UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 29, 2019

PROVIDENT FINANCIAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

Delaware
000-28304
33-0704889
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)

3756 Central Avenue, Riverside, California
92506
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code:  (951) 686-6060

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.
 
[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act 
            (17 CFR 240.14d-2(b))
 
[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act  
            (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, par value $.01 per share
Trading Symbol(s)
PROV
Name of each exchange on which registere
The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [  ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]



Item 2.02  Results of Operations and Financial Condition

On October 29, 2019, Provident Financial Holdings, Inc. (“Corporation”), the holding company for Provident Savings Bank, F.S.B., distributed its quarterly results for the quarter ended September 30, 2019. A copy of the news release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 7.01  Regulation FD Disclosure.

On October 29, 2019, the Corporation posted its Investor Presentation for the quarter ended September 30, 2019 on the Corporation’s website, www.myprovident.com, under Presentations in the Investor Relations section.  A copy of the Investor Presentation is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

Item 9.01  Financial Statements and Exhibits

(d)
Exhibits

The following exhibits are being furnished herewith and this list shall constitute the exhibit index:











SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  October 29, 2019 PROVIDENT FINANCIAL HOLDINGS, INC.
 
 


 
/s/ Donavon P. Ternes                            
 
Donavon P. Ternes
 
President, Chief Operating Officer and
Chief Financial Officer
(Principal Financial and Accounting Officer)
  






                        




Exhibit 99.1


 
 
 

3756 Central Avenue
Riverside, CA 92506
(951) 686-6060
NEWS RELEASE




PROVIDENT FINANCIAL HOLDINGS REPORTS
FIRST QUARTER OF FISCAL 2020 RESULTS


Net Income Increases by 41% in the September 2019 Quarter in Comparison to the
September 2018 Quarter

Net Interest Margin Expands 34 Basis Points to 3.64% in the September 2019 Quarter
in Comparison to the September 2018 Quarter and by 12 Basis Points in Comparison
to the Prior Sequential Quarter

Classified Assets Decrease 20% to $13.0 Million at September 30, 2019 in Comparison
to $16.2 Million at June 30, 2019


Riverside, Calif. – October 29, 2019 – Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the holding company for Provident Savings Bank, F.S.B. (“Bank”), today announced first quarter earnings results for the fiscal year ending June 30, 2020.
            For the quarter ended September 30, 2019, the Company reported net income of $2.56 million, or $0.33 per diluted share (on 7.65 million average diluted shares outstanding), up 41 percent from the net income of $1.82 million, or $0.24 per diluted share (on 7.56 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 higher net interest income and lower non-interest expenses, partly offset by lower non-interest income.
“I am pleased with our financial results for the September 2019 quarter and pleased that our fundamentals continue to improve.  For example, our net interest margin
Page 1 of 16


 
 
 
continues to expand, loans originated and purchased for investment increased, our credit quality metrics are very good, and our capital levels are strong,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company.  “We believe the Company is well-positioned for fiscal 2020,” Mr. Blunden concluded.
Return on average assets for the first quarter of fiscal 2020 was 0.95 percent compared to 0.63 percent for the same period of fiscal 2019; and return on average stockholders’ equity for the first quarter of fiscal 2020 was 8.46 percent compared to 6.03 percent for the comparable period of fiscal 2019.
On a sequential quarter basis, the $2.56 million net income for the first quarter of fiscal 2020 reflects a $1.78 million or 226 percent increase from $787,000 in the fourth quarter of fiscal 2019. The increase in earnings for the first quarter of fiscal 2020 compared to the fourth quarter of fiscal 2019 was primarily attributable to higher net interest income and lower non-interest expenses, partly offset by lower non-interest income. Diluted earnings per share for the first quarter of fiscal 2020 were $0.33 per share, up 230 percent from the $0.10 per share during the fourth quarter of fiscal 2019. Return on average assets was 0.95 percent for the first quarter of fiscal 2020 compared to 0.29 percent in the fourth quarter of fiscal 2019; and return on average stockholders’ equity for the first quarter of fiscal 2020 was 8.46 percent, compared to 2.60 percent for the fourth quarter of fiscal 2019.
Net interest income increased $225,000, or two percent, to $9.58 million in the first quarter of fiscal 2020 from $9.36 million for the same quarter of fiscal 2019, attributable to an increase in the net interest margin, partly offset by a lower average interest-earning assets balance.  The net interest margin during the first quarter of fiscal
Page 2 of 16


 
 
 
2020 increased 34 basis points to 3.64 percent from 3.30 percent in the same quarter last year, primarily due to an increase in the average yield of interest-earning assets and a slight decrease in the average cost of interest-bearing liabilities. The average yield on interest-earning assets increased by 33 basis points to 4.21 percent in the first quarter of fiscal 2020 from 3.88 percent in the same quarter last year; while the average cost of interest-bearing liabilities decreased by one basis point to 0.63 percent in the first quarter of fiscal 2020 from 0.64 percent in the same quarter last year. The average balance of interest-earning assets decreased by $82.0 million, or seven percent, to $1.05 billion in the first quarter of fiscal 2020 from $1.13 billion in the same quarter last year. The average balance of interest-bearing liabilities decreased by $80.4 million, or eight percent, to $942.5 million in the first quarter of fiscal 2020 from $1.02 billion in the same quarter last year.
The average balance of loans receivable (including loans held for sale) decreased by $63.8 million, or seven percent, to $903.3 million in the first quarter of fiscal 2020 from $967.1 million in the same quarter of fiscal 2019, primarily due to a decrease in the average balance of loans held for sale, partly offset by an increase in loans held for investment. There were no loans held for sale during the first quarter of fiscal 2020. The average yield on loans receivable increased by 25 basis points to 4.46 percent in the first quarter of fiscal 2020 from an average yield of 4.21 percent in the same quarter of fiscal 2019 on both the repricing of the predominantly adjustable rate loan portfolio and new loans originated at higher market interest rates as well as a lower net deferred loan cost amortization (primarily attributable to lower loan payoffs). Total loans originated and purchased for investment in the first quarter of fiscal 2020 were $93.4 million, up 154
Page 3 of 16


 
 
 
percent from $36.7 million in the same quarter of fiscal 2019. Loan principal payments received in the first quarter of fiscal 2020 were $50.8 million, compared to $62.9 million in the same quarter of fiscal 2019.
The average balance of investment securities increased by $4.6 million, or five percent, to $95.9 million in the first quarter of fiscal 2020 from $91.3 million in the same quarter of fiscal 2019. The increase was primarily attributable to purchases of mortgage-backed securities, partly offset by principal payments received on mortgage-backed securities. The average yield on investment securities increased 105 basis points to 2.56 percent in the first quarter of fiscal 2020 from 1.51 percent for the same quarter of fiscal 2019. The increase in the average yield was primarily attributable to purchases of mortgage-backed securities which had higher average yields than the existing portfolio and the repricing of variable rate investment securities to higher market interest rates.
In the first quarter of fiscal 2020, the Federal Home Loan Bank – San Francisco (“FHLB”) distributed a $143,000 cash dividend to the Bank on its FHLB stock, unchanged from 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 $22.8 million, or 34 percent, to $44.5 million in the first quarter of fiscal 2020 from $67.3 million in the same quarter of fiscal 2019. The average yield earned on interest-earning deposits in the first quarter of fiscal 2020 was 2.16 percent, up 20 basis points from 1.96 percent in the same quarter of fiscal 2019 as a result of the impact of a higher targeted federal funds rate between the periods.
Page 4 of 16


 
 
 
Average deposits decreased $72.1 million, or eight percent, to $830.8 million in the first quarter of fiscal 2020 from $902.9 million in the same quarter of fiscal 2019 due to a managed run-off of higher cost time deposits consistent with the reduction in the Bank’s funding needs resulting from no loans held for sale during the first quarter of fiscal 2020. The average cost of deposits remained relatively stable, decreasing by two basis points to 0.37 percent in the first quarter of fiscal 2020 from 0.39 percent in the same quarter last year.
Transaction account balances or “core deposits” decreased $7.5 million, or one percent, to $640.6 million at September 30, 2019 from $648.1 million at June 30, 2019, while time deposits decreased $1.9 million, or one percent, to $191.2 million at September 30, 2019 from $193.1 million at June 30, 2019.
The average balance of borrowings, which consisted of FHLB advances, decreased $8.4 million, or seven percent, to $111.6 million while the average cost of borrowings increased four basis points to 2.56 percent in the first quarter of fiscal 2020, compared to an average balance of $120.0 million with an average cost of 2.52 percent in the same quarter of fiscal 2019. The decrease in the average balance of borrowings was primarily due to the maturity of short-term borrowings in the first quarter of fiscal 2019.
During the first quarter of fiscal 2020, the Company recorded a recovery from the allowance for loan losses of $181,000, as compared to a recovery of $237,000 recorded during the same period of fiscal 2019 and a recovery of $25,000 recorded in the fourth quarter of fiscal 2019 (sequential quarter).
Non-performing assets, with underlying collateral located in California, decreased $988,000, or 16 percent, to $5.2 million, or 0.47 percent of total assets, at

Page 5 of 16


 
 
 
September 30, 2019, compared to $6.2 million, or 0.57 percent of total assets, at June 30, 2019. The non-performing loans at September 30, 2019 are comprised of 17 single-family loans ($4.1 million), one construction loan ($1.1 million) and one commercial business loan ($38,000).  At both September 30, 2019 and June 30, 2019, there was no real estate owned.
Net loan recoveries for the quarter ended September 30, 2019 were $34,000 or 0.02 percent (annualized) of average loans receivable, compared to net loan recoveries of $7,000 or 0.00 percent (annualized) of average loans receivable for the quarter ended September 30, 2018 and net loan recoveries of $21,000 or 0.01 percent (annualized) of average loans receivable for the quarter ended June 30, 2019 (sequential quarter).
Classified assets at September 30, 2019 were $13.0 million, comprised of $6.9 million of loans in the special mention category, $6.1 million of loans in the substandard category and no real estate owned; while classified assets at June 30, 2019 were $16.2 million, comprised of $8.6 million of loans in the special mention category, $7.6 million of loans in the substandard category and no real estate owned.
For the quarter ended September 30, 2019, no new loans were restructured from their original terms and classified as restructured loans, while two substandard restructured loans were paid off. The outstanding balance of restructured loans at September 30, 2019 was $1.8 million (six loans), down 53 percent from $3.8 million (eight loans) at June 30, 2019. As of September 30, 2019, one restructured loan was classified as special mention ($431,000) and five restructured loans were classified as substandard non-accrual ($1.4 million). As of September 30, 2019, 77% or $1.4 million of the restructured loans have a current payment status.
Page 6 of 16


 
 
 
The allowance for loan losses was $6.9 million at September 30, 2019, or 0.74 percent of gross loans held for investment, compared to $7.1 million at June 30, 2019, or 0.80 percent of gross loans held for investment. Management believes that, based on currently available information, the allowance for loan losses is sufficient to absorb potential losses inherent in loans held for investment at September 30, 2019.
Non-interest income decreased by $3.48 million, or 76 percent, to $1.07 million in the first quarter of fiscal 2020 from $4.55 million in the same period of fiscal 2019, primarily as a result of no loan sales during the current quarter. The gain on sale of loans during the first quarter of fiscal 2019 was $3.1 million. On a sequential quarter basis, non-interest income decreased $245,000, or 19 percent, primarily as a result of the decline in the gain on sale of loans. There were no loans originated for sale during the current quarter.
Non-interest expenses decreased $4.46 million, or 38 percent, to $7.24 million in the first quarter of fiscal 2020 from $11.70 million in the same quarter last year.  On a sequential quarter basis, non-interest expenses decreased $2.42 million or 25 percent from $9.66 million. The decreases in non-interest expenses for both periods were primarily due to scaling back the origination of saleable single-family mortgage loans resulting in significant reductions in salaries and employee benefits expenses due to lower incentive compensation and staff reductions and premises and occupancy expenses due to the closing of loan production offices, as well as reductions in other related expenses. In addition, deposit insurance premiums and regulatory assessments decreased $181,000 due primarily to a $150,000 small bank assessment credit awarded by the Federal Deposit Insurance Corporation and other expenses decreased by $320,000 due

Page 7 of 16


 
 
 
primarily to a $296,000 reversion of a previously recognized legal settlement, both of which were recognized during the quarter ended September 30, 2019. The Bank has $224,000 remaining in small bank assessment credits, which may be recognized in future periods when allowed for by the FDIC consistent with insurance fund levels being met.
The Company’s efficiency ratio in the first quarter of fiscal 2020 was 68 percent, an improvement from 84 percent in the same quarter last year and an improvement from 90 percent in the fourth quarter of fiscal 2019 (sequential quarter).
The Company’s provision for income tax was $1.03 million for the first quarter of fiscal 2020, up 68 percent from $616,000 in the same quarter last year. The effective tax rate in the first quarter of fiscal 2020 was 28.73% as compared to 25.26% in the same quarter of fiscal 2019. The Company believes that the tax provision recorded in the first quarter of fiscal 2020 reflects its current federal and state income tax obligations.
The Company repurchased 16,924 shares of its common stock during the quarter ended September 30, 2019 at an average cost of $20.41 per share. As of September 30, 2019, a total of 68,923 shares or 18 percent of the April 2018 stock repurchase plan have been purchased at an average cost of $19.91 per share, leaving 304,077 shares available for future purchases.
The Bank currently operates 13 retail/business banking offices in Riverside County and San Bernardino County (Inland Empire).
The Company will host a conference call for institutional investors and bank analysts on Wednesday, October 30, 2019 at 9:00 a.m. (Pacific) to discuss its financial results.  The conference call can be accessed by dialing 1-800-230-1059 and requesting the Provident Financial Holdings Earnings Release Conference Call.  An audio replay of

Page 8 of 16


 
 
 
the conference call will be available through Wednesday, November 6, 2019 by dialing 1-800-475-6701 and referencing access code number 473332.
For more financial information about the Company please visit the website at www.myprovident.com and click on the “Investor Relations” section.


Safe-Harbor Statement

This press release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements relate to the Company’s financial condition, liquidity, results of operations, plans, objectives, future performance or business. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors which could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements include, but are not limited  to increased competitive pressures; changes in the interest rate environment; secondary market conditions for loans and our ability to originate for sale and sell loans in the secondary market; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (“SEC”) - which are available on our website at www.myprovident.com and on the SEC’s website at www.sec.gov. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements whether as a result of new information, future events or otherwise. These risks could cause our actual results for fiscal 2020 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of us and could negatively affect our operating and stock price performance.


Contacts: Craig G. Blunden Donavon P. Ternes
 
Chairman and
Chief Executive Officer
President, Chief Operating Officer,
and Chief Financial Officer







Page 9 of 16


 
 
 


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

   
September 30,
2019
   
June 30,
2019
   
March 31,
2019
   
December 31,
2018
   
September 30,
2018
 
Assets
                             
Cash and cash equivalents
 
$
54,515
   
$
70,632
   
$
61,458
   
$
67,359
   
$
78,928
 
Investment securities – held to maturity, at
  cost
   
85,088
     
94,090
     
102,510
     
84,990
     
79,611
 
Investment securities - available for sale, at
  fair value
   
5,517
     
5,969
     
6,294
     
6,563
     
7,033
 
Loans held for investment, net of allowance
  for loan losses of $6,929; $7,076; $7,080;
  $7,061 and $7,155 respectively; includes
  $4,386; $5,094; $5,239; $4,995 and $4,945
  at fair value, respectively
   
924,314
     
879,925
     
883,554
     
875,413
     
877,091
 
Loans held for sale, at fair value
   
-
     
-
     
30,500
     
57,562
     
78,794
 
Accrued interest receivable
   
3,380
     
3,424
     
3,386
     
3,156
     
3,350
 
Real estate owned, net
   
-
     
-
     
-
     
-
     
524
 
FHLB – San Francisco stock
   
8,199
     
8,199
     
8,199
     
8,199
     
8,199
 
Premises and equipment, net
   
11,215
     
8,226
     
8,395
     
8,601
     
8,779
 
Prepaid expenses and other assets
   
13,068
     
14,385
     
15,099
     
15,327
     
15,171
 
                                         
Total assets
 
$
1,105,296
   
$
1,084,850
   
$
1,119,395
   
$
1,127,170
   
$
1,157,480
 
                                         
Liabilities and Stockholders’ Equity
                                       
Liabilities:
                                       
Non interest-bearing deposits
 
$
85,338
   
$
90,184
   
$
90,875
   
$
78,866
   
$
87,250
 
Interest-bearing deposits
   
746,398
     
751,087
     
786,009
     
794,018
     
814,862
 
Total deposits
   
831,736
     
841,271
     
876,884
     
872,884
     
902,112
 
                                         
Borrowings
   
131,092
     
101,107
     
101,121
     
111,135
     
111,149
 
Accounts payable, accrued interest and other
  liabilities
   
20,299
     
21,831
     
20,181
     
20,474
     
22,539
 
Total liabilities
   
983,127
     
964,209
     
998,186
     
1,004,493
     
1,035,800
 
                                         
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; 18,091,865; 18,081,365;
  18,064,365; 18,053,115 and 18,048,115
  shares issued, respectively; 7,479,682;
  7,486,106; 7,497,357; 7,506,855 and
  7,500,860 shares outstanding, respectively)
                                       
                                       
   
181
     
181
     
181
     
181
     
181
 
Additional paid-in capital
   
94,795
     
94,351
     
96,114
     
95,913
     
95,795
 
Retained earnings
   
192,354
     
190,839
     
191,103
     
192,306
     
191,399
 
Treasury stock at cost (10,612,183;
  10,559,259; 10,567,008; 10,546,260 and
  10,547,255 shares, respectively)
                                       
   
(165,309
)
   
(164,891
)
   
(166,352
)
   
(165,892
)
   
(165,884
)
Accumulated other comprehensive income,
  net of tax
   
148
     
161
     
163
     
169
     
189
 
                                         
Total stockholders’ equity
   
122,169
     
120,641
     
121,209
     
122,677
     
121,680
 
                                         
Total liabilities and stockholders’ equity
 
$
1,105,296
   
$
1,084,850
   
$
1,119,395
   
$
1,127,170
   
$
1,157,480
 


Page 10 of 16


 
 
 

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


   
Quarter Ended
 
   
September 30,
2019
   
June 30,
2019
   
March 31,
2019
   
December 31,
2018
   
September 30,
2018
 
Interest income:
                             
     Loans receivable, net
 
$
10,075
   
$
9,576
   
$
10,011
   
$
10,331
   
$
10,174
 
     Investment securities
   
614
     
661
     
592
     
444
     
345
 
     FHLB – San Francisco stock
   
143
     
142
     
144
     
278
     
143
 
     Interest-earning deposits
   
246
     
426
     
386
     
387
     
338
 
Total interest income
   
11,078
     
10,805
     
11,133
     
11,440
     
11,000
 
                                         
Interest expense:
                                       
     Checking and money market deposits
   
110
     
101
     
102
     
117
     
108
 
     Savings deposits
   
134
     
135
     
139
     
147
     
151
 
     Time deposits
   
532
     
530
     
600
     
630
     
621
 
     Borrowings
   
720
     
669
     
680
     
715
     
763
 
Total interest expense
   
1,496
     
1,435
     
1,521
     
1,609
     
1,643
 
                                         
Net interest income
   
9,582
     
9,370
     
9,612
     
9,831
     
9,357
 
Provision (recovery) for loan losses
   
(181
)
   
(25
)
   
4
     
(217
)
   
(237
)
Net interest income, after provision (recovery) for
  loan losses
   
9,763
     
9,395
     
9,608
     
10,048
     
9,594
 
                                         
Non-interest income:
                                       
     Loan servicing and other fees
   
133
     
188
     
262
     
277
     
324
 
     Gain (loss) on sale of loans, net
   
(86
)
   
21
     
1,719
     
2,263
     
3,132
 
     Deposit account fees
   
447
     
443
     
471
     
509
     
505
 
     Gain (loss) on sale and operations of real estate
        owned acquired in the settlement of loans, net
   
-
     
-
     
2
     
(7
)
   
1
 
     Card and processing fees
   
390
     
405
     
373
     
392
     
398
 
     Other
   
186
     
258
     
225
     
161
     
189
 
Total non-interest income
   
1,070
     
1,315
     
3,052
     
3,595
     
4,549
 
                                         
Non-interest expense:
                                       
     Salaries and employee benefits
   
4,985
     
5,396
     
9,292
     
7,211
     
8,250
 
     Premises and occupancy
   
878
     
1,133
     
1,286
     
1,274
     
1,345
 
     Equipment
   
279
     
1,141
     
417
     
495
     
421
 
     Professional expenses
   
408
     
493
     
513
     
411
     
447
 
     Sales and marketing expenses
   
117
     
312
     
246
     
253
     
169
 
 Deposit insurance premiums and regulatory
   assessments
   
(16
)
   
129
     
124
     
172
     
165
 
     Other
   
587
     
1,053
     
1,122
     
1,059
     
907
 
Total non-interest expense
   
7,238
     
9,657
     
13,000
     
10,875
     
11,704
 
                                         
Income (loss) before taxes
   
3,595
     
1,053
     
(340
)
   
2,768
     
2,439
 
Provision (benefit) for income taxes
   
1,033
     
266
     
(189
)
   
810
     
616
 
Net income (loss)
 
$
2,562
 
$
787


$
(151
)

$
1,958


$
1,823
 
                                         
Basic earnings (loss) per share
 
$
0.34
   
$
0.10
   
$
(0.02
)
 
$
0.26
   
$
0.25
 
Diluted earnings (loss) per share
 
$
0.33
   
$
0.10
   
$
(0.02
)
 
$
0.26
   
$
0.24
 
Cash dividends per share
 
$
0.14
   
$
0.14
   
$
0.14
   
$
0.14
   
$
0.14
 


Page 11 of 16


 
 
 


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


 
Quarter
Ended
 
Quarter
Ended
 
Quarter
Ended
 
Quarter
Ended
 
Quarter
Ended
 
 
09/30/19
 
06/30/19
 
03/31/19
 
12/31/18
 
09/30/18
 
SELECTED FINANCIAL RATIOS:
                   
Return (loss) on average assets
0.95%
 
0.29%
 
(0.05)%
 
0.69%
 
0.63%
 
Return (loss) on average stockholders’ equity
8.46%
 
2.60%
 
(0.49)%
 
6.42%
 
6.03%
 
Stockholders’ equity to total assets
11.05%
 
11.12%
 
10.83%
 
10.88%
 
10.51%
 
Net interest spread
3.58%
 
3.46%
 
3.46%
 
3.48%
 
3.24%
 
Net interest margin
3.64%
 
3.52%
 
3.53%
 
3.54%
 
3.30%
 
Efficiency ratio
67.95%
 
90.38%
 
102.65%
 
81.00%
 
84.17%
 
Average interest-earning assets to average
interest-bearing liabilities
 
111.61%
 
 
111.45%
 
 
111.28%
 
 
110.98%
 
 
110.86%
 
                     
SELECTED FINANCIAL DATA:
                   
Basic earnings (loss) per share
 $   0.34
 
 $   0.10
 
 $  (0.02
)
 $   0.26
 
 $   0.25
 
Diluted earnings (loss) per share
 $   0.33
 
 $   0.10
 
 $  (0.02
)
 $   0.26
 
 $   0.24
 
Book value per share
 $ 16.33
 
 $ 16.12
 
 $ 16.17
 
 $ 16.34
 
 $ 16.22
 
Average shares used for basic EPS
  7,482,435
 
  7,496,457
 
  7,506,770
 
  7,506,106
 
7,430,967
 
Average shares used for diluted EPS
  7,647,763
 
  7,626,661
 
  7,506,770
 
  7,601,759
 
7,557,068
 
Total shares issued and outstanding
7,479,682
 
7,486,106
 
7,497,357
 
7,506,855
 
7,500,860
 
                     
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:
                   
Mortgage Loans:
                   
Single-family
$ 33,629
 
$ 31,982
 
$ 15,288
 
$ 24,180
 
$ 17,216
 
Multi-family
56,476
 
14,513
 
21,546
 
10,068
 
12,709
 
Commercial real estate
2,419
 
2,882
 
5,197
 
3,175
 
5,305
 
Construction
896
 
1,846
 
1,970
 
1,863
 
1,480
 
   Total loans originated and purchased for
      investment
 
$ 93,420
 
 
$ 51,223
 
 
$ 44,001
 
 
$ 39,286
 
 
$ 36,710
 
                     
LOANS ORIGINATED FOR SALE:
                   
Retail originations
$           -
 
$   9,593
 
$ 72,353
 
$ 87,913
 
$ 127,133
 
Wholesale originations
-
 
4,057
 
38,353
 
58,504
 
69,188
 
   Total loans originated for sale
$           -
 
$ 13,650
 
$ 110,706
 
$ 146,417
 
$ 196,321
 
                     
LOANS SOLD:
                   
Servicing released
$           -
 
$ 40,956
 
$ 134,264
 
$ 165,484
 
$ 211,050
 
Servicing retained
-
 
2,003
 
2,409
 
2,026
 
758
 
   Total loans sold
$           -
 
$ 42,959
 
$ 136,673
 
$ 167,510
 
$ 211,808
 


Page 12 of 16


 
 
 

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

 
As of
 
As of
 
As of
 
As of
 
As of
 
09/30/19
 
06/30/19
 
03/31/19
 
12/31/18
 
09/30/18
ASSET QUALITY RATIOS AND
  DELINQUENT LOANS:
                 
Recourse reserve for loans sold
$    250
 
$    250
 
$    250
 
$    250
 
$    250
Allowance for loan losses
$ 6,929
 
$ 7,076
 
$ 7,080
 
$ 7,061
 
$ 7,155
Non-performing loans to loans held for
  investment, net
 
0.57%
 
 
0.71%
 
 
0.69%
 
 
0.69%
 
 
0.78%
Non-performing assets to total assets
0.47%
 
0.57%
 
0.55%
 
0.54%
 
0.64%
Allowance for loan losses to gross loans held
                 
  for investment
0.74%
 
0.80%
 
0.79%
 
0.80%
 
0.81%
Net loan charge-offs (recoveries) to average
  loans receivable (annualized)
 
(0.02)%
 
 
(0.01)%
 
 
(0.01)%
 
 
(0.05)%
 
 
- %
Non-performing loans
$ 5,230
 
$ 6,218
 
$ 6,115
 
$ 6,062
 
$ 6,862
Loans 30 to 89 days delinquent
$    995
 
$    665
 
$    699
 
$        2
 
$         -

 
Quarter
Ended
 
Quarter
Ended
 
Quarter
Ended
 
Quarter
Ended
 
Quarter
Ended
 
 
09/30/19
 
06/30/19
 
03/31/19
 
12/31/18
 
09/30/18
 
Recourse provision (recovery) for loans sold
$       -
 
$     -
 
$     -
 
$       -
 
$   (33
)
Provision (recovery) for loan losses
$ (181
)
$ (25
)
$    4
 
$ (217
)
$ (237
)
Net loan charge-offs (recoveries)
$   (34
)
$ (21
)
$ (15
)
$ (123
)
$     (7
)

 
      As of
 
      As of
 
      As of
 
    As of
 
     As of
 
09/30/19
 
06/30/19
 
03/31/19
 
12/31/18
 
09/30/18
REGULATORY CAPITAL RATIOS (BANK):
Tier 1 leverage ratio
10.21%
 
10.50%
 
10.17%
 
9.96%
 
9.59%
Common equity tier 1 capital ratio
16.32%
 
18.00%
 
17.24%
 
17.17%
 
16.62%
Tier 1 risk-based capital ratio
16.32%
 
18.00%
 
17.24%
 
17.17%
 
16.62%
Total risk-based capital ratio
17.37%
 
19.13%
 
18.34%
 
18.26%
 
17.71%

   
As of September 30,
 
   
2019
   
2018
 
   
Balance
   
Rate(1)
   
Balance
   
Rate(1)
 
INVESTMENT SECURITIES:
                       
Held to maturity:
                       
Certificates of deposit
 
$
800
     
2.63
%
 
$
600
     
2.23
%
U.S. SBA securities
   
2,876
     
2.85
     
2,960
     
2.35
 
U.S. government sponsored enterprise MBS
   
81,412
     
2.91
     
76,051
     
2.30
 
   Total investment securities held to maturity
 
$
85,088
     
2.91
%
 
$
79,611
     
2.30
%
                                 
Available for sale (at fair value):
                               
U.S. government agency MBS
 
$
3,413
     
3.92
%
 
$
4,156
     
3.19
%
U.S. government sponsored enterprise MBS
   
1,851
     
4.72
     
2,561
     
3.96
 
Private issue collateralized mortgage obligations
   
253
     
4.65
     
316
     
3.95
 
   Total investment securities available for sale
 
$
5,517
     
4.22
%
 
$
7,033
     
3.50
%
                                 
   Total investment securities
 
$
90,605
     
2.99
%
 
$
86,644
     
2.39
%

(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.

Page 13 of 16


 
 
 


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

   
As of September 30,
 
   
2019
   
2018
 
   
Balance
   
Rate(1)
   
Balance
   
Rate(1)
 
LOANS HELD FOR INVESTMENT:
                       
Held to maturity:
                       
Single-family (1 to 4 units)
 
$
328,332
     
4.39
%
 
$
307,480
     
4.45
%
Multi-family (5 or more units)
   
479,597
     
4.39
     
454,821
     
4.23
 
Commercial real estate
   
110,652
     
5.00
     
112,026
     
4.79
 
Construction
   
5,912
     
7.17
     
3,846
     
6.68
 
Other
   
-
     
-
     
167
     
6.50
 
Commercial business
   
368
     
6.57
     
416
     
6.44
 
Consumer
   
144
     
15.25
     
104
     
14.76
 
   Total loans held for investment
   
925,005
     
4.48
%
   
878,860
     
4.40
%
                                 
Advance payments of escrows
   
34
             
3
         
Deferred loan costs, net
   
6,204
             
5,383
         
Allowance for loan losses
   
(6,929
)
           
(7,155
)
       
   Total loans held for investment, net
 
$
924,314
           
$
877,091
         
                                 
Purchased loans serviced by others included above
 
$
32,441
     
3.77
%
 
$
17,363
     
3.36
%
                                 
(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 September 30,
 
   
2019
   
2018
 
   
Balance
   
Rate(1)
   
Balance
   
Rate(1)
 
                         
DEPOSITS:
                       
Checking accounts – non interest-bearing
 
$
85,338
     
-
%
 
$
87,250
     
-
%
Checking accounts – interest-bearing
   
263,400
     
0.12
     
261,295
     
0.12
 
Savings accounts
   
256,880
     
0.20
     
284,705
     
0.21
 
Money market accounts
   
34,959
     
0.36
     
36,213
     
0.37
 
Time deposits
   
191,159
     
1.14
     
232,649
     
1.10
 
   Total deposits
 
$
831,736
     
0.38
%
 
$
902,112
     
0.40
%
                                 
BORROWINGS:
                               
Overnight
 
$
-
     
-
%
 
$
-
     
-
%
Three months or less
   
-
     
-
     
-
     
-
 
Over three to six months
   
-
     
-
     
-
     
-
 
Over six months to one year
   
-
     
-
     
10,000
     
1.53
 
Over one year to two years
   
41,092
     
2.78
     
-
     
-
 
Over two years to three years
   
30,000
     
1.90
     
31,149
     
3.17
 
Over three years to four years
   
20,000
     
2.00
     
10,000
     
2.20
 
Over four years to five years
   
20,000
     
2.50
     
20,000
     
2.00
 
Over five years
   
20,000
     
2.70
     
40,000
     
2.60
 
   Total borrowings
 
$
131,092
     
2.41
%
 
$
111,149
     
2.52
%

(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.
 

Page 14 of 16


 
 
 


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

   
Quarter Ended
   
Quarter Ended
 
   
September 30, 2019
   
September 30, 2018
 
   
Balance
   
Rate(1)
   
Balance
   
Rate(1)
 
SELECTED AVERAGE BALANCE SHEETS:
                       
Loans receivable, net (2)
 
$
903,272
     
4.46
%
 
$
967,104
     
4.21
%
Investment securities
   
95,945
     
2.56
%
   
91,301
     
1.51
%
FHLB – San Francisco stock
   
8,199
     
6.98
%
   
8,199
     
6.98
%
Interest-earning deposits
   
44,511
     
2.16
%
   
67,344
     
1.96
%
Total interest-earning assets
 
$
1,051,927
     
4.21
%
 
$
1,133,948
     
3.88
%
Total assets
 
$
1,083,335
           
$
1,164,228
         
                                 
Deposits
 
$
830,820
     
0.37
%
 
$
902,877
     
0.39
%
Borrowings
   
111,641
     
2.56
%
   
120,013
     
2.52
%
Total interest-bearing liabilities
 
$
942,461
     
0.63
%
 
$
1,022,890
     
0.64
%
Total stockholders’ equity
 
$
121,182
           
$
121,005
         

(1) The interest rate described in the rate column is the weighted-average interest rate or yield/cost of all instruments, which are included in the balance of the respective line item.
(2) Includes loans held for sale at fair value for the quarter ended September 30, 2018.







Page 15 of 16



 
 
 


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

 
   
As of
   
As of
   
As of
   
As of
   
As of
 
   
09/30/19
   
06/30/19
   
03/31/19
   
12/31/18
   
09/30/18
 
Loans on non-accrual status (excluding
  restructured loans):
                             
Mortgage loans:
                             
Single-family
 
$
2,737
   
$
3,315
   
$
2,657
   
$
2,572
   
$
2,773
 
Construction
   
1,139
     
971
     
745
     
745
     
745
 
Total
   
3,876
     
4,286
     
3,402
     
3,317
     
3,518
 
                                         
Accruing loans past due 90 days or more:
   
-
     
-
     
-
     
-
     
-
 
Total
   
-
     
-
     
-
     
-
     
-
 
                                         
Restructured loans on non-accrual status:
                                       
Mortgage loans:
                                       
Single-family
   
1,316
     
1,891
     
2,669
     
2,698
     
3,280
 
Commercial business loans
   
38
     
41
     
44
     
47
     
64
 
Total
   
1,354
     
1,932
     
2,713
     
2,745
     
3,344
 
                                         
Total non-performing loans
   
5,230
     
6,218
     
6,115
     
6,062
     
6,862
 
                                         
Real estate owned, net
   
-
     
-
     
-
     
-
     
524
 
Total non-performing assets
 
$
5,230
   
$
6,218
   
$
6,115
   
$
6,062
   
$
7,386
 
(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.







Page 16 of 16


Exhibit 99.2