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Provident Financial Holdings Reports Fourth Quarter and Fiscal 2019 Results

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  
                     


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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 %