Press Release

Provident Financial Holdings Reports Fourth Quarter and Fiscal Year 2021 Results

Company Release - 7/28/2021 6:00 AM ET

The Company Reports Net Income of $3.34 Million in the June 2021 Quarter

Loans Held for Investment Increase 1% from March 31, 2021 to $851.0 Million

Total Deposits Increase 5% from June 30, 2020 to $938.0 Million

Improved Asset Quality with a $767,000 Recovery from the Allowance for Loan Losses

Non-Interest Expenses Remain Well-Controlled

RIVERSIDE, Calif., July 28, 2021 (GLOBE NEWSWIRE) -- Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the holding company for Provident Savings Bank, F.S.B. (“Bank”), today announced fourth quarter and full year earnings results for the fiscal year ended June 30, 2021.

For the quarter ended June 30, 2021, the Company reported net income of $3.34 million, or $0.44 per diluted share (on 7.59 million average diluted shares outstanding), up 111 percent from net income of $1.58 million, or $0.21 per diluted share (on 7.49 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 a $1.22 million improvement in the provision for loan losses to a recovery from a provision for loan losses and a $1.68 million decrease in non-interest expenses (mainly, lower salaries and employee benefits expenses), partly offset by lower net interest income.

“I am pleased that general economic conditions are improving and the United States is making progress in its fight against the COVID-19 pandemic,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company. “We believe Provident is well-positioned to benefit from improving conditions and I am confident that our strong financial foundation will allow us to capitalize on future opportunities as they develop,” said Mr. Blunden.

Return on average assets for the fourth quarter of fiscal 2021 was 1.12 percent, up from 0.55 percent for the same period of fiscal 2020; and return on average stockholders’ equity for the fourth quarter of fiscal 2021 was 10.65 percent, up from 5.14 percent for the comparable period of fiscal 2020.

On a sequential quarter basis, the $3.34 million net income for the fourth quarter of fiscal 2021 reflects a 114 percent increase from $1.56 million in the third quarter of fiscal 2021. The increase in earnings for the fourth quarter of fiscal 2021 compared to the third quarter of fiscal 2021 was primarily attributable to a $1.99 million decrease in non-interest expenses and a $567,000 increase in the recovery from the allowance for loan losses. Diluted earnings per share for the fourth quarter of fiscal 2021 were $0.44 per share, up 110 percent from the $0.21 per share during the third quarter of fiscal 2021. Return on average assets was 1.12 percent for the fourth quarter of fiscal 2021, up from 0.53 percent in the third quarter of fiscal 2021; and return on average stockholders’ equity for the fourth quarter of fiscal 2021 was 10.65 percent, up from 4.99 percent for the third quarter of fiscal 2021.

For the fiscal year ended June 30, 2021 net income decreased $128,000, or two percent, to $7.56 million from $7.69 million in the comparable period ended June 30, 2020; and diluted earnings per share for the fiscal year ended June 30, 2021 decreased one percent to $1.00 per share (on 7.54 million average diluted shares outstanding) from $1.01 per share (on 7.58 million average diluted shares outstanding) for the comparable period last year. Compared to the same period last year, the decrease in earnings was primarily attributable to a $5.76 million decrease in net interest income; partly offset by a $3.17 million decrease in non-interest expenses (mainly, a decrease in salaries and employee benefits expenses) and a $1.83 million improvement in the provision for loan losses to a recovery from a provision for loan losses.

Net interest income decreased $912,000, or 11 percent, to $7.38 million in the fourth quarter of fiscal 2021 from $8.29 million for the same quarter of fiscal 2020, attributable to a decrease in the net interest margin, partly offset by a higher average interest-earning assets balance. The net interest margin during the fourth quarter of fiscal 2021 decreased 41 basis points to 2.54 percent from 2.95 percent in the same quarter last year, primarily due to a decrease in the average yield on interest-earning assets reflecting primarily downward pressure on adjustable rate instruments as a result of decreases in market interest rates over the last year and originations and purchases of new loans held for investment and purchases of investment securities at lower market yields, partly offset by a much smaller decrease in the average cost of interest-bearing liabilities. The average yield on interest-earning assets decreased by 59 basis points to 2.87 percent in the fourth quarter of fiscal 2021 from 3.46 percent in the same quarter last year while the average cost of interest-bearing liabilities decreased by 20 basis points to 0.37 percent in the fourth quarter of fiscal 2021 from 0.57 percent in the same quarter last year. The average balance of interest-earning assets increased by $39.9 million, or four percent, to $1.16 billion in the fourth quarter of fiscal 2021 from $1.12 billion in the same quarter last year due primarily to purchases of investment securities, partly offset by a decrease in loans receivable and interest-earning deposits (primarily federal funds).

The average balance of loans receivable decreased by $45.9 million, or five percent, to $848.6 million in the fourth quarter of fiscal 2021 from $894.5 million in the same quarter of fiscal 2020. The average yield on loans receivable decreased by 43 basis points to 3.65 percent in the fourth quarter of fiscal 2021 from an average yield of 4.08 percent in the same quarter of fiscal 2020. Net deferred loan cost amortization in the fourth quarter of fiscal 2021 increased to $752,000 from $495,000 in the same quarter of fiscal 2020. Total loans originated and purchased for investment in the fourth quarter of fiscal 2021 were $93.3 million, up 111 percent from $44.2 million in the same quarter of fiscal 2020. Loan principal payments received in the fourth quarter of fiscal 2021 were $79.9 million, up 41 percent from $56.5 million in the same quarter of fiscal 2020 reflecting primarily increased refinance activity of single-family loans in the current low interest rate environment.

The average balance of investment securities increased by $150.9 million, or 177 percent, to $236.2 million in the fourth quarter of fiscal 2021 from $85.3 million in the same quarter of fiscal 2020 as excess liquidity earning a nominal yield was deployed into higher earning assets. The average yield on investment securities decreased 136 basis points to 0.80 percent in the fourth quarter of fiscal 2021 from 2.16 percent for the same quarter of fiscal 2020. The decrease in the average yield was primarily attributable to investment security purchases with a lower average yield than the legacy portfolio of investment securities, reflecting the current low interest rate environment. During the fourth quarter of fiscal 2021, the Bank did not purchase any investment securities; but for fiscal 2021, the Bank purchased investment securities totaling $154.2 million with an average yield of approximately 0.82 percent.

In the fourth quarter of fiscal 2021, the Federal Home Loan Bank – San Francisco (“FHLB”) distributed a $118,000 cash dividend to the Bank on its FHLB stock, up $16,000 or 16 percent from $102,000 in the same quarter last year.

The average balance of the Company’s interest-earning deposits, primarily cash with the Federal Reserve Bank of San Francisco, decreased $65.2 million, or 48 percent, to $69.9 million in the fourth quarter of fiscal 2021 from $135.1 million in the same quarter of fiscal 2020 primarily as a result of purchases of investment securities, new loan originations and purchases of loans held for investment outpacing deposit growth and loan repayments. The average yield earned on interest-earning deposits in the fourth quarter of fiscal 2021 was 0.11 percent, unchanged from the same quarter of fiscal 2020.

Average deposits increased $63.4 million, or seven percent, to $939.0 million in the fourth quarter of fiscal 2021 from $875.6 million in the same quarter of fiscal 2020, primarily due to increases in transaction accounts resulting primarily from government stimulus programs related to the COVID-19 pandemic, partly offset by a managed run-off of higher cost time deposits. The average cost of deposits improved, decreasing by 15 basis points to 0.15 percent in the fourth quarter of fiscal 2021 from 0.30 percent in the same quarter last year.

Transaction account balances or “core deposits” increased $74.5 million, or 10 percent, to $797.5 million at June 30, 2021 from $723.0 million at June 30, 2020, while time deposits decreased $29.6 million, or 17 percent, to $140.4 million at June 30, 2021 from $170.0 million at June 30, 2020.

The average balance of borrowings, which consisted of FHLB advances, decreased $27.1 million, or 20 percent, to $110.8 million while the average cost of borrowings decreased eight basis points to 2.24 percent in the fourth quarter of fiscal 2021, compared to an average balance of $137.9 million with an average cost of 2.32 percent in the same quarter of fiscal 2020. The decrease in the average balance of borrowings was primarily due to prepayments and maturities of borrowings.

During the fourth quarter of fiscal 2021, the Company recorded a recovery from the allowance for loan losses of $767,000, in contrast to a $448,000 provision for loan losses recorded during the same period of fiscal 2020 and a $200,000 recovery from the allowance for loan losses recorded in the third quarter of fiscal 2021 (sequential quarter). The recovery from the allowance for loan losses for the current quarter primarily reflects an improved economic outlook as of June 30, 2021, reducing the expected impact of the pandemic to the credit quality of the loan portfolio, partly offset by an increase in loan balances during the current quarter; while the provision for loan losses recorded in the same quarter last year primarily reflected the deterioration in forecasted economic metrics reflecting the economic outlook that existed at the quarter end as a result of the COVID-19 pandemic, partly offset by a decrease in loan balances.

Non-performing assets, comprised solely of non-performing loans with underlying collateral located in California, increased $3.7 million or 76 percent to $8.6 million, or 0.73 percent of total assets, at June 30, 2021, compared to $4.9 million, or 0.42 percent of total assets, at June 30, 2020 but declined from $9.8 million, or 0.82 percent of total assets, at March 31, 2021 (sequential quarter). The non-performing loans at June 30, 2021 are comprised of 27 single-family loans and one multi-family loan. At both June 30, 2021 and June 30, 2020, there was no real estate owned.

Net loan recoveries for the quarter ended June 30, 2021 were $8,000 or 0.00 percent (annualized) of average loans receivable, as compared to net loan recoveries of $7,000 or 0.00 percent (annualized) of average loans receivable for the quarter ended June 30, 2020 and net loan recoveries of $8,000 or 0.00 percent (annualized) of average loans receivable for the quarter ended March 31, 2021 (sequential quarter).

Classified assets, comprised solely of loans, were $10.4 million at June 30, 2021, including $1.8 million of loans in the special mention category and $8.6 million of loans in the substandard category; while classified assets at June 30, 2020 were $14.1 million, including $8.6 million of loans in the special mention category and $5.5 million of loans in the substandard category.

The Bank received requests from borrowers for some type of payment relief due to the COVID-19 pandemic. Loans that were current on their payments prior to the COVID-19 pandemic and modified by deferred payments, are not considered to be troubled debt restructurings pursuant to applicable accounting guidance consistent with the Coronavirus Aid, Relief, and Economic Security Act of 2020 or CARES Act and related bank regulatory guidance. The primary method of relief is to allow the borrower to defer loan payments for up to an initial six-month period, although we have also waived late fees and suspended foreclosure proceedings. Loans in which their payments are deferred beyond the initial six months are no longer in forbearance and are subsequently classified as troubled debt restructuring. The Bank ended the loan forbearance program on March 31, 2021. As of June 30, 2021, loans in forbearance included three single-family loans with outstanding balances of approximately $897,000 or 0.11 percent of gross loans held for investment and one commercial real estate loan with an outstanding balance of $945,000 or 0.11 percent of gross loans held for investment. As of June 30, 2021, the Bank had no pending requests for payment relief. Interest income is recognized during the forbearance period unless the loans are classified as non-performing. After the payment deferral period, scheduled loan payments will once again become due and payable. The forbearance amount will be due and payable in full as a balloon payment at the end of the loan term or sooner if the loan becomes due and payable in full at an earlier date. The Company believes the steps it is taking are necessary to effectively manage the loan portfolio and assist its customers through the ongoing uncertainty surrounding the duration, impact and government response to the COVID-19 pandemic.

During the quarter ended June 30, 2021, two COVID-19 related forbearance loans were restructured while two restructured loans were paid off. During the fiscal year ended June 30, 2021, 19 loans previously in a COVID-19 related payment forbearance and one pass loan were restructured and classified as restructured loans, while two restructured loans were upgraded to the pass category and three loans were paid off. The outstanding balance of restructured loans at June 30, 2021 was $7.9 million (23 loans) up from $2.6 million (eight loans) at June 30, 2020. As of June 30, 2021, a total of $7.0 million or 89 percent of the restructured loans were classified as substandard non-accrual and $7.7 million or 97 percent of the restructured loans have a current payment status consistent with their restructuring terms.

The allowance for loan losses was $7.6 million or 0.88 percent of gross loans held for investment at June 30, 2021, down from the $8.3 million or 0.91 percent of gross loans held for investment at June 30, 2020. 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 June 30, 2021 under the incurred loss methodology.

Non-interest income increased by $236,000, or 23 percent, to $1.24 million in the fourth quarter of fiscal 2021 from $1.01 million in the same period of fiscal 2020, primarily due to increases in card and processing fees and loan servicing and other fees (resulting from higher loan prepayment fees). On a sequential quarter basis, non-interest income increased $42,000, or four percent, primarily as a result of an increase in card and processing fees, partly offset by decreases in loan servicing and other fees and deposit account fees.

Non-interest expenses decreased $1.68 million, or 25 percent, to $4.92 million in the fourth quarter of fiscal 2021 from $6.60 million in the same quarter last year due primarily to lower salaries and employee benefits expense resulting from a $2.44 million credit for the Employee Retention Tax Credit (“ERTC”), partly offset by a $373,000 increase in stock-based compensation expense and a $532,000 reversal of the incentive bonus expense in the fourth quarter last year (not replicated in this current quarter). The ERTC credit was recorded for qualified wages consistent with the Consolidated Appropriations Act of 2021 and American Rescue Plan Act of 2021 where eligible employers can claim a maximum credit equal to 70 percent of $10,000 of qualified wages paid to an employee per calendar quarter. On a sequential quarter basis, non-interest expenses decreased $1.99 million, or 29 percent, to $4.92 million in the fourth quarter of fiscal 2021 from $6.91 million in the third quarter of fiscal 2021 due primarily to lower salaries and employee benefits expense resulting from the $2.44 million credit for the ERTC, partly offset by a $409,000 increase in stock-based compensation expense.

The Company’s efficiency ratio in the fourth quarter of fiscal 2021 was 57 percent, significantly improved from 71 percent in the same quarter last year and from 80 percent in the third quarter of fiscal 2021 (sequential quarter), primarily attributable to the ERTC credit.

The Company’s provision for income tax was $1.12 million for the fourth quarter of fiscal 2021, up 70 percent from $660,000 in the same quarter last year primarily due to higher net income before the provision for income taxes. The effective tax rate in the fourth quarter of fiscal 2021 was 25.2 percent, lower than 29.4 percent in the same quarter last year, attributable to the tax benefits from the exercise of stock options and the non-taxable treatment of the ERTC for state tax purposes. The Company believes that the tax provision recorded in the fourth quarter of fiscal 2021 reflects its current federal and state income tax obligations.

The Company repurchased 50,275 shares of its common stock with an average cost of $16.68 per share during the quarter ended June 30, 2021 pursuant to its stock repurchase plan. As of June 30, 2021, a total of 266,833 shares or 72 percent of the shares authorized for repurchase under the April 2020 stock repurchase plan remain available to purchase until the plan expires on April 30, 2022. In addition, the Company purchased 31,553 shares at $17.40 per share from employees to fund their withholding tax obligations resulting from restricted stock distributions.

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 Thursday, July 29, 2021 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-877-692-8955 and referencing access code number 5497888. An audio replay of the conference call will be available through Thursday, August 5, 2021 by dialing 1-866-207-1041 and referencing access code number 1060286.

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 the effect of the COVID-19 pandemic, including on Company’s credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; increased competitive pressures; changes in the interest rate environment; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes,; including as a result of the COVID-19 pandemic; 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 2022 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)

                               
       June 30,      March 31,      December 31,      September 30,      June 30,
    2021     2021     2020     2020     2020  
Assets                              
Cash and cash equivalents   $ 70,270     $ 71,629     $ 74,001     $ 66,467     $ 116,034  
Investment securities – held to maturity, at cost     223,306       239,480       203,098       193,868       118,627  
Investment securities - available for sale, at fair value     3,587       3,802       4,158       4,416       4,717  
Loans held for investment, net of allowance for loan losses of $7,587; $8,346; $8,538; $8,490 and $8,265, respectively; includes $1,874; $1,879; $1,972; $2,240 and $2,258 at fair value, respectively     850,960       840,274       855,086       884,953       902,796  
Accrued interest receivable     2,999       3,060       3,126       3,373       3,271  
FHLB – San Francisco stock     8,155       7,970       7,970       7,970       7,970  
Premises and equipment, net     9,377       9,608       9,980       10,099       10,254  
Prepaid expenses and other assets     14,942       13,473       13,308       12,887       13,168  
Total assets   $ 1,183,596     $ 1,189,296     $ 1,170,727     $ 1,184,033     $ 1,176,837  
                               
Liabilities and Stockholders’ Equity                              
Liabilities:                              
Non interest-bearing deposits   $ 123,179     $ 124,043     $ 109,609     $ 114,537     $ 118,771  
Interest-bearing deposits     814,794       809,713       800,359       790,149       774,198  
Total deposits     937,973       933,756       909,968       904,686       892,969  
                               
Borrowings     100,983       111,000       116,015       136,031       141,047  
Accounts payable, accrued interest and other liabilities     17,360       18,790       19,760       18,657       18,845  
Total liabilities     1,056,316       1,063,546       1,045,743       1,059,374       1,052,861  
                               
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; 18,229,615; 18,226,615; 18,097,615; 18,097,615 and 18,097,615 shares issued respectively; 7,541,469; 7,516,547; 7,442,254; 7,441,259 and 7,436,315 shares outstanding, respectively)     183       182       181       181       181  
Additional paid-in capital     97,978       97,323       96,164       95,948       95,593  
Retained earnings     197,733       195,443       194,923       194,789       194,345  
Treasury stock at cost (10,688,146; 10,710,068; 10,655,361; 10,656,356 and 10,661,300 shares, respectively)     (168,686 )     (167,276 )     (166,364 )     (166,358 )     (166,247 )
Accumulated other comprehensive income, net of tax     72       78       80       99       104  
Total stockholders’ equity     127,280       125,750       124,984       124,659       123,976  
Total liabilities and stockholders’ equity   $ 1,183,596     $ 1,189,296     $ 1,170,727     $ 1,184,033     $ 1,176,837  
 
 

PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(Unaudited - In Thousands, Except Earnings Per Share)

                         
    Quarter Ended   Fiscal Year Ended
       June 30,      June 30,
       2021        2020      2021        2020
Interest income:                        
Loans receivable, net   $ 7,735     $ 9,128   $ 32,856     $ 39,145
Investment securities     471       461     1,849       2,120
FHLB – San Francisco stock     118       102     418       534
Interest-earning deposits     19       36     78       657
Total interest income     8,343       9,727     35,201       42,456
                         
Interest expense:                        
Checking and money market deposits     48       91     268       424
Savings deposits     38       100     208       496
Time deposits     260       452     1,269       2,023
Borrowings     619       794     2,817       3,112
Total interest expense     965       1,437     4,562       6,055
                         
Net interest income     7,378       8,290     30,639       36,401
(Recovery) provision for loan losses     (767 )     448     (708 )     1,119
Net interest income, after (recovery) provision for loan losses     8,145       7,842     31,347       35,282
                         
Non-interest income:                        
Loan servicing and other fees     290       188     1,170       819
Deposit account fees     290       289     1,247       1,610
Card and processing fees     507       333     1,605       1,454
Other     154       195     551       637
Total non-interest income     1,241       1,005     4,573       4,520
                         
Non-interest expense:                        
Salaries and employee benefits     2,172       3,963     15,157       18,913
Premises and occupancy     869       862     3,500       3,465
Equipment     293       274     1,153       1,129
Professional expenses     378       349     1,561       1,439
Sales and marketing expenses     210       267     680       773
Deposit insurance premiums and regulatory assessments     123       130     552       227
Other     878       758     3,130       2,954
Total non-interest expense     4,923       6,603     25,733       28,900
Income before income taxes     4,463       2,244     10,187       10,902
Provision for income taxes     1,124       660     2,626       3,213
Net income   $ 3,339     $ 1,584   $ 7,561     $ 7,689
                         
Basic earnings per share   $ 0.44     $ 0.21   $ 1.01     $ 1.03
Diluted earnings per share   $ 0.44     $ 0.21   $ 1.00     $ 1.01
Cash dividend per share   $ 0.14     $ 0.14   $ 0.56     $ 0.56
 
 

PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Operations – Sequential Quarters
(Unaudited – In Thousands, Except Share Information)

                               
    Quarter Ended
    June 30,   March 31,   December 31,   September 30,   June 30,
       2021        2021        2020      2020      2020
Interest income:                              
Loans receivable, net   $ 7,735     $ 7,860     $ 8,344   $ 8,917   $ 9,128
Investment securities     471       452       448     478     461
FHLB – San Francisco stock     118       100       100     100     102
Interest-earning deposits     19       18       17     24     36
Total interest income     8,343       8,430       8,909     9,519     9,727
                               
Interest expense:                              
Checking and money market deposits     48       50       79     91     91
Savings deposits     38       38       54     78     100
Time deposits     260       292       335     382     452
Borrowings     619       593       803     802     794
Total interest expense     965       973       1,271     1,353     1,437
                               
Net interest income     7,378       7,457       7,638     8,166     8,290
(Recovery) provision for loan losses     (767 )     (200 )     39     220     448
Net interest income, after (recovery) provision for loan losses     8,145       7,657       7,599     7,946     7,842
                               
Non-interest income:                              
Loan servicing and other fees     290       355       120     405     188
Deposit account fees     290       318       329     310     289
Card and processing fees     507       366       368     364     333
Other     154       160       157     80     195
Total non-interest income     1,241       1,199       974     1,159     1,005
                               
Non-interest expense:                              
Salaries and employee benefits     2,172       4,241       4,301     4,443     3,963
Premises and occupancy     869       863       865     903     862
Equipment     293       312       273     275     274
Professional expenses     378       367       402     414     349
Sales and marketing expenses     210       130       227     113     267
Deposit insurance premiums and regulatory assessments     123       154       141     134     130
Other     878       842       707     703     758
Total non-interest expense     4,923       6,909       6,916     6,985     6,603
Income before income taxes     4,463       1,947       1,657     2,120     2,244
Provision for income taxes     1,124       386       481     635     660
Net income   $ 3,339     $ 1,561     $ 1,176   $ 1,485   $ 1,584
                               
Basic earnings per share   $ 0.44     $ 0.21     $ 0.16   $ 0.20   $ 0.21
Diluted earnings per share   $ 0.44     $ 0.21     $ 0.16   $ 0.20   $ 0.21
Cash dividends per share   $ 0.14     $ 0.14     $ 0.14   $ 0.14   $ 0.14
 
 

PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands, Except Share Information)

                           
    Quarter Ended   Fiscal Year Ended  
    June 30,   June 30,  
       2021      2020      2021      2020  
SELECTED FINANCIAL RATIOS:                          
Return on average assets     1.12 %   0.55 %   0.64 %   0.69 %
Return on average stockholders' equity     10.65 %   5.14 %   6.05 %   6.26 %
Stockholders’ equity to total assets     10.75 %   10.53 %   10.75 %   10.53 %
Net interest spread     2.50 %   2.89 %   2.62 %   3.30 %
Net interest margin     2.54 %   2.95 %   2.66 %   3.36 %
Efficiency ratio     57.12 %   71.04 %   73.08 %   70.62 %
Average interest-earning assets to average interest-bearing liabilities     110.77 %   110.80 %   110.78 %   111.32 %
                           
SELECTED FINANCIAL DATA:                          
Basic earnings per share   $ 0.44   $ 0.21   $ 1.01   $ 1.03  
Diluted earnings per share   $ 0.44   $ 0.21   $ 1.00   $ 1.01  
Book value per share   $ 16.88   $ 16.67   $ 16.88   $ 16.67  
Shares used for basic EPS computation     7,518,542     7,436,315     7,464,814     7,467,577  
Shares used for diluted EPS computation     7,590,312     7,485,019     7,538,409     7,576,182  
Total shares issued and outstanding     7,541,469     7,436,315     7,541,469     7,436,315  
                           
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:                          
Mortgage Loans:                          
Single-family   $ 51,574   $ 11,206   $ 126,145   $ 107,160  
Multi-family     36,987     32,876     96,474     122,366  
Commercial real estate     1,128         3,818     14,468  
Construction     3,598         5,426     3,983  
Other         143         143  
Consumer loans                 1  
Total loans originated and purchased for investment   $ 93,287   $ 44,225   $ 231,863   $ 248,121  
                           
                           

PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands, Except Share Information)

                                 
    Quarter   Quarter   Quarter   Quarter   Quarter  
    Ended   Ended   Ended   Ended   Ended  
       06/30/21      03/31/21      12/31/20      09/30/20      06/30/20  
SELECTED FINANCIAL RATIOS:                                
Return on average assets     1.12 %   0.53 %   0.40 %   0.50 %   0.55 %
Return on average stockholders' equity     10.65 %   4.99 %   3.77 %   4.78 %   5.14 %
Stockholders’ equity to total assets     10.75 %   10.57 %   10.68 %   10.53 %   10.53 %
Net interest spread     2.50 %   2.56 %   2.61 %   2.79 %   2.89 %
Net interest margin     2.54 %   2.60 %   2.66 %   2.84 %   2.95 %
Efficiency ratio     57.12 %   79.82 %   80.31 %   74.91 %   71.04 %
Average interest-earning assets to average interest-bearing liabilities     110.77 %   110.94 %   110.82 %   110.62 %   110.80 %
                                 
SELECTED FINANCIAL DATA:                                
Basic earnings per share   $ 0.44   $ 0.21   $ 0.16   $ 0.20   $ 0.21  
Diluted earnings per share   $ 0.44   $ 0.21   $ 0.16   $ 0.20   $ 0.21  
Book value per share   $ 16.88   $ 16.73   $ 16.79   $ 16.75   $ 16.67  
Average shares used for basic EPS     7,518,542     7,462,795     7,441,984     7,436,476     7,436,315  
Average shares used for diluted EPS     7,590,312     7,579,897     7,492,040     7,457,282     7,485,019  
Total shares issued and outstanding     7,541,469     7,516,547     7,442,254     7,441,259     7,436,315  
                                 
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:                                
Mortgage loans:                                
Single-family   $ 51,574   $ 38,928   $ 12,444   $ 23,199   $ 11,206  
Multi-family     36,987     21,208     16,432     21,847     32,876  
Commercial real estate     1,128     830         1,860      
Construction     3,598         688     1,140      
Other                     143  
Total loans originated and purchased for investment   $ 93,287   $ 60,966   $ 29,564   $ 48,046   $ 44,225  
 
 

PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands)

                                 
       As of      As of      As of      As of      As of  
    06/30/21   03/31/21   12/31/20   09/30/20   06/30/20  
ASSET QUALITY RATIOS AND DELINQUENT LOANS:                                
Recourse reserve for loans sold   $ 200   $ 215   $ 390   $ 370   $ 270  
Allowance for loan losses   $ 7,587   $ 8,346   $ 8,538   $ 8,490   $ 8,265  
Non-performing loans to loans held for investment, net     1.02 %   1.16 %   1.20 %   0.51 %   0.55 %
Non-performing assets to total assets     0.73 %   0.82 %   0.88 %   0.38 %   0.42 %
Allowance for loan losses to gross loans held                                
for investment     0.88 %   0.98 %   0.99 %   0.95 %   0.91 %
Net loan charge-offs (recoveries) to average loans receivable (annualized)     %   %   %   %   %
Non-performing loans   $ 8,646   $ 9,759   $ 10,270   $ 4,532   $ 4,924  
Loans 30 to 89 days delinquent   $   $   $ 350   $ 2   $ 219  

 

       Quarter      Quarter      Quarter      Quarter      Quarter
    Ended   Ended   Ended   Ended   Ended
    06/30/21   03/31/21   12/31/20   09/30/20   06/30/20
Recourse provision (recovery) for loans sold   $ (15 )   $     $ 20     $ 100     $ 20  
(Recovery) provision for loan losses   $ (767 )   $ (200 )   $ 39     $ 220     $ 448  
Net loan charge-offs (recoveries)   $ (8 )   $ (8 )   $ (9 )   $ (5 )   $ (7 )

 

       As of      As of      As of      As of      As of  
    06/30/2021   03/31/2021   12/31/2020   09/30/2020   06/30/2020  
REGULATORY CAPITAL RATIOS (BANK):                      
Tier 1 leverage ratio   10.19 % 9.99 % 9.78 % 9.64 % 10.13 %
Common equity tier 1 capital ratio   18.58 % 18.77 % 18.30 % 16.94 % 17.51 %
Tier 1 risk-based capital ratio   18.58 % 18.77 % 18.30 % 16.94 % 17.51 %
Total risk-based capital ratio   19.76 % 20.02 % 19.56 % 18.19 % 18.76 %

 

                       
    As of June 30,  
       2021      2020  
       Balance      Rate (1)      Balance      Rate (1)  
INVESTMENT SECURITIES:                      
Held to maturity:                      
Certificates of deposit   $ 1,000   0.28 % $ 800   1.53 %
U.S. SBA securities     1,858   0.60     2,064   0.60  
U.S. government sponsored enterprise MBS     220,448   1.22     115,763   1.85  
Total investment securities held to maturity   $ 223,306   1.21 % $ 118,627   1.83 %
                       
Available for sale (at fair value):                      
U.S. government agency MBS   $ 2,222   2.32 % $ 2,943   3.32 %
U.S. government sponsored enterprise MBS     1,211   2.32     1,577   3.75  
Private issue collateralized mortgage obligations     154   2.52     197   3.70  
Total investment securities available for sale   $ 3,587   2.33 % $ 4,717   3.48 %
Total investment securities   $ 226,893   1.23 % $ 123,344   1.89 %

_____________________________
(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 June 30,  
       2021      2020  
       Balance      Rate (1)      Balance      Rate (1)  
LOANS HELD FOR INVESTMENT:                      
Held to maturity:                      
Single-family (1 to 4 units)   $ 268,272     3.42 % $ 298,810     4.04 %
Multi-family (5 or more units)     484,408     4.09     491,903     4.24  
Commercial real estate     95,279     4.68     105,235     4.75  
Construction     3,040     5.84     7,801     6.35  
Other mortgage     139     5.25     143     5.25  
Commercial business     849     6.39     480     5.99  
Consumer     95     15.00     94     15.00  
Total loans held for investment     852,082     3.96 %   904,466     4.25 %
                       
Advance payments of escrows     157           68        
Deferred loan costs, net     6,308           6,527        
Allowance for loan losses     (7,587 )         (8,265 )      
Total loans held for investment, net   $ 850,960         $ 902,796        
Purchased loans serviced by others included above   $ 13,556     3.53 % $ 23,899     3.71 %

_____________________________
(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 June 30,  
       2021      2020  
       Balance      Rate (1)      Balance      Rate (1)  
DEPOSITS:                      
Checking accounts – non interest-bearing   $ 123,179   % $ 118,771   %
Checking accounts – interest-bearing     327,388   0.04     290,463   0.10  
Savings accounts     307,299   0.05     273,769   0.13  
Money market accounts     39,670   0.15     39,989   0.22  
Time deposits     140,437   0.71     169,977   0.95  
Total deposits   $ 937,973   0.15 % $ 892,969   0.26 %
                       
BORROWINGS:                      
Overnight   $   % $   %
Three months or less     10,983   1.88        
Over three to six months           15,000   2.62  
Over six months to one year     10,000   2.20     15,000   2.52  
Over one year to two years     30,000   1.92     31,047   1.90  
Over two years to three years     30,000   2.25     30,000   1.92  
Over three years to four years     20,000   2.70     30,000   2.25  
Over four years to five years           20,000   2.70  
Over five years              
Total borrowings   $ 100,983   2.19 % $ 141,047   2.23 %

_____________________________
(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  
    June 30, 2021   June 30, 2020  
       Balance      Rate (1)      Balance      Rate (1)  
SELECTED AVERAGE BALANCE SHEETS:                        
Held to maturity:                        
Loans receivable, net   $ 848,587     3.65 % $ 894,522   4.08 %
Investment securities     236,236     0.80     85,255   2.16  
FHLB – San Francisco stock     8,125     5.81     8,020   5.09  
Interest-earning deposits     69,881     0.11     135,138   0.11  
Total interest-earning assets   $ 1,162,829     2.87 % $ 1,122,935   3.46 %
Total assets   $ 1,193,534         $ 1,154,834      
                         
Deposits   $ 938,990     0.15 % $ 875,628   0.30 %
Borrowings     110,769     2.24     137,871   2.32  
Total interest-bearing liabilities   $ 1,049,759     0.37 % $ 1,013,499   0.57 %
Total stockholders’ equity   $ 125,408         $ 123,256      

_____________________________
(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.

                         
                         
    Fiscal Year Ended   Fiscal Year Ended  
       June 30, 2021      June 30, 2020  
       Balance      Rate (1)      Balance      Rate (1)  
SELECTED AVERAGE BALANCE SHEETS:                        
Held to maturity:                        
Loans receivable, net   $ 863,507     3.80 % $ 915,353   4.28 %
Investment securities     205,628     0.90     86,761   2.44  
FHLB – San Francisco stock     8,008     5.22     8,155   6.55  
Interest-earning deposits     74,952     0.10     71,766   0.90  
Total interest-earning assets   $ 1,152,095     3.06 % $ 1,082,035   3.92 %
Total assets   $ 1,183,011         $ 1,113,755      
                         
Deposits   $ 914,351     0.19 % $ 844,148   0.35 %
Borrowings     125,589     2.24     127,882   2.43  
Total interest-bearing liabilities   $ 1,039,940     0.44 % $ 972,030   0.62 %
Total stockholders’ equity   $ 124,913         $ 122,757      

_____________________________
(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.

 

PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands)

ASSET QUALITY:

                               
       As of      As of      As of      As of      As of
    06/30/21   03/31/21   12/31/20   09/30/20   06/30/20
Loans on non-accrual status (excluding restructured loans):                                   
Mortgage loans:                              
Single-family   $ 882   $ 896   $ 2,062   $ 2,084   $ 2,281
Multi-family     781     786            
Total     1,663     1,682     2,062     2,084     2,281
                               
Accruing loans past due 90 days or more:                    
Total                    
                               
Restructured loans on non-accrual status:                                   
Mortgage loans:                                   
Single-family     6,983     8,077     8,208     2,421     2,612
Commercial business loans                 27     31
Total     6,983     8,077     8,208     2,448     2,643
Total non-performing loans (1)     8,646     9,759     10,270     4,532     4,924
                               
Real estate owned, net                    
Total non-performing assets   $ 8,646   $ 9,759   $ 10,270   $ 4,532   $ 4,924

__________________________
(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.