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Provident Financial Holdings Reports Fourth Quarter and Fiscal 2019 Results

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Provident Financial Holdings Reports Fourth Quarter and Fiscal 2019 Results

RIVERSIDE, Calif., July 30, 2019 (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, 2019.

For the quarter ended June 30, 2019, the Company reported net income of $787,000, or $0.10 per diluted share (on 7.63 million average diluted shares outstanding), down 44 percent from the net income of $1.40 million, or $0.18 per diluted share (on 7.59 million average diluted shares outstanding), in the comparable period a year ago. Compared to the same quarter last year, the decrease in earnings was primarily attributable to a $3.02 million decrease in the gain on sale of loans and a $744,000 increase in equipment expenses, partly offset by a $2.72 million decrease in salaries and employee benefits expense and a $604,000 decrease in the provision for income taxes.

“I am pleased with how we have positioned the Company to take advantage of future opportunities. Capital levels are strong and consistent with our business plan and capital management goals. Our credit quality metrics are very good resulting from our disciplined credit culture, our net interest margin has improved during the fiscal year as a result of our strong deposit franchise, and we are well positioned to capitalize on growth opportunities in the markets we serve,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company. “Additionally, we have largely completed the process of scaling back our operations regarding the origination of salable single-family mortgage loans but we still have some work to do in improving the volume of portfolio single-family mortgage loan originations,” Mr. Blunden concluded.

Return on average assets for the fourth quarter of fiscal 2019 was 0.29 percent compared to 0.48 percent for the same period of fiscal 2018; and return on average stockholders’ equity for the fourth quarter of fiscal 2019 was 2.60 percent compared to 4.65 percent for the comparable period of fiscal 2018.

On a sequential quarter basis, the $787,000 net income for the fourth quarter of fiscal 2019 reflects a $938,000 increase from the net loss of $151,000 in the third quarter of fiscal 2019. The increase in earnings for the fourth quarter of fiscal 2019 compared to the net loss in the third quarter of fiscal 2019 was primarily attributable to a $3.90 million decrease in salaries and employee benefit expenses, partly offset by a $1.70 million decrease in the gain on sale of loans, a $724,000 increase in equipment expenses and the $266,000 provision for income taxes in the fourth quarter of fiscal 2019 in contrast to the $189,000 benefit from income taxes in the third quarter of fiscal 2019 (a $455,000 difference). Diluted earnings (loss) per share for the fourth quarter of fiscal 2019 were $0.10 per share, up from the $(0.02) loss per share during the third quarter of fiscal 2019. Return (loss) on average assets was 0.29 percent for the fourth quarter of fiscal 2019 compared to (0.05) percent in the third quarter of fiscal 2019; and return (loss) on average stockholders’ equity for the fourth quarter of fiscal 2019 was 2.60 percent, compared to (0.49) percent for the third quarter of fiscal 2019.

For the fiscal year ended June 30, 2019 net income increased $2.29 million, or 107 percent, to $4.42 million from $2.13 million in the comparable period ended June 30, 2018; and diluted earnings per share for the fiscal year ended June 30, 2019 increased 107 percent to $0.58 per share (on 7.60 million average diluted shares outstanding) from $0.28 per share (on 7.70 million average diluted shares outstanding) for the prior fiscal year. Compared to the last fiscal year, the increase in earnings was primarily attributable to (a) the one-time, non-cash, net tax charge of $1.87 million from the net deferred tax assets revaluation required by the Tax Cuts and Jobs Act consistent with the lower corporate federal income tax rate applied in the second quarter of fiscal 2018 (not replicated this fiscal year), (b) the $3.42 million litigation reserve recognized in fiscal 2018 (not replicated this fiscal year), (c) a $1.87 million increase in net interest income, (d) a $4.67 million decrease in salaries and employee benefits expense and (e) the application of the lower statutory income tax rate of 29.56% this fiscal year as compared to the blended statutory income tax rate of 35.86% during last fiscal year, partly offset by an $8.67 million decrease in the gain on sale of loans, a $524,000 decrease in loan servicing and other fees and an $898,000 increase in equipment expenses.

Net interest income increased $63,000, or one percent, to $9.37 million in the fourth quarter of fiscal 2019 from $9.31 million for the same quarter of fiscal 2018, attributable to an increase in the net interest margin, partly offset by a lower average interest-earning assets balance. The net interest margin during the fourth quarter of fiscal 2019 increased 24 basis points to 3.52 percent from 3.28 percent in the same quarter last year, primarily due to an increase in the average yield of interest-earning assets resulting primarily from the rise in interest rates over the last year and a slight decrease in the average cost of interest-bearing liabilities. The average yield on interest-earning assets increased by 22 basis points to 4.06 percent in the fourth quarter of fiscal 2019 from 3.84 percent in the same quarter last year; while the average cost of interest-bearing liabilities decreased by three basis points to 0.60 percent in the fourth quarter of fiscal 2019 from 0.63 percent in the same quarter last year. The average balance of interest-earning assets decreased by $71.0 million, or six percent, to $1.06 billion in the fourth quarter of fiscal 2019 from $1.14 billion in the same quarter last year. The average balance of interest-bearing liabilities decreased by $72.1 million, or seven percent, to $955.5 million in the fourth quarter of fiscal 2019 from $1.03 billion in the same quarter last year.

The average balance of loans receivable, including loans held for sale, decreased by $106.6 million, or 11 percent, to $879.8 million in the fourth quarter of fiscal 2019 from $986.4 million in the same quarter of fiscal 2018, primarily due to decreases in both the average balance of loans held for sale (attributable to the previously disclosed scaling back of saleable single-family loan originations) and, to a lesser extent, loans held for investment. The average yield on loans receivable increased by 22 basis points to 4.35 percent in the fourth quarter of fiscal 2019 from an average yield of 4.13 percent in the same quarter of fiscal 2018 reflecting the rise in interest rates over the last year as the predominantly adjustable rate loan portfolio repriced upward and new loans were originated at higher market interest rates. Also, the increase in the average loan yield was attributable to an increase in the average yield of loans held for investment, partly offset by a decrease in the average yield of loans held for sale. The average balance of loans held for investment in the fourth quarter of fiscal 2019 was $872.0 million with an average yield of 4.35 percent, down from $904.8 million with an average yield of 4.09 percent in the same quarter of fiscal 2018. The average balance of loans held for sale in the fourth quarter of fiscal 2019 was $7.8 million with an average yield of 4.29 percent, down from $81.6 million with an average yield of 4.56 percent in the same quarter of fiscal 2018. Loan principal payments received in the fourth quarter of fiscal 2019 were $54.8 million, compared to $64.6 million in the same quarter of fiscal 2018.

The average balance of investment securities increased by $5.2 million, or five percent, to $105.0 million in the fourth quarter of fiscal 2019 from $99.8 million in the same quarter of fiscal 2018. The increase was primarily attributable to purchases of mortgage-backed securities, partly offset by principal payments received on mortgage-backed securities. The average yield on investment securities increased 97 basis points to 2.52 percent in the fourth quarter of fiscal 2019 from 1.55 percent for the same quarter of fiscal 2018. The increase in the average yield was primarily attributable to purchases of mortgage-backed securities which had higher average yields than the existing portfolio and the repricing of variable rate investment securities to higher market interest rates.

In the fourth quarter of fiscal 2019, the Federal Home Loan Bank – San Francisco (“FHLB”) distributed $142,000 of quarterly cash dividends to the Bank on its FHLB stock, slightly higher than the amount received 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, increased $30.3 million, or 73 percent, to $71.8 million in the fourth quarter of fiscal 2019 from $41.5 million in the same quarter of fiscal 2018. The average yield earned on interest-earning deposits in the fourth quarter of fiscal 2019 was 2.35 percent, up 51 basis points from 1.84 percent in the same quarter of fiscal 2018 as a result of the impact of increases in the targeted federal funds rate.

Average deposits decreased $55.6 million, or six percent, to $854.4 million in the fourth quarter of fiscal 2019 from $910.0 million in the same quarter of fiscal 2018. The average cost of deposits remained relatively stable, decreasing by two basis points to 0.36 percent in the fourth quarter of fiscal 2019 from 0.38 percent in the same quarter last year. Transaction account balances or “core deposits” decreased $21.9 million, or three percent, to $648.1 million at June 30, 2019 from $670.0 million at June 30, 2018, while time deposits decreased $44.5 million, or 19 percent, to $193.1 million at June 30, 2019 from $237.6 million at June 30, 2018, consistent with the Bank’s strategy to decrease the percentage of time deposits in its deposit base and its asset/liability objectives.

The average balance of borrowings, which consisted of FHLB advances, decreased $16.6 million, or 14 percent, to $101.1 million while the average cost of borrowings increased 12 basis points to 2.65 percent in the fourth quarter of fiscal 2019, compared to an average balance of $117.7 million with an average cost of 2.53 percent in the same quarter of fiscal 2018. The decrease in the average balance of borrowings was primarily due to the early payoff of $10.0 million of long-term FHLB advances and the maturity of short-term FHLB advances.

During the fourth quarter of fiscal 2019, the Company recorded a recovery from the allowance for loan losses of $25,000, as compared to a recovery from the allowance for loan losses of $189,000 recorded during the same period of fiscal 2018 and a provision for loan losses of $4,000 recorded in the third quarter of fiscal 2019 (sequential quarter).

Non-performing assets, with underlying collateral located in California, decreased $745,000, or 11 percent, to $6.2 million, or 0.57 percent of total assets, at June 30, 2019, compared to $7.0 million, or 0.59 percent of total assets, at June 30, 2018. Non-performing loans increased slightly to $6.2 million at June 30, 2019 from $6.1 million at June 30, 2018. The non-performing loans at June 30, 2019 are comprised of 20 single-family loans ($5.2 million), one construction loan ($971,000) and one commercial business loan ($41,000). At June 30, 2019, there was no outstanding real estate owned as compared to $906,000 at June 30, 2018.

Net loan recoveries for the quarter ended June 30, 2019 were $21,000 or 0.01 percent (annualized) of average loans receivable, compared to net loan recoveries of $43,000 or 0.02 percent (annualized) of average loans receivable for the quarter ended June 30, 2018 and net loan recoveries of $15,000 or 0.01 percent (annualized) of average loans receivable for the quarter ended March 31, 2019 (sequential quarter).

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; while classified assets at June 30, 2018 were $15.8 million, comprised of $7.5 million of loans in the special mention category, $7.4 million of loans in the substandard category and $906,000 in real estate owned.

For the quarter ended June 30, 2019, no new loans were restructured from their original terms and classified as restructured loans, while two previously restructured loans were upgraded to the pass category. The outstanding balance of restructured loans at June 30, 2019 was $3.8 million (eight loans), down 27 percent from $5.2 million (11 loans) at June 30, 2018, and down 17 percent from $4.6 million (10 loans) at March 31, 2019 (sequential quarter). As of June 30, 2019, one restructured loan was classified as special mention ($437,000), one restructured loan was classified as substandard accrual ($1.4 million) and six restructured loans were classified as substandard non-accrual ($1.9 million). As of June 30, 2019, 63% or $2.4 million of the restructured loans have a current payment status.

The allowance for loan losses was $7.1 million at June 30, 2019, or 0.80 percent of gross loans held for investment, compared to $7.4 million at June 30, 2018, or 0.81 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 June 30, 2019.

Non-interest income decreased by $3.27 million, or 71 percent, to $1.32 million in the fourth quarter of fiscal 2019 from $4.59 million in the same period of fiscal 2018, primarily as a result of a decrease in the gain on sale of loans during the current quarter as compared to the comparable period last year. On a sequential quarter basis, non-interest income decreased $1.73 million, or 57 percent, primarily as a result of the decline in the gain on sale of loans.

The gain on sale of loans decreased $3.02 million, to $21,000 for the quarter ended June 30, 2019 from $3.04 million in the comparable quarter last year (reflecting primarily the impact of a substantially lower loan sale volume resulting from the previously disclosed scaling back of the saleable single-family loan originations) and decreased $1.70 million from the quarter ended March 31, 2019 (sequential quarter). Total loan sale volume, which includes the net change in commitments to extend credit on loans to be held for sale, was $1.7 million in the quarter ended June 30, 2019, down from $236.3 million in the comparable quarter last year and $95.8 million in the quarter ended March 31, 2019 (sequential quarter). The average loan sale margin from mortgage banking was 123 basis points for the quarter ended June 30, 2019, a decrease of six basis points from 129 basis points in the same quarter last year, and 56 basis points lower than the 179 basis points in the third quarter of fiscal 2019 (sequential quarter). The gain on sale of loans includes unfavorable/favorable fair-value adjustments on loans held for sale and derivative financial instruments (commitments to extend credit, commitments to sell loans, commitments to sell mortgage-backed securities, and option contracts) that amounted to a net loss of $951,000 in the fourth quarter of fiscal 2019, compared to a net gain of $85,000 in the same period last year and a net loss of $778,000 in the third quarter of fiscal 2019 (sequential quarter).

In the fourth quarter of fiscal 2019, $13.7 million of loans were originated for sale, compared to $241.6 million for the same period last year and $110.7 million during the third quarter of fiscal 2019 (sequential quarter). The loan origination volume decreased from the previous year as a result of market conditions and the scaling back of the saleable single-family mortgage loan originations. Total loans sold during the quarter ended June 30, 2019 were $43.0 million, compared to $233.9 million sold during the same quarter last year and $136.7 million sold during the third quarter of fiscal 2019 (sequential quarter). Total loan originations (including loans originated and purchased for investment and loans originated for sale) were $64.9 million in the fourth quarter of fiscal 2019, a decrease from $312.4 million in the same quarter of fiscal 2018, and lower than the $154.7 million in the third quarter of fiscal 2019 (sequential quarter).

Non-interest expenses decreased $2.16 million, or 18 percent, to $9.66 million in the fourth quarter of fiscal 2019 from $11.82 million in the same quarter last year. The decrease was primarily due to a $2.72 million decrease in salaries and employee benefits expense, partly offset by a $744,000 increase in equipment expenses. The decrease in salaries and employee benefits expense was primarily attributable to the staff reductions in mortgage banking operations and lower variable compensation expenses resulting from a lower volume of loans originated for sale. On a sequential quarter basis, non-interest expenses decreased $3.34 million or 26 percent from $13.00 million, primarily as a result of a $3.90 million decrease in salaries and employee benefits expense (attributable primarily to the staff reductions in mortgage banking operations and lower variable compensation expenses resulting from lower loans originated for sale).

Consistent with the Company’s announcement on February 4, 2019 that it was in the best interests of the Company to scale back the saleable single-family mortgage loan originations and improve on its efforts to increase the volume of portfolio single-family mortgage loan originations, the Company recognized non-recurring costs of $2.80 million ($1.20 million in the June 2019 quarter and $1.60 million in the March 2019 quarter), which is comprised of $1.70 million in salaries and employee benefits expenses (attributable to severance and other personnel expenses), $337,000 in premises and occupancy expenses (attributable to accelerated lease expenses and accelerated depreciation of furniture and fixtures), and $758,000 in equipment expenses (attributable to termination, charge-off, or modification of data processing and other contractual arrangements). Additionally, in fiscal 2020, the Company will incur approximately $147,000 in salaries and employee benefits expense (approximately $12,000 per month) as a result of retention bonuses paid to certain key staff critical to growing portfolio single-family loan originations. The $2.9 million of non-recurring costs ($2.8 million recognized in fiscal 2019 and approximately $147,000 to be recognized in fiscal 2020) is lower than the initial range reported which was estimated at $3.6 million to $4.0 million. The Company does not anticipate any additional non-recurring costs.

The Company’s efficiency ratio in the fourth quarter of fiscal 2019 was 90 percent, an increase from 85 percent in the same quarter last year but an improvement from 103 percent in the third quarter of fiscal 2019 (sequential quarter).

The Company’s provision for income tax was $266,000 for the fourth quarter of fiscal 2019, down 69 percent from $870,000 in the same quarter last year, which includes the application of the lower statutory income tax rate of 29.56% in fiscal 2019 versus a blended statutory income tax rate of 35.86% in fiscal 2018. The Company believes that the tax provision recorded in the fourth quarter of fiscal 2019 reflects its current federal and state income tax obligations.

The Company repurchased 28,251 shares of its common stock during the quarter ended June 30, 2019 at an average cost of $20.06 per share. As of June 30, 2019, a total of 51,999 shares of the April 2018 stock repurchase plan have been purchased at an average cost of $19.74 per share, leaving 321,001 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 Wednesday, July 31, 2019 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-800-230-1093 and requesting the Provident Financial Holdings Earnings Release Conference Call. An audio replay of the conference call will be available through Wednesday, August 7, 2019 by dialing 1-800-475-6701 and referencing access code number 470314.

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

Donavon P. Ternes

Chairman and

President, Chief Operating Officer,

Chief Executive Officer

and Chief Financial Officer


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,

2019

2019

2018

2018

2018

Assets

Cash and cash equivalents ………………….

$

70,632

$

61,458

$

67,359

$

78,928

$

43,301

Investment securities – held to maturity, at cost ……………………………………….

94,090

102,510

84,990

79,611

87,813

Investment securities - available for sale, at fair value …………………………………

5,969

6,294

6,563

7,033

7,496

Loans held for investment, net of allowance for loan losses of $7,076; $7,080; $7,061; $7,155 and $7,385 respectively; includes $5,094; $5,239; $4,995; $4,945 and $5,234 at fair value, respectively …………………

879,925

883,554

875,413

877,091

902,685

Loans held for sale, at fair value ……………

-

30,500

57,562

78,794

96,298

Accrued interest receivable …………………

3,424

3,386

3,156

3,350

3,212

Real estate owned, net ………………………

-

-

-

524

906

FHLB – San Francisco stock ……………….

8,199

8,199

8,199

8,199

8,199

Premises and equipment, net ……………….

8,226

8,395

8,601

8,779

8,696

Prepaid expenses and other assets ………….

14,385

15,099

15,327

15,171

16,943

Total assets ………………………………

$

1,084,850

$

1,119,395

$

1,127,170

$

1,157,480

$

1,175,549

Liabilities and Stockholders’ Equity

Liabilities:

Non interest-bearing deposits ………………

$

90,184

$

90,875

$

78,866

$

87,250

$

86,174

Interest-bearing deposits ……………………

751,087

786,009

794,018

814,862

821,424

Total deposits

841,271

876,884

872,884

902,112

907,598

Borrowings …………………………………

101,107

101,121

111,135

111,149

126,163

Accounts payable, accrued interest and other liabilities…………………………………...

21,831

20,181

20,474

22,539

21,331

Total liabilities……………………………

964,209

998,186

1,004,493

1,035,800

1,055,092

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; 18,081,365; 18,064,365; 18,053,115; 18,048,115 and 18,033,115 shares issued, respectively; 7,486,106; 7,497,357; 7,506,855; 7,500,860 and 7,421,426 shares outstanding, respectively)

181

181

181

181

181

Additional paid-in capital …………………..

94,351

96,114

95,913

95,795

94,957

Retained earnings …………………………..

190,839

191,103

192,306

191,399

190,616

Treasury stock at cost (10,559,259; 10,567,008; 10,546,260; 10,547,255 and 10,611,689 shares, respectively) ………….

(164,891

)

(166,352

)

(165,892

)

(165,884

)

(165,507

)

Accumulated other comprehensive income, net of tax …………………………………..

161

163

169

189

210

Total stockholders’ equity ……………….

120,641

121,209

122,677

121,680

120,457

Total liabilities and stockholders’ equity …

$

1,084,850

$

1,119,395

$

1,127,170

$

1,157,480

$

1,175,549


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

Quarter Ended
June 30,

Fiscal Year Ended
June 30,

2019

2018

2019

2018

Interest income:

Loans receivable, net ……………………………

$ 9,576

$ 10,191

$ 40,092

$ 40,016

Investment securities ……………………………

661

386

2,042

1,344

FHLB – San Francisco stock ……………..…….

142

140

707

568

Interest-earning deposits ………………………..

426

193

1,537

784

Total interest income ……………………………

10,805

10,910

44,378

42,712

Interest expense:

Checking and money market deposits …………

101

96

428

407

Savings deposits ……………………………......

135

150

572

595

Time deposits …………………………………..

530

616

2,381

2,493

Borrowings ……………………………………..

669

741

2,827

2,917

Total interest expense …………………………..

1,435

1,603

6,208

6,412

Net interest income …………………………………

9,370

9,307

38,170

36,300

Recovery from the allowance for loan losses ……...

(25

)

(189

)

(475

)

(536

)

Net interest income, after recovery from the allowance for loan losses …………………………

9,395

9,496

38,645

36,836

Non-interest income:

Loan servicing and other fees……………………

188

402

1,051

1,575

Gain on sale of loans, net………………………..

21

3,041

7,135

15,802

Deposit account fees ……………………………

443

496

1,928

2,119

Loss on sale and operations of real estate owed acquired in the settlement of loans …………..

-

(5

)

(4

)

(86

)

Card and processing fees ……………………….

405

415

1,568

1,541

Other…………………………………………….

258

243

833

944

Total non-interest income……………………….

1,315

4,592

12,511

21,895

Non-interest expense:

Salaries and employee benefits………………….

5,396

8,111

30,149

34,821

Premises and occupancy………………………...

1,133

1,305

5,038

5,134

Equipment……………………………………….

1,141

397

2,474

1,576

Professional expenses…………………………...

493

471

1,864

1,912

Sales and marketing expenses…………………..

312

322

980

1,039

Deposit insurance premiums and regulatory assessments ……………………………………

129

158

590

749

Other…………………………………………….

1,053

1,054

4,141

7,973

Total non-interest expense………………………

9,657

11,818

45,236

53,204

Income before taxes ………………………………..

1,053

2,270

5,920

5,527

Provision for income taxes …………………………

266

870

1,503

3,396

Net income ……………………………………...

$ 787

$ 1,400

$ 4,417

$ 2,131

Basic earnings per share ………………………….

$ 0.10

$ 0.19

$ 0.59

$ 0.28

Diluted earnings per share ……………………….

$ 0.10

$ 0.18

$ 0.58

$ 0.28

Cash dividends 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,

2019

2019

2018

2018

2018

Interest income:

Loans receivable, net ………………………….

$ 9,576

$ 10,011

$ 10,331

$ 10,174

$ 10,191

Investment securities ………………………….

661

592

444

345

386

FHLB – San Francisco stock ………………….

142

144

278

143

140

Interest-earning deposits ………………………

426

386

387

338

193

Total interest income ………………………

10,805

11,133

11,440

11,000

10,910

Interest expense:

Checking and money market deposits ………...

101

102

117

108

96

Savings deposits ……………………………….

135

139

147

151

150

Time deposits ………………………………….

530

600

630

621

616

Borrowings …………………………………….

669

680

715

763

741

Total interest expense ………………………

1,435

1,521

1,609

1,643

1,603

Net interest income ………………………………..

9,370

9,612

9,831

9,357

9,307

Provision (recovery) for loan losses ………………

(25

)

4

(217

)

(237

)

(189

)

Net interest income, after provision (recovery) for loan losses ……………………………………….

9,395

9,608

10,048

9,594

9,496

Non-interest income:

Loan servicing and other fees ………………….

188

262

277

324

402

Gain on sale of loans, net ……………………...

21

1,719

2,263

3,132

3,041

Deposit account fees ……………………………

443

471

509

505

496

Gain (loss) on sale and operations of real estate owned acquired in the settlement of loans, net

-

2

(7

)

1

(5

)

Card and processing fees ……………………….

405

373

392

398

415

Other ……………………………………………

258

225

161

189

243

Total non-interest income …………………..

1,315

3,052

3,595

4,549

4,592

Non-interest expense:

Salaries and employee benefits ………………..

5,396

9,292

7,211

8,250

8,111

Premises and occupancy ………………………

1,133

1,286

1,274

1,345

1,305

Equipment ……………………………………...

1,141

417

495

421

397

Professional expenses ………………………….

493

513

411

447

471

Sales and marketing expenses …………………

312

246

253

169

322

Deposit insurance premiums and regulatory assessments …………………………………..

129

124

172

165

158

Other ……………………………………………

1,053

1,122

1,059

907

1,054

Total non-interest expense ………………….

9,657

13,000

10,875

11,704

11,818

Income (loss) before taxes …………………………

1,053

(340

)

2,768

2,439

2,270

Provision (benefit) for income taxes ………………

266

(189

)

810

616

870

Net income (loss) …………………………………

$ 787

$ (151

)

$ 1,958

$ 1,823

$ 1,400

Basic earnings (loss) per share ………………….

$ 0.10

$ (0.02

)

$ 0.26

$ 0.25

$ 0.19

Diluted earnings (loss) per share ………………..

$ 0.10

$ (0.02

)

$ 0.26

$ 0.24

$ 0.18

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
June 30,

Fiscal Year Ended
June 30,

2019

2018

2019

2018

SELECTED FINANCIAL RATIOS:

Return on average assets ………………………

0.29

%

0.48

%

0.39

%

0.18

%

Return on average stockholders’ equity ………

2.60

%

4.65

%

3.63

%

1.73

%

Stockholders’ equity to total assets ……………

11.12

%

10.25

%

11.12

%

10.25

%

Net interest spread ……………………………..

3.46

%

3.21

%

3.40

%

3.13

%

Net interest margin …………………………….

3.52

%

3.28

%

3.47

%

3.19

%

Efficiency ratio …………………………………

90.38

%

85.03

%

89.26

%