Provident Financial Holdings Reports Fourth Quarter and Fiscal 2015 Earnings


FOURTH QUARTER HIGHLIGHTS INCLUDE:

Net Income Rises 19% to $2.5 Million Compared to Same Quarter Last Year

Diluted Earnings Per Share Increases 27% to $0.28 Per Share Compared to Same Quarter Last Year

Net Interest Margin Expands 24 Basis Points to 3.09% Compared to Same Quarter Last Year

Loans Held for Investment Increase 5% to $814.2 Million Since June 30, 2014

Non-Performing Assets Decline 11% to $16.3 Million Since June 30, 2014

Repurchased 187,566 Shares of Common Stock During the Current Quarter

RIVERSIDE, Calif., July 28, 2015 (GLOBE NEWSWIRE) -- Provident Financial Holdings, Inc. (“Company”) (NASDAQ:PROV), the holding company for Provident Savings Bank, F.S.B. (“Bank”), today announced fourth quarter earnings for the fiscal year ended June 30, 2015.            

For the quarter ended June 30, 2015, the Company reported net income of $2.49 million, or $0.28 per diluted share (on 8.88 million average diluted shares outstanding), compared to net income of $2.09 million, or $0.22 per diluted share (on 9.70 million average diluted shares outstanding), in the comparable period a year ago.  The increase in net income for the fourth quarter of fiscal 2015 was primarily attributable to a $1.19 million, or 16 percent, increase in net interest income, a $740,000, or nine percent, increase in the gain on sale of loans; partly offset by a $1.27 million, or 13 percent, increase in salaries and employee benefits expense and a $587,000, or 85 percent, reduction in the recovery from the allowance for loan losses, compared to the same period one year ago.            

“We are very pleased with our improved financial results this year in comparison to last year.  We have worked very hard to advance our fundamental performance and will continue to do so,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company.  “Although we are disappointed with the small sequential quarter decline in loans held for investment, we will not sacrifice our prudent underwriting standards and disciplined pricing standards to enhance our short-term growth and performance at the expense of our long-term growth and performance,” he concluded.   

Return on average assets for the fourth quarter of fiscal 2015 increased to 0.84 percent from 0.75 percent for the same period of fiscal 2014 and return on average stockholders’ equity for the fourth quarter of fiscal 2015 increased to 7.02 percent from 5.66 percent for the comparable period of fiscal 2014.            

On a sequential quarter basis, the fourth quarter of fiscal 2015 net income reflects an $115,000, or four percent, decrease from net income of $2.60 million in the third quarter of fiscal 2015.  The decrease in net income in the fourth quarter of fiscal 2015 compared to the third quarter of fiscal 2015 was primarily attributable to a decrease of $992,000 in the gain on sale of loans, partly offset by an increase of $472,000 in net interest income.  Diluted earnings per share for the fourth quarter of fiscal 2015 were $0.28 per share, down three percent from $0.29 per share in the third quarter of fiscal 2015.  Return on average assets decreased to 0.84 percent for the fourth quarter of fiscal 2015 from 0.92 percent in the third quarter of fiscal 2015; and return on average stockholders’ equity for the fourth quarter of fiscal 2015 was 7.02 percent, compared to 7.22 percent for the third quarter of fiscal 2015.            

For the fiscal year ended June 30, 2015, net income increased $3.19 million, or 48 percent, to $9.80 million from $6.61 million in the comparable period ended June 30, 2014; and diluted earnings per share for the fiscal year ended June 30, 2015 increased $0.42, or 65 percent, to $1.07 from $0.65 for the comparable period last year.  The increase was primarily attributable to the increase in the gain on sale of loans, which was partly offset by a decrease in the recovery from the allowance for loan losses, an increase in salaries and employee benefits expense and an increase in the provision for income taxes.  Total loan originations and purchases in fiscal 2015 and 2014 were $2.66 billion and $2.14 billion, respectively, while $2.41 billion and $2.00 billion, respectively, were sold to investors.

Net interest income increased $1.19 million, or 16 percent, to $8.85 million in the fourth quarter of fiscal 2015 from $7.66 million for the same quarter of fiscal 2014, attributable to a higher average earning assets balance and, to a lesser extent, an increase in the net interest margin.  Non-interest income increased $954,000, or 10 percent, to $10.51 million in the fourth quarter of fiscal 2015 from $9.56 million in the same quarter of fiscal 2014.  Non-interest expense increased $936,000, or seven percent, to $15.15 million in the fourth quarter of fiscal 2015 from $14.21 million in the same quarter of fiscal 2014.  The increases in non-interest income (primarily due to an increase in the gain on sale of loans) and non-interest expense (primarily due to an increase in salaries and employee benefits expense) relate primarily to increased mortgage banking activity.

The average balance of loans outstanding, including loans held for sale, increased by $165.5 million, or 19 percent, to $1.04 billion in the fourth quarter of fiscal 2015 from $869.6 million in the same quarter of fiscal 2014, primarily due to an increase in loans held for sale attributable to the improved mortgage banking activity and, to a lesser extent, an increase in loans held for investment, primarily in multi-family loans.  The average yield on loans receivable decreased by 20 basis points to 3.89 percent in the fourth quarter of fiscal 2015 from an average yield of 4.09 percent in the same quarter of fiscal 2014.  The decrease in the average loan yield was primarily attributable to payoffs of loans which had a higher yield than the average yield of loans held for investment, adjustable rate loans repricing to lower current market interest rates and a lower average yield on loans held for sale.  The average balance of loans held for sale in the fourth quarter of fiscal 2015 was $219.8 million with an average yield of 3.63 percent as compared to $99.1 million with an average yield of 4.29 percent in the same quarter of fiscal 2014.  Loans originated and purchased for investment in the fourth quarter of fiscal 2015 totaled $26.8 million, consisting primarily of multi-family, construction and single-family loans.  The outstanding balance of “preferred loans” (multi-family, commercial real estate, construction and commercial business loans) increased by $52.4 million, or 13 percent, to $453.4 million at June 30, 2015 from $401.0 million at June 30, 2014.  The percentage of preferred loans to total loans held for investment at June 30, 2015 increased to 55 percent from 51 percent at June 30, 2014.  Loan principal payments received in the fourth quarter of fiscal 2015 were $32.0 million, compared to $46.1 million in the same quarter of fiscal 2014.

The average balance of investment securities decreased by $1.5 million, or nine percent, to $15.5 million in the fourth quarter of fiscal 2015 from $17.0 million in the same quarter of fiscal 2014.  The decrease was attributable to principal payments received on mortgage-backed securities during the last 12 months, partly offset by an $800,000 investment in short-term time deposits at four minority-owned financial institutions in June 2014 and a $250,000 investment in the common stock of a community development financial institution in July 2014 to help fulfill the Bank’s Community Reinvestment Act obligation.  The average yield on investment securities decreased eight basis points to 1.78 percent in the fourth quarter of fiscal 2015 from 1.86 percent for the same quarter of fiscal 2014.  The decline in the average yield was primarily attributable to the downward repricing of adjustable rate mortgage-backed securities and the placement of the short-term time deposits referred to above at an average yield of 0.50 percent.

In the fourth quarter of fiscal 2015, the Federal Home Loan Bank (“FHLB”) – San Francisco distributed a $133,000 regular cash dividend and a $261,000 special cash dividend to the Bank.  This compares to the same quarter last year when the Bank received a $178,000 regular cash dividend.

The average balance of the Company’s interest-earning deposits, primarily cash with the Federal Reserve Bank of San Francisco, decreased $93.4 million, or 52 percent, to $85.2 million in the fourth quarter of fiscal 2015 from $178.6 million in the same quarter of fiscal 2014.  The decrease in interest-earning deposits was primarily the result of redeploying cash balances to fund the increase in loans held for sale and loans held for investment.  The average yield earned on interest-earning deposits was 0.25 percent in both the fourth quarters of fiscal 2015 and 2014 and lower than the yield that could have been earned if the excess liquidity was deployed in loans or investment securities.

Average deposits increased $15.4 million, or two percent, to $918.1 million in the fourth quarter of fiscal 2015 from $902.7 million in the same quarter of fiscal 2014.  The average cost of deposits decreased by six basis points to 0.50 percent in the fourth quarter of fiscal 2015 from 0.56 percent in the same quarter last year, primarily due to higher cost time deposits repricing to lower current market interest rates and a lower percentage of time deposits to the total deposit balance.  Transaction account balances or “core deposits” increased $51.4 million, or 10 percent, to $578.4 million at June 30, 2015 from $527.0 million at June 30, 2014, while time deposits decreased $25.2 million, or seven percent, to $345.7 million at June 30, 2015 from $370.9 million at June 30, 2014, consistent with the Bank’s strategy to decrease the percentage of time deposits in its deposit base and to increase the percentage of lower cost checking and savings accounts.

The average balance of borrowings, which consisted of FHLB – San Francisco advances, increased $56.9 million, or 127 percent, to $101.5 million and the average cost of advances decreased 82 basis points to 2.38 percent in the fourth quarter of fiscal 2015, compared to an average balance of $44.6 million and an average cost of 3.20 percent in the same quarter of fiscal 2014.  The increase in borrowings was primarily attributable to newly acquired long-term advances to hedge against rising interest rates.

The net interest margin during the fourth quarter of fiscal 2015 increased 24 basis points to 3.09 percent from 2.85 percent in the same quarter last year.  The increase was primarily due to the deployment of excess liquidity into higher yielding interest-earning assets, primarily to fund increases in loans held for sale and loans held for investment and the special cash dividend received from FHLB – San Francisco.  The average yield of interest-earning assets increased by 24 basis points to 3.70 percent in the fourth quarter of fiscal 2015 from 3.46 percent in the same quarter last year, while the average cost of liabilities increased by one basis point to 0.69 percent in the fourth quarter of fiscal 2015 from 0.68 percent in the same quarter last year.

During the fourth quarter of fiscal 2015, the Company recorded a recovery from the allowance for loan losses of $104,000 compared to the recovery of $691,000 recorded during the same period of fiscal 2014 and the $111,000 recovery recorded in the third quarter of fiscal 2015 (sequential quarter).

Non-performing assets, with underlying collateral primarily located in Southern California, decreased to $16.3 million, or 1.39 percent of total assets, at June 30, 2015, compared to $18.4 million, or 1.66 percent of total assets, at June 30, 2014.  Non-performing loans at June 30, 2015 decreased $2.0 million or 12 percent since June 30, 2014 to $13.9 million and were primarily comprised of 34 single-family loans ($9.9 million); four multi-family loans ($2.2 million); five commercial real estate loans ($1.7 million); and one commercial business loan ($89,000).  Real estate owned acquired in the settlement of loans at June 30, 2015 decreased $69,000, or three percent, to $2.4 million (three properties) from $2.5 million (four properties) at June 30, 2014.  The real estate owned at June 30, 2015 was comprised of two single-family properties ($432,000) and one commercial real estate property ($2.0 million).

Net recoveries for the quarter ended June 30, 2015 were $116,000 or 0.04 percent (annualized) of average loans receivable, compared to net recoveries of $411,000 or 0.19 percent (annualized) of average loans receivable for the quarter ended June 30, 2014 and net recoveries of $130,000 or 0.05 percent (annualized) of average loans receivable for the quarter ended March 31, 2015 (sequential quarter).

Classified assets at June 30, 2015 were $31.1 million, comprised of $8.2 million of loans in the special mention category, $20.5 million of loans in the substandard category and $2.4 million in real estate owned.  Classified assets at June 30, 2014 were $37.9 million, comprised of $9.4 million of loans in the special mention category, $26.0 million of loans in the substandard category and $2.5 million in real estate owned.

For the quarter ended June 30, 2015, no loans were restructured from their original terms or newly classified as a restructured loan.  As of June 30, 2015, the outstanding balance of restructured loans that have not returned to their original promissory note terms was $6.6 million: two loans were classified as special mention ($989,000, on accrual status); and 16 loans were classified as substandard ($5.6 million, all are on non-accrual status).  As of June 30, 2015, $4.9 million, or 74 percent, of restructured loans were current with respect to their modified payment terms.

The allowance for loan losses was $8.7 million at June 30, 2015, or 1.06 percent of gross loans held for investment, compared to $9.7 million at June 30, 2014, or 1.25 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, 2015.

Non-interest income increased by $954,000, or 10 percent, to $10.51 million in the fourth quarter of fiscal 2015 from $9.56 million in the same period of fiscal 2014, primarily as a result of a $740,000 increase in the gain on sale of loans.  On a sequential quarter basis, non-interest income decreased $758,000, or seven percent, primarily as a result of a $992,000, or 10 percent, decrease in the gain on sale of loans.

The gain on sale of loans increased to $8.76 million for the quarter ended June 30, 2015 from $8.02 million in the comparable quarter last year, reflecting the impact of a higher loan sale volume, partly offset by a lower average loan sale margin.  Total loan sale volume, which includes the net change in commitments to extend credit on loans to be held for sale, was $636.8 million in the quarter ended June 30, 2015, up $135.8 million, or 27 percent, from $501.0 million in the comparable quarter last year.  The average loan sale margin for mortgage banking was 139 basis points for the quarter ended June 30, 2015, down 20 basis points from 159 basis points in the comparable quarter last year but up 14 basis points from 125 basis points in the third quarter of fiscal 2015 (sequential quarter).  The gain on sale of loans includes an unfavorable fair-value adjustment on loans held for sale and derivative financial instruments (commitments to extend credit, commitments to sell loans, commitments to sell mortgage-backed securities, and option contracts) that amounted to a net loss of $5.34 million in the fourth quarter of fiscal 2015, compared to a favorable fair-value adjustment that amounted to a net gain of $3.03 million in the same period last year.

In the fourth quarter of fiscal 2015, a total of $720.7 million of loans were originated and purchased for sale, 51 percent higher than the $477.2 million for the same period last year, and six percent higher than the $680.6 million during the third quarter of fiscal 2015 (sequential quarter).  The loan origination volume has increased from the previous year because mortgage interest rates have declined spurring an increase in refinance activity.  Total loans sold during the quarter ended June 30, 2015 were $795.5 million, 87 percent higher than the $425.2 million sold during the same quarter last year, and 32 percent higher than the $604.1 million sold during the third quarter of fiscal 2015 (sequential quarter).  Total loan originations (including loans originated and purchased for investment and loans originated and purchased for sale) were $747.5 million in the fourth quarter of fiscal 2015, an increase of 42 percent from $525.1 million in the same quarter of fiscal 2014, and two percent higher than the $735.8 million in the third quarter of fiscal 2015 (sequential quarter).

The sale and operations of real estate owned acquired in the settlement of loans resulted in a net gain of $294,000 in the fourth quarter of fiscal 2015, compared to a net gain of $3,000 in the comparable period last year.  Four real estate owned properties were sold and two real estate owned properties were acquired in the settlement of loans in both the fourth quarters of fiscal 2015 and 2014.  As of June 30, 2015, the real estate owned balance was $2.4 million (three properties), compared to $2.5 million (four properties) at June 30, 2014.

Non-interest expenses increased $936,000, or seven percent, to $15.15 million in the fourth quarter of fiscal 2015 from $14.21 million in the same quarter last year, primarily as a result of the increase in salaries and employee benefits expense.  The increase in salaries and employee benefits expense was primarily related to the increase in mortgage banking loan production resulting in higher variable compensation expense.

The Company’s efficiency ratio improved to 78 percent in the fourth quarter of fiscal 2015 from 83 percent in the fourth quarter of fiscal 2014.  The improvement was primarily the result of the increases in net interest income and non-interest income, partly offset by the increase in non-interest expense.

The Company’s provision for income taxes was $1.83 million for the fourth quarter of fiscal 2015, an increase of $230,000 or 14 percent, from $1.60 million in the same quarter last year, as a result of the increase in income before taxes.  The effective income tax rate for the quarter ended June 30, 2015 was 42.4 percent as compared to 43.4 percent in the same quarter last year.  The Company believes that the tax provision recorded in the fourth quarter of fiscal 2015 reflects its current income tax obligations.

The Company repurchased 187,566 shares of its common stock during the quarter ended June 30, 2015 at an average cost of $17.39 per share.  As of June 30, 2015, a total of 81,667 shares or 19 percent of the shares authorized in the April 2015 stock repurchase plan have been purchased, leaving 348,984 shares available for future purchases.

The Bank currently operates 15 retail/business banking offices in Riverside County and San Bernardino County (Inland Empire).  Provident Bank Mortgage operates two wholesale loan production offices and 13 retail loan production offices located throughout California.

The Company will host a conference call for institutional investors and bank analysts on Tuesday, July 28, 2015 at 10:00 a.m. (Pacific) to discuss its financial results.  The conference call can be accessed by dialing 1-800-230-1092 and requesting the Provident Financial Holdings Earnings Release Conference Call.  An audio replay of the conference call will be available through Tuesday, August 4, 2015 by dialing 1-800-475-6701 and referencing access code number 365009.

For more financial information about the Company please visit the website at www.myprovident.com and click on the “Investor Relations” section.

Safe-Harbor Statement

This press release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements relate to the Company’s financial condition, liquidity, results of operations, plans, objectives, future performance or business. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors which could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements include, but are not limited  to increased competitive pressures; changes in the interest rate environment; secondary market conditions for loans and our ability to sell loans in the secondary market; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and other factors described in the Company’s latest annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission-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 2015 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.

 

  
PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Financial Condition
(Unaudited –In Thousands, Except Share Information)
        
  June 30,March 31, June 30, 
  2015 2015   2014  
Assets       
Cash and cash equivalents  $81,403  $30,675  $118,937  
Investment securities - held to maturity, at cost   800   800   800  
Investment securities - available for sale, at fair value  14,161   14,986   16,347  
Loans held for investment (net of allowance for loan losses of $8,724; $8,712 and $9,744, respectively; includes $4,518, $0 and $0 at fair value, respectively)   814,234   819,636   772,141  
Loans held for sale, at fair value   224,715   307,054   158,883  
Accrued interest receivable   2,839   2,855   2,483  
Real estate owned, net   2,398   3,190   2,467  
FHLB – San Francisco stock   8,094   7,732   7,056  
Premises and equipment, net   5,417   5,617   6,369  
Prepaid expenses and other assets   20,494   21,246   20,146  
        
Total assets  $1,174,555  $1,213,791  $1,105,629  
        
Liabilities and Stockholders’ Equity       
Liabilities:       
Non interest-bearing deposits  $67,538  $62,824  $58,654  
Interest-bearing deposits   856,548   855,076   839,216  
Total deposits  924,086   917,900   897,870  
        
Borrowings   91,367   131,384   41,431  
Accounts payable, accrued interest and other liabilities   17,965   22,649   20,466  
Total liabilities   1,033,418   1,071,933   959,767  
        
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; 17,766,865; 17,718,365 and 17,714,365 shares issued, respectively; 8,634,607; 8,718,929 and 9,312,269 shares outstanding, respectively)  177   177   177  
        
Additional paid-in capital   88,893   87,552   88,259  
Retained earnings   188,206   186,762   182,458  
Treasury stock at cost (9,132,258; 8,999,436 and 8,402,096 shares, respectively)   (136,470)  (133,030)  (125,418) 
Accumulated other comprehensive income, net of tax  331   397   386  
        
Total stockholders’ equity   141,137   141,858   145,862  
        
Total liabilities and stockholders’ equity  $1,174,555  $1,213,791  $1,105,629  
        


 
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, 
  2015   2014   2015   2014  
Interest income:        
  Loans receivable, net $10,077  $8,902  $38,337  $36,424  
  Investment securities  69   79   287   339  
  FHLB – San Francisco stock  394   178   796   793  
  Interest-earning deposits  54   113   276   503  
  Total interest income  10,594   9,272   39,696   38,059  
         
Interest expense:        
  Checking and money market deposits  104   93   419   385  
  Savings deposits  164   154   641   606  
  Time deposits  875   1,012   3,701   4,504  
  Borrowings  601   356   1,660   1,841  
  Total interest expense  1,744   1,615   6,421   7,336  
         
Net interest income  8,850   7,657   33,275   30,723  
Recovery from the allowance for loan losses  (104)  (691)  (1,387)  (3,380) 
Net interest income, after  recovery from the        
  allowance for loan losses  8,954  8,348  34,662  34,103 
         
Non-interest income:        
  Loan servicing and other fees 262   299   1,085   1,077  
  Gain on sale of loans, net  8,762   8,022   34,210   25,799  
  Deposit account fees  575   601   2,412   2,469  
  Gain on sale and operations of real estate        
  owned acquired in the settlement of loans  294  3  282  18 
  Card and processing fees  376   373   1,406   1,370  
  Other  242   259   992   942  
  Total non-interest income  10,511   9,557   40,387   31,675  
         
Non-interest expense:        
  Salaries and employee benefits  11,137   9,869   41,618   38,044  
  Premises and occupancy  1,062   1,106   4,666   4,468  
  Equipment  414   441   1,720   1,830  
  Professional expenses  551   518   2,179   1,832  
  Sales and marketing expenses  455   537   1,643   1,761  
  Deposit insurance and regulatory assessments  236   251   974   945  
  Other  1,295   1,492   5,169   5,288  
  Total non-interest expense  15,150   14,214   57,969   54,168  
         
Income before taxes  4,315   3,691   17,080   11,610  
Provision for income taxes  1,830   1,600   7,277   5,004  
  Net income $2,485  $2,091  $9,803  $6,606  
         
Basic earnings per share $0.29   $0.22   $1.09   $0.67   
Diluted earnings per share $0.28   $0.22   $1.07   $0.65   
Cash dividends per share $0.12   $0.10   $0.45   $0.40   
  

 

PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Operations – Sequential Quarter
(Unaudited – In Thousands, Except Share Information)
 
 Quarter Ended
 June 30,March 31, 
 2015 2015  
Interest income:    
  Loans receivable, net $10,077  $9,689  
  Investment securities  69   70  
  FHLB – San Francisco stock  394   126  
  Interest-earning deposits  54   52  
  Total interest income  10,594   9,937  
     
Interest expense:    
  Checking and money market deposits  104   101  
  Savings deposits  164   160  
  Time deposits  875   910  
  Borrowings  601   388  
  Total interest expense  1,744   1,559  
     
Net interest income  8,850   8,378  
Recovery from the allowance for loan losses  (104)  (111) 
Net interest income, after recovery from the allowance for loan    
  losses  8,954  8,489 
     
Non-interest income:    
  Loan servicing and other fees  262   264  
  Gain on sale of loans, net  8,762   9,754  
  Deposit account fees  575   607  
  Gain on sale and operations of real estate owned    
    acquired in the settlement of loans, net  294  58 
  Card and processing fees  376   338  
  Other  242   248  
  Total non-interest income  10,511   11,269  
     
Non-interest expense:    
  Salaries and employee benefits  11,137   10,950  
  Premises and occupancy  1,062   1,106  
  Equipment  414   420  
  Professional expenses  551   671  
  Sales and marketing expenses  455   458  
  Deposit insurance premiums and regulatory assessments  236   227  
  Other  1,295   1,336  
  Total non-interest expense  15,150   15,168  
     
Income before taxes  4,315   4,590  
Provision for income taxes  1,830   1,990  
  Net income $2,485  $2,600  
     
Basic earnings per share $0.29   $0.29   
Diluted earnings per share $0.28   $0.29   
Cash dividends per share $0.12   $0.11   
  

 

 
PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands, Except Share Information )
 
 Quarter Ended Fiscal Year Ended
June 30,June 30,
  2015   2014   2015   2014 
SELECTED FINANCIAL RATIOS:       
Return on average assets  0.84%  0.75%  0.87%  0.58%
Return on average stockholders’ equity  7.02%  5.66%  6.81%  4.31%
Stockholders’ equity to total assets  12.02%  13.19%  12.02%  13.19%
Net interest spread  3.01%  2.78%  2.96%  2.69%
Net interest margin  3.09%  2.85%  3.03%  2.79%
Efficiency ratio  78.25%  82.57%  78.70%  86.81%
Average interest-earning assets to average        
  interest-bearing liabilities  112.20%  113.27%  113.02%  113.54%
        
SELECTED FINANCIAL DATA:       
Basic earnings per share $0.29  $0.22  $1.09  $0.67 
Diluted earnings per share $0.28  $0.22  $1.07  $0.65 
Book value per share $16.35  $15.66  $16.35  $15.66 
Shares used for basic EPS computation  8,669,375   9,521,624   8,996,952   9,926,323 
Shares used for diluted EPS computation  8,875,220   9,697,117   9,173,112   10,110,993 
Total shares issued and outstanding  8,634,607   9,312,269   8,634,607   9,312,269 
        
LOANS ORIGINATED AND PURCHASED FOR SALE:       
Retail originations $339,578  $247,536  $1,175,413  $984,378 
Wholesale originations and purchases  381,098   229,684   1,305,302   983,244 
  Total loans originated and purchased for sale .$720,676  $477,220  $2,480,715  $1,967,622 
        
LOANS SOLD:       
Servicing released $790,621  $423,882  $2,392,251  $1,990,087 
Servicing retained  4,917   1,323   17,663   9,189 
  Total loans sold $795,538  $425,205  $2,409,914  $1,999,276 
        

 

   As of   As of   As of   As of   As of 
 06/30/2015 03/31/2015 12/31/2014 09/30/2014 06/30/2014
ASSET QUALITY RATIOS AND         
  DELINQUENT LOANS:
Recourse reserve for loans sold $ 768   $ 731   $ 711   $712  $ 904  
Allowance for loan losses $ 8,724   $ 8,712   $ 8,693   $8,888  $ 9,744  
Non-performing loans to loans held for         
  investment, net   1.71 %  1.28 %  1.40 % 1.62%  2.06 %
Non-performing assets to total assets   1.39 %   1.13 %   1.32 %  1.40%   1.66 %
Allowance for loan losses to gross non-         
  performing loans   59.77 %  79.74 %  73.88 % 66.62%  55.73 %
Allowance for loan losses to gross loans held          
  for investment   1.06 %   1.05 %   1.08 %  1.11%   1.25 %
Net (recoveries) charge-offs to average loans         
  receivable (annualized)   (0.04)%  (0.05)%  (0.07)% 0.02%  (0.19)%
Non-performing loans $ 13,946   $ 10,521   $ 11,151   $12,791  $ 15,936  
Loans 30 to 89 days delinquent $ 1,335   $ 4,445   $ 291   $581  $ 322  

 

 
PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands)
 
 Quarter Quarter Quarter Quarter Quarter 
EndedEndedEndedEndedEnded
 06/30/2015 03/31/2015 12/31/2014 09/30/2014 06/30/2014 
Recourse provision (recovery) for loans sold $72  $42  $  (1) $(199) $  (86) 
Recovery from the allowance for loan losses $(104) $(111) $(354 $(818 $(691 
Net (recoveries) charge-offs $(116 $(130) $(159 $38  $(411 
          
   As of   As of   As of   As of   As of
  
 06/30/2015 03/31/2015 12/31/14(1) 09/30/14(1) 06/30/14(1)
  
REGULATORY CAPITAL RATIOS (BANK):
Tier 1 leverage ratio  10.68%  10.79%  10.70%  10.50%  12.53%  
Common equity tier 1 capital ratio  17.22%  15.81% N/A N/A  N/A  
Tier 1 risk-based capital ratio  17.22%  15.81%  15.15%  15.28%  18.72%  
Total risk-based capital ratio  18.47%  17.04%  16.26%  16.47%  19.98%  
          
REGULATORY CAPITAL RATIOS (HOLDING COMPANY):
Tier 1 leverage ratio  11.94%  12.47% N/A N/A  N/A  
Common equity tier 1 capital ratio  19.24%  18.27% N/A N/A  N/A  
Tier 1 risk-based capital ratio  19.24%  18.27% N/A N/A  N/A  
Total risk-based capital ratio  20.49%  19.50% N/A N/A  N/A  
  
(1)  On January 1, 2015 the Bank and the Holding Company implemented the Basel III capital protocol consistent with regulatory requirements which were not applicable in prior periods.

 

 As of June 30,
 2015 2014
 Balance Rate(1) Balance Rate(1)
INVESTMENT SECURITIES:         
Held to maturity:         
Certificates of deposit $800   0.50% $800   0.50%
  Total investment securities held to maturity $800   0.50% $800   0.50%
          
Available for sale (at fair value):         
U.S. government agency MBS $7,906   1.66% $9,109   1.65%
U.S. government sponsored enterprise MBS  5,387   2.40   6,385   2.35 
Private issue collateralized mortgage obligations  717   2.49   853   2.40 
Common stock – community development financial         
  institution  151  -  -  - 
  Total investment securities available for sale $14,161   1.97% $16,347   1.96%
          
  Total investment securities $14,961   1.89% $17,147   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,
 2015 2014
 Balance Rate(1) Balance Rate(1)
LOANS HELD FOR INVESTMENT:         
Held to maturity:         
Single-family (1 to 4 units) $365,961   3.28% $377,824   3.23%
Multi-family (5 or more units)  347,020   4.48   301,191   4.74 
Commercial real estate  100,897   5.27   96,781   5.74 
Construction  8,191   5.24   2,869   5.27 
Commercial business  666   6.53   1,237   6.56 
Consumer  244   9.94   306   9.06 
  Total loans held for investment  822,979   4.06%  780,208   4.14%
          
Undisbursed loan funds  (3,360     (1,090   
Advance payments of escrows  199      215    
Deferred loan costs, net  3,140      2,552    
Allowance for loan losses    (8,724)       (9,744)   
  Total loans held for investment, net $814,234     $772,141    
          
Purchased loans serviced by others included above $5,377   4.82% $11,991   4.36%
        
(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, 
 2015 2014 
 Balance Rate(1) Balance Rate(1)  
       
DEPOSITS:       
Checking accounts – non interest-bearing $67,538  -%$58,654  -% 
Checking accounts – interest-bearing  224,090    0.15  202,769    0.14  
Savings accounts  255,090    0.26  239,429    0.26  
Money market accounts  31,672    0.31  26,125    0.36  
Time deposits  345,696    1.02  370,893    1.08  
  Total deposits $924,086    0.50%$897,870    0.56% 
          
BORROWINGS:         
Overnight $  -   - %$  -   - % 
Three months or less  -   -   -   -   
Over three to twelve months  -   -   -   -   
Over twelve months to one year  -   -   -   -   
Over one year to two years  -   -   -   -   
Over two years to three years  10,059    3.03  -   -   
Over three years to four years  10,000    1.53  10,080    3.04  
Over four years to five years  -   -   10,000    1.53  
Over five years  71,308    2.92  21,351    4.01  
Total borrowings $91,367  2.78%$41,431  3.18% 
              
  
(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, 2015 June 30, 2014 
 Balance Rate(1) Balance Rate(1) 
         
SELECTED AVERAGE BALANCE SHEETS:        
Loans receivable, net (2) $1,035,154   3.89% $869,620   4.09% 
Investment securities  15,508   1.78%  16,963   1.86% 
FHLB – San Francisco stock  8,003   19.69%  7,859   9.06% 
Interest-earning deposits  85,203   0.25%  178,569   0.25% 
Total interest-earning assets $1,143,868   3.70% $1,073,011   3.46% 
Total assets $1,179,421    $1,110,915    
         
Deposits $918,052   0.50% $902,688   0.56% 
Borrowings  101,483   2.38%  44,624   3.20% 
Total interest-bearing liabilities $1,019,535   0.69% $947,312   0.68% 
Total stockholders’ equity $141,544    $147,754    
         
         
(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 investment and loans held for sale at fair value, net of the allowance for loan losses. 
   
 
 Fiscal Year Ended Fiscal Year Ended 
 June 30, 2015 June 30, 2014 
 Balance Rate(1) Balance Rate(1) 
         
SELECTED AVERAGE BALANCE SHEETS:        
Loans receivable, net (2) $965,035   3.97% $874,941   4.16% 
Investment securities  16,227   1.77%  17,923   1.89% 
FHLB – San Francisco stock  7,294   10.91%  11,228   7.06% 
Interest-earning deposits  108,971   0.25%  198,682   0.25% 
Total interest-earning assets $1,097,527   3.62% $1,102,774   3.45% 
Total assets $1,133,097    $1,140,648    
         
Deposits $910,059   0.52% $914,175   0.60% 
Borrowings  61,074   2.72%  57,131   3.22% 
Total interest-bearing liabilities $971,133   0.66% $971,306   0.76% 
Total stockholders’ equity $143,978    $153,153    
         
         
(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 investment and loans held for sale at fair value, net of the allowance for loan losses. 


  
PROVIDENT FINANCIAL HOLDINGS, INC.
Asset Quality (1)
(Unaudited – Dollars in Thousands)
 
   As of   As of   As of   As of   As of 
 06/30/2015 03/31/2015 12/31/2014 09/30/2014 06/30/2014 
Loans on non-accrual status (excluding           
  restructured loans):       
Mortgage loans:           
Single-family  $7,010  $4,761  $4,561  $5,163  $7,442  
Multi-family   653   582   589   745   1,333  
Commercial real estate   680   444   728   1,521   1,552  
Total   8,343   5,787   5,878   7,429   10,327  
            
Accruing loans past due 90 days or more:  -   -   -   -   -  
Total   -   -   -   -   -  
            
Restructured loans on non-accrual status:           
Mortgage loans:           
Single-family   2,902   2,037   2,792   2,861   2,957  
Multi-family   1,593   1,580   1,591   1,620   1,760  
Commercial real estate   1,019   1,024   792   796   800  
Commercial business loans   89   93   98   85   92  
Total   5,603   4,734   5,273   5,362   5,609  
            
Total non-performing loans   13,946   10,521   11,151   12,791   15,936  
           
Real estate owned, net   2,398   3,190   3,496   2,707   2,467  
Total non-performing assets  $16,344  $13,711  $14,647  $15,498  $18,403  
            
Restructured loans on accrual status:           
Mortgage loans:           
Single-family  $989  $2,023  $687  $687  $343  
Total  $989  $2,023  $687  $687  $343  
 
(1) The non-performing loan balances are net of individually evaluated or collectively evaluated allowances, specifically attached to the individual loans. 



            

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