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Provident Financial Holdings Reports Fourth Quarter and Fiscal 2020 Results

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Company Reports Net Income of $1.58 Million in the June 2020 Quarter, up 101% from the June 2019 Quarter

Non-Interest Expense Declines by 32% in the June 2020 Quarter from the June 2019 Quarter

Loans Held for Investment Increase 3% to $902.8 Million from June 30, 2019

Total Deposits Increase 6% to $893.0 Million from June 30, 2019

Non-Performing Assets Decrease 21% to $4.9 Million at June 30, 2020 in Comparison to $6.2 Million at June 30, 2019

RIVERSIDE, Calif., July 28, 2020 (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, 2020.

For the quarter ended June 30, 2020, the Company reported net income of $1.58 million, or $0.21 per diluted share (on 7.49 million average diluted shares outstanding), up from net income of $787,000, or $0.10 per diluted share (on 7.63 million average diluted shares outstanding), in the comparable period a year ago. Compared to the same quarter last year, the increase in earnings was primarily attributable to lower non-interest expenses (mainly, lower salaries and employee benefits expenses related to fewer employees and reduced incentive compensation and lower equipment expenses resulting from the scaling back of saleable single-family loan originations), partly offset by lower net interest income and a higher provision for loan losses.

Provident is profitable, strongly capitalized and well-positioned to serve the residents and businesses of the Inland Empire. We have been able to navigate the COVID-19 pandemic reasonably well and we will continue to operate the Company in a prudent manner, said Craig G. Blunden, Chairman and Chief Executive Officer of the Company. I specifically wish to recognize and thank our employees who are working diligently to support our customers and communities under unprecedented circumstances, said Mr. Blunden.

Return on average assets for the fourth quarter of fiscal 2020 was 0.55 percent, up from 0.29 percent for the same period of fiscal 2019; and return on average stockholders equity for the fourth quarter of fiscal 2020 was 5.14 percent, up from 2.60 percent for the comparable period of fiscal 2019.

On a sequential quarter basis, the $1.58 million net income for the fourth quarter of fiscal 2020 reflects a 38 percent increase from $1.14 million in the third quarter of fiscal 2020. The increase in earnings for the fourth quarter of fiscal 2020 compared to the third quarter of fiscal 2020 was primarily attributable to decreases of $902,000 in non-interest expenses and $426,000 in the provision for loan losses, partly offset by a $600,000 reduction in net interest income. Diluted earnings per share for the fourth quarter of fiscal 2020 were $0.21 per share, up 40 percent from the $0.15 per share during the third quarter of fiscal 2020. Return on average assets was 0.55 percent for the fourth quarter of fiscal 2020 compared to 0.41 percent in the third quarter of fiscal 2020; and return on average stockholders equity for the fourth quarter of fiscal 2020 was 5.14 percent, compared to 3.70 percent for the third quarter of fiscal 2020.

For the fiscal year ended June 30, 2020 net income increased $3.27 million, or 74 percent, to $7.69 million from $4.42 million in the comparable period ended June 30, 2019; and diluted earnings per share for the fiscal year ended June 30, 2020 increased 74 percent to $1.01 per share (on 7.58 million average diluted shares outstanding) from $0.58 per share (on 7.60 million average diluted shares outstanding) for the comparable 12-month period last year. Compared to the same period last year, the increase in earnings was primarily attributable to a $16.34 million decrease in non-interest expense, partly offset by a $7.99 million decrease in non-interest income (mainly, a $7.27 million decrease in the gain on sale of loans), a $1.77 million decrease in net interest income and a $1.59 million change in the provision for loan losses to a $1.12 million provision from a $475,000 recovery. The decrease in non-interest expense was mainly attributable to the scaling back of saleable single-family loan originations resulting in an $11.24 million decrease in salaries and employee benefits expenses (primarily related to fewer employees and lower incentive compensation), a $1.57 million decrease in premises and occupancy expenses, a $1.35 million decrease in equipment expenses and a $1.19 million decrease in other operating expenses (primarily decreases in loan origination related expenses).

Net interest income decreased $1.08 million, or 12 percent, to $8.29 million in the fourth quarter of fiscal 2020 from $9.37 million for the same quarter of fiscal 2019, 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 2020 decreased 57 basis points to 2.95 percent from 3.52 percent in the same quarter last year, primarily due to a decrease in the average yield of interest-earning assets, partly offset by a much smaller decrease in the average cost of interest-bearing liabilities. The average yield on interest-earning assets decreased by 60 basis points to 3.46 percent in the fourth quarter of fiscal 2020 from 4.06 percent in the same quarter last year reflecting in part recent significant decreases in the targeted Federal Funds Rate; while the average cost of interest-bearing liabilities decreased by three basis points to 0.57 percent in the fourth quarter of fiscal 2020 from 0.60 percent in the same quarter last year. The average balance of interest-earning assets increased by $58.1 million, or five percent, to $1.12 billion in the fourth quarter of fiscal 2020 from $1.06 billion in the same quarter last year. The average balance of interest-bearing liabilities increased by $58.0 million, or six percent, to $1.01 billion in the fourth quarter of fiscal 2020 from $955.5 million in the same quarter last year.

The average balance of loans receivable (including loans held for sale in the prior year) increased by $14.7 million, or two percent, to $894.5 million in the fourth quarter of fiscal 2020 from $879.8 million in the same quarter of fiscal 2019, due to an increase in loans held for investment, partly offset by a decrease in loans held for sale. There were no loans held for sale during the fourth quarter of fiscal 2020. The average yield on loans receivable decreased by 27 basis points to 4.08 percent in the fourth quarter of fiscal 2020 from an average yield of 4.35 percent in the same quarter of fiscal 2019. Net deferred loan cost amortization in the fourth quarter of fiscal 2020 increased 22% to $495,000 from $405,000 in the same quarter of fiscal 2019 due primarily to higher loan payoffs. Total loans originated and purchased for investment in the fourth quarter of fiscal 2020 were $44.2 million, down 14 percent from $51.2 million in the same quarter of fiscal 2019. Loan principal payments received in the fourth quarter of fiscal 2020 were $56.5 million, up three percent from $54.8 million in the same quarter of fiscal 2019.

The average balance of investment securities decreased by $19.7 million, or 19 percent, to $85.3 million in the fourth quarter of fiscal 2020 from $105.0 million in the same quarter of fiscal 2019. The average yield on investment securities decreased 36 basis points to 2.16 percent in the fourth quarter of fiscal 2020 from 2.52 percent for the same quarter of fiscal 2019. The decrease in the average yield was primarily attributable to investment purchases with a lower average yield, partly offset by a lower premium amortization ($110,000 vs. $148,000). During the fourth quarter of fiscal 2020, the Bank purchased investment securities totaling $54.1 million with an average yield of approximately 1.16%.

In the fourth quarter of fiscal 2020, the Federal Home Loan Bank San Francisco (FHLB) distributed a $102,000 cash dividend to the Bank on its FHLB stock, down 28 percent from $142,000 in the same quarter last year.

The average balance of the Companys interest-earning deposits, primarily cash with the Federal Reserve Bank of San Francisco, increased $63.3 million, or 88 percent, to $135.1 million in the fourth quarter of fiscal 2020 from $71.8 million in the same quarter of fiscal 2019. The average yield earned on interest-earning deposits in the fourth quarter of fiscal 2020 was 0.11 percent, down 224 basis points from 2.35 percent in the same quarter of fiscal 2019 largely as a result of decreases in the targeted Federal Funds Rate since July 2019.

Average deposits increased $21.2 million, or two percent, to $875.6 million in the fourth quarter of fiscal 2020 from $854.4 million in the same quarter of fiscal 2019, primarily due to increases in transaction accounts resulting primarily from government assistance 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 six basis points to 0.30 percent in the fourth quarter of fiscal 2020 from 0.36 percent in the same quarter last year.

Transaction account balances or core deposits increased $74.9 million, or 12 percent, to $723.0 million at June 30, 2020 from $648.1 million at June 30, 2019, while time deposits decreased $23.1 million, or 12 percent, to $170.0 million at June 30, 2020 from $193.1 million at June 30, 2019.

The average balance of borrowings, which consisted of FHLB advances, increased $36.8 million, or 36 percent, to $137.9 million while the average cost of borrowings decreased 33 basis points to 2.32 percent in the fourth quarter of fiscal 2020, compared to an average balance of $101.1 million with an average cost of 2.65 percent in the same quarter of fiscal 2019. The increase in the average balance of borrowings was primarily due to new borrowings with a lower average cost obtained during fiscal 2020.

During the fourth quarter of fiscal 2020, the Company recorded a provision for loan losses of $448,000, in contrast to a $25,000 recovery from the allowance for loan losses recorded during the same period of fiscal 2019 but lower than the provision for loan losses of $874,000 recorded in the third quarter of fiscal 2020 (sequential quarter). The provision for loan losses in the June 2020 and March 2020 quarters was primarily due to a qualitative component established in our allowance for loan losses methodology in response to the COVID-19 pandemic and its continued and forecast adverse economic impact.

Non-performing assets, with underlying collateral located in California, decreased $1.3 million, or 21 percent, to $4.9 million, or 0.42 percent of total assets, at June 30, 2020, compared to $6.2 million, or 0.57 percent of total assets, at June 30, 2019. The non-performing loans at June 30, 2020 are comprised of 18 single-family loans ($4.9 million) and one commercial business loan ($31,000). At both June 30, 2020 and June 30, 2019, there was no real estate owned.

Net loan recoveries for the quarter ended June 30, 2020 were $7,000 or 0.00 percent (annualized) of average loans receivable, in contrast to net loan recoveries of $21,000 or 0.01 percent (annualized) of average loans receivable for the quarter ended June 30, 2019 and net loan recoveries of $15,000 or 0.01 percent (annualized) of average loans receivable for the quarter ended March 31, 2020 (sequential quarter).

Classified assets at June 30, 2020 were $14.1 million, comprised of $8.6 million of loans in the special mention category, $5.5 million of loans in the substandard category and no real estate owned; while classified assets at June 30, 2019 were $16.2 million, comprised of $8.6 million of loans in the special mention category, $7.6 million of loans in the substandard category and no real estate owned.

For the quarter ended June 30, 2020, two new loans were restructured from their original terms and classified as restructured loans. The outstanding balance of restructured loans at June 30, 2020 was $2.6 million (eight loans), down 32 percent from $3.8 million (eight loans) at June 30, 2019. As of June 30, 2020, all of the restructured loans were classified as substandard non-accrual. As of June 30, 2020, 65% or $1.7 million of the restructured loans have a current payment status.

The Bank has received numerous requests from borrowers for some type of payment relief due to the COVID-19 pandemic. Since these loans were performing loans that were current on their payments prior to the COVID-19 pandemic, these restructurings are not considered to be troubled debt restructurings at June 30, 2020 pursuant to applicable accounting guidance. The primary method of relief is to allow the borrower to defer loan payments for up to six months, although we have also waived late fees and suspended foreclosure proceedings. As of June 30, 2020, there were 48 single-family loans in forbearance with outstanding balances of approximately $19.9 million or 2.20 percent of gross loans held for investment and five multi-family and commercial real estate loans in forbearance with outstanding balances of approximately $2.7 million or 0.29 percent of gross loans held for investment. Interest income is recognized during the forbearance period unless the loans are classified as non-performing. After the payment deferral period (up to six months), 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. In addition, as of June 30, 2020, the Bank had pending requests for payment relief for an additional seven loans totaling approximately $3.0 million. 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.

The allowance for loan losses was $8.3 million at June 30, 2020, or 0.91 percent of gross loans held for investment, compared to $7.1 million at June 30, 2019, or 0.80 percent of gross loans held for investment. Management believes that, based on currently available information, the allowance for loan losses is sufficient to absorb potential losses inherent in loans held for investment at June 30, 2020 under the incurred loss methodology.

Non-interest income decreased by $310,000, or 24 percent, to $1.01 million in the fourth quarter of fiscal 2020 from $1.32 million in the same period of fiscal 2019, primarily due to decreases in deposit account fees and card and processing fees reflecting reduced transactions as a result of the COVID-19 pandemic. On a sequential quarter basis, non-interest income decreased $96,000, or nine percent, primarily as a result of a decrease in deposit account fees.

Non-interest expenses decreased $3.06 million, or 32 percent, to $6.60 million in the fourth quarter of fiscal 2020 from $9.66 million in the same quarter last year resulting primarily from the scaling back of saleable single-family loan originations. The decrease was due primarily to lower salaries and employee benefits expenses resulting from fewer employees and lower incentive compensation and, to a lesser extent, reductions in equipment expenses, premises and occupancy expenses and professional expenses. On a sequential quarter basis, non-interest expenses decreased $902,000 or 12 percent to $6.60 million from $7.51 million, primarily due to lower salaries and employee benefits expenses resulting from fewer employees and lower incentive compensation.

The Companys efficiency ratio in the fourth quarter of fiscal 2020 was 71 percent, improving from 90 percent in the same quarter last year and 75 percent in the third quarter of fiscal 2020 (sequential quarter).

The Companys provision for income tax was $660,000 for the fourth quarter of fiscal 2020, up 148 percent from $266,000 in the same quarter last year primarily due to higher pre-tax income. The effective tax rate in the fourth quarter of fiscal 2020 was 29.41%. The Company believes that the tax provision recorded in the fourth quarter of fiscal 2020 reflects its current federal and state income tax obligations.

The Company did not repurchase any shares of its common stock during the quarter ended June 30, 2020. As of June 30, 2020, a total of 371,815 shares or 100 percent of the shares authorized for repurchase under the April 2020 stock repurchase plan are available to purchase.

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 29, 2020 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-844-291-6362 and referencing access code number 6176327. An audio replay of the conference call will be available through Wednesday, August 5, 2020 by dialing 1-866-207-1041 and referencing access code number 2795378.

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 Companys 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 Companys 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 Companys 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 SECs 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 2021 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) 686-606

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,

 

 

2020

 

2020

 

2019

 

2019

 

2019

 

Assets

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

  116,034

 

$

  84,250

 

$

  48,233

 

$

  54,515

 

$

  70,632

 

Investment securities held to maturity, at cost

 

118,627

 

 

69,482

 

 

77,161

 

 

85,088

 

 

94,090

 

Investment securities - available for sale, at fair value

 

4,717

 

 

4,828

 

 

5,237

 

 

5,517

 

 

5,969

 

Loans held for investment, net of allowance for loan losses of $8,265; $7,810; $6,921; $6,929 and $7,076, respectively; includes $2,258; $3,835; $4,173; $4,386 and $5,094 at fair value, respectively

 

902,796

 

 

914,307

 

 

941,729

 

 

924,314

 

 

879,925

 

Accrued interest receivable

 

3,271

 

 

3,154

 

 

3,292

 

 

3,380

 

 

3,424

 

FHLB San Francisco stock

 

7,970

 

 

8,199

 

 

8,199

 

 

8,199

 

 

8,199

 

Premises and equipment, net

 

10,254

 

 

10,606

 

 

10,967

 

 

11,215

 

 

8,226

 

Prepaid expenses and other assets

 

13,168

 

 

12,741

 

 

12,569

 

 

13,068

 

 

14,385

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

1,176,837

 

$

1,107,567

 

$

1,107,387

 

$

1,105,296

 

$

1,084,850

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders Equity

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

Non interest-bearing deposits

$

  118,771

 

$

  86,585

 

$

  85,846

 

$

  85,338

 

$

  90,184

 

Interest-bearing deposits

 

774,198

 

 

749,246

 

 

747,804

 

 

746,398

 

 

751,087

 

Total deposits

 

892,969

 

 

835,831

 

 

833,650

 

 

831,736

 

 

841,271

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings

 

141,047

 

 

131,070

 

 

131,085

 

 

131,092

 

 

101,107

 

Accounts payable, accrued interest and other liabilities

 

18,845

 

 

17,508

 

 

18,876

 

 

20,299

 

 

21,831

 

Total liabilities

 

1,052,861

 

 

984,409

 

 

983,611

 

 

983,127

 

 

964,209

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders equity:

 

 

 

 

 

 

 

 

 

 

Preferred stock, $.01 par value (2,000,000 shares authorized; none issued and outstanding)

-

 

-

 

-

 

 

-

 

 

-

 

Common stock, $.01 par value (40,000,000 shares authorized; 18,097,615; 18,097,615; 18,097,615; 18,091,865 and 18,081,365 shares issued, respectively; 7,436,315; 7,436,315; 7,483,071; 7,479,682 and 7,486,106 shares outstanding, respectively)

 

 
181

 

 


181

 

 


181

 

 

 
181

 

 


181

 

Additional paid-in capital

 

95,593

 

 

95,355

 

 

95,118

 

 

94,795

 

 

94,351

 

Retained earnings

 

194,345

 

 

193,802

 

 

193,704

 

 

192,354

 

 

190,839

 

Treasury stock at cost (10,661,300; 10,661,300; 10,614,544; 10,612,183 and 10,595,259 shares, respectively)

 

(166,247

)

 

(166,247

)

 

(165,360

)

 

(165,309

)

 

(164,891

)

Accumulated other comprehensive income, net of tax

 

104

 

 

67

 

 

133

 

 

148

 

 

161

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders equity

 

123,976

 

 

123,158

 

 

123,776

 

 

122,169

 

 

120,641

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders equity

$

1,176,837

 

$

1,107,567

 

$

1,107,387

 

$

1,105,296

 

$

1,084,850

 



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,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Interest income:

 

 

 

 

 

 

 

 

  Loans receivable, net

$

9,128

 

$

  9,576

 

$

39,145

 

$

40,092

 

  Investment securities

 

461

 

 

661

 

 

2,120

 

 

2,042

 

  FHLB San Francisco stock 

 

102

 

 

142

 

 

534

 

 

707

 

  Interest-earning deposits

 

36

 

 

426

 

 

657

 

 

1,537

 

  Total interest income

 

9,727

 

 

10,805

 

 

42,456

 

 

44,378

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

  Checking and money market deposits 

 

91

 

 

101

 

 

424

 

 

428

 

  Savings deposits

 

100

 

 

135

 

 

496

 

 

572

 

  Time deposits

 

452

 

 

530

 

 

2,023

 

 

2,381

 

  Borrowings

 

794

 

 

669

 

 

3,112

 

 

2,827

 

  Total interest expense

 

1,437

 

 

1,435

 

 

6,055

 

 

6,208

 

 

 

 

 

 

 

 

 

 

Net interest income

 

8,290

 

 

9,370

 

 

36,401

 

 

38,170

 

Provision (recovery) for loan losses

 

448

 

 

(25

)

 

1,119

 

 

(475

)

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

 

7,842

 

 

9,395

 

 

 35,282

 

 

 38,645

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

  Loan servicing and other fees

 

188

 

 

188

 

 

819

 

 

1,051

 

  (Loss) gain on sale of loans, net

 

(17

)

 

21

 

 

(132

)

 

7,135

 

  Deposit account fees

 

289

 

 

443

 

 

1,610

 

 

1,928

 

  Card and processing fees

 

333

 

 

405

 

 

1,454

 

 

1,568

 

  Other

 

212

 

 

258

 

 

769

 

 

829

 

  Total non-interest income

 

1,005

 

 

1,315

 

 

4,520

 

 

12,511

 

 

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

  Salaries and employee benefits

 

3,963

 

 

5,396

 

 

18,913

 

 

30,149

 

  Premises and occupancy 

 

862

 

 

1,133

 

 

3,465

 

 

5,038

 

  Equipment

 

274

 

 

1,141

 

 

1,129

 

 

2,474

 

  Professional expenses

 

349

 

 

493

 

 

1,439

 

 

1,864

 

  Sales and marketing expenses

 

267

 

 

312

 

 

773

 

 

980

 

  Deposit insurance premiums and regulatory
  assessments

 

 

130

 

 

 

129

 

 

 

227

 

 

 

590

 

  Other

 

758

 

 

1,053

 

 

2,954

 

 

4,141

 

  Total non-interest expense

 

6,603

 

 

9,657

 

 

28,900

 

 

45,236

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

2,244

 

 

1,053

 

 

10,902

 

 

5,920

 

Provision for income taxes

 

660

 

 

266

 

 

3,213

 

 

1,503

 

  Net income

$

  1,584

 

$

   787

 

$

  7,689

 

$

  4,417

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

  0.21

 

$

0.10

 

$

1.03

 

$

0.59

 

Diluted earnings per share

$

  0.21

 

$

0.10

 

$

1.01

 

$

0.58

 

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,

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

 

2019

 

Interest income:

 

 

 

 

 

 

 

 

 

 

  Loans receivable, net

$

   9,128

 

$

  9,622

 

$

  10,320

 

$

  10,075

 

$

   9,576

 

  Investment securities

 

461

 

 

  478

 

 

567

 

 

614

 

 

661

 

  FHLB San Francisco stock

 

102

 

 

144

 

 

145

 

 

143

 

 

142

 

  Interest-earning deposits

 

36

 

 

186

 

 

189

 

 

246

 

 

426

 

Total interest income

 

9,727

 

 

10,430

 

 

11,221

 

 

11,078

 

 

10,805

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

  Checking and money market deposits

 

91

 

 

106

 

 

117

 

 

110

 

 

101

 

  Savings deposits

 

100

 

 

131

 

 

131

 

 

134

 

 

135

 

  Time deposits

 

452

 

 

509

 

 

530

 

 

532

 

 

530

 

  Borrowings

 

794

 

 

794

 

 

804

 

 

720

 

 

669

 

Total interest expense

 

1,437

 

 

1,540

 

 

1,582

 

 

1,496

 

 

1,435

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

8,290

 

 

8,890

 

 

9,639

 

 

9,582

 

 

9,370

 

Provision (recovery) for loan losses

 

448

 

 

874

 

 

(22

)

 

(181

)

 

(25

)

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

 

 

7,842

 

 

 

8,016

 

 

 

9,661

 

 

 

9,763

 

 

 

9,395

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

  Loan servicing and other fees

 

188

 

 

131

 

 

367

 

 

133

 

 

188

 

  (Loss) gain on sale of loans, net 

 

(17

)

 

14

 

 

(43

)

 

(86

)

 

21

 

  Deposit account fees

 

289

 

 

423

 

 

451

 

 

447

 

 

443

 

  Card and processing fees

 

333

 

 

360

 

 

371

 

 

390

 

 

405

 

  Other

 

212

 

 

173

 

 

198

 

 

186

 

 

258

 

Total non-interest income

 

1,005

 

 

1,101

 

 

1,344

 

 

1,070

 

 

1,315

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

  Salaries and employee benefits

 

3,963

 

 

4,966

 

 

4,999

 

 

4,985

 

 

5,396

 

  Premises and occupancy

 

862

 

 

845

 

 

880

 

 

878

 

 

1,133

 

  Equipment

 

274

 

 

314

 

 

262

 

 

279

 

 

1,141

 

  Professional expenses

 

349

 

 

351

 

 

331

 

 

408

 

 

493

 

  Sales and marketing expenses

 

267

 

 

177

 

 

212

 

 

117

 

 

312

 

 Deposit insurance premiums and regulatory assessments

 

 

130

 

 

 

 

54

 

 

 

 

59

 

 

 

 

(16

 

)

 

 

129

 

  Other

 

758

 

 

798

 

 

811

 

 

587

 

 

1,053

 

Total non-interest expense

 

6,603

 

 

7,505

 

 

7,554

 

 

7,238

 

 

9,657

 

 

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

2,244

 

 

1,612

 

 

3,451

 

 

3,595

 

 

1,053

 

Provision for income taxes

 

660

 

 

467

 

 

1,053

 

 

1,033

 

 

266

 

Net income

$

   1,584

 

$

  1,145

 

$

  2,398

 

$

  2,562

 

$

  787

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share 

$

 0.21

 

$

 0.15

 

$

 0.32

 

$

 0.34

 

$

 0.10

 

Diluted earnings per share

$

   0.21

 

$

 0.15

 

$

 0.31

 

$

 0.33

 

$

 0.10

 

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,

 

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

SELECTED FINANCIAL RATIOS:

 

 

 

 

 

 

 

Return on average assets

 

0.55

%

 

 

0.29

%

 

 

0.69

%

 

 

0.39

%

Return on average stockholders equity

 

5.14

%

 

 

2.60

%

 

 

6.26

%

 

 

3.63

%

Stockholders equity to total assets

 

10.53

%

 

 

11.12

%

 

 

10.53

%

 

 

11.12

%

Net interest spread

 

2.89

%

 

 

3.46

%

 

 

3.30

%

 

 

3.40

%

Net interest margin

 

2.95

%

 

 

3.52

%

 

 

3.36

%

 

 

3.47

%

Efficiency ratio

 

71.04

%

 

 

90.38

%

 

 

70.62

%

 

 

89.26

%

Average interest-earning assets to average
   interest-bearing liabilities

 

110.80

%

 

 

 111.45

%

 

 

111.32

%

 

 

111.14

%

 

 

 

 

 

 

 

 

SELECTED FINANCIAL DATA:

 

 

 

 

 

 

 

Basic earnings per share

$

  0.21

 

 

$

  0.10

 

 

$

  1.03

 

 

$

  0.59

 

Diluted earnings per share

$

  0.21

 

 

$

  0.10

 

 

$

  1.01

 

 

$

  0.58

 

Book value per share

$

  16.67

 

 

$

  16.12

 

 

$

  16.67

 

 

$

  16.12

 

Shares used for basic EPS computation

 

  7,436,315

 

 

 

  7,496,457

 

 

 

 7,467,577

 

 

 

 7,484,925

 

Shares used for diluted EPS computation

 

  7,485,019

 

 

 

  7,626,661

 

 

 

7,576,182

 

 

 

7,596,268

 

Total shares issued and outstanding

 

7,436,315

 

 

 

7,486,106

 

 

 

7,436,315

 

 

 

7,486,106

 

 

 

 

 

 

 

 

 

LOANS ORIGINATED AND PURCHASED FOR INVESTMENT: 

 

 

 

 

 

 

 

Mortgage Loans:

 

 

 

 

 

 

 

Single-family

$

11,206

 

 

$

31,982

 

 

$

107,160

 

 

$

   88,666

 

Multi-family

 

32,876

 

 

 

14,513

 

 

 

122,366

 

 

 

58,836

 

Commercial real estate

 

-

 

 

 

2,882

 

 

 

14,468

 

 

 

16,559

 

Construction

 

-

 

 

 

1,846

 

 

 

3,983

 

 

 

7,159

 

Other

 

143

 

 

 

1,846

 

 

 

143

 

 

 

7,159

 

Consumer loans

- - 1 - Total loans originated and purchased for
investment$44,225 $51,223 $248,121 $171,220 LOANS ORIGINATED FOR SALE: Retail originations$ - $9,593 $ - $296,992 Wholesale originations - 4,057 - 170,102 Total loans originated for sale$ - $13,650 $ - $467,094 LOANS SOLD: Servicing released$ - $40,956 $ - $551,754 Servicing retained - 2,003 - 7,196 Total loans sold$ - $42,959 $ - $558,950


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

Quarter
Ended

Quarter
Ended

Quarter
Ended

Quarter
Ended

Quarter
Ended

06/30/20

03/31/20

12/31/19

09/30/19

06/30/19

SELECTED FINANCIAL RATIOS:

Return on average assets

0.55

%

0.41

%

0.87

%

0.95

%

0.29

%

Return on average stockholders’ equity

5.14

%

3.70

%

7.81

%

8.46

%

2.60

%

Stockholders’ equity to total assets

10.53

%

11.12

%

11.18

%

11.05

%

11.12

%

Net interest spread

2.89

%

3.23

%

3.53

%

3.58

%

3.46

%

Net interest margin

2.95

%

3.30

%

3.59

%

3.64

%

3.52

%

Efficiency ratio

71.04

%

75.12

%

68.78

%

67.95

%

90.38

%

Average interest-earning assets to average interest-bearing liabilities



110.80



%



111.39



%



111.43



%



111.61



%



111.45



%

SELECTED FINANCIAL DATA:

Basic earnings per share

$

0.21

$

0.15

$

0.32

$

0.34

$

0.10

Diluted earnings per share

$

0.21

$

0.15

$

0.31

$

0.33

$

0.10

Book value per share

$

16.67

$

16.56

$

16.54

$

16.33

$

16.12

Average shares used for basic EPS

7,436,315

7,468,932

7,482,300

7,482,435

7,496,457

Average shares used for diluted EPS

7,485,019

7,590,348

7,658,050

7,647,763

7,626,661

Total shares issued and outstanding

7,436,315

7,436,315

7,483,071

7,479,682

7,486,106

LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:

Mortgage Loans:

Single-family

$

11,206

$

9,654

$

52,671

$

33,629

$

31,982

Multi-family

32,876

12,850

20,164

56,476

14,513

Commercial real estate

-

5,570

6,479

2,419

2,882

Construction

-

774

2,313

896

1,846

Other

143

-

-

-

-

Consumer loans

-

-

1

-

-

Total loans originated and purchased for
investment

$

44,225

$

28,848

$

81,628

$

93,420

$

51,223

LOANS ORIGINATED FOR SALE:

Retail originations

$

-

$

-

$

-

$

-

$

9,593

Wholesale originations

-

-

-

-

4,057

Total loans originated for sale

$

-

$

-

$

-

$

-

$

13,650

LOANS SOLD:

Servicing released

$

-

$

-

$

-

$

-

$

40,956

Servicing retained

-

-

-

-

2,003

Total loans sold

$

-

$

-

$

-

$

-

$

42,959




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

As of

As of

As of

As of

As of

06/30/20

03/31/20

12/31/19

09/30/19

06/30/19

ASSET QUALITY RATIOS AND DELINQUENT LOANS:

Recourse reserve for loans sold

$

270

$

250

$

250

$

250

$

250

Allowance for loan losses

$

8,265

$

7,810

$

6,921

$

6,929

$

7,076

Non-performing loans to loans held for
investment, net



0.55



%



0.40



%



0.36



%



0.57



%



0.71



%

Non-performing assets to total assets

0.42

%

0.33

%

0.31

%

0.47

%

0.57

%

Allowance for loan losses to gross loans held

for investment .

0.91

%

0.85

%

0.73

%

0.74

%

0.80

%

Net loan charge-offs (recoveries) to average loans receivable (annualized)

0.00

%

(0.01

)%

(0.01

)%

(0.02

)%

(0.01

)%

Non-performing loans

$

4,924

$

3,635

$

3,427

$

5,230

$

6,218

Loans 30 to 89 days delinquent

$

219

$

2,827

$

986

$

990

$

665


Quarter
Ended

Quarter
Ended

Quarter
Ended

Quarter
Ended

Quarter
Ended

06/30/20

03/31/20

12/31/19

09/30/19

06/30/19

Provision (recovery) for loan losses

$

448

$

(874

)

$

(22

)

$

(81

)

$

(25

)

Net loan charge-offs (recoveries)

$

(7

)

$

(15

)

$

(14

)

$

(34

)

$

(21

)

As of

As of

As of

As of

As of

06/30/20

03/31/20

12/31/19

09/30/19

06/30/19

REGULATORY CAPITAL RATIOS (BANK):

Tier 1 leverage ratio

10.13

%

10.36

%

10.24

%

10.21

%

10.50

%

Common equity tier 1 capital ratio

17.51

%

17.26

%

16.62

%

16.32

%

18.00

%

Tier 1 risk-based capital ratio

17.51

%

17.26

%

16.62

%

16.32

%

18.00

%

Total risk-based capital ratio

18.76

%

18.45

%

17.65

%

17.37

%

19.13

%


As of June 30,

2020

2019

Balance

Rate(1)

Balance

Rate(1)

INVESTMENT SECURITIES:

Held to maturity:

Certificates of deposit

$

800

1.53

%

$

800

2.63

%

U.S. SBA securities

2,064

0.60

2,896

2.85

U.S. government sponsored enterprise MBS

115,763

1.85

90,394

2.84

Total investment securities held to maturity

$

118,627

1.83

%

$

94,090

2.84

%

Available for sale (at fair value):

U.S. government agency MBS

$

2,943

3.32

%

$

3,613

3.86

%

U.S. government sponsored enterprise MBS

1,577

3.75

2,087

4.75

Private issue collateralized mortgage obligations

197

3.70

269

4.66

Total investment securities available for sale

$

4,717

3.48

%

$

5,969

4.21

%

Total investment securities

$

123,344

1.89

%

$

100,059

2.92

%


(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,

2020

2019

Balance

Rate(1)

Balance

Rate(1)

LOANS HELD FOR INVESTMENT:

Held to maturity:

Single-family (1 to 4 units)

$

298,810

4.04

%

$

324,952

4.50

%

Multi-family (5 or more units)

491,903

4.24

439,041

4.52

Commercial real estate

105,235

4.75

111,928

4.92

Construction

7,801

6.35

4,638

7.34

Other

143

5.25

167

6.50

Commercial business

480

5.99

478

6.72

Consumer

94

15.00

134

15.50

Total loans held for investment

904,466

4.25

%

881,338

4.58

%

Advance payments of escrows

68

53

Deferred loan costs, net

6,527

5,610

Allowance for loan losses

(8,265

)

(7,076

)

Total loans held for investment, net

$

902,796

$

879,925

Purchased loans serviced by others included above

$

23,899

3.71

%

$

33,934

3.78

%

(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,

2020

2019

Balance

Rate(1)

Balance

Rate(1)

DEPOSITS:

Checking accounts – non interest-bearing

$

118,771

-

%

$

90,184

-

%

Checking accounts – interest-bearing

290,463

0.10

257,909

0.12

Savings accounts

273,769

0.13

264,387

0.20

Money market accounts

39,989

0.22

35,646

0.28

Time deposits

169,977

0.95

193,145

1.12

Total deposits

$

892,969

0.26

%

$

841,271

0.37

%

BORROWINGS:

Overnight

$

-

-

%

$

-

-

%

Three months or less

-

-

-

-

Over three to six months

15,000

2.62

-

-

Over six months to one year

15,000

2.52

-

-

Over one year to two years

31,047

1.90

20,000

3.85

Over two years to three years

30,000

1.92

21,107

2.06

Over three years to four years

30,000

2.25

10,000

2.25

Over four years to five years

20,000

2.70

30,000

2.25

Over five years

-

-

20,000

2.70

Total borrowings

$

141,047

2.23

%

$

101,107

2.62

%

(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, 2020

June 30, 2019

Balance

Rate(1)

Balance

Rate(1)

SELECTED AVERAGE BALANCE SHEETS:

Held to maturity:

Loans receivable, net (2)

$

894,522

4.08

%

$

879,835

4.35

%

Investment securities

85,255

2.16

105,024

2.52

FHLB – San Francisco stock

8,020

5.09

8,199

6.93

Interest-earning deposits

135,138

0.11

71,768

2.35

Total interest-earning assets

$

1,122,935

3.46

%

$

1,064,826

4.06

%

Total assets

$

1,154,834

$

1,095,818

Deposits

$

875,628

0.30

%

$

854,359

0.36

%

Borrowings

137,871

2.32

101,112

2.65

Total interest-bearing liabilities

$

1,013,499

0.57

%

$

955,471

0.60

%

Total stockholders’ equity

$

123,256

$

121,129

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

(2) Includes loans held for sale at fair value for the quarter ended June 30, 2019.

Fiscal Year Ended

Fiscal Year Ended

June 30, 2020

June 30, 2019

Balance

Rate(1)

Balance

Rate(1)

SELECTED AVERAGE BALANCE SHEETS:

Held to maturity:

Loans receivable, net (2)

$

915,353

4.28

%

$

926,003

4.33

%

Investment securities

86,761

2.44

97,870

2.09

FHLB – San Francisco stock

8,155

6.55

8,199

8.62

Interest-earning deposits

71,766

0.90

67,816

2.24

Total interest-earning assets

$

1,082,035

3.92

$

1,099,888

4.03

%

Total assets

$

1,113,755

$

1,130,666

Deposits

$

844,148

0.35

%

$

880,118

0.38

%

Borrowings

127,882

2.43

109,558

2.58

Total interest-bearing liabilities

$

972,030

0.62

$

989,676

0.63

%

Total stockholders’ equity

$

122,757

$

121,702

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

(2) Includes loans held for sale at fair value for the fiscal year ended June 30, 2019.


PROVIDENT FINANCIAL HOLDINGS, INC.
Asset Quality(1)
(Unaudited – Dollars in Thousands)

As of

As of

As of

As of

As of

06/30/20

03/31/20

12/31/19

09/30/19

06/30/19

Loans on non-accrual status (excluding restructured loans):

Mortgage loans:

Single-family

$

2,281

$

1,875

$

1,607

$

2,737

$

3,315

Construction

-

-

-

1,139

971

Total

2,281

1,875

1,607

3,876

4,286

Accruing loans past due 90 days or more:

-

-

-

-

-

Total

-

-

-

-

-

Restructured loans on non-accrual status:

Mortgage loans:

Single-family

2,612

1,726

1,783

1,316

1,891

Commercial business loans

31

34

37

38

41

Total

2,643

1,760

1,820

1,354

1,932

Total non-performing loans

4,924

3,635

3,427

5,230

6,218

Real estate owned, net

-

-

-

-

-

Total non-performing assets

$

4,924

$

3,635

$

3,427

$

5,230

$

6,218


(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.