Provident Financial : Reports Fourth Quarter and Fiscal Year 2021 Results
July 28, 2021 at 06:01 am EDT
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The Company Reports Net Income of $3.34 Million in the June 2021 Quarter
Loans Held for Investment Increase 1% from March 31, 2021 to $851.0 Million
Total Deposits Increase 5% from June 30, 2020 to $938.0 Million
Improved Asset Quality with a $767,000 Recovery from the Allowance for Loan Losses
Non-Interest Expenses Remain Well-Controlled
RIVERSIDE, Calif., July 28, 2021 (GLOBE NEWSWIRE) -- Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the holding company for Provident Savings Bank, F.S.B. (“Bank”), today announced fourth quarter and full year earnings results for the fiscal year ended June 30, 2021.
For the quarter ended June 30, 2021, the Company reported net income of $3.34 million, or $0.44 per diluted share (on 7.59 million average diluted shares outstanding), up 111 percent from net income of $1.58 million, or $0.21 per diluted share (on 7.49 million average diluted shares outstanding), in the comparable period a year ago. Compared to the same quarter last year, the increase in earnings was primarily attributable to a $1.22 million improvement in the provision for loan losses to a recovery from a provision for loan losses and a $1.68 million decrease in non-interest expenses (mainly, lower salaries and employee benefits expenses), partly offset by lower net interest income.
“I am pleased that general economic conditions are improving and the United States is making progress in its fight against the COVID-19 pandemic,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company. “We believe Provident is well-positioned to benefit from improving conditions and I am confident that our strong financial foundation will allow us to capitalize on future opportunities as they develop,” said Mr. Blunden.
Return on average assets for the fourth quarter of fiscal 2021 was 1.12 percent, up from 0.55 percent for the same period of fiscal 2020; and return on average stockholders’ equity for the fourth quarter of fiscal 2021 was 10.65 percent, up from 5.14 percent for the comparable period of fiscal 2020.
On a sequential quarter basis, the $3.34 million net income for the fourth quarter of fiscal 2021 reflects a 114 percent increase from $1.56 million in the third quarter of fiscal 2021. The increase in earnings for the fourth quarter of fiscal 2021 compared to the third quarter of fiscal 2021 was primarily attributable to a $1.99 million decrease in non-interest expenses and a $567,000 increase in the recovery from the allowance for loan losses. Diluted earnings per share for the fourth quarter of fiscal 2021 were $0.44 per share, up 110 percent from the $0.21 per share during the third quarter of fiscal 2021. Return on average assets was 1.12 percent for the fourth quarter of fiscal 2021, up from 0.53 percent in the third quarter of fiscal 2021; and return on average stockholders’ equity for the fourth quarter of fiscal 2021 was 10.65 percent, up from 4.99 percent for the third quarter of fiscal 2021.
For the fiscal year ended June 30, 2021 net income decreased $128,000, or two percent, to $7.56 million from $7.69 million in the comparable period ended June 30, 2020; and diluted earnings per share for the fiscal year ended June 30, 2021 decreased one percent to $1.00 per share (on 7.54 million average diluted shares outstanding) from $1.01 per share (on 7.58 million average diluted shares outstanding) for the comparable period last year. Compared to the same period last year, the decrease in earnings was primarily attributable to a $5.76 million decrease in net interest income; partly offset by a $3.17 million decrease in non-interest expenses (mainly, a decrease in salaries and employee benefits expenses) and a $1.83 million improvement in the provision for loan losses to a recovery from a provision for loan losses.
Net interest income decreased $912,000, or 11 percent, to $7.38 million in the fourth quarter of fiscal 2021 from $8.29 million for the same quarter of fiscal 2020, attributable to a decrease in the net interest margin, partly offset by a higher average interest-earning assets balance. The net interest margin during the fourth quarter of fiscal 2021 decreased 41 basis points to 2.54 percent from 2.95 percent in the same quarter last year, primarily due to a decrease in the average yield on interest-earning assets reflecting primarily downward pressure on adjustable rate instruments as a result of decreases in market interest rates over the last year and originations and purchases of new loans held for investment and purchases of investment securities at lower market yields, partly offset by a much smaller decrease in the average cost of interest-bearing liabilities. The average yield on interest-earning assets decreased by 59 basis points to 2.87 percent in the fourth quarter of fiscal 2021 from 3.46 percent in the same quarter last year while the average cost of interest-bearing liabilities decreased by 20 basis points to 0.37 percent in the fourth quarter of fiscal 2021 from 0.57 percent in the same quarter last year. The average balance of interest-earning assets increased by $39.9 million, or four percent, to $1.16 billion in the fourth quarter of fiscal 2021 from $1.12 billion in the same quarter last year due primarily to purchases of investment securities, partly offset by a decrease in loans receivable and interest-earning deposits (primarily federal funds).
The average balance of loans receivable decreased by $45.9 million, or five percent, to $848.6 million in the fourth quarter of fiscal 2021 from $894.5 million in the same quarter of fiscal 2020. The average yield on loans receivable decreased by 43 basis points to 3.65 percent in the fourth quarter of fiscal 2021 from an average yield of 4.08 percent in the same quarter of fiscal 2020. Net deferred loan cost amortization in the fourth quarter of fiscal 2021 increased to $752,000 from $495,000 in the same quarter of fiscal 2020. Total loans originated and purchased for investment in the fourth quarter of fiscal 2021 were $93.3 million, up 111 percent from $44.2 million in the same quarter of fiscal 2020. Loan principal payments received in the fourth quarter of fiscal 2021 were $79.9 million, up 41 percent from $56.5 million in the same quarter of fiscal 2020 reflecting primarily increased refinance activity of single-family loans in the current low interest rate environment.
The average balance of investment securities increased by $150.9 million, or 177 percent, to $236.2 million in the fourth quarter of fiscal 2021 from $85.3 million in the same quarter of fiscal 2020 as excess liquidity earning a nominal yield was deployed into higher earning assets. The average yield on investment securities decreased 136 basis points to 0.80 percent in the fourth quarter of fiscal 2021 from 2.16 percent for the same quarter of fiscal 2020. The decrease in the average yield was primarily attributable to investment security purchases with a lower average yield than the legacy portfolio of investment securities, reflecting the current low interest rate environment. During the fourth quarter of fiscal 2021, the Bank did not purchase any investment securities; but for fiscal 2021, the Bank purchased investment securities totaling $154.2 million with an average yield of approximately 0.82 percent.
In the fourth quarter of fiscal 2021, the Federal Home Loan Bank – San Francisco (“FHLB”) distributed a $118,000 cash dividend to the Bank on its FHLB stock, up $16,000 or 16 percent from $102,000 in the same quarter last year.
The average balance of the Company’s interest-earning deposits, primarily cash with the Federal Reserve Bank of San Francisco, decreased $65.2 million, or 48 percent, to $69.9 million in the fourth quarter of fiscal 2021 from $135.1 million in the same quarter of fiscal 2020 primarily as a result of purchases of investment securities, new loan originations and purchases of loans held for investment outpacing deposit growth and loan repayments. The average yield earned on interest-earning deposits in the fourth quarter of fiscal 2021 was 0.11 percent, unchanged from the same quarter of fiscal 2020.
Average deposits increased $63.4 million, or seven percent, to $939.0 million in the fourth quarter of fiscal 2021 from $875.6 million in the same quarter of fiscal 2020, primarily due to increases in transaction accounts resulting primarily from government stimulus programs related to the COVID-19 pandemic, partly offset by a managed run-off of higher cost time deposits. The average cost of deposits improved, decreasing by 15 basis points to 0.15 percent in the fourth quarter of fiscal 2021 from 0.30 percent in the same quarter last year.
Transaction account balances or “core deposits” increased $74.5 million, or 10 percent, to $797.5 million at June 30, 2021 from $723.0 million at June 30, 2020, while time deposits decreased $29.6 million, or 17 percent, to $140.4 million at June 30, 2021 from $170.0 million at June 30, 2020.
The average balance of borrowings, which consisted of FHLB advances, decreased $27.1 million, or 20 percent, to $110.8 million while the average cost of borrowings decreased eight basis points to 2.24 percent in the fourth quarter of fiscal 2021, compared to an average balance of $137.9 million with an average cost of 2.32 percent in the same quarter of fiscal 2020. The decrease in the average balance of borrowings was primarily due to prepayments and maturities of borrowings.
During the fourth quarter of fiscal 2021, the Company recorded a recovery from the allowance for loan losses of $767,000, in contrast to a $448,000 provision for loan losses recorded during the same period of fiscal 2020 and a $200,000 recovery from the allowance for loan losses recorded in the third quarter of fiscal 2021 (sequential quarter). The recovery from the allowance for loan losses for the current quarter primarily reflects an improved economic outlook as of June 30, 2021, reducing the expected impact of the pandemic to the credit quality of the loan portfolio, partly offset by an increase in loan balances during the current quarter; while the provision for loan losses recorded in the same quarter last year primarily reflected the deterioration in forecasted economic metrics reflecting the economic outlook that existed at the quarter end as a result of the COVID-19 pandemic, partly offset by a decrease in loan balances.
Non-performing assets, comprised solely of non-performing loans with underlying collateral located in California, increased $3.7 million or 76 percent to $8.6 million, or 0.73 percent of total assets, at June 30, 2021, compared to $4.9 million, or 0.42 percent of total assets, at June 30, 2020 but declined from $9.8 million, or 0.82 percent of total assets, at March 31, 2021 (sequential quarter). The non-performing loans at June 30, 2021 are comprised of 27 single-family loans and one multi-family loan. At both June 30, 2021 and June 30, 2020, there was no real estate owned.
Net loan recoveries for the quarter ended June 30, 2021 were $8,000 or 0.00 percent (annualized) of average loans receivable, as compared to net loan recoveries of $7,000 or 0.00 percent (annualized) of average loans receivable for the quarter ended June 30, 2020 and net loan recoveries of $8,000 or 0.00 percent (annualized) of average loans receivable for the quarter ended March 31, 2021 (sequential quarter).
Classified assets, comprised solely of loans, were $10.4 million at June 30, 2021, including $1.8 million of loans in the special mention category and $8.6 million of loans in the substandard category; while classified assets at June 30, 2020 were $14.1 million, including $8.6 million of loans in the special mention category and $5.5 million of loans in the substandard category.
The Bank received requests from borrowers for some type of payment relief due to the COVID-19 pandemic. Loans that were current on their payments prior to the COVID-19 pandemic and modified by deferred payments, are not considered to be troubled debt restructurings pursuant to applicable accounting guidance consistent with the Coronavirus Aid, Relief, and Economic Security Act of 2020 or CARES Act and related bank regulatory guidance. The primary method of relief is to allow the borrower to defer loan payments for up to an initial six-month period, although we have also waived late fees and suspended foreclosure proceedings. Loans in which their payments are deferred beyond the initial six months are no longer in forbearance and are subsequently classified as troubled debt restructuring. The Bank ended the loan forbearance program on March 31, 2021. As of June 30, 2021, loans in forbearance included three single-family loans with outstanding balances of approximately $897,000 or 0.11 percent of gross loans held for investment and one commercial real estate loan with an outstanding balance of $945,000 or 0.11 percent of gross loans held for investment. As of June 30, 2021, the Bank had no pending requests for payment relief. Interest income is recognized during the forbearance period unless the loans are classified as non-performing. After the payment deferral period, scheduled loan payments will once again become due and payable. The forbearance amount will be due and payable in full as a balloon payment at the end of the loan term or sooner if the loan becomes due and payable in full at an earlier date. The Company believes the steps it is taking are necessary to effectively manage the loan portfolio and assist its customers through the ongoing uncertainty surrounding the duration, impact and government response to the COVID-19 pandemic.
During the quarter ended June 30, 2021, two COVID-19 related forbearance loans were restructured while two restructured loans were paid off. During the fiscal year ended June 30, 2021, 19 loans previously in a COVID-19 related payment forbearance and one pass loan were restructured and classified as restructured loans, while two restructured loans were upgraded to the pass category and three loans were paid off. The outstanding balance of restructured loans at June 30, 2021 was $7.9 million (23 loans) up from $2.6 million (eight loans) at June 30, 2020. As of June 30, 2021, a total of $7.0 million or 89 percent of the restructured loans were classified as substandard non-accrual and $7.7 million or 97 percent of the restructured loans have a current payment status consistent with their restructuring terms.
The allowance for loan losses was $7.6 million or 0.88 percent of gross loans held for investment at June 30, 2021, down from the $8.3 million or 0.91 percent of gross loans held for investment at June 30, 2020. Management believes that, based on currently available information, the allowance for loan losses is sufficient to absorb potential losses inherent in loans held for investment at June 30, 2021 under the incurred loss methodology.
Non-interest income increased by $236,000, or 23 percent, to $1.24 million in the fourth quarter of fiscal 2021 from $1.01 million in the same period of fiscal 2020, primarily due to increases in card and processing fees and loan servicing and other fees (resulting from higher loan prepayment fees). On a sequential quarter basis, non-interest income increased $42,000, or four percent, primarily as a result of an increase in card and processing fees, partly offset by decreases in loan servicing and other fees and deposit account fees.
Non-interest expenses decreased $1.68 million, or 25 percent, to $4.92 million in the fourth quarter of fiscal 2021 from $6.60 million in the same quarter last year due primarily to lower salaries and employee benefits expense resulting from a $2.44 million credit for the Employee Retention Tax Credit (“ERTC”), partly offset by a $373,000 increase in stock-based compensation expense and a $532,000 reversal of the incentive bonus expense in the fourth quarter last year (not replicated in this current quarter). The ERTC credit was recorded for qualified wages consistent with the Consolidated Appropriations Act of 2021 and American Rescue Plan Act of 2021 where eligible employers can claim a maximum credit equal to 70 percent of $10,000 of qualified wages paid to an employee per calendar quarter. On a sequential quarter basis, non-interest expenses decreased $1.99 million, or 29 percent, to $4.92 million in the fourth quarter of fiscal 2021 from $6.91 million in the third quarter of fiscal 2021 due primarily to lower salaries and employee benefits expense resulting from the $2.44 million credit for the ERTC, partly offset by a $409,000 increase in stock-based compensation expense.
The Company’s efficiency ratio in the fourth quarter of fiscal 2021 was 57 percent, significantly improved from 71 percent in the same quarter last year and from 80 percent in the third quarter of fiscal 2021 (sequential quarter), primarily attributable to the ERTC credit.
The Company’s provision for income tax was $1.12 million for the fourth quarter of fiscal 2021, up 70 percent from $660,000 in the same quarter last year primarily due to higher net income before the provision for income taxes. The effective tax rate in the fourth quarter of fiscal 2021 was 25.2 percent, lower than 29.4 percent in the same quarter last year, attributable to the tax benefits from the exercise of stock options and the non-taxable treatment of the ERTC for state tax purposes. The Company believes that the tax provision recorded in the fourth quarter of fiscal 2021 reflects its current federal and state income tax obligations.
The Company repurchased 50,275 shares of its common stock with an average cost of $16.68 per share during the quarter ended June 30, 2021 pursuant to its stock repurchase plan. As of June 30, 2021, a total of 266,833 shares or 72 percent of the shares authorized for repurchase under the April 2020 stock repurchase plan remain available to purchase until the plan expires on April 30, 2022. In addition, the Company purchased 31,553 shares at $17.40 per share from employees to fund their withholding tax obligations resulting from restricted stock distributions.
The Bank currently operates 13 retail/business banking offices in Riverside County and San Bernardino County (Inland Empire).
The Company will host a conference call for institutional investors and bank analysts on Thursday, July 29, 2021 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-877-692-8955 and referencing access code number 5497888. An audio replay of the conference call will be available through Thursday, August 5, 2021 by dialing 1-866-207-1041 and referencing access code number 1060286.
For more financial information about the Company please visit the website at www.myprovident.com and click on the “Investor Relations” section.
Safe-Harbor Statement
This press release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to the Company’s financial condition, liquidity, results of operations, plans, objectives, future performance or business. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors which could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements include, but are not limited to the effect of the COVID-19 pandemic, including on Company’s credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; increased competitive pressures; changes in the interest rate environment; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes,; including as a result of the COVID-19 pandemic; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (“SEC”) - which are available on our website at www.myprovident.com and on the SEC’s website at www.sec.gov. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements whether as a result of new information, future events or otherwise. These risks could cause our actual results for fiscal 2022 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of us and could negatively affect our operating and stock price performance.
Contacts:
Craig G. Blunden Chairman and Chief Executive Officer
Donavon P. Ternes President, Chief Operating Officer and Chief Financial Officer
(951) 686-6060
PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Financial Condition (Unaudited –In Thousands, Except Share Information)
June 30,
March 31,
December 31,
September 30,
June 30,
2021
2021
2020
2020
2020
Assets
Cash and cash equivalents
$
70,270
$
71,629
$
74,001
$
66,467
$
116,034
Investment securities – held to maturity, at cost
223,306
239,480
203,098
193,868
118,627
Investment securities - available for sale, at fair value
3,587
3,802
4,158
4,416
4,717
Loans held for investment, net of allowance for loan losses of $7,587; $8,346; $8,538; $8,490 and $8,265, respectively; includes $1,874; $1,879; $1,972; $2,240 and $2,258 at fair value, respectively
850,960
840,274
855,086
884,953
902,796
Accrued interest receivable
2,999
3,060
3,126
3,373
3,271
FHLB – San Francisco stock
8,155
7,970
7,970
7,970
7,970
Premises and equipment, net
9,377
9,608
9,980
10,099
10,254
Prepaid expenses and other assets
14,942
13,473
13,308
12,887
13,168
Total assets
$
1,183,596
$
1,189,296
$
1,170,727
$
1,184,033
$
1,176,837
Liabilities and Stockholders’ Equity
Liabilities:
Non interest-bearing deposits
$
123,179
$
124,043
$
109,609
$
114,537
$
118,771
Interest-bearing deposits
814,794
809,713
800,359
790,149
774,198
Total deposits
937,973
933,756
909,968
904,686
892,969
Borrowings
100,983
111,000
116,015
136,031
141,047
Accounts payable, accrued interest and other liabilities
17,360
18,790
19,760
18,657
18,845
Total liabilities
1,056,316
1,063,546
1,045,743
1,059,374
1,052,861
Stockholders’ equity:
Preferred stock, $.01 par value (2,000,000 shares authorized; none issued and outstanding)
—
—
—
—
—
Common stock, $.01 par value; (40,000,000 shares authorized; 18,229,615; 18,226,615; 18,097,615; 18,097,615 and 18,097,615 shares issued respectively; 7,541,469; 7,516,547; 7,442,254; 7,441,259 and 7,436,315 shares outstanding, respectively)
183
182
181
181
181
Additional paid-in capital
97,978
97,323
96,164
95,948
95,593
Retained earnings
197,733
195,443
194,923
194,789
194,345
Treasury stock at cost (10,688,146; 10,710,068; 10,655,361; 10,656,356 and 10,661,300 shares, respectively)
(168,686
)
(167,276
)
(166,364
)
(166,358
)
(166,247
)
Accumulated other comprehensive income, net of tax
72
78
80
99
104
Total stockholders’ equity
127,280
125,750
124,984
124,659
123,976
Total liabilities and stockholders’ equity
$
1,183,596
$
1,189,296
$
1,170,727
$
1,184,033
$
1,176,837
PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Operations (Unaudited - In Thousands, Except Earnings Per Share)
Quarter Ended
Fiscal Year Ended
June 30,
June 30,
2021
2020
2021
2020
Interest income:
Loans receivable, net
$
7,735
$
9,128
$
32,856
$
39,145
Investment securities
471
461
1,849
2,120
FHLB – San Francisco stock
118
102
418
534
Interest-earning deposits
19
36
78
657
Total interest income
8,343
9,727
35,201
42,456
Interest expense:
Checking and money market deposits
48
91
268
424
Savings deposits
38
100
208
496
Time deposits
260
452
1,269
2,023
Borrowings
619
794
2,817
3,112
Total interest expense
965
1,437
4,562
6,055
Net interest income
7,378
8,290
30,639
36,401
(Recovery) provision for loan losses
(767
)
448
(708
)
1,119
Net interest income, after (recovery) provision for loan losses
8,145
7,842
31,347
35,282
Non-interest income:
Loan servicing and other fees
290
188
1,170
819
Deposit account fees
290
289
1,247
1,610
Card and processing fees
507
333
1,605
1,454
Other
154
195
551
637
Total non-interest income
1,241
1,005
4,573
4,520
Non-interest expense:
Salaries and employee benefits
2,172
3,963
15,157
18,913
Premises and occupancy
869
862
3,500
3,465
Equipment
293
274
1,153
1,129
Professional expenses
378
349
1,561
1,439
Sales and marketing expenses
210
267
680
773
Deposit insurance premiums and regulatory assessments
123
130
552
227
Other
878
758
3,130
2,954
Total non-interest expense
4,923
6,603
25,733
28,900
Income before income taxes
4,463
2,244
10,187
10,902
Provision for income taxes
1,124
660
2,626
3,213
Net income
$
3,339
$
1,584
$
7,561
$
7,689
Basic earnings per share
$
0.44
$
0.21
$
1.01
$
1.03
Diluted earnings per share
$
0.44
$
0.21
$
1.00
$
1.01
Cash dividend per share
$
0.14
$
0.14
$
0.56
$
0.56
PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Operations – Sequential Quarters (Unaudited – In Thousands, Except Share Information)
Quarter Ended
June 30,
March 31,
December 31,
September 30,
June 30,
2021
2021
2020
2020
2020
Interest income:
Loans receivable, net
$
7,735
$
7,860
$
8,344
$
8,917
$
9,128
Investment securities
471
452
448
478
461
FHLB – San Francisco stock
118
100
100
100
102
Interest-earning deposits
19
18
17
24
36
Total interest income
8,343
8,430
8,909
9,519
9,727
Interest expense:
Checking and money market deposits
48
50
79
91
91
Savings deposits
38
38
54
78
100
Time deposits
260
292
335
382
452
Borrowings
619
593
803
802
794
Total interest expense
965
973
1,271
1,353
1,437
Net interest income
7,378
7,457
7,638
8,166
8,290
(Recovery) provision for loan losses
(767
)
(200
)
39
220
448
Net interest income, after (recovery) provision for loan losses
8,145
7,657
7,599
7,946
7,842
Non-interest income:
Loan servicing and other fees
290
355
120
405
188
Deposit account fees
290
318
329
310
289
Card and processing fees
507
366
368
364
333
Other
154
160
157
80
195
Total non-interest income
1,241
1,199
974
1,159
1,005
Non-interest expense:
Salaries and employee benefits
2,172
4,241
4,301
4,443
3,963
Premises and occupancy
869
863
865
903
862
Equipment
293
312
273
275
274
Professional expenses
378
367
402
414
349
Sales and marketing expenses
210
130
227
113
267
Deposit insurance premiums and regulatory assessments
123
154
141
134
130
Other
878
842
707
703
758
Total non-interest expense
4,923
6,909
6,916
6,985
6,603
Income before income taxes
4,463
1,947
1,657
2,120
2,244
Provision for income taxes
1,124
386
481
635
660
Net income
$
3,339
$
1,561
$
1,176
$
1,485
$
1,584
Basic earnings per share
$
0.44
$
0.21
$
0.16
$
0.20
$
0.21
Diluted earnings per share
$
0.44
$
0.21
$
0.16
$
0.20
$
0.21
Cash dividends per share
$
0.14
$
0.14
$
0.14
$
0.14
$
0.14
PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands, Except Share Information)
Quarter Ended
Fiscal Year Ended
June 30,
June 30,
2021
2020
2021
2020
SELECTED FINANCIAL RATIOS:
Return on average assets
1.12
%
0.55
%
0.64
%
0.69
%
Return on average stockholders' equity
10.65
%
5.14
%
6.05
%
6.26
%
Stockholders’ equity to total assets
10.75
%
10.53
%
10.75
%
10.53
%
Net interest spread
2.50
%
2.89
%
2.62
%
3.30
%
Net interest margin
2.54
%
2.95
%
2.66
%
3.36
%
Efficiency ratio
57.12
%
71.04
%
73.08
%
70.62
%
Average interest-earning assets to average interest-bearing liabilities
110.77
%
110.80
%
110.78
%
111.32
%
SELECTED FINANCIAL DATA:
Basic earnings per share
$
0.44
$
0.21
$
1.01
$
1.03
Diluted earnings per share
$
0.44
$
0.21
$
1.00
$
1.01
Book value per share
$
16.88
$
16.67
$
16.88
$
16.67
Shares used for basic EPS computation
7,518,542
7,436,315
7,464,814
7,467,577
Shares used for diluted EPS computation
7,590,312
7,485,019
7,538,409
7,576,182
Total shares issued and outstanding
7,541,469
7,436,315
7,541,469
7,436,315
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:
Mortgage Loans:
Single-family
$
51,574
$
11,206
$
126,145
$
107,160
Multi-family
36,987
32,876
96,474
122,366
Commercial real estate
1,128
—
3,818
14,468
Construction
3,598
—
5,426
3,983
Other
—
143
—
143
Consumer loans
—
—
—
1
Total loans originated and purchased for investment
$
93,287
$
44,225
$
231,863
$
248,121
PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands, Except Share Information)
Quarter
Quarter
Quarter
Quarter
Quarter
Ended
Ended
Ended
Ended
Ended
06/30/21
03/31/21
12/31/20
09/30/20
06/30/20
SELECTED FINANCIAL RATIOS:
Return on average assets
1.12
%
0.53
%
0.40
%
0.50
%
0.55
%
Return on average stockholders' equity
10.65
%
4.99
%
3.77
%
4.78
%
5.14
%
Stockholders’ equity to total assets
10.75
%
10.57
%
10.68
%
10.53
%
10.53
%
Net interest spread
2.50
%
2.56
%
2.61
%
2.79
%
2.89
%
Net interest margin
2.54
%
2.60
%
2.66
%
2.84
%
2.95
%
Efficiency ratio
57.12
%
79.82
%
80.31
%
74.91
%
71.04
%
Average interest-earning assets to average interest-bearing liabilities
110.77
%
110.94
%
110.82
%
110.62
%
110.80
%
SELECTED FINANCIAL DATA:
Basic earnings per share
$
0.44
$
0.21
$
0.16
$
0.20
$
0.21
Diluted earnings per share
$
0.44
$
0.21
$
0.16
$
0.20
$
0.21
Book value per share
$
16.88
$
16.73
$
16.79
$
16.75
$
16.67
Average shares used for basic EPS
7,518,542
7,462,795
7,441,984
7,436,476
7,436,315
Average shares used for diluted EPS
7,590,312
7,579,897
7,492,040
7,457,282
7,485,019
Total shares issued and outstanding
7,541,469
7,516,547
7,442,254
7,441,259
7,436,315
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:
Mortgage loans:
Single-family
$
51,574
$
38,928
$
12,444
$
23,199
$
11,206
Multi-family
36,987
21,208
16,432
21,847
32,876
Commercial real estate
1,128
830
—
1,860
—
Construction
3,598
—
688
1,140
—
Other
—
—
—
—
143
Total loans originated and purchased for investment
$
93,287
$
60,966
$
29,564
$
48,046
$
44,225
PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands)
As of
As of
As of
As of
As of
06/30/21
03/31/21
12/31/20
09/30/20
06/30/20
ASSET QUALITY RATIOS AND DELINQUENT LOANS:
Recourse reserve for loans sold
$
200
$
215
$
390
$
370
$
270
Allowance for loan losses
$
7,587
$
8,346
$
8,538
$
8,490
$
8,265
Non-performing loans to loans held for investment, net
1.02
%
1.16
%
1.20
%
0.51
%
0.55
%
Non-performing assets to total assets
0.73
%
0.82
%
0.88
%
0.38
%
0.42
%
Allowance for loan losses to gross loans held
for investment
0.88
%
0.98
%
0.99
%
0.95
%
0.91
%
Net loan charge-offs (recoveries) to average loans receivable (annualized)
—
%
—
%
—
%
—
%
—
%
Non-performing loans
$
8,646
$
9,759
$
10,270
$
4,532
$
4,924
Loans 30 to 89 days delinquent
$
—
$
—
$
350
$
2
$
219
Quarter
Quarter
Quarter
Quarter
Quarter
Ended
Ended
Ended
Ended
Ended
06/30/21
03/31/21
12/31/20
09/30/20
06/30/20
Recourse provision (recovery) for loans sold
$
(15
)
$
—
$
20
$
100
$
20
(Recovery) provision for loan losses
$
(767
)
$
(200
)
$
39
$
220
$
448
Net loan charge-offs (recoveries)
$
(8
)
$
(8
)
$
(9
)
$
(5
)
$
(7
)
As of
As of
As of
As of
As of
06/30/2021
03/31/2021
12/31/2020
09/30/2020
06/30/2020
REGULATORY CAPITAL RATIOS (BANK):
Tier 1 leverage ratio
10.19
%
9.99
%
9.78
%
9.64
%
10.13
%
Common equity tier 1 capital ratio
18.58
%
18.77
%
18.30
%
16.94
%
17.51
%
Tier 1 risk-based capital ratio
18.58
%
18.77
%
18.30
%
16.94
%
17.51
%
Total risk-based capital ratio
19.76
%
20.02
%
19.56
%
18.19
%
18.76
%
As of June 30,
2021
2020
Balance
Rate(1)
Balance
Rate(1)
INVESTMENT SECURITIES:
Held to maturity:
Certificates of deposit
$
1,000
0.28
%
$
800
1.53
%
U.S. SBA securities
1,858
0.60
2,064
0.60
U.S. government sponsored enterprise MBS
220,448
1.22
115,763
1.85
Total investment securities held to maturity
$
223,306
1.21
%
$
118,627
1.83
%
Available for sale (at fair value):
U.S. government agency MBS
$
2,222
2.32
%
$
2,943
3.32
%
U.S. government sponsored enterprise MBS
1,211
2.32
1,577
3.75
Private issue collateralized mortgage obligations
154
2.52
197
3.70
Total investment securities available for sale
$
3,587
2.33
%
$
4,717
3.48
%
Total investment securities
$
226,893
1.23
%
$
123,344
1.89
%
_____________________________ (1) The interest rate described in the rate column is the weighted-average interest rate or yield of all instruments, which are included in the balance of the respective line item.
PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands)
As of June 30,
2021
2020
Balance
Rate(1)
Balance
Rate(1)
LOANS HELD FOR INVESTMENT:
Held to maturity:
Single-family (1 to 4 units)
$
268,272
3.42
%
$
298,810
4.04
%
Multi-family (5 or more units)
484,408
4.09
491,903
4.24
Commercial real estate
95,279
4.68
105,235
4.75
Construction
3,040
5.84
7,801
6.35
Other mortgage
139
5.25
143
5.25
Commercial business
849
6.39
480
5.99
Consumer
95
15.00
94
15.00
Total loans held for investment
852,082
3.96
%
904,466
4.25
%
Advance payments of escrows
157
68
Deferred loan costs, net
6,308
6,527
Allowance for loan losses
(7,587
)
(8,265
)
Total loans held for investment, net
$
850,960
$
902,796
Purchased loans serviced by others included above
$
13,556
3.53
%
$
23,899
3.71
%
_____________________________ (1) The interest rate described in the rate column is the weighted-average interest rate or yield of all instruments, which are included in the balance of the respective line item.
As of June 30,
2021
2020
Balance
Rate(1)
Balance
Rate(1)
DEPOSITS:
Checking accounts – non interest-bearing
$
123,179
—
%
$
118,771
—
%
Checking accounts – interest-bearing
327,388
0.04
290,463
0.10
Savings accounts
307,299
0.05
273,769
0.13
Money market accounts
39,670
0.15
39,989
0.22
Time deposits
140,437
0.71
169,977
0.95
Total deposits
$
937,973
0.15
%
$
892,969
0.26
%
BORROWINGS:
Overnight
$
—
—
%
$
—
—
%
Three months or less
10,983
1.88
—
—
Over three to six months
—
—
15,000
2.62
Over six months to one year
10,000
2.20
15,000
2.52
Over one year to two years
30,000
1.92
31,047
1.90
Over two years to three years
30,000
2.25
30,000
1.92
Over three years to four years
20,000
2.70
30,000
2.25
Over four years to five years
—
—
20,000
2.70
Over five years
—
—
—
—
Total borrowings
$
100,983
2.19
%
$
141,047
2.23
%
_____________________________ (1) The interest rate described in the rate column is the weighted-average interest rate or cost of all instruments, which are included in the balance of the respective line item.
PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands)
Quarter Ended
Quarter Ended
June 30, 2021
June 30, 2020
Balance
Rate(1)
Balance
Rate(1)
SELECTED AVERAGE BALANCE SHEETS:
Held to maturity:
Loans receivable, net
$
848,587
3.65
%
$
894,522
4.08
%
Investment securities
236,236
0.80
85,255
2.16
FHLB – San Francisco stock
8,125
5.81
8,020
5.09
Interest-earning deposits
69,881
0.11
135,138
0.11
Total interest-earning assets
$
1,162,829
2.87
%
$
1,122,935
3.46
%
Total assets
$
1,193,534
$
1,154,834
Deposits
$
938,990
0.15
%
$
875,628
0.30
%
Borrowings
110,769
2.24
137,871
2.32
Total interest-bearing liabilities
$
1,049,759
0.37
%
$
1,013,499
0.57
%
Total stockholders’ equity
$
125,408
$
123,256
_____________________________ (1) The interest rate described in the rate column is the weighted-average interest rate or yield/cost of all instruments, which are included in the balance of the respective line item.
Fiscal Year Ended
Fiscal Year Ended
June 30, 2021
June 30, 2020
Balance
Rate(1)
Balance
Rate(1)
SELECTED AVERAGE BALANCE SHEETS:
Held to maturity:
Loans receivable, net
$
863,507
3.80
%
$
915,353
4.28
%
Investment securities
205,628
0.90
86,761
2.44
FHLB – San Francisco stock
8,008
5.22
8,155
6.55
Interest-earning deposits
74,952
0.10
71,766
0.90
Total interest-earning assets
$
1,152,095
3.06
%
$
1,082,035
3.92
%
Total assets
$
1,183,011
$
1,113,755
Deposits
$
914,351
0.19
%
$
844,148
0.35
%
Borrowings
125,589
2.24
127,882
2.43
Total interest-bearing liabilities
$
1,039,940
0.44
%
$
972,030
0.62
%
Total stockholders’ equity
$
124,913
$
122,757
_____________________________ (1) The interest rate described in the rate column is the weighted-average interest rate or yield/cost of all instruments, which are included in the balance of the respective line item.
PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands)
ASSET QUALITY:
As of
As of
As of
As of
As of
06/30/21
03/31/21
12/31/20
09/30/20
06/30/20
Loans on non-accrual status (excluding restructured loans):
Mortgage loans:
Single-family
$
882
$
896
$
2,062
$
2,084
$
2,281
Multi-family
781
786
—
—
—
Total
1,663
1,682
2,062
2,084
2,281
Accruing loans past due 90 days or more:
—
—
—
—
—
Total
—
—
—
—
—
Restructured loans on non-accrual status:
Mortgage loans:
Single-family
6,983
8,077
8,208
2,421
2,612
Commercial business loans
—
—
—
27
31
Total
6,983
8,077
8,208
2,448
2,643
Total non-performing loans (1)
8,646
9,759
10,270
4,532
4,924
Real estate owned, net
—
—
—
—
—
Total non-performing assets
$
8,646
$
9,759
$
10,270
$
4,532
$
4,924
__________________________ (1) The non-performing loans balances are net of individually evaluated or collectively evaluated allowances, specifically attached to the individual loans and include fair value adjustments.
Provident Financial Holdings, Inc. is a holding company of Provident Savings Bank, F.S.B. (the Bank). The Bank is a federally chartered stock savings bank. The Bank is a financial services company serving consumers and small to mid-sized businesses in the Inland Empire region of Southern California. The Bank conducts its business operations as Provident Bank, and through its subsidiary, Provident Financial Corp (PFC). The business activities of the Bank consist of community banking, investment services and trustee services for real estate transactions. The Bankâs community banking operations primarily consist of accepting deposits from customers within the communities surrounding its full-service offices and investing those funds in single-family, multi-family, commercial real estate, construction and other mortgage loans. The Bank conducts trustee services for its real estate transactions through PFC. It operates approximately 12 full-service banking offices in Riverside County.