Attached files
| file | filename |
|---|---|
| 8-K - PROVIDENT FINANCIAL HOLDINGS, INC. FORM 8-K - PROVIDENT FINANCIAL HOLDINGS INC | prov8k102710.htm |
| EX-99.2 - EXHIBIT 99.2 - PROVIDENT FINANCIAL HOLDINGS INC | ex992.htm |
Exhibit 99.1
 |
 |
| 3756 Central Avenue | Contacts: |
| Riverside, CA 92506 | Craig G. Blunden, CEO |
| (951) 686 – 6060 | Donavon P. Ternes, COO, CFO |
PROVIDENT
FINANCIAL HOLDINGS REPORTS
FIRST
QUARTER OF FISCAL 2011 EARNINGS
Net
Income Increases 42% (Sequential Quarter)
Gain
on Sale of Loans Increases 108% (Sequential Quarter)
Core
Deposits (Transaction Accounts) Increase by 22%
Net
Interest Margin Expands 26 Basis Points
Non-Performing
Assets Stabilize at Lower Level
Riverside, Calif. – October 27, 2010 –
Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the holding
company for Provident Savings Bank, F.S.B. (“Bank”), today announced first
quarter earnings for the fiscal year ending June 30, 2011.
For
the quarter ended September 30, 2010, the Company reported net income of $4.53
million, or $0.40 per diluted share (on 11.36 million average shares
outstanding), compared to a net loss of $(5.02) million, or $(0.82) per diluted
share (on 6.11 million average shares outstanding), in the comparable period a
year ago. The first quarter of fiscal 2011 net income was primarily
attributable to a substantial decrease in the provision for loan losses and an
increase in non-interest income, partly offset by a decrease in net interest
income (before provision for loan losses) and an increase in operating expenses
as compared to the same period last year.
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“We are very pleased with the improving
fundamentals of our businesses and lower levels of non-performing
assets. However, we must remain cautious as it is too soon to suggest
the end of the challenging economic environment,” said Craig G. Blunden,
Chairman, President and Chief Executive Officer of the Company. “The
current mortgage banking environment is favorable and we continue to capture
sizable mortgage banking loan origination volume. In fact, the
current quarter is the best in our 54-year history.”
As of
September 30, 2010 the Bank exceeded all regulatory capital requirements and was
deemed “well-capitalized” with Tangible Capital, Core Capital, Total Risk-Based
Capital and Tier 1 Risk-Based Capital ratios of 9.25 percent, 9.25 percent,
13.96 percent and 12.69 percent, respectively. As of June 30, 2010
these ratios were 8.82 percent, 8.82 percent, 13.17 percent and 11.91 percent,
respectively. For each period, the Bank’s capital ratios exceeded the
minimum required ratios to be deemed “well-capitalized” (5.00 percent for Core
Capital, 10.00 percent for Total Risk-Based Capital and 6.00 percent for Tier 1
Risk-Based Capital).
Return on average assets for the first
quarter of fiscal 2011 improved to 1.29 percent from negative (1.28) percent for
the same period of fiscal 2010. Return on average stockholders’
equity for the first quarter of fiscal 2011 improved to 13.93 percent from
negative (17.68) percent for the comparable period of fiscal 2010.
On a sequential quarter basis, first
quarter results reflect net income of $4.53 million, a 42 percent increase from
$3.20 million in the fourth quarter of fiscal 2010. The increase was
primarily attributable to a $4.92 million increase in the gain on sale of loans,
partly offset by an $877,000 increase in the provision for loan losses and an
$846,000
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increase
in compensation expense. Diluted earnings per share for the first
quarter of fiscal 2011 increased to $0.40 per share from $0.28 per share in the
fourth quarter of fiscal 2010. Return on average assets increased to
1.29 percent for the first quarter of fiscal 2011 from 0.92 percent in the
fourth quarter of fiscal 2010; and return on average equity for the first
quarter of fiscal 2011 was 13.93 percent, compared to 10.16 percent for the
fourth quarter of fiscal 2010.
Net interest income before provision
for loan losses decreased $294,000, or three percent, to $9.81 million in the
first quarter of fiscal 2011 from $10.11 million for the same period in fiscal
2010. Non-interest income increased $3.33 million, or 48 percent, to
$10.34 million in the first quarter of fiscal 2011 from $7.01 million in the
comparable period of fiscal 2010. Operating expense increased $2.66
million, or 31 percent, to $11.21 million in the first quarter of fiscal 2011
from $8.55 million in the comparable period in fiscal 2010. The
increase in both non-interest income and operating expenses relate to the
increase in mortgage banking loan production.
The
average balance of loans outstanding decreased by $119.4 million, or nine
percent, to $1.17 billion in the first quarter of fiscal 2011 from $1.28 billion
in the same quarter of fiscal 2010. The managed decline in the loan
balance was consistent with the Company’s short-term strategy of curtailing loan
portfolio growth to further its goals of maintaining prudent capital ratios,
reducing its credit risk profile in response to unfavorable economic conditions
and providing sufficient balance sheet capacity for its mortgage banking
operations. The average yield on loans receivable decreased by 31
basis points to 5.34 percent in the first quarter of fiscal 2011 from an average
yield of 5.65 percent in the same quarter of fiscal 2010. The
decrease in the average loan yield
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was
primarily attributable to payoffs of loans which had a higher yield than the
average yield of loans held for investment and adjustable rate loans re-pricing
to lower interest rates. Total loans originated for investment in the
first quarter of fiscal 2011 were $579,000, consisting of multi-family and
commercial real estate loans. In the first quarter of fiscal 2010
total loans originated for investment were $105,000, which consisted of
single-family loans. The outstanding balance of “preferred loans”
(multi-family, commercial real estate, construction and commercial business
loans) decreased by $43.5 million, or nine percent, to $447.8 million at
September 30, 2010 from $491.3 million at September 30,
2009. Outstanding construction loans, net of undisbursed loan funds,
declined $3.9 million, or 91 percent, to $400,000 at September 30, 2010 from
$4.3 million at September 30, 2009. The percentage of preferred loans
to total loans held for investment at September 30, 2010 increased to 44 percent
from 42 percent at September 30, 2009. Loan principal payments
received in the first quarter of fiscal 2011 were $28.1 million, compared to
$33.3 million in the same quarter of fiscal 2010. In addition, real estate
acquired in the settlement of loans (real estate owned) in the first quarter of
fiscal 2011 totaled $15.0 million, compared to $11.8 million in the same quarter
of fiscal 2010.
The
average balance of investment securities decreased by $69.1 million, or 67
percent, to $33.9 million in the first quarter of fiscal 2011 from $103.0
million in the same quarter of fiscal 2010. The decrease was
attributable primarily to the sale of investment securities in fiscal 2010 and
principal paydowns of mortgage-backed securities. The average yield
decreased 141 basis points to 2.84 percent in the first quarter of fiscal 2011
from 4.25 percent in the same quarter of fiscal 2010. The decline in
average yield was primarily attributable to the downward repricing of adjustable
rate
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mortgage-backed
securities, principal paydowns of higher yielding mortgage-backed securities and
the sale of higher yielding mortgage-backed securities.
In July
2010, the Federal Home Loan Bank (“FHLB”) – San Francisco announced a partial
redemption of excess capital stock held by member banks. As a result,
a total of $1.2 million of excess capital stock was redeemed in August
2010. Also in July 2010, the FHLB – San Francisco declared a cash
dividend for the quarter ended June 30, 2010; the $36,000 cash dividend was
received by the Bank in the first quarter of fiscal 2011.
The
average balance of excess liquidity, primarily cash with the Federal Reserve
Bank of San Francisco, increased to $100.8 million in the first quarter of
fiscal 2011 from $84.2 million in the same quarter of fiscal
2010. The Bank maintained higher levels of cash and cash equivalents
in the first quarter of fiscal 2011 in response to the uncertain operating
environment. The average yield earned on interest-earning deposits
was 0.25% in the first quarter of fiscal 2011, much lower than the yield that
could have been earned if the excess liquidity were deployed in loans or
investment securities.
Average
deposits decreased to $937.8 million in the first quarter of fiscal 2011 from
$977.5 million in the same quarter of fiscal 2010. The average cost
of deposits decreased by 73 basis points to 1.20 percent in the first quarter of
fiscal 2011 from 1.93 percent in the same quarter last year, primarily due to
higher costing time deposits repricing to lower interest rates and a reduction
in rates paid on core deposits. Transaction account balances (core
deposits) increased by $82.4 million, or 22 percent, to $458.8 million at
September 30, 2010 from $376.4 million at September 30, 2009, primarily
attributable to an increase in interest-bearing checking and savings account
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balances. Time
deposits decreased by $82.1 million, or 15 percent, to $473.4 million at
September 30, 2010 compared to $555.5 million at September 30,
2009.
The
average balance of borrowings, which consisted of FHLB – San Francisco advances,
decreased $145.1 million, or 32 percent, to $309.2 million in the first quarter
of fiscal 2011 while the average cost of advances increased 25 basis points to
4.19 percent in the first quarter of fiscal 2011, compared to an average balance
of $454.3 million and an average cost of 3.94 percent in the same quarter of
fiscal 2010. The decrease in borrowings was attributable to
prepayments and scheduled maturities, one of the results of the Bank’s efforts
to deleverage its balance sheet during fiscal 2010. In the first
quarter of fiscal 2011, $15.0 million of advances were prepaid requiring an
$87,000 prepayment fee.
The net
interest margin during the first quarter of fiscal 2011 improved 26 basis points
to 2.95 percent from 2.69 percent during the same quarter last
year. The increase in the net interest margin was primarily
attributable to the decrease in deposit costs, particularly time deposit costs,
partly offset by a lower average yield on loans and investment securities, a
higher level of excess liquidity invested at a nominal yield and a higher
average cost of borrowings.
During
the first quarter of fiscal 2011, the Company recorded a provision for loan
losses of $877,000, compared to the $17.21 million provision for loan losses
recorded during the same period of fiscal 2010 and no provision recorded in the
fourth quarter of fiscal 2010 (sequential quarter). Improving asset
quality trends during the first quarter of fiscal 2011 resulted in a lower
balance of non-performing loans and 30 to 89 day delinquent loans.
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Non-performing
assets, with underlying collateral primarily located in Southern California,
decreased to $72.7 million, or 5.23 percent of total assets, at September 30,
2010, compared to $98.2 million, or 6.64 percent of total assets, at September
30, 2009 and $73.5 million, or 5.25 percent of total assets, at June 30, 2010
(sequential quarter). Non-performing loans at September 30, 2010 were
primarily comprised of 155 single-family loans ($47.9 million); six multi-family
loans ($6.1 million); five commercial real estate loans ($1.4 million); one
construction loan ($250,000); and two commercial business loans
($180,000). Real estate owned was comprised of 56 single-family
properties ($15.1 million), one multi-family property ($986,000), one commercial
real estate property ($377,000), one developed lot ($399,000) and 25 undeveloped
lots acquired in the settlement of loans ($78,000). Net charge-offs
for the quarter ended September 30, 2010 were $5.29 million or 1.82 percent
(annualized) of average loans receivable, compared to $4.64 million or 1.44
percent (annualized) of average loans receivable for the quarter ended September
30, 2009 and $7.35 million or 2.49 percent (annualized) of average loans
receivable for the quarter ended June 30, 2010 (sequential
quarter).
Classified
assets at September 30, 2010 were $94.1 million, comprised of $18.9 million in
the special mention category, $58.3 million in the substandard category and
$16.9 million in real estate owned. Classified assets at September
30, 2009 were $121.7 million, comprised of $22.1 million in the special mention
category, $86.9 million in the substandard category and $12.7 million in real
estate owned.
For the
quarter ended September 30, 2010, 21 loans for $9.4 million were re-underwritten
and modified from their original terms, and were identified as restructured
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loans. As
of September 30, 2010, the outstanding balance of restructured loans was $47.3
million: 42 loans are classified as pass, are not included in the
classified asset totals described earlier and remain on accrual status ($18.2
million); five loans are classified as special mention and remain on accrual
status ($3.6 million); 64 loans are classified as substandard ($25.5 million,
with 63 of the 64 loans or $25.0 million on non-accrual status); and two loans
are classified as loss, fully reserved and on non-accrual status. As
of September 30, 2010, 81 percent, or $38.5 million of the restructured loans
are current with respect to their payment status.
The
allowance for loan losses was $39.1 million at September 30, 2010, or 3.88
percent of gross loans held for investment, compared to $58.0 million, or 4.97
percent of gross loans held for investment at September 30, 2009. The
allowance for loan losses at September 30, 2010 includes $14.9 million of
specific loan loss reserves and $24.2 million of general loan loss reserves,
compared to $28.9 million of specific loan loss reserves and $29.1 million of
general loan loss reserves at September 30, 2009. 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.
Non-interest
income increased to $10.34 million in the first quarter of fiscal 2011 compared
to $7.01 million in the same period of fiscal 2010, primarily the result of a
$6.31 million increase in the gain on sale of loans, partly offset by a $1.95
million gain on sale of investment securities which was realized in the first
quarter of fiscal 2010 and not replicated in the same quarter of fiscal
2011.
The gain
on sale of loans increased to $9.45 million for the quarter ended September 30,
2010 from $3.14 million in the comparable quarter last year, reflecting a
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higher
average loan sale margin and a higher loan sale volume. The average
loan sale margin for mortgage banking was 142 basis points for the quarter ended
September 30, 2010, compared to 59 basis points in the comparable quarter last
year. The gain on sale of loans includes a favorable 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 put option contracts) that amounted to a gain of
$3.36 million, in the first quarter of fiscal 2011 as compared to an unfavorable
fair-value adjustment, a loss of $(891,000), in the same period last
year. The gain on sale of loans for the first quarter of fiscal 2011
was partially reduced by a $536,000 recourse provision on loans sold that are
subject to repurchase, compared to a $1.19 million recourse provision in the
comparable quarter last year. As of September 30, 2010, the recourse
reserve for loans sold that are subject to repurchase was $6.5 million, compared
to $4.5 million at September 30, 2009 and $6.3 million at June 30, 2010
(sequential quarter). The mortgage banking environment has shown
improvement as a result of relatively low mortgage interest rates but remains
volatile.
The
volume of loans originated for sale was $649.5 million in the first quarter of
fiscal 2011, an increase of 32 percent from $491.6 million for the same period
last year. The loan origination volumes were the result of favorable
liquidity in the secondary mortgage markets particularly in FHA/VA, Fannie Mae
and Freddie Mac loan products and relatively low mortgage interest
rates. Total loans sold for the quarter ended September 30, 2010 were
$590.8 million, an increase of 16 percent from $508.8 million for the same
quarter last year. Total loan originations (including loans
originated for
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investment
and loans originated for sale) were $650.1 million in the first quarter of
fiscal 2011, an increase of 32 percent from $491.7 million in the same quarter
of fiscal 2010.
The sale
and operations of real estate owned acquired in the settlement of loans resulted
in a net loss of $(368,000) in the first quarter of fiscal 2011, as compared to
a net gain of $438,000 in the comparable period last
year. Twenty-seven real estate owned properties were sold in the
quarter ended September 30, 2010 compared to 48 real estate owned properties
sold in the same quarter last year. During the first quarter of
fiscal 2011, 34 real estate owned properties were acquired in the settlement of
loans, compared to 32 real estate owned properties acquired in the settlement of
loans in the comparable period last year. As of September 30, 2010,
the real estate owned balance was $16.9 million (84 properties), compared to
$14.7 million (77 properties) at June 30, 2010 and $12.7 million (64 properties)
at September 30, 2009.
Operating
expense increased to $11.21 million in the first quarter of fiscal 2011 from
$8.55 million in the same quarter last year, primarily as a result of an
increase in compensation expense related to higher mortgage banking loan
production.
The
Company’s efficiency ratio increased to 56 percent in the first quarter of
fiscal 2011 from 50 percent in the first quarter of fiscal 2010. The
increase was the result of a decrease in net interest income (before provision
for loan losses) and an increase in non-interest expense, partly offset by an
increase in non-interest income.
The
Company’s tax provision was $3.53 million for the first quarter of fiscal 2011
in comparison to a tax benefit of $(3.63) million in the same quarter last
year. The effective income tax rate for the quarter ended September
30, 2010 was 43.8 percent as compared to 42.0 percent in the same quarter last
year. The increase in the effective
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income
tax rate was primarily the result of a higher percentage of permanent tax
differences relative to income or loss before taxes. The Company
believes that the tax provision recorded in the first quarter of fiscal 2011
reflects its current income tax obligations.
The Bank
currently operates 14 retail/business banking offices in Riverside County and
San Bernardino County (Inland Empire). Provident Bank Mortgage
operates wholesale loan production offices in Pleasanton and Rancho Cucamonga,
California and retail loan production offices in City of Industry, Escondido,
Glendora, Rancho Cucamonga and Riverside (3), California.
The
Company will host a conference call for institutional investors and bank
analysts on Thursday, October 28, 2010 at 9:00 a.m. (Pacific Time) to discuss
its financial results. The conference call can be accessed by dialing
(800) 288-8967 and requesting the Provident Financial Holdings Earnings Release
Conference Call. An audio replay of the conference call will be
available through Thursday, November 4, 2010 by dialing (800) 475-6701 and
referencing access code number 175813.
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 and the
conference call noted above contain statements that the Company believes are
“forward-looking statements.” These statements relate to the Company’s financial
condition, 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 include, but are not limited to the credit risks of lending
activities, including changes in the level and trend of loan delinquencies and
write-offs and changes in our allowance for loan losses and provision for loan
losses that may be impacted by deterioration in the housing and commercial real
estate markets; changes in general economic conditions, either nationally or in
our market areas; changes in the levels of general interest rates, and the
relative
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differences between short and long
term interest rates, deposit interest rates, our net interest margin and funding
sources; fluctuations in the demand for loans, the number of unsold homes, land
and other properties and fluctuations in real estate values in our market areas;
secondary market conditions for loans and our ability to sell loans in the
secondary market; the accuracy of the results of our stress test; results of
examinations of us by the Office of Thrift Supervision or other regulatory
authorities, including the possibility that any such regulatory authority may,
among other things, require us to increase our reserve for loan losses,
write-down assets, change our regulatory capital position or affect our ability
to borrow funds or maintain or increase deposits, which could adversely affect
our liquidity and earnings; legislative or regulatory changes that adversely
affect our business including changes in regulatory policies and principles, or
the interpretation of regulatory capital or other rules; our ability to attract
and retain deposits; further increases in premiums for deposit insurance; our
ability to control operating costs and expenses; the use of estimates in
determining fair value of certain of our assets, which estimates may prove to be
incorrect and result in significant declines in valuation; difficulties in
reducing risk associated with the loans on our balance sheet; staffing
fluctuations in response to product demand or the implementation of corporate
strategies that affect our workforce and potential associated charges; computer
systems on which we depend could fail or experience a security
breach; our ability to retain key members of our senior management
team; costs and effects of litigation, including settlements and judgments; our
ability to implement our branch expansion strategy; our ability to successfully
integrate any assets, liabilities, customers, systems, and management personnel
we have acquired or may in the future acquire into our operations and our
ability to realize related revenue synergies and cost savings within expected
time frames and any goodwill charges related thereto; increased competitive
pressures among financial services companies; changes in consumer spending,
borrowing and savings habits; the availability of resources to address changes
in laws, rules, or regulations or to respond to regulatory actions; our ability
to pay dividends on our common stock; adverse changes in the securities
markets; inability of key third-party providers to perform their
obligations to us; changes in accounting policies and practices, as may be
adopted by the financial institution regulatory agencies or the Financial
Accounting Standards Board, including additional guidance and interpretation on
accounting issues and details of the implementation of new accounting methods;
and other economic, competitive, governmental, regulatory, and technological
factors affecting our operations, pricing, products and services and the other
risks described detailed in the Company’s reports filed with the Securities and
Exchange Commission, including its Annual Report on Form 10-K for the fiscal
year ended June 30, 2010.
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PROVIDENT
FINANCIAL HOLDINGS, INC.
Condensed
Consolidated Statements of Financial Condition
(Unaudited
– Dollars In Thousands)
|
|||||
|
September
30,
2010
|
June
30,
2010
|
||||
|
Assets
|
|||||
|
Cash
and cash equivalents
|
$ 67,430
|
$ 96,201
|
|||
|
Investment
securities – available for sale at fair value
|
33,016
|
35,003
|
|||
|
Loans
held for investment, net of allowance for loan losses of
|
|||||
|
$39,086
and $43,501, respectively
|
968,323
|
1,006,260
|
|||
|
Loans
held for sale, at fair value
|
229,103
|
170,255
|
|||
|
Accrued
interest receivable
|
4,416
|
4,643
|
|||
|
Real
estate owned, net
|
16,937
|
14,667
|
|||
|
FHLB
– San Francisco stock
|
30,571
|
31,795
|
|||
|
Premises
and equipment, net
|
5,768
|
5,841
|
|||
|
Prepaid
expenses and other assets
|
33,603
|
34,736
|
|||
|
Total
assets
|
$
1,389,167
|
$
1,399,401
|
|||
|
|
|
||||
|
Liabilities
and Stockholders’ Equity
|
|||||
|
Liabilities:
|
|||||
|
Non
interest-bearing deposits
|
$ 50,670
|
$ 52,230
|
|||
|
Interest-bearing
deposits
|
881,578
|
880,703
|
|||
|
Total
deposits
|
932,248
|
932,933
|
|||
|
Borrowings
|
294,635
|
309,647
|
|||
|
Accounts
payable, accrued interest and other liabilities
|
29,815
|
29,077
|
|||
|
Total
liabilities
|
1,256,698
|
1,271,657
|
|||
|
Stockholders’
equity:
|
|||||
|
Preferred
stock, $.01 par value (2,000,000 shares authorized;
none
issued and outstanding)
|
|||||
|
-
|
-
|
||||
|
Common
stock, $.01 par value (40,000,000 and 40,000,000 shares
authorized, respectively; 17,610,865 and 17,610,865 shares
issued, respectively; 11,407,454 and 11,406,654 shares
outstanding, respectively)
|
|||||
|
176
|
176
|
||||
|
Additional
paid-in capital
|
85,918
|
85,663
|
|||
|
Retained
earnings
|
139,798
|
135,383
|
|||
|
Treasury
stock at cost (6,203,411 and 6,204,211 shares,
respectively)
|
|||||
|
(93,942
|
)
|
(93,942
|
)
|
||
|
Unearned
stock compensation
|
(135
|
)
|
(203
|
)
|
|
|
Accumulated
other comprehensive income, net of tax
|
654
|
667
|
|||
|
Total
stockholders’ equity
|
132,469
|
127,744
|
|||
|
Total
liabilities and stockholders’ equity
|
$
1,389,167
|
$
1,399,401
|
|||
Page 13 of 19
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PROVIDENT
FINANCIAL HOLDINGS, INC.
Condensed
Consolidated Statements of Operations
(Unaudited
– In Thousands, Except Earnings (Loss) Per Share)
|
||||
|
Quarter
Ended
|
||||
|
September
30,
|
September
30,
|
|||
|
2010
|
2009
|
|||
|
Interest
income:
|
||||
|
Loans
receivable, net
|
$
15,561
|
$
18,148
|
||
|
Investment
securities
|
241
|
1,095
|
||
|
FHLB
– San Francisco stock
|
36
|
69
|
||
|
Interest-earning
deposits
|
65
|
54
|
||
|
Total
interest income
|
15,903
|
19,366
|
||
|
Interest
expense:
|
||||
|
Checking
and money market deposits
|
305
|
326
|
||
|
Savings
deposits
|
340
|
521
|
||
|
Time
deposits
|
2,184
|
3,904
|
||
|
Borrowings
|
3,262
|
4,509
|
||
|
Total
interest expense
|
6,091
|
9,260
|
||
|
Net
interest income, before provision for loan losses
|
9,812
|
10,106
|
||
|
Provision
for loan losses
|
877
|
17,206
|
||
|
Net
interest income (expense), after provision for loan losses
|
8,935
|
(7,100
|
)
|
|
|
Non-interest
income:
|
||||
|
Loan
servicing and other fees
|
124
|
235
|
||
|
Gain
on sale of loans, net
|
9,447
|
3,143
|
||
|
Deposit
account fees
|
629
|
763
|
||
|
Gain
on sale of investment securities
|
-
|
1,949
|
||
|
(Loss)
gain on sale and operations of real estate owned
acquired
in the settlement of loans, net
|
(368
|
)
|
438
|
|
|
Other
|
503
|
478
|
||
|
Total
non-interest income
|
10,335
|
7,006
|
||
|
Non-interest
expense:
|
||||
|
Salaries
and employee benefits
|
7,377
|
4,930
|
||
|
Premises
and occupancy
|
820
|
788
|
||
|
Equipment
|
325
|
357
|
||
|
Professional
expenses
|
383
|
387
|
||
|
Sales
and marketing expenses
|
134
|
112
|
||
|
Deposit
insurance premiums and regulatory assessments
|
681
|
716
|
||
|
Other
|
1,490
|
1,261
|
||
|
Total
non-interest expense
|
11,210
|
8,551
|
||
|
Income
(loss) before taxes
|
8,060
|
(8,645
|
)
|
|
|
Provision
(benefit) for income taxes
|
3,531
|
(3,629
|
)
|
|
|
Net
income (loss)
|
$ 4,529
|
$ (5,016
|
)
|
|
|
Basic
earnings (loss) per share
|
$
0.40
|
$
(0.82
|
)
|
|
|
Diluted
earnings (loss) per share
|
$
0.40
|
$
(0.82
|
)
|
|
|
Cash
dividends per share
|
$
0.01
|
$
0.01
|
||
Page 14 of 19
|
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Condensed
Consolidated Statements of Operations – Sequential Quarter
(Unaudited
– In Thousands, Except Earnings Per Share)
|
||||
|
Quarter
Ended
|
||||
|
September
30,
|
June
30,
|
|||
|
2010
|
2010
|
|||
|
Interest
income:
|
||||
|
Loans
receivable, net
|
$
15,561
|
$
16,290
|
||
|
Investment
securities
|
241
|
275
|
||
|
FHLB
– San Francisco stock
|
36
|
21
|
||
|
Interest-earning
deposits
|
65
|
51
|
||
|
Total
interest income
|
15,903
|
16,637
|
||
|
Interest
expense:
|
||||
|
Checking
and money market deposits
|
305
|
330
|
||
|
Savings
deposits
|
340
|
399
|
||
|
Time
deposits
|
2,184
|
2,375
|
||
|
Borrowings
|
3,262
|
3,231
|
||
|
Total
interest expense
|
6,091
|
6,335
|
||
|
Net
interest income, before provision for loan losses
|
9,812
|
10,302
|
||
|
Provision
for loan losses
|
877
|
-
|
||
|
Net
interest income, after provision for loan losses
|
8,935
|
10,302
|
||
|
Non-interest
income:
|
||||
|
Loan
servicing and other fees
|
124
|
160
|
||
|
Gain
on sale of loans, net
|
9,447
|
4,534
|
||
|
Deposit
account fees
|
629
|
688
|
||
|
Loss
on sale and operations of real estate owned
acquired
in the settlement of loans, net
|
(368
|
)
|
(231
|
)
|
|
Other
|
503
|
537
|
||
|
Total
non-interest income
|
10,335
|
5,688
|
||
|
Non-interest
expense:
|
||||
|
Salaries
and employee benefits
|
7,377
|
6,531
|
||
|
Premises
and occupancy
|
820
|
766
|
||
|
Equipment
|
325
|
589
|
||
|
Professional
expenses
|
383
|
340
|
||
|
Sales
and marketing expenses
|
134
|
189
|
||
|
Deposit
insurance premiums and regulatory assessments
|
681
|
679
|
||
|
Other
|
1,490
|
1,375
|
||
|
Total
non-interest expense
|
11,210
|
10,469
|
||
|
Income
before taxes
|
8,060
|
5,521
|
||
|
Provision
for income taxes
|
3,531
|
2,319
|
||
|
Net
income
|
$ 4,529
|
$ 3,202
|
||
|
Basic
earnings per share
|
$
0.40
|
$
0.28
|
||
|
Diluted
earnings per share
|
$
0.40
|
$
0.28
|
||
|
Cash
dividends per share
|
$
0.01
|
$
0.01
|
||
Page 15 of 19
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Financial
Highlights
(Unaudited)
|
|
|||||||
|
(Dollars
in Thousands, Except Share Information)
|
Quarter
Ended
September
30,
|
||||||
|
2010
|
2009
|
||||||
|
SELECTED
FINANCIAL RATIOS:
|
|||||||
|
Return
(loss) on average assets
|
1.29%
|
(1.28)%
|
|||||
|
Return
(loss) on average stockholders’ equity
|
13.93%
|
(17.68)%
|
|||||
|
Stockholders’
equity to total assets
|
9.54%
|
7.36
%
|
|||||
|
Net
interest spread
|
2.83%
|
2.58
%
|
|||||
|
Net
interest margin
|
2.95%
|
2.69
%
|
|||||
|
Efficiency
ratio
|
55.64%
|
49.97
%
|
|||||
|
Average
interest-earning assets to average
|
|||||||
|
interest-bearing
liabilities
|
106.87%
|
105.14
%
|
|||||
|
SELECTED
FINANCIAL DATA:
|
|||||||
|
Basic
earnings (loss) per share
|
$ 0.40
|
$ (0.82
|
)
|
||||
|
Diluted
earnings (loss) per share
|
$ 0.40
|
$ (0.82
|
)
|
||||
|
Book
value per share
|
$
11.61
|
$
17.51
|
|||||
|
Shares
used for basic EPS computation
|
11,361,752
|
6,113,903
|
|||||
|
Shares
used for diluted EPS computation
|
11,361,752
|
6,113,903
|
|||||
|
Total
shares issued and outstanding
|
11,407,454
|
6,220,454
|
|||||
|
LOANS
ORIGINATED FOR SALE:
|
|||||||
|
Retail
originations
|
$
233,739
|
$ 89,675
|
|||||
|
Wholesale
originations
|
415,732
|
401,900
|
|||||
|
Total
loans originated for sale
|
$
649,471
|
$
491,575
|
|||||
|
LOANS
SOLD:
|
|||||||
|
Servicing
released
|
$
590,589
|
$
508,789
|
|||||
|
Servicing
retained
|
185
|
-
|
|||||
|
Total
loans sold
|
$
590,774
|
$
508,789
|
|||||
|
As
of
|
As
of
|
As
of
|
As
of
|
||||
|
09/30/10
|
06/30/10
|
03/31/10
|
12/31/09
|
||||
|
ASSET
QUALITY RATIOS AND DELINQUENT LOANS:
|
|||||||
|
Recourse
reserve for loans sold
|
$ 6,498
|
$ 6,335
|
$ 6,073
|
$ 5,103
|
|||
|
Allowance
for loan losses
|
$
39,086
|
$
43,501
|
$
50,849
|
$
55,364
|
|||
|
Non-performing
loans to loans held for investment, net
|
5.76%
|
5.84%
|
7.15%
|
8.40%
|
|||
|
Non-performing
assets to total assets
|
5.23%
|
5.25%
|
6.50%
|
7.12%
|
|||
|
Allowance
for loan losses to non-performing loans
|
70.07%
|
74.00%
|
68.86%
|
61.63%
|
|||
|
Allowance
for loan losses to gross loans held for
|
|||||||
|
investment
|
3.88%
|
4.14%
|
4.69%
|
4.92%
|
|||
|
Net
charge-offs to average loans receivable (annualized)
|
1.82%
|
2.49%
|
2.35%
|
1.63%
|
|||
|
Non-performing
loans
|
$
55,785
|
$
58,783
|
$
73,839
|
$
89,833
|
|||
|
Loans
30 to 89 days delinquent
|
$ 4,323
|
$ 5,849
|
$ 6,937
|
$ 6,686
|
|||
|
Quarter
Ended
|
Quarter
Ended
|
Quarter
Ended
|
Quarter
Ended
|
||||
|
09/30/10
|
06/30/10
|
03/31/10
|
12/31/09
|
||||
|
Recourse
provision for loans sold
|
$
536
|
$
2,051
|
$
1,178
|
$
1,865
|
|||
|
Provision
for loan losses
|
$
877
|
$ -
|
$
2,322
|
$
2,315
|
|||
Page 16 of 19
|
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Financial
Highlights
(Unaudited)
|
|||||||
|
As
of
|
As
of
|
As
of
|
As
of
|
||||
|
09/30/10
|
06/30/10
|
03/31/10
|
12/31/09
|
||||
|
REGULATORY
CAPITAL RATIOS:
|
|||||||
|
Tangible
equity ratio
|
9.25%
|
8.82%
|
8.53%
|
8.41%
|
|||
|
Core
capital ratio
|
9.25%
|
8.82%
|
8.53%
|
8.41%
|
|||
|
Total
risk-based capital ratio
|
13.96%
|
13.17%
|
15.53%
|
15.06%
|
|||
|
Tier
1 risk-based capital ratio
|
12.69%
|
11.91%
|
14.25%
|
13.79%
|
|||
|
(Dollars
in Thousands)
|
As
of September 30,
|
||||||||
|
2010
|
2009
|
||||||||
|
INVESTMENT
SECURITIES:
|
Balance
|
Rate
|
Balance
|
Rate
|
|||||
|
Available
for sale (at fair value):
|
|||||||||
|
U.S.
government sponsored enterprise debt securities
|
$ 3,290
|
4.00
|
%
|
$ 5,369
|
4.00
|
%
|
|||
|
U.S.
government agency MBS
|
16,609
|
3.09
|
32,998
|
4.18
|
|||||
|
U.S.
government sponsored enterprise MBS
|
11,643
|
2.64
|
14,621
|
3.92
|
|||||
|
Private
issue collateralized mortgage obligations
|
1,474
|
2.65
|
1,514
|
3.04
|
|||||
|
Total
investment securities available for sale
|
$
33,016
|
3.00
|
%
|
$
54,502
|
4.06
|
%
|
|||
|
LOANS
HELD FOR INVESTMENT:
|
|||||||||
|
Single-family
(1 to 4 units)
|
$ 554,045
|
4.74
|
%
|
$ 668,459
|
5.60
|
%
|
|||
|
Multi-family
(5 or more units)
|
332,443
|
6.18
|
358,879
|
6.27
|
|||||
|
Commercial
real estate
|
109,282
|
6.85
|
119,719
|
6.88
|
|||||
|
Construction
|
400
|
5.25
|
4,339
|
7.51
|
|||||
|
Other
mortgage
|
1,532
|
6.16
|
1,532
|
6.16
|
|||||
|
Commercial
business
|
5,703
|
7.26
|
8,338
|
7.07
|
|||||
|
Consumer
|
845
|
7.65
|
1,329
|
6.94
|
|||||
|
Total
loans held for investment
|
1,004,250
|
5.46
|
%
|
1,162,595
|
5.96
|
%
|
|||
|
Undisbursed
loan funds
|
-
|
(75
|
)
|
||||||
|
Deferred
loan costs, net
|
3,159
|
4,029
|
|||||||
|
Allowance
for loan losses
|
(39,086
|
)
|
(58,013
|
)
|
|||||
|
Total
loans held for investment, net
|
$ 968,323
|
$
1,108,536
|
|||||||
|
Purchased
loans serviced by others included above
|
$ 21,438
|
4.76
|
%
|
$ 23,985
|
4.95
|
%
|
|||
|
DEPOSITS:
|
|||||||||
|
Checking
accounts – non interest-bearing
|
$ 50,670
|
-
|
%
|
$ 43,476
|
-
|
%
|
|||
|
Checking
accounts – interest-bearing
|
176,515
|
0.53
|
133,677
|
0.74
|
|||||
|
Savings
accounts
|
204,856
|
0.60
|
172,566
|
1.16
|
|||||
|
Money
market accounts
|
26,793
|
0.88
|
26,697
|
1.28
|
|||||
|
Time
deposits
|
473,414
|
1.80
|
555,505
|
2.55
|
|||||
|
Total
deposits
|
$
932,248
|
1.17
|
%
|
$
931,921
|
1.88
|
%
|
|||
|
Brokered
deposits included above
|
$ 19,612
|
2.78
|
%
|
$ 19,612
|
2.78
|
%
|
|||
|
Note: The
interest rate or yield/cost described in the rate or yield/cost column is
the weighted-average interest rate or yield/cost of all instruments, which
are included in the balance of the respective line
item.
|
|||||||||
Page 17 of 19
|
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Financial
Highlights
(Unaudited)
|
|||||||||
|
As
of September 30,
|
|||||||||
|
(Dollars
in Thousands)
|
2010
|
2009
|
|||||||
|
Balance
|
Rate
|
Balance
|
Rate
|
||||||
|
BORROWINGS:
|
|||||||||
|
Overnight
|
$ -
|
-
|
%
|
$ -
|
-
|
%
|
|||
|
Six
months or less
|
93,000
|
4.56
|
42,000
|
3.35
|
|||||
|
Over
six months to one year
|
45,000
|
4.63
|
35,000
|
3.77
|
|||||
|
Over
one year to two years
|
70,000
|
3.76
|
163,000
|
4.34
|
|||||
|
Over
two years to three years
|
70,000
|
3.89
|
70,000
|
3.76
|
|||||
|
Over
three years to four years
|
15,000
|
2.79
|
70,000
|
3.89
|
|||||
|
Over
four years to five years
|
-
|
-
|
20,000
|
2.68
|
|||||
|
Over
five years
|
1,635
|
6.37
|
16,681
|
3.26
|
|||||
|
Total
borrowings
|
$
294,635
|
4.14
|
%
|
$
416,681
|
3.89
|
%
|
|||
|
Quarter
Ended
|
|||||||||||||
|
September
30,
|
|||||||||||||
|
2010
|
2009
|
||||||||||||
|
SELECTED
AVERAGE BALANCE SHEETS:
|
Balance
|
Balance
|
|||||||||||
|
Loans
receivable, net (1)
|
$
1,165,264
|
$
1,284,747
|
|||||||||||
|
Investment
securities
|
33,905
|
103,022
|
|||||||||||
|
FHLB
– San Francisco stock
|
31,143
|
33,023
|
|||||||||||
|
Interest-earning
deposits
|
102,307
|
84,610
|
|||||||||||
|
Total
interest-earning assets
|
$
1,332,619
|
$
1,505,402
|
|||||||||||
|
Total
assets
|
$
1,400,177
|
$
1,565,941
|
|||||||||||
|
Deposits
|
$ 937,774
|
$ 977,474
|
|||||||||||
|
Borrowings
|
309,150
|
454,348
|
|||||||||||
|
Total
interest-bearing liabilities
|
$
1,246,924
|
$
1,431,822
|
|||||||||||
|
Total
stockholders’ equity
|
$ 130,004
|
$ 113,504
|
|||||||||||
|
Quarter
Ended
|
|||||||||||||
|
September
30,
|
|||||||||||||
|
2010
|
2009
|
||||||||||||
|
Yield/Cost
|
Yield/Cost
|
||||||||||||
|
Loans
receivable, net (1)
|
5.34%
|
5.65%
|
|||||||||||
|
Investment
securities
|
2.84%
|
4.25%
|
|||||||||||
|
FHLB
– San Francisco stock
|
0.46%
|
0.84%
|
|||||||||||
|
Interest-earning
deposits
|
0.25%
|
0.26%
|
|||||||||||
|
Total
interest-earning assets
|
4.77%
|
5.15%
|
|||||||||||
|
Deposits
|
1.20%
|
1.93%
|
|||||||||||
|
Borrowings
|
4.19%
|
3.94%
|
|||||||||||
|
Total
interest-bearing liabilities
|
1.94%
|
2.57%
|
|||||||||||
|
(1) Includes
loans held for investment, loans held for sale at fair value and loans
held for sale at lower cost or market, net of allowance for loan
losses.
|
|||||||||||||
|
Note: Note:
The interest rate or yield/cost described in the rate or yield/cost column
is the weighted-average interest rate or yield/cost of all instruments,
which are included in the balance of the respective line
item.
|
|||||||||||||
Page 18 of 19
|
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Asset
Quality
(Unaudited
– Dollars in Thousands)
|
|||||||||
| As of | As of | As of | As of | ||||||
|
09/30/10
|
06/30/10
|
03/31/10
|
12/31/09
|
||||||
|
Loans
on non-accrual status:
|
|||||||||
|
Mortgage
loans:
|
|||||||||
|
Single-family
|
$
26,640
|
$
30,129
|
$
37,670
|
$ 43,262
|
|||||
|
Multi-family
|
3,440
|
3,945
|
4,016
|
5,909
|
|||||
|
Commercial
real estate
|
377
|
725
|
1,571
|
2,500
|
|||||
|
Construction
|
250
|
350
|
373
|
374
|
|||||
|
Commercial
business loans
|
37
|
-
|
-
|
-
|
|||||
|
Consumer
loans
|
-
|
1
|
-
|
-
|
|||||
|
Total
|
30,744
|
35,150
|
43,630
|
52,045
|
|||||
|
Accruing
loans past due 90 days or more:
|
-
|
-
|
-
|
-
|
|||||
|
Total
|
-
|
-
|
-
|
-
|
|||||
|
Restructured
loans on non-accrual status:
|
||||||||||
|
Mortgage
loans:
|
||||||||||
|
Single-family
|
21,267
|
19,522
|
25,982
|
33,626
|
||||||
|
Multi-family
|
2,631
|
2,541
|
2,540
|
1,992
|
||||||
|
Commercial
real estate
|
1,000
|
1,003
|
1,224
|
1,044
|
||||||
|
Construction
|
-
|
-
|
319
|
918
|
||||||
|
Commercial
business loans
|
143
|
567
|
144
|
208
|
||||||
|
Total
|
25,041
|
23,633
|
30,209
|
37,788
|
||||||
|
Total
non-performing loans
|
55,785
|
58,783
|
73,839
|
89,833
|
||||||
|
Real
estate owned, net
|
16,937
|
14,667
|
17,555
|
10,871
|
||||||
|
Total
non-performing assets
|
$
72,722
|
$
73,450
|
$
91,394
|
$
100,704
|
||||||
|
Restructured
loans on accrual status:
|
|||||||||
|
Mortgage
loans:
|
|||||||||
|
Single-family
|
$
19,044
|
$
33,212
|
$
27,594
|
$
22,315
|
|||||
|
Commercial
real estate
|
1,832
|
1,832
|
537
|
-
|
|||||
|
Other
|
1,292
|
1,292
|
1,292
|
1,292
|
|||||
|
Commercial
business loans
|
96
|
-
|
750
|
750
|
|||||
|
Total
|
$
22,264
|
$
36,336
|
$
30,173
|
$
24,357
|
|||||