Categories: Wire Stories

Provident Financial Holdings Reports�Fourth Quarter and Fiscal Year 2022 Results

Net Income of $2.46 Million in the June 2022 Quarter

Net Income of $9.09 Million for Fiscal 2022

Net Interest Margin Expands 32 Basis Points in Comparison
to the Prior Sequential Quarter

Loans Held for Investment Increase 11% from June 30, 2021 to $940.0 Million

Total Deposits Increase 2% from June 30, 2021 to $955.5 Million

Improved Asset Quality with a $411,000 Recovery from the Allowance for Loan Losses

Non-Interest Expenses Remain Well-Controlled

RIVERSIDE, Calif., July 26, 2022 (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 for the fiscal year ended June 30, 2022.

For the quarter ended June 30, 2022, the Company reported net income of $2.46 million, or $0.34 per diluted share (on 7.32 million average diluted shares outstanding), down 26 percent from net income of $3.34 million, or $0.44 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 lower salaries and employee benefits expenses due to the $2.44 million credit from the Employee Retention Tax Credit (“ERTC”) in the fourth quarter last year (not replicated this quarter) and the $356,000 lower recovery from the allowance for loan losses, partly offset by the $1.13 million net interest income increase.

“I am pleased with our financial results for the June 2022 quarter and encouraged that our fundamentals continue to improve. For example, the net interest margin expanded by 32 basis points from the prior sequential quarter, we achieved a second consecutive quarter of compelling loan portfolio growth, and operating expenses are well-controlled,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company. “And while much has recently been written about a potential economic downturn, I am confident that our credit quality and strong capital position provides a robust financial foundation to weather the challenges that may arise,” said Mr. Blunden.

Return on average assets for the fourth quarter of fiscal 2022 was 0.83 percent, down from 1.12 percent for the same period of fiscal 2021; and return on average stockholders’ equity for the fourth quarter of fiscal 2022 was 7.72 percent, down from 10.65 percent for the comparable period of fiscal 2021.

On a sequential quarter basis, the $2.46 million net income for the fourth quarter of fiscal 2022 reflects a 45 percent increase from $1.70 million in the third quarter of fiscal 2022. The increase in earnings for the fourth quarter of fiscal 2022 compared to the third quarter of fiscal 2022 was primarily attributable to a $968,000 increase in net interest income and a $450,000 decrease in non-interest expenses, partly offset by a $234,000 decrease in the recovery from the allowance for loan losses. The decrease in non-interest expenses was primarily due to lower salaries and employee benefits, premises and equipment and other operating expenses. Diluted earnings per share for the fourth quarter of fiscal 2022 were $0.34 per share, up 48 percent from the $0.23 per share during the third quarter of fiscal 2022. Return on average assets was 0.83 percent for the fourth quarter of fiscal 2022, up from 0.57 percent in the third quarter of fiscal 2022; and return on average stockholders’ equity for the fourth quarter of fiscal 2022 was 7.72 percent, up from 5.33 percent for the third quarter of fiscal 2022.

For the fiscal year ended June 30, 2022, net income increased $1.53 million, or 20 percent, to $9.09 million from $7.56 million for the fiscal year ended June 30, 2021; and diluted earnings per share for the fiscal year ended June 30, 2022 increased 22 percent to $1.22 per share (on 7.45 million average diluted shares outstanding) from $1.00 per share (on 7.54 million average diluted shares outstanding) for the last fiscal year. Compared to the last fiscal year, the increase in earnings was primarily attributable to a $1.75 million increase in the recovery from the allowance for loan losses and a $956,000 increase in net interest income.

In the fourth quarter of fiscal 2022, net interest income increased $1.13 million or 15 percent to $8.51 million from $7.38 million for the same quarter last year. The increase in net interest income was primarily due to a higher net interest margin primarily due to a shift in the composition of interest-earning assets towards higher yielding loans held for investment and an increase in the average yield on interest-earning deposits reflecting recent increases in the targeted federal funds rate. The net interest margin during the fourth quarter of fiscal 2022 increased by 39 basis points to 2.93 percent from 2.54 percent in the same quarter last year. The average yield on interest-earning assets increased by 31 basis points to 3.18 percent in the fourth quarter of fiscal 2022 from 2.87 percent in the same quarter last year while the average cost of interest-bearing liabilities decreased by 10 basis points to 0.27 percent in the fourth quarter of fiscal 2022 from 0.37 percent in the same quarter last year. The average balance of interest-earning assets was virtually unchanged at $1.16 billion in the fourth quarter of fiscal 2022 as compared to the same quarter last year. The increase in the average balance of loans held for investment was mainly offset by decreases in the average balance of lower yielding investment securities and interest-earning deposits.

Interest income on loans receivable increased by $750,000, or 10 percent, to $8.49 million in the fourth quarter of fiscal 2022 from $7.74 million in the same quarter of fiscal 2021. The increase was due to a higher average balance and, to a lesser extent, a higher average yield. The average balance of loans receivable increased by $67.6 million, or eight percent, to $916.2 million in the fourth quarter of fiscal 2022 from $848.6 million in the same quarter last year. Total loans originated and purchased for investment in the fourth quarter of fiscal 2022 were $85.9 million, down eight percent from $93.3 million in the same quarter last year. Loan principal payments received in the fourth quarter of fiscal 2022 were $41.3 million, down 48 percent from $79.9 million in the same quarter last year. The average yield on loans receivable increased by five basis points to 3.70 percent in the fourth quarter of fiscal 2022 from an average yield of 3.65 percent in the same quarter last year. Net deferred loan cost amortization in the fourth quarter of fiscal 2022 decreased 75 percent to $191,000 from $752,000 in the same quarter last year. The decrease in the net deferred loan cost amortization was due primarily to lower total loan principal payments ($41.3 million vs. $79.9 million) and, to a lesser extent, a $94,000 deferred loan fee recovery from a legacy restructured loan that was paid off in the fourth quarter of fiscal 2022 (not incurred in the same quarter last year).

Interest income from investment securities increased $69,000, or 15 percent, to $540,000 in the fourth quarter of fiscal 2022 from $471,000 for the same quarter of fiscal 2021. This increase was attributable to a higher average yield, partly offset by a lower average balance. The average yield on investment securities increased 31 basis points to 1.11 percent in the fourth quarter of fiscal 2022 from 0.80 percent for the same quarter last year. The increase in the average investment securities yield was primarily attributable to the upward repricing of adjustable-rate mortgage-backed securities and a lower premium amortization during the current quarter in comparison to the same quarter last year ($270,000 vs. $535,000), attributable to a lower total principal repayment ($10.5 million vs. $15.8 million). The average balance of investment securities decreased by $41.7 million, or 18 percent, to $194.5 million in the fourth quarter of fiscal 2022 from $236.2 million in the same quarter last year.

In the fourth quarter of fiscal 2022, the Federal Home Loan Bank – San Francisco (“FHLB”) distributed a $121,000 cash dividend to the Bank on its FHLB stock, up $3,000 or three percent from $118,000 in the same quarter last year. The average balance of FHLB – San Francisco stock in the fourth quarter of fiscal 2022 increased $97,000, or one percent, to $8.2 million from $8.1 million in the same quarter of fiscal 2021 and the average yield increased to 5.89 percent in the fourth quarter of fiscal 2022 from 5.81 percent in the same quarter last year.

Interest income from interest-earning deposits, primarily cash deposited at the Federal Reserve Bank of San Francisco, was $69,000 in the fourth quarter of fiscal 2022, up 263 percent from $19,000 in the same quarter of fiscal 2021. The increase was due to a higher average yield, partly offset by a lower average balance. The average yield earned on interest-earning deposits in the fourth quarter of fiscal 2022 was 0.68 percent, up 57 basis points from 0.11 percent in the same quarter last year. The average balance of the Company’s interest-earning deposits decreased $29.5 million, or 42 percent, to $40.4 million in the fourth quarter of fiscal 2022 from $69.9 million in the same quarter last year primarily due to the utilization of these excess funds for loan portfolio growth.

Interest expense on deposits for the fourth quarter of fiscal 2022 was $255,000 as compared to $346,000 for the same period last year, a decrease of $91,000, or 26 percent. The decrease in interest expense on deposits was attributable to a lower average cost of deposits, partly offset by a higher average balance. The average cost of deposits improved, decreasing by four basis points to 0.11 percent in the fourth quarter of fiscal 2022 from 0.15 percent in the same quarter last year. The average balance of deposits increased $29.6 million, or three percent, to $968.6 million in the fourth quarter of fiscal 2022 from $939.0 million in the same quarter last year, primarily due to increases in transaction accounts, partly offset by a managed run-off of higher cost time deposits.

Transaction account balances or “core deposits” increased $36.9 million, or five percent, to $834.4 million at June 30, 2022 from $797.5 million at June 30, 2021, while time deposits decreased $19.3 million, or 14 percent, to $121.1 million at June 30, 2022 from $140.4 million at June 30, 2021.

Interest expense on borrowings, consisting of FHLB – San Francisco advances, for the fourth quarter of fiscal 2022 decreased $165,000, or 27 percent, to $454,000 from $619,000 for the same period last year. The decrease in interest expense on borrowings was the result of a lower average balance, partly offset by a slightly higher average cost. The average balance of borrowings decreased $30.3 million, or 27 percent, to $80.5 million while the average cost of borrowings increased two basis points to 2.26 percent in the fourth quarter of fiscal 2022, compared to an average balance of $110.8 million with an average cost of 2.24 percent in the same quarter last year. The decrease in the average balance and the increase in the average cost of borrowings were primarily due to prepayments and maturities of borrowings with a lower average cost than our remaining borrowings.

During the fourth quarter of fiscal 2022, the Company recorded a recovery from the allowance for loan losses of $411,000, as compared to the $767,000 recovery recorded during the same period last year and the $645,000 recovery from the allowance for loan losses recorded in the third quarter of fiscal 2022 (sequential quarter). The recoveries from the allowance for loan losses primarily reflects improved credit quality and improving general economic conditions, partly offset by increases in loans held for investment during the respective periods.

Non-performing assets, comprised solely of non-performing loans with underlying collateral located in California, decreased $7.2 million or 84 percent to $1.4 million, or 0.12 percent of total assets, at June 30, 2022, compared to $8.6 million, or 0.73 percent of total assets, at June 30, 2021. The non-performing loans at June 30, 2022 are comprised of seven single-family loans, while the non-performing loans at June 30, 2021 were comprised of 27 single-family loans and one multi-family loan. At both June 30, 2022 and June 30, 2021, there was no real estate owned.

Net loan recoveries for the quarter ended June 30, 2022 were $6,000 or 0.00 percent (annualized) of average loans receivable, as compared to net loan recoveries of $8,000 or 0.00 percent (annualized) of average loans receivable for the quarter ended June 30, 2021 and net loan recoveries of $6,000 or 0.00 percent (annualized) of average loans receivable for the quarter ended March 31, 2022 (sequential quarter).

Classified assets, comprised solely of loans, were $1.6 million at June 30, 2022 which consist of $224,000 of loans in the special mention category and $1.4 million of loans in the substandard category; while classified assets at June 30, 2021 were $10.4 million, consisting of $1.8 million of loans in the special mention category and $8.6 million of loans in the substandard category.

The allowance for loan losses was $5.6 million or 0.59 percent of gross loans held for investment at June 30, 2022, down from the $7.6 million or 0.88 percent of gross loans held for investment at June 30, 2021. 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, 2022 under the incurred loss methodology.

Non-interest income decreased by $76,000, or six percent, to $1.17 million in the fourth quarter of fiscal 2022 from $1.24 million in the same period last year, primarily due to a $101,000 decrease in loan servicing and other fees. On a sequential quarter basis, non-interest income increased $51,000, or five percent, primarily as a result of an increase in card and processing fees, partly offset by a decrease in loan servicing and other fees.

Non-interest expenses increased by $1.53 million or 31 percent to $6.45 million in the fourth quarter of fiscal 2022 from $4.92 million for the same quarter last year. The increase in the non-interest expense in the fourth quarter of fiscal 2022 was primarily due to the $2.44 million credit from the ERTC in the fourth quarter last year (not replicated this quarter), partly offset by the retirement benefits expense recovery ($198,000 expense recovery in comparison to a $115,000 expense accrual) and a $136,000 refund from a vendor on previously paid network services invoices that were overstated when billed. On a sequential quarter basis, non-interest expenses decreased by $450,000 or seven percent to $6.45 million in the fourth quarter of fiscal 2022 from $6.90 million in the third quarter of fiscal 2022.

The Company’s efficiency ratio, defined as non-interest expense divided by the sum of net interest income and non-interest income, in the fourth quarter of fiscal 2022 was 67 percent, up from 57 percent in the same quarter last year but improved from 80 percent in the third quarter of fiscal 2022 (sequential quarter).

The Company’s provision for income taxes was $1.17 million for the fourth quarter of fiscal 2022, up four percent from $1.12 million in the same quarter last year primarily due to an increase in the effective tax rate in the fourth quarter of fiscal 2022 to 32.2 percent from 25.2 percent in the same quarter last year. The lower than normal effective tax rate in the fourth quarter of last year was primarily attributable to the recognition of tax benefits resulting from the exercise of stock options and the non-taxable treatment of the ERTC for state tax purposes.

The Company repurchased 35,488 shares of its common stock with an average cost of $15.90 per share during the quarter ended June 30, 2022 pursuant to its April 2020 stock repurchase plan that expired on April 27, 2022. For fiscal 2022, there were 257,285 shares of PROV common stock purchased at an average cost of $16.73 per share. The Board of Directors approved a new stock repurchase plan on April 28, 2022 which authorized 364,259 shares for repurchase, all of which remain available for purchase at June 30, 2022.

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 27, 2022 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-844-291-6356 and referencing access code number 2262909. An audio replay of the conference call will be available through Wednesday, August 3, 2022 by dialing 1-866-207-1041 and referencing access code number 5500963.

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 potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, generally, resulting from the ongoing novel coronavirus of 2019 (“COVID-19”) and any governmental or societal responses thereto; increased competitive pressures; changes in the interest rate environment; changes in general economic conditions, including the effects of inflation, and conditions within the securities markets; legislative and regulatory changes, including as a result of the COVID-19 pandemic; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (“SEC”) – which are available on our website at www.myprovident.com and on the SEC’s website at www.sec.gov. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements whether as a result of new information, future events or otherwise. These risks could cause our actual results for fiscal 2023 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of us and could negatively affect our operating and stock price performance.

Contacts:

Craig G. Blunden 
Chairman and 
Chief Executive Officer 

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

(951) 686-6060


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

                             
  June 30,      March 31,      December 31,      September 30,      June 30,
  2022   2022   2021   2021   2021
Assets                            
Cash and cash equivalents $ 23,414     $ 60,121     $ 85,680     $ 88,249     $ 70,270  
Investment securities – held to maturity, at cost   185,745       195,579       205,065       205,821       223,306  
Investment securities – available for sale, at fair value   2,676       2,944       3,118       3,316       3,587  
Loans held for investment, net of allowance for loan losses of $5,564; $5,969; $6,608; $7,413 and $7,587, respectively; includes $1,396; $1,470; $1,555; $1,577 and $1,874 at fair value, respectively   939,992       893,563       852,006       859,035       850,960  
Accrued interest receivable   2,966       2,850       2,862       2,909       2,999  
FHLB – San Francisco stock   8,239       8,155       8,155       8,155       8,155  
Premises and equipment, net   8,826       8,957       8,942       9,014       9,377  
Prepaid expenses and other assets   15,180       15,665       16,577       15,782       14,942  
Total assets $ 1,187,038     $ 1,187,834     $ 1,182,405     $ 1,192,281     $ 1,183,596  
                             
Liabilities and Stockholders’ Equity                            
Liabilities:                            
Non interest-bearing deposits $ 125,089     $ 117,097     $ 112,022     $ 120,883     $ 123,179  
Interest-bearing deposits   830,415       846,403       844,326       835,859       814,794  
Total deposits   955,504       963,500       956,348       956,742       937,973  
                             
Borrowings   85,000       80,000       80,000       90,000       100,983  
Accounts payable, accrued interest and other liabilities   17,884       16,717       18,123       17,304       17,360  
Total liabilities   1,058,388       1,060,217       1,054,471       1,064,046       1,056,316  
                             
Stockholders’ equity:                            
Preferred stock, $.01 par value (2,000,000 shares authorized; none issued and outstanding)   —       —       —       —       —  
Common stock, $.01 par value; (40,000,000 shares authorized; 18,229,615; 18,229,615; 18,229,615; 18,229,615 and 18,229,615 shares issued respectively; 7,285,184; 7,320,672; 7,389,943; 7,491,705 and 7,541,469 shares outstanding, respectively)   183       183       183       183       183  
Additional paid-in capital   98,826       98,617       98,404       98,179       97,978  
Retained earnings   202,680       201,237       200,569       199,344       197,733  
Treasury stock at cost (10,944,431; 10,908,943; 10,839,672; 10,737,910 and 10,688,146 shares, respectively)   (173,041 )     (172,459 )     (171,280 )     (169,537 )     (168,686 )
Accumulated other comprehensive income, net of tax   2       39       58       66       72  
Total stockholders’ equity   128,650       127,617       127,934       128,235       127,280  
Total liabilities and stockholders’ equity $ 1,187,038     $ 1,187,834     $ 1,182,405     $ 1,192,281     $ 1,183,596  
                                       

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

                       
  Quarter Ended   Fiscal Year Ended
  June 30,      June 30,
  2022      2021      2022      2021
Interest income:                      
Loans receivable, net $ 8,485     $ 7,735     $ 32,161     $ 32,856  
Investment securities   540       471       1,906       1,849  
FHLB – San Francisco stock   121       118       489       418  
Interest-earning deposits   69       19       174       78  
Total interest income   9,215       8,343       34,730       35,201  
                       
Interest expense:                      
Checking and money market deposits   51       48       220       268  
Savings deposits   44       38       172       208  
Time deposits   160       260       752       1,269  
Borrowings   454       619       1,991       2,817  
Total interest expense   709       965       3,135       4,562  
                       
Net interest income   8,506       7,378       31,595       30,639  
Recovery from the allowance for loan losses   (411 )     (767 )     (2,462 )     (708 )
Net interest income, after recovery from the allowance for loan losses   8,917       8,145       34,057       31,347  
                       
Non-interest income:                      
Loan servicing and other fees   189       290       1,056       1,170  
Deposit account fees   336       290       1,302       1,247  
Card and processing fees   457       507       1,639       1,605  
Other   183       154       719       551  
Total non-interest income   1,165       1,241       4,716       4,573  
                       
Non-interest expense:                      
Salaries and employee benefits   4,055       2,172       15,833       15,157  
Premises and occupancy   690       869       3,189       3,500  
Equipment   350       293       1,282       1,153  
Professional expenses   311       378       1,419       1,561  
Sales and marketing expenses   165       210       642       680  
Deposit insurance premiums and regulatory assessments   134       123       543       552  
Other   744       878       3,007       3,130  
Total non-interest expense   6,449       4,923       25,915       25,733  
Income before income taxes   3,633       4,463       12,858       10,187  
Provision for income taxes   1,170       1,124       3,765       2,626  
Net income $ 2,463     $ 3,339     $ 9,093     $ 7,561  
                       
Basic earnings per share $ 0.34     $ 0.44     $ 1.23     $ 1.01  
Diluted earnings per share $ 0.34     $ 0.44     $ 1.22     $ 1.00  
Cash dividend per share $ 0.14     $ 0.14     $ 0.56     $ 0.56  
                               

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

                             
  Quarter Ended
  June 30,   March 31,   December 31,   September 30,   June 30,
  2022      2022      2021      2021      2021
Interest income:                                 
Loans receivable, net $ 8,485     $ 7,581     $ 7,920     $ 8,175     $ 7,735  
Investment securities   540       515       433       418       471  
FHLB – San Francisco stock   121       123       123       122       118  
Interest-earning deposits   69       39       35       31       19  
Total interest income   9,215       8,258       8,511       8,746       8,343  
                             
Interest expense:                                 
Checking and money market deposits   51       54       58       57       48  
Savings deposits   44       42       45       41       38  
Time deposits   160       178       199       215       260  
Borrowings   454       446       546       545       619  
Total interest expense   709       720       848       858       965  
                             
Net interest income   8,506       7,538       7,663       7,888       7,378  
Recovery from the allowance for loan losses   (411 )     (645 )     (1,067 )     (339 )     (767 )
Net interest income, after recovery from the allowance for loan losses   8,917       8,183       8,730       8,227       8,145  
                             
Non-interest income:                                 
Loan servicing and other fees   189       237       444       186       290  
Deposit account fees   336       329       325       312       290  
Card and processing fees   457       378       399       405       507  
Other   183       170       200       166       154  
Total non-interest income   1,165       1,114       1,368       1,069       1,241  
                             
Non-interest expense:                                 
Salaries and employee benefits   4,055       4,203       4,455       3,120       2,172  
Premises and occupancy   690       836       758       905       869  
Equipment   350       330       314       288       293  
Professional expenses   311       299       348       461       378  
Sales and marketing expenses   165       186       149       142       210  
Deposit insurance premiums and regulatory assessments   134       136       136       137       123  
Other   744       909       739       615       878  
Total non-interest expense   6,449       6,899       6,899       5,668       4,923  
Income before income taxes   3,633       2,398       3,199       3,628       4,463  
Provision for income taxes   1,170       699       935       961       1,124  
Net income $ 2,463     $ 1,699     $ 2,264     $ 2,667     $ 3,339  
                             
Basic earnings per share $ 0.34     $ 0.23     $ 0.30     $ 0.35     $ 0.44  
Diluted earnings per share $ 0.34     $ 0.23     $ 0.30     $ 0.35     $ 0.44  
Cash dividends per share $ 0.14     $ 0.14     $ 0.14     $ 0.14     $ 0.14  
                                       

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

 
  Quarter Ended   Fiscal Year Ended  
  June 30,   June 30,  
  2022      2021      2022      2021  
SELECTED FINANCIAL RATIOS:                        
Return on average assets   0.83 %   1.12 %   0.76 %   0.64 %
Return on average stockholders’ equity   7.72 %   10.65 %   7.14 %   6.05 %
Stockholders’ equity to total assets   10.84 %   10.75 %   10.84 %   10.75 %
Net interest spread   2.91 %   2.50 %   2.69 %   2.62 %
Net interest margin   2.93 %   2.54 %   2.72 %   2.66 %
Efficiency ratio   66.68 %   57.12 %   71.37 %   73.08 %
Average interest-earning assets to average interest-bearing liabilities   110.51 %   110.77 %   110.67 %   110.78 %
                         
SELECTED FINANCIAL DATA:                        
Basic earnings per share $ 0.34   $ 0.44   $ 1.23   $ 1.01  
Diluted earnings per share $ 0.34   $ 0.44   $ 1.22   $ 1.00  
Book value per share $ 17.66   $ 16.88   $ 17.66   $ 16.88  
Shares used for basic EPS computation   7,291,046     7,518,542     7,404,089     7,464,814  
Shares used for diluted EPS computation   7,323,138     7,590,312     7,449,004     7,538,409  
Total shares issued and outstanding   7,285,184     7,541,469     7,285,184     7,541,469  
                         
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:                        
Mortgage Loans:                        
Single-family $ 62,908   $ 51,574   $ 198,026   $ 126,145  
Multi-family   16,013     36,987     87,738     96,474  
Commercial real estate   6,971     1,128     18,187     3,818  
Construction   —     3,598     2,228     5,426  
Total loans originated and purchased for investment $ 85,892   $ 93,287   $ 306,179   $ 231,863  
                         

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

 
  Quarter   Quarter   Quarter   Quarter   Quarter  
  Ended   Ended   Ended   Ended   Ended  
  06/30/22      03/31/22      12/31/21      09/30/21      06/30/21  
SELECTED FINANCIAL RATIOS:                              
Return on average assets   0.83 %   0.57 %   0.76 %   0.89 %   1.12 %
Return on average stockholders’ equity   7.72 %   5.33 %   7.11 %   8.39 %   10.65 %
Stockholders’ equity to total assets   10.84 %   10.74 %   10.82 %   10.76 %   10.75 %
Net interest spread   2.91 %   2.58 %   2.61 %   2.69 %   2.50 %
Net interest margin   2.93 %   2.61 %   2.64 %   2.71 %   2.54 %
Efficiency ratio   66.68 %   79.74 %   76.39 %   63.28 %   57.12 %
Average interest-earning assets to average interest-bearing liabilities   110.51 %   110.79 %   110.65 %   110.76 %   110.77 %
                               
SELECTED FINANCIAL DATA:                              
Basic earnings per share $ 0.34   $ 0.23   $ 0.30   $ 0.35   $ 0.44  
Diluted earnings per share $ 0.34   $ 0.23   $ 0.30   $ 0.35   $ 0.44  
Book value per share $ 17.66   $ 17.43   $ 17.31   $ 17.12   $ 16.88  
Average shares used for basic EPS   7,291,046     7,357,989     7,435,218     7,529,870     7,518,542  
Average shares used for diluted EPS   7,323,138     7,412,516     7,482,812     7,575,320     7,590,312  
Total shares issued and outstanding   7,285,184     7,320,672     7,389,943     7,491,705     7,541,469  
                               
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:                              
Mortgage loans:                              
Single-family $ 62,908   $ 54,978   $ 45,720   $ 34,420   $ 51,574  
Multi-family   16,013     31,487     14,920     25,318     36,987  
Commercial real estate   6,971     7,011     3,005     1,200     1,128  
Construction   —     544     1,684     —     3,598  
Total loans originated and purchased for investment $ 85,892   $ 94,020   $ 65,329   $ 60,938   $ 93,287  
                               

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

                                   
  As of        As of        As of      As of      As of  
  06/30/22     03/31/22     12/31/21   09/30/21   06/30/21  
ASSET QUALITY RATIOS AND DELINQUENT LOANS:                                  
Recourse reserve for loans sold $ 160     $ 160     $ 160     $ 200     $ 200  
Allowance for loan losses $ 5,564     $ 5,969     $ 6,608     $ 7,413     $ 7,587  
Non-performing loans to loans held for investment, net   0.15 %     0.22 %     0.33 %     0.77 %     1.02 %
Non-performing assets to total assets   0.12 %     0.17 %     0.24 %     0.55 %     0.73 %
Allowance for loan losses to gross loans held for investment   0.59 %     0.66 %     0.77 %     0.86 %     0.88 %
Net loan charge-offs (recoveries) to average loans receivable (annualized)   — %     — %     (0.12 )%     (0.08 )%     — %
Non-performing loans $ 1,423     $ 1,996     $ 2,802     $ 6,616     $ 8,646  
Loans 30 to 89 days delinquent $ 3     $ 2     $ 3     $ 20     $ —  

                             
  Quarter      Quarter      Quarter      Quarter      Quarter
  Ended   Ended   Ended   Ended   Ended
  06/30/22   03/31/22   12/31/21   09/30/21   06/30/21
Recourse provision (recovery) for loans sold $ —     $ —     $ (40 )   $ —     $ (15 )
(Recovery) provision for loan losses $ (411 )   $ (645 )   $ (1,067 )   $ (339 )   $ (767 )
Net loan charge-offs (recoveries) $ (6 )   $ (6 )   $ (262 )   $ (165 )   $ (8 )

 
  As of      As of      As of      As of      As of  
  06/30/2022   03/31/2022   12/31/2021   09/30/2021   06/30/2021  
REGULATORY CAPITAL RATIOS (BANK):                         
Tier 1 leverage ratio 10.47 %   10.27 %   10.02 %   9.81 %   10.19 %
Common equity tier 1 capital ratio 19.58 %   19.32 %   19.69 %   18.90 %   18.58 %
Tier 1 risk-based capital ratio 19.58 %   19.32 %   19.69 %   18.90 %   18.58 %
Total risk-based capital ratio 20.47 %   20.29 %   20.79 %   20.12 %   19.76 %

 
  As of June 30,  
  2022      2021  
  Balance      Rate(1)      Balance      Rate(1)  
INVESTMENT SECURITIES:                        
Held to maturity:                        
Certificates of deposit $ 400   0.73 %   $ 1,000   0.28 %
U.S. SBA securities   940   0.85     1,858   0.60  
U.S. government sponsored enterprise MBS   180,492   1.36     220,448   1.22  
U.S. government sponsored enterprise CMO   3,913   2.23     —   —  
Total investment securities held to maturity $ 185,745   1.37 %   $ 223,306   1.21 %
                     
Available for sale (at fair value):                        
U.S. government agency MBS $ 1,698   1.90 %   $ 2,222   2.32 %
U.S. government sponsored enterprise MBS   865   2.67     1,211   2.32  
Private issue CMO   113   3.02     154   2.52  
Total investment securities available for sale $ 2,676   2.20 %   $ 3,587   2.33 %
Total investment securities $ 188,421   1.39 %   $ 226,893   1.23 %

 

(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,  
  2022      2021  
  Balance      Rate(1)      Balance      Rate(1)  
LOANS HELD FOR INVESTMENT:                    
                     
Single-family (1 to 4 units) $ 378,234     3.34 % $ 268,272     3.42 %
Multi-family (5 or more units)   464,676     4.05     484,408     4.09  
Commercial real estate   90,429     4.61     95,279     4.68  
Construction   3,216     3.62     3,040     5.84  
Other mortgage   123     5.25     139     5.25  
Commercial business   1,206     6.66     849     6.39  
Consumer   86     15.00     95     15.00  
Total loans held for investment   937,970     3.82 %   852,082     3.96 %
                     
Advance payments of escrows   47           157        
Deferred loan costs, net   7,539           6,308        
Allowance for loan losses   (5,564 )         (7,587 )      
Total loans held for investment, net $ 939,992         $ 850,960        
Purchased loans serviced by others included above $ 11,394     3.50 % $ 13,556     3.53 %

(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,  
  2022      2021  
  Balance      Rate(1)      Balance      Rate(1)  
DEPOSITS:                    
Checking accounts – non interest-bearing $ 125,089   — % $ 123,179   — %
Checking accounts – interest-bearing   335,788   0.04     327,388   0.04  
Savings accounts   333,581   0.05     307,299   0.05  
Money market accounts   39,897   0.17     39,670   0.15  
Time deposits   121,149   0.52     140,437   0.71  
Total deposits $ 955,504   0.11 % $ 937,973   0.15 %
                     
BORROWINGS:                    
Overnight $ 5,000   1.66 % $ —   — %
Three months or less   20,000   1.75     10,983   1.88  
Over three to six months   —   —     —   —  
Over six months to one year   10,000   2.25     10,000   2.20  
Over one year to two years   30,000   2.25     30,000   1.92  
Over two years to three years   20,000   2.70     30,000   2.25  
Over three years to four years   —   —     20,000   2.70  
Over four years to five years   —   —     —   —  
Over five years   —   —     —   —  
Total borrowings $ 85,000   2.20 % $ 100,983   2.19 %

(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, 2022   June 30, 2021  
  Balance      Rate(1)      Balance      Rate(1)  
SELECTED AVERAGE BALANCE SHEETS:                      
                       
Loans receivable, net $ 916,241     3.70 % $ 848,587   3.65 %
Investment securities   194,524     1.11     236,236   0.80  
FHLB – San Francisco stock   8,222     5.89     8,125   5.81  
Interest-earning deposits   40,385     0.68     69,881   0.11  
Total interest-earning assets $ 1,159,372     3.18 % $ 1,162,829   2.87 %
Total assets $ 1,192,583         $ 1,193,534      
                       
Deposits $ 968,554     0.11 % $ 938,990   0.15 %
Borrowings   80,549     2.26     110,769   2.24  
Total interest-bearing liabilities $ 1,049,103     0.27 % $ 1,049,759   0.37 %
Total stockholders’ equity $ 127,561         $ 125,408      

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

 
  Fiscal Year Ended   Fiscal Year Ended  
  June 30, 2022      June 30, 2021  
  Balance      Rate(1)      Balance      Rate(1)  
SELECTED AVERAGE BALANCE SHEETS:                      
                       
Loans receivable, net $ 870,328     3.70 % $ 863,507   3.80 %
Investment securities   206,876     0.92     205,628   0.90  
FHLB – San Francisco stock   8,172     5.98     8,008   5.22  
Interest-earning deposits   74,897     0.23     74,952   0.10  
Total interest-earning assets $ 1,160,273     2.99 % $ 1,152,095   3.06 %
Total assets $ 1,193,060         $ 1,183,011      
                       
Deposits $ 961,497     0.12 % $ 914,351   0.19 %
Borrowings   86,883     2.29     125,589   2.24  
Total interest-bearing liabilities $ 1,048,380     0.30 % $ 1,039,940   0.44 %
Total stockholders’ equity $ 127,408         $ 124,913      

(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.
   

ASSET QUALITY:

 
  As of      As of      As of      As of      As of
  06/30/22   03/31/22   12/31/21   09/30/21   06/30/21
Loans on non-accrual status (excluding restructured loans):                            
Mortgage loans:                            
Single-family $ 701   $ 716   $ 745   $ 739   $ 882
Multi-family   —     306     1,077     775     781
Total   701     1,022     1,822     1,514     1,663
                             
Accruing loans past due 90 days or more:   —     —     —     —     —
Total   —     —     —     —     —
                             
Restructured loans on non-accrual status:                            
Mortgage loans:                            
Single-family   722     974     980     5,102     6,983
Total   722     974     980     5,102     6,983
Total non-performing loans (1)   1,423     1,996     2,802     6,616     8,646
                             
Real estate owned, net   —     —     —     —     —
Total non-performing assets $ 1,423   $ 1,996   $ 2,802   $ 6,616   $ 8,646

(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.
   

Alex

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