are included in the balance of the respective line item. 


PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands)
 
  
   As of December 31,
   2019
    2018
   Balance
 Rate(1)   Balance
  Rate(1)  
             
        
LOANS HELD FOR INVESTMENT:          
Held to maturity:          
Single-family (1 to 4 units)$347,344 4.20% $312,499 4.48% 
Multi-family (5 or more units)   479,151 4.34     447,033 4.29  
Commercial real estate  107,613 4.98   112,830 4.83  
Construction  6,914 7.04   3,986 7.37  
Other  - -   167 6.50  
Commercial business    578 6.09     455 6.45  
Consumer    140 15.00     103 15.05  
Total loans held for investment  941,740 4.38%  877,073 4.44% 
           
Advance payments of escrows 56     95    
Deferred loan costs, net    6,854       5,306    
Allowance for loan losses    (6,921)      (7,061)   
Total loans held for investment, net $941,729    $875,413    
           
Purchased loans serviced by others included above $  29,798 3.74% $  17,247 3.36% 
             
         
(1) The interest rate described in the rate column is the weighted-average interest rate or yield of all instruments, which are included in the balance of the respective line item. 

 


 As of December 31,
  
 2019
  2018 
 Balance
  Rate(1)
  BalanceRate(1)
 
       
 
DEPOSITS:         
Checking accounts – non interest-bearing$85,846 -% $78,866-%
Checking accounts – interest-bearing  269,454 0.12   256,5490.12 
Savings accounts  259,035 0.2   277,1450.21 
Money market accounts  33,418 0.28   36,6270.28 
Time deposits  185,897 1.13   223,6971.12 
Total deposits $833,650 0.37% $872,8840.4%
        
BORROWINGS:       
Overnight $- -% $--%
Three months or less  - -   -- 
Over three to six months  - -   10,0001.53  
Over six months to one year  10,000 3.92   -- 
Over one year to two years  31,078 2.41   10,0003.92 
Over two years to three years 30,000 1.9   21,1352.81 
Over three years to four years  20,000 2   10,0002.2 
Over four years to five years  20,007 2.5   20,0002 
Over five years 20,000 2.7   40,0002.6 
Total borrowings $131,085 2.41% $111,1352.52%
         
   
(1)  The interest rate described in the rate column is the weighted-average interest rate or cost of all instruments, which are included in the balance of the respective line item.

 

PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands)
 
  
 Quarter Ended Quarter Ended 
 December 31, 2019 December 31, 2018 
 Balance Rate(1) Balance Rate(1)
 
           
SELECTED AVERAGE BALANCE SHEETS:          
Loans receivable, net (2) $ 934,060 4.42% $ 941,192 4.39% 
Investment securities  87,108 2.60%  93,468 1.90% 
FHLB – San Francisco stock  8,199 7.07%  8,199 13.56% 
Interest-earning deposits 45,519 1.62%  67,760 2.23% 
Total interest-earning assets $1,074,886 4.18% $1,110,619 4.12% 
Total assets $1,107,102   $1,142,302   
         
Deposits $  833,554 0.37% $  889,557 0.40% 
Borrowings  131,084 2.43%  111,141 2.55% 
Total interest-bearing liabilities$ 964,638 0.65% $1,000,698 0.64% 
Total stockholders’ equity$  122,820   $  122,017   
         

(1) The interest rate described in the rate column is the weighted-average interest rate or yield/cost of all instruments, which are included in the balance of the respective line item.

(2) Includes loans held for sale at fair value for the quarter ended December 31, 2018.

 Six Months Ended Six Months Ended
 December 31, 2019 December 31, 2018
 Balance Rate(1) Balance Rate(1)
        
SELECTED AVERAGE BALANCE SHEETS:       
Loans receivable, net (2) $918,666 4.44% $954,148 4.30%
Investment securities 91,527 2.58%  92,384 1.71%
FHLB – San Francisco stock 8,199 7.03%  8,199 10.27%
Interest-earning deposits  45,015 1.89%  67,552 2.10%
Total interest-earning assets $1,063,407 4.19% $1,122,283 4.00%
Total assets$1,095,219   $1,153,265  
        
Deposits $832,187 0.37% $896,217 0.39%
Borrowings  121,363 2.49%  115,577 2.54%
Total interest-bearing liabilities$953,550 0.64% $1,011,794 0.64%
Total stockholders’ equity$122,001   $121,511  
         
(1)  The interest rate described in the rate column is the weighted-average interest rate or yield/cost of all instruments, which are included in the balance of the respective line item.
(2)  Includes loans held for sale at fair value for the six months ended December 31, 2018.


 PROVIDENT FINANCIAL HOLDINGS, INC.
Asset Quality (1)
(Unaudited – Dollars in Thousands)
 
  
   As of   As of   As of   As of   As of 
 12/31/19 09/30/19 06/30/19 03/31/19 12/31/18 
Loans on non-accrual status (excluding
restructured loans):
          
 Mortgage loans:          
  Single-family $1,607 $2,737 $3,315 $2,657 $2,572 
  Construction  -  1,139  971  745  745 
  Total  1,607  3,876  4,286  3,402  3,317 
            
Accruing loans past due 90 days or more: -  -  -  -  - 
  Total  -  -  -  -  - 
            
Restructured loans on non-accrual status:          
 Mortgage loans:          
  Single-family  1,783  1,316  1,891  2,669  2,698 
 Commercial business loans  37  38  41  44  47 
  Total  1,820  1,354  1,932  2,713  2,745 
              
   Total non-performing loans 3,427  5,230  6,218  6,115  6,062 
           
Real estate owned, net -  -  -  -  - 
Total non-performing assets$3,427 $5,230 $6,218 $6,115 $6,062 

(1) The non-performing loans balances are net of individually evaluated or collectively evaluated allowances, specifically attached to the individual loans and include fair value adjustments.

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Source: Provident Financial Holdings, Inc.