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EX-32.2 - EXHIBIT 32.2 - PROVIDENT FINANCIAL HOLDINGS INCprov10q123119exh322.htm
EX-32.1 - EXHIBIT 32.1 - PROVIDENT FINANCIAL HOLDINGS INCprov10q123119exh321.htm
EX-31.2 - EXHIBIT 31.2 - PROVIDENT FINANCIAL HOLDINGS INCprov10q123119exh312.htm
EX-31 - EXHIBIT 31.1 - PROVIDENT FINANCIAL HOLDINGS INCprov10q123119exh311.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
[ X ]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

  For the quarterly period ended
December 31, 2019

[     ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

  For the transition period from ________________ to _________________



Commission File Number 000-28304
 

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

Delaware
 
       33-0704889     
(State or other jurisdiction of
 
(I.R.S.  Employer
incorporation or organization)
 
Identification No.)

3756 Central Avenue, Riverside, California 92506
(Address of principal executive offices and zip code)

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

_________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common stock, par value $0.01 per share
 
PROV
 
The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.           [X]   Yes    [  ] No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).            [X] Yes   [   ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]
 
Accelerated filer  [X]
Non-accelerated filer [   ]  
 
Smaller reporting company [X]
 
 
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  [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   [   ] Yes   [X] No

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of January 31, 2020 there were 7,483,071 shares of the registrant's common stock, $0.01 par value per share, outstanding.


PROVIDENT FINANCIAL HOLDINGS, INC.
Table of Contents
PART 1  -
FINANCIAL INFORMATION
Page
       
ITEM 1  -
Financial Statements.  The Unaudited Interim Condensed Consolidated Financial Statements of
Provident Financial Holdings, Inc. filed as a part of the report are as follows:
 
       
 
Condensed Consolidated Statements of Financial Condition
 
   
as of December 31, 2019 and June 30, 2019
1
 
Condensed Consolidated Statements of Operations
 
   
for the Quarter and Six Months Ended December 31, 2019 and 2018
2
 
Condensed Consolidated Statements of Comprehensive Income
 
   
for the Quarter and Six Months Ended December 31, 2019 and 2018
3
 
Condensed Consolidated Statements of Stockholders’ Equity
 
   
for the Quarter and Six Months Ended December 31, 2019 and 2018
4
 
Condensed Consolidated Statements of Cash Flows
 
   
for the Six Months Ended December 31, 2019 and 2018
6
 
Notes to Unaudited Interim Condensed Consolidated Financial Statements
7
       
ITEM 2  -
Management’s Discussion and Analysis of Financial Condition and Results of Operations:
 
       
 
General
41
 
Safe-Harbor Statement
42
 
Critical Accounting Policies
43
 
Executive Summary and Operating Strategy
43
 
Off-Balance Sheet Financing Arrangements and Contractual Obligations
44
 
Comparison of Financial Condition at December 31, 2019 and June 30, 2019
45
 
Comparison of Operating Results
for the Quarter and Six Months Ended December 31, 2019 and 2018
47
 
Asset Quality
58
 
Loan Volume Activities
61
 
Liquidity and Capital Resources
61
 
Supplemental Information
63
       
ITEM 3  -
Quantitative and Qualitative Disclosures about Market Risk
64
       
ITEM 4  -
Controls and Procedures
68
       
PART II  -
OTHER INFORMATION
 
       
ITEM 1  -
Legal Proceedings
68
ITEM 1A -
Risk Factors
69
ITEM 2  -
Unregistered Sales of Equity Securities and Use of Proceeds
69
ITEM 3  -
Defaults Upon Senior Securities
69
ITEM 4  -
Mine Safety Disclosures
69
ITEM 5  -
Other Information
69
ITEM 6  -
Exhibits
70
       
SIGNATURES
71
.


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

 
December 31,
 2019
June 30,
 2019
Assets
   
     Cash and cash equivalents
$
48,233
 
$
70,632
 
     Investment securities – held to maturity, at cost
77,161
 
94,090
 
     Investment securities – available for sale, at fair value
5,237
 
5,969
 
     Loans held for investment, net of allowance for loan losses of
      $6,921 and $7,076, respectively; includes $4,173 and $5,094 at fair value, respectively
941,729
 
879,925
 
     Accrued interest receivable
3,292
 
3,424
 
     Federal Home Loan Bank (“FHLB”) – San Francisco stock
8,199
 
8,199
 
     Premises and equipment, net
10,967
 
8,226
 
     Prepaid expenses and other assets
12,569
 
14,385
 
              Total assets
$
1,107,387
 
$
 1,084,850
 
     
Liabilities and Stockholders’ Equity
   
     
Liabilities:
   
     Non interest-bearing deposits
$
85,846
 
$
90,184
 
     Interest-bearing deposits
747,804
 
751,087
 
             Total deposits
833,650
 
841,271
 
     
     Borrowings
131,085
 
101,107
 
     Accounts payable, accrued interest and other liabilities
18,876
 
21,831
 
             Total liabilities
983,611
 
964,209
 
     
Commitments and Contingencies  (Notes 6 and 10)
   
     
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;
     18,097,615 and 18,081,365 shares issued; 7,483,071 and
     7,486,106 shares outstanding, respectively)
181
 
181
 
     Additional paid-in capital
95,118
 
94,351
 
     Retained earnings
193,704
 
190,839
 
     Treasury stock at cost (10,614,544 and 10,559,259 shares, respectively)
(165,360
)
(164,891
)
     Accumulated other comprehensive income, net of tax
133
 
161
 
             Total stockholders’ equity
123,776
 
120,641
 
             Total liabilities and stockholders’ equity
$
1,107,387
 
$
1,084,850
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
1

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


   
Quarter Ended
December 31,
   
Six Months Ended
December 31,
 
   
2019
   
2018
   
2019
   
2018
 
Interest income:
                       
    Loans receivable, net
 
$
10,320
   
$
10,331
   
$
20,395
   
$
20,505
 
    Investment securities
   
567
     
444
     
1,181
     
789
 
    FHLB – San Francisco stock
   
145
     
278
     
288
     
421
 
    Interest-earning deposits
   
189
     
387
     
435
     
725
 
    Total interest income
   
11,221
     
11,440
     
22,299
     
22,440
 
                                 
Interest expense:
                               
    Checking and money market deposits
   
117
     
117
     
227
     
225
 
    Savings deposits
   
131
     
147
     
265
     
298
 
    Time deposits
   
530
     
630
     
1,062
     
1,251
 
    Borrowings
   
804
     
715
     
1,524
     
1,478
 
    Total interest expense
   
1,582
     
1,609
     
3,078
     
3,252
 
                                 
Net interest income
   
9,639
     
9,831
     
19,221
     
19,188
 
(Recovery) provision for loan losses
   
(22
)
   
(217
)
   
(203
)
   
(454
)
Net interest income, after  (recovery) provision for loan losses
   
9,661
     
10,048
     
19,424
     
19,642
 
                                 
Non-interest income:
                               
    Loan servicing and other fees
   
367
     
277
     
500
     
601
 
    (Loss) gain on sale of loans, net
   
(43
)
   
2,263
     
(129
)
   
5,395
 
    Deposit account fees
   
451
     
509
     
898
     
1,014
 
    Loss on sale and operations of real estate owned acquired in the
      settlement of loans, net
   
     
(7
)
   
     
(6
)
    Card and processing fees
   
371
     
392
     
761
     
790
 
    Other
   
198
     
161
     
384
     
350
 
    Total non-interest income
   
1,344
     
3,595
     
2,414
     
8,144
 
                                 
Non-interest expense:
                               
    Salaries and employee benefits
   
4,999
     
7,211
     
9,984
     
15,461
 
    Premises and occupancy
   
880
     
1,274
     
1,758
     
2,619
 
    Equipment
   
262
     
495
     
541
     
916
 
    Professional expenses
   
331
     
411
     
739
     
858
 
    Sales and marketing expenses
   
212
     
253
     
329
     
422
 
    Deposit insurance premiums and regulatory assessments
   
59
     
172
     
43
     
337
 
    Other
   
811
     
1,059
     
1,398
     
1,966
 
    Total non-interest expense
   
7,554
     
10,875
     
14,792
     
22,579
 
Income before income taxes
   
3,451
     
2,768
     
7,046
     
5,207
 
Provision for income taxes
   
1,053
     
810
     
2,086
     
1,426
 
    Net income
 
$
2,398
   
$
1,958
   
$
4,960
   
$
3,781
 
                                 
Basic earnings per share
 
$
0.32
   
$
0.26
   
$
0.66
   
$
0.51
 
Diluted earnings per share
 
$
0.31
   
$
0.26
   
$
0.65
   
$
0.50
 
Cash dividends per share
 
$
0.14
   
$
0.14
   
$
0.28
   
$
0.28
 

The accompanying notes are an integral part of these condensed consolidated financial statements.
2


.
PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
In Thousands

 
For the Quarter Ended
 December 31,
For the Six Months Ended
 December 31,
 
2019
2018
2019
2018
Net income
$
2,398
 
$
1,958
 
$
4,960
 
$
3,781
 
         
Change in unrealized holding loss on securities available for sale
(21
)
(28
)
(40
)
(58
)
Reclassification adjustment for net loss on securities available
  for sale included in net loss
 
 
 
 
Other comprehensive loss, before income taxes
(21
)
(28
)
(40
)
(58
)
         
Income tax benefit
(6
)
(8
)
(12
)
(17
)
Other comprehensive loss
(15
)
(20
)
(28
)
(41
)
         
Total comprehensive income
$
2,383
 
$
1,938
 
$
4,932
 
$
3,740
 




The accompanying notes are an integral part of these condensed consolidated financial statements.
3



PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Stockholders' Equity
(Unaudited)
In Thousands, Except Share Information

For the Quarter Ended December 31, 2019 and 2018:
 
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss),
Net of Tax
 
 
Shares
Amount
Total
Balance at September 30, 2019
7,479,682
 
$
181
 
$
94,795
 
$
192,354
 
$
(165,309
)
$
148
 
$
122,169
 
               
Net income
     
2,398
     
2,398
 
Other comprehensive loss
         
(15
)
(15
)
Purchase of treasury stock
(2,361
)
     
(51
)
 
(51
)
Exercise of stock options
5,750
   
83
       
83
 
Amortization of restricted stock
   
219
       
219
 
Stock options expense
   
21
       
21
 
Cash dividends (1)
     
(1,048
)
   
(1,048
)
               
Balance at December 31, 2019
7,483,071
 
$
181
 
$
95,118
 
$
193,704
 
$
(165,360
)
$
133
 
$
123,776
 

(1)
Cash dividends of $0.14 per share were paid in the quarter ended December 31, 2019.

 
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss),
Net of Tax
 
 
Shares
Amount
Total
Balance at September 30, 2018
7,500,860
 
$
181
 
$
95,795
 
$
191,399
 
$
(165,884
)
$
189
 
$
121,680
 
               
Net income
     
1,958
     
1,958
 
Other comprehensive loss
         
(20
)
(20
)
Purchase of treasury stock (1)
(505
)
     
(8
)
 
(8
)
Exercise of stock options
5,000
   
73
       
73
 
Distribution of restricted stock
1,500
             
 
Amortization of restricted stock
   
33
       
33
 
Stock options expense
   
12
       
12
 
Cash dividends (2)
     
(1,051
)
   
(1,051
)
               
Balance at December 31, 2018
7,506,855
 
$
181
 
$
95,913
 
$
192,306
 
$
(165,892
)
$
169
 
$
122,677
 
(1)
Includes the repurchase of 505 shares of distributed restricted stock in settlement of employee withholding tax obligations.
(2)
Cash dividends of $0.14 per share were paid in the quarter ended December 31, 2018.



The accompanying notes are an integral part of these condensed consolidated financial statements.
4


For the Six Months Ended December 31, 2019 and 2018:
 
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss),
Net of Tax
 
 
Shares
Amount
Total
Balance at June 30, 2019
7,486,106
 
$
181
 
$
94,351
 
$
190,839
 
$
(164,891
)
$
161
 
$
120,641
 
               
Net income
     
4,960
     
4,960
 
Other comprehensive loss
         
(28
)
(28
)
Purchase of treasury stock
(19,285
)
     
(397
)
 
(397
)
Exercise of stock options
16,250
   
215
       
215
 
Forfeiture of restricted stock
    72
    (72
)
   
Amortization of restricted stock
   
439
       
439
 
Stock options expense
   
41
       
41
 
Cash dividends (1)
     
(2,095
)
   
(2,095
)
               
Balance at December 31, 2019
7,483,071
 
$
181
 
$
95,118
 
$
193,704
 
$
(165,360
)
$
133
 
$
123,776
 
 (1)   Cash dividends of $0.28 per share were paid in the six months ended December 31, 2019.


 
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss),
Net of Tax
 
 
Shares
Amount
Total
Balance at June 30, 2018
7,421,426
 
$
181
 
$
94,957
 
$
190,616
 
$
(165,507
)
$
210
 
$
120,457
 
               
Net income
     
3,781
     
3,781
 
Other comprehensive loss
         
(41
)
(41
)
Purchase of treasury stock (1)
(21,071
)
     
(385
)
 
(385
)
Exercise of stock options
20,000
   
226
       
226
 
Distribution of restricted stock
86,500
             
 
Amortization of restricted stock
   
397
       
397
 
Stock options expense
   
333
       
333
 
Cash dividends (2)
     
(2,091
)
   
(2,091
)
               
Balance at December 31, 2018
7,506,855
 
$
181
 
$
95,913
 
$
192,306
 
$
(165,892
)
$
169
 
$
122,677
 
(1)   Includes the repurchase of 21,071 shares of distributed restricted stock in settlement of employee withholding tax obligations.
(2)   Cash dividends of $0.28 per share were paid in the six months ended December 31, 2018.





The accompanying notes are an integral part of these condensed consolidated financial statements.
5

PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited - In Thousands)
 
Six Months Ended
December 31,
 
2019
2018
Cash flows from operating activities:
   
   Net income
$
4,960
 
$
3,781
 
   Adjustments to reconcile net income to net cash provided by operating activities:
   
      Depreciation and amortization
1,356
 
1,664
 
      (Recovery) provision for loan losses
(203
)
(454
)
      Loss (gain) on sale of loans, net
129
 
(5,395
)
      Stock-based compensation
480
 
730
 
      Provision for deferred income taxes
1,432
 
733
 
   Decrease in accounts payable, accrued interest and other liabilities
(3,052
)
(482
)
   (Increase) decrease in prepaid expenses and other assets
(3,025
)
537
 
   Loans originated for sale
 
(342,738
)
   Proceeds from sale of loans
 
386,778
 
         Net cash provided by operating activities
2,077
 
45,154
 
     
Cash flows from investing activities:
   
   (Increase) decrease in loans held for investment, net
(61,773
)
27,554
 
   Maturity of investment securities held to maturity
 
200
 
   Principal payments from investment securities held to maturity
16,702
 
15,782
 
   Principal payments from investment securities available for sale
695
 
875
 
   Purchase of investment securities held to maturity
 
(13,669
)
   Proceeds from sale of real estate owned
 
915
 
   Purchase of premises and equipment
(148
)
(348
)
         Net cash (used for) provided by investing activities
(44,524
)
31,309
 
     
Cash flows from financing activities:
   
   Decrease in deposits, net
(7,621
)
(34,714
)
   Repayments of short-term borrowings, net
 
(15,000
)
   Repayments of long-term borrowings
(29
)
(28
)
   Proceeds from long-term borrowings
30,007
 
 
   Exercise of stock options
215
 
226
 
   Withholding taxes on stock based compensation
(32
)
(413
)
   Cash dividends
(2,095
)
(2,091
)
   Treasury stock purchases
(397
)
(385
)
         Net cash provided by (used for) financing activities
20,048
 
(52,405
)
     
Net (decrease) increase in cash and cash equivalents
(22,399
)
24,058
 
Cash and cash equivalents at beginning of period
70,632
 
43,301
 
Cash and cash equivalents at end of period
$
48,233
 
$
67,359
 
Supplemental information:
   
   Cash paid for interest
$
3,091
 
$
3,263
 
   Cash paid for income taxes
$
350
 
$
1,525
 
   Transfer of loans held for sale to held for investment
$
1,085
 
$
724
 

The accompanying notes are an integral part of these condensed consolidated financial statements.
6

PROVIDENT FINANCIAL HOLDINGS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements

December 31, 2019

Note 1: Basis of Presentation

The unaudited interim condensed consolidated financial statements included herein reflect all adjustments which are, in the opinion of management, necessary to present a fair statement of the results of operations for the interim periods presented.  All such adjustments are of a normal, recurring nature.  The condensed consolidated statement of financial condition at June 30, 2019 is derived from the audited consolidated financial statements of Provident Financial Holdings, Inc. and its wholly-owned subsidiary, Provident Savings Bank, F.S.B. (the “Bank”) (collectively, the “Corporation”).  Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) with respect to interim financial reporting.  It is recommended that these unaudited interim condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended June 30, 2019.  The results of operations for the quarter ended December 31, 2019 are not necessarily indicative of results that may be expected for the entire fiscal year ending June 30, 2020.


Note 2: Accounting Standard Updates (“ASU”)

There have been no accounting standard updates or changes in the status of their adoption that are significant to the Corporation as previously disclosed in Note 1 of the Corporation's Annual Report on Form 10-K for the year ended June 30, 2019, other than:

ASU 2016-13:
In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” and subsequent amendments to the initial guidance in November 2018, ASU No. 2018-19, April 2019, ASU 2019-04, May 2019, ASU 2019-05, and November 2019 ASU 2019-11, all of which clarifies codification and corrects unintended application of the guidance. In November 2019, the FASB also issued ASU 2019-10, “Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates” extending the adoption date for certain registrants, including the Corporation. These ASUs will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Corporation is evaluating its current expected loss methodology of its loan and investment portfolios to identify the necessary modifications in accordance with these standards and expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. A valuation adjustment to its allowance for loan losses or investment portfolio that is identified in this process will be reflected as a one-time adjustment in equity rather than earnings upon adoption. The Corporation is in the process of compiling historical data that will be used to calculate expected credit losses on its loan portfolio to ensure the Corporation is fully compliant with these ASUs at the adoption date and is evaluating the potential impact adoption of these ASUs will have on the Corporation’s Consolidated Financial Statements.

ASU 2018-11
In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." This ASU introduces a lessee model that brings most leases onto the balance sheet and aligns many of the underlying principles of the new lessor model with those in the new revenue recognition standard, Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers. The new leases standard represents a wholesale change to lease accounting and did not result in significant implementation

7


challenges during the transition period. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The effective date of this ASU for annual periods is beginning after December 15, 2018 (i.e., calendar periods beginning on January 1, 2019) and interim periods therein. In July 2018, the FASB issued ASU 2018-11, Leases, Targeted Improvements, which allows entities the option of initially applying the new leases standard at the adoption date (such as January 1, 2019, for calendar year- end public business entities) and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Corporation adopted the provisions of ASC 842 effective July 1, 2019 utilizing the transition method allowed under ASU 2018-11 and will not restate comparative periods as well as electing to not separate non-lease components from lease components. The Corporation elected the package of practical expedients permitted under ASC 842's transition guidance, which allows the Corporation to carryforward its historical lease classifications and its assessment as to whether a contract is or contains a lease. The Corporation also elected to not recognize lease assets and lease liabilities for leases with an initial term of 12 months or less. The adoption of ASC 842 did not have a material impact on its consolidated financial statements. See Note 10 for additional discussion.

ASU 2018-13:
In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies disclosure requirements on fair value measurements to improve their effectiveness.” The guidance permits entities to consider materiality when evaluating fair value measurement disclosures and, among other modifications, requires certain new disclosures related to Level 3 fair value measurements. This guidance will be effective fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The guidance only affects disclosures in the notes to the consolidated financial statements and will not otherwise affect the Corporation’s Consolidated Financial Statements.


Note 3: Earnings Per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing income available to common shareholders by the weighted-average number of shares outstanding for the period.  Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the earnings of the Corporation.

As of December 31, 2019 and 2018, there were outstanding options to purchase 554,500 shares and 509,000 shares of the Corporation’s common stock, respectively. Of those shares, as of December 31, 2019 and 2018, there were no shares and 45,000 shares, respectively, which were excluded from the diluted EPS computation as their effect was anti-dilutive. As of December 31, 2019 and 2018, there were outstanding restricted stock awards of 225,500 shares and 12,000 shares, respectively.



8


The following table provides the basic and diluted EPS computations for the quarter and six months ended December 31, 2019 and 2018, respectively.
   
For the Quarter Ended
December 31,
   
For the Six Months Ended
December 31,
 
(In Thousands, Except Earnings Per Share)
 
2019
   
2018
   
2019
   
2018
 
Numerator:
                       
    Net income – numerator for basic earnings per share and
      diluted earnings per share - available to common
      stockholders
 
$
2,398
   
$
1,958
   
$
4,960
   
$
3,781
 
                                 
Denominator:
                               
  Denominator for basic earnings per share:
                               
    Weighted-average shares
   
7,482
     
7,506
     
7,482
     
7,468
 
                                 
    Effect of dilutive shares:
                               
Stock options
   
133
     
89
     
133
     
90
 
Restricted stock
   
43
     
7
     
36
     
21
 
                                 
  Denominator for diluted earnings per share:
                               
    Adjusted weighted-average shares and assumed
      conversions
   
7,658
     
7,602
     
7,651
     
7,579
 
                                 
Basic earnings per share
 
$
0.32
   
$
0.26
   
$
0.66
   
$
0.51
 
Diluted earnings per share
 
$
0.31
   
$
0.26
   
$
0.65
   
$
0.50
 


Note 4: Investment Securities

The amortized cost and estimated fair value of investment securities as of December 31, 2019 and June 30, 2019 were as follows:

December 31, 2019
 
Amortized
Cost
   
Gross
Unrealized
Gains
   
Gross
Unrealized
(Losses)
   
Estimated
Fair
Value
   
Carrying
Value
 
(In Thousands)
                             
Held to maturity:
                             
  U.S. government sponsored enterprise MBS (1)
 
$
73,545
   
$
1,185
   
$
(64
)
 
$
74,666
   
$
73,545
 
  U.S. SBA securities (2)
   
2,816
     
     
(13
)
   
2,803
     
2,816
 
  Certificate of deposits
   
800
     
     
     
800
     
800
 
Total investment securities - held to maturity
 
$
77,161
   
$
1,185
   
$
(77
)
 
$
78,269
   
$
77,161
 
                                         
Available for sale:
                                       
  U.S. government agency MBS
 
$
3,146
   
$
100
   
$
   
$
3,246
   
$
3,246
 
  U.S. government sponsored enterprise MBS
   
1,688
     
72
     
     
1,760
     
1,760
 
  Private issue CMO (3)
   
227
     
4
     
     
231
     
231
 
Total investment securities - available for sale
 
$
5,061
   
$
176
   
$
   
$
5,237
   
$
5,237
 
Total investment securities
 
$
82,222
   
$
1,361
   
$
(77
)
 
$
83,506
   
$
82,398
 

(1)
Mortgage-Backed Securities (“MBS”).
(2)
Small Business Administration (“SBA”).
(3)
Collateralized Mortgage Obligations (“CMO”).

9


June 30, 2019
 
Amortized
Cost
   
Gross
Unrealized
Gains
   
Gross
Unrealized
(Losses)
   
Estimated
Fair
Value
   
Carrying
Value
 
(In Thousands)
                             
Held to maturity
                             
  U.S. government sponsored enterprise MBS
 
$
90,394
   
$
1,289
   
$
(14
)
 
$
91,669
   
$
90,394
 
  U.S. SBA securities
   
2,896
     
     
(6
)
   
2,890
     
2,896
 
  Certificate of deposits
   
800
     
     
     
800
     
800
 
Total investment securities - held to maturity
 
$
94,090
   
$
1,289
   
$
(20
)
 
$
95,359
   
$
94,090
 
                                         
Available for sale
                                       
  U.S. government agency MBS
 
$
3,498
   
$
116
   
$
(1
)
 
$
3,613
   
$
3,613
 
  U.S. government sponsored enterprise MBS
   
1,998
     
89
     
     
2,087
     
2,087
 
  Private issue CMO
   
261
     
8
     
     
269
     
269
 
Total investment securities - available for sale
 
$
5,757
   
$
213
   
$
(1
)
 
$
5,969
   
$
5,969
 
Total investment securities
 
$
99,847
   
$
1,502
   
$
(21
)
 
$
101,328
   
$
100,059
 

In the second quarter of fiscal 2020 and 2019, the Corporation received MBS principal payments of $8.1 million and $8.3 million, respectively, and there were no sales of investment securities during these periods. The Corporation did not purchase any investment securities in the second quarter of fiscal 2020, as compared to the purchase of $13.5 million of U.S. government sponsored enterprise MBS to be held to maturity in the same period of fiscal 2019. For the first six months of fiscal 2020 and 2019, the Corporation received MBS principal payments of $17.4 million and $16.7 million, respectively, and there were no sales of investment securities during these periods. The Corporation did not purchase any investment securities in the first six months of fiscal 2020, as compared to the purchase of $13.5 million of U.S. government sponsored enterprise MBS to be held to maturity in the same period of fiscal 2019.

The Corporation held investments with an unrealized loss position of $77,000 at December 31, 2019 and $21,000 at June 30, 2019.
As of December 31, 2019
Unrealized Holding
Losses
 
Unrealized Holding
Losses
 
Unrealized Holding
Losses
 
(In Thousands)
Less Than 12 Months
 
12 Months or More
 
Total
 
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Description  of Securities
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
 
Held to maturity:
                       
  U.S. government sponsored enterprise MBS
 
$
6,407
   
$
64
   
$
   
$
   
$
6,407
   
$
64
 
  U.S. SBA securities
   
   
$
     
2,313
     
13
     
2,313
     
13
 
Total investment securities – held to maturity
 
$
6,407
   
$
64
   
$
2,313
   
$
13
   
$
8,720
   
$
77
 
                                                 
Available for sale
                                               
Total investment securities – available for sale
 
$
   
$
   
$
   
$
   
$
   
$
 
Total investment securities
 
$
6,407
   
$
64
   
$
2,313
   
$
13
   
$
8,720
    $ 77  

10


As of June 30, 2019
Unrealized Holding
Losses
 
Unrealized Holding
Losses
 
Unrealized Holding
Losses
(In Thousands)
Less Than 12 Months
 
12 Months or More
 
Total
 
Fair
Unrealized
 
Fair
Unrealized
 
Fair
Unrealized
Description  of Securities
Value
Losses
 
Value
Losses
 
Value
Losses
Held to maturity
               
  U.S. government sponsored enterprise MBS
$
6,507
 
$
8
   
$
1,657
 
$
6
   
$
8,164
 
$
14
 
  U.S. SBA securities
 
 
$
     
2,883
   
6
     
2,883
   
6
 
Total investment securities – held to maturity
$
6,507
 
$
8
   
$
4,540
 
$
12
   
$
11,047
 
$
20
 
                                         
Available for sale
                                       
U.S. government agency MBS
$
289
 
$
1
   
$
 
$
   
$
289
 
$
1
 
Total investment securities – available for sale
$
289
 
$
1
   
$
 
$
   
$
289
 
$
1
 
Total investment securities
$
6,796
 
$
9
   
$
4,540
 
$
12
   
$
11,336
 
$
21
 

The Corporation evaluates individual investment securities quarterly for other-than-temporary declines in market value. At December 31, 2019, $13,000 of the $77,000 unrealized holding losses were 12 months or more; while at June 30, 2019, $12,000 of the $21,000 unrealized holding losses were 12 months or more. The Corporation does not believe that there were any other-than-temporary impairments on the investment securities at December 31, 2019 and 2018; therefore, no impairment losses were recorded for the quarter ended December 31, 2019 and 2018.

Contractual maturities of investment securities as of December 31, 2019 and June 30, 2019 were as follows:
 
December 31, 2019
 

June 30, 2019
(In Thousands)
Amortized
Cost
Estimated
Fair
Value
 
Amortized
Cost
Estimated
Fair
Value
           
Held to maturity:
         
Due in one year or less
$
800
 
$
800
   
$
400
 
$
400
 
Due after one through five years
25,201
 
25,309
   
32,584
 
32,728
 
Due after five through ten years
30,383
 
31,066
   
35,306
 
36,090
 
Due after ten years
20,777
 
21,094
   
25,800
 
26,141
 
Total investment securities - held to maturity
$
77,161
 
$
78,269
   
$
94,090
 
$
95,359
 
           
Available for sale:
         
Due in one year or less
$
 
$
   
$
 
$
 
Due after one through five years
 
   
 
 
Due after five through ten years
 
   
 
 
Due after ten years
5,061
 
5,237
   
5,757
 
5,969
 
Total investment securities - available for sale
$
5,061
 
$
5,237
   
$
5,757
 
$
5,969
 
Total investment securities
$
82,222
 
$
83,506
   
$
99,847
 
$
101,328
 

11


Note 5: Loans Held for Investment

Loans held for investment, net of fair value adjustments, consisted of the following:
(In Thousands)
December 31,
2019
June 30,
2019
Mortgage loans:
   
    Single-family
$
347,344
 
$
324,952
 
    Multi-family
479,151
 
439,041
 
    Commercial real estate
107,613
 
111,928
 
    Construction (1)
6,914
 
4,638
 
    Other
 
167
 
Commercial business loans (2)
578
 
478
 
Consumer loans (3)
140
 
134
 
    Total loans held for investment, gross
941,740
 
881,338
 
     
Advance payments of escrows
56
 
53
 
Deferred loan costs, net
6,854
 
5,610
 
Allowance for loan losses
(6,921
)
(7,076
)
    Total loans held for investment, net
$
941,729
 
$
879,925
 

(1)
Net of $6.8 million and $6.6 million of undisbursed loan funds as of December 31, 2019 and June 30, 2019, respectively
(2)
Net of $0.9 million and $1.0 million of undisbursed lines of credit as of December 31, 2019 and June 30, 2019, respectively.
(3)
Net of $0.5 million and $0.5 million of undisbursed lines of credit as of December 31, 2019 and June 30, 2019, respectively.

The following table sets forth information at December 31, 2019 regarding the dollar amount of loans held for investment that are contractually repricing during the periods indicated, segregated between adjustable rate loans and fixed rate loans.  Fixed-rate loans comprised one percent and two percent of loans held for investment at December 31, 2019 and June 30, 2019, respectively.  Adjustable rate loans having no stated repricing dates that reprice when the index they are tied to reprices (e.g. prime rate index) and checking account overdrafts are reported as repricing within one year.  The table does not include any estimate of prepayments which may cause the Corporation’s actual repricing experience to differ materially from that shown.

 
Adjustable Rate
   
(In Thousands)
Within One
Year
After
One Year
Through 3
Years
After
3 Years
Through 5
Years
After
5 Years
Through 10
Years
Fixed Rate
Total
Mortgage loans:
           
    Single-family
$
83,613
 
$
41,111
 
$
121,719
 
$
90,106
 
$
10,795
 
$
347,344
 
    Multi-family
138,125
 
162,170
 
159,357
 
19,327
 
172
 
479,151
 
    Commercial real estate
38,497
 
27,918
 
40,118
 
685
 
395
 
107,613
 
    Construction
5,796
 
 
 
 
1,118
 
6,914
 
Commercial business loans
160
 
 
 
 
418
 
578
 
Consumer loans
140
 
 
 
 
 
140
 
    Total loans held for investment,
      gross
$
266,331
 
$
231,199
 
$
321,194
 
$
110,118
 
$
12,898
 
$
941,740
 

The Corporation has developed an internal loan grading system to evaluate and quantify the Bank’s loans held for investment portfolio with respect to quality and risk.  Management continually evaluates the credit quality of the Corporation’s loan

12

portfolio and conducts a quarterly review of the adequacy of the allowance for loan losses using quantitative and qualitative methods. The Corporation has adopted an internal risk rating policy in which each loan is rated for credit quality with a rating of pass, special mention, substandard, doubtful or loss.  The two primary components that are used during the loan review process to determine the proper allowance levels are individually evaluated allowances and collectively evaluated allowances.  Quantitative loan loss factors are developed by determining the historical loss experience, expected future cash flows, discount rates and collateral fair values, among others.  Qualitative loan loss factors are developed by assessing general economic indicators such as gross domestic product, retail sales, unemployment rates, employment growth, California home sales and median California home prices.  The Corporation assigns individual factors for the quantitative and qualitative methods for each loan category and each internal risk rating.

The Corporation categorizes all of the loans held for investment into risk categories based on relevant information about the ability of the borrower to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.  A description of the general characteristics of the risk grades is as follows:
Pass - These loans range from minimal credit risk to average, but still acceptable, credit risk.  The likelihood of loss is considered remote.
Special Mention - A special mention loan has potential weaknesses that may be temporary or, if left uncorrected, may result in a loss.  While concerns exist, the bank is currently protected and loss is considered unlikely and not imminent.
Substandard - A substandard loan is inadequately protected by the current sound net worth and paying capacity of the borrower or of the collateral pledged, if any.  Loans so classified must have a well-defined weakness, or weaknesses, that may jeopardize the liquidation of the debt.  A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
Doubtful - A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of the currently existing facts, conditions and values, highly questionable and improbable.
Loss - A loss loan is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted.

The following tables summarize gross loans held for investment, net of fair value adjustments, by loan types and risk category at the dates indicated:
   
December 31, 2019
(In Thousands)
Single-
family
Multi-
family
Commercial
Real Estate
Construction
Commercial
Business
Consumer
Total
                 
Pass
$
339,599
 
$
475,330
 
$
106,687
 
$
5,629
 
$
535
 
$
140
 
$
927,920
 
Special Mention
4,276
 
3,821
 
 
1,285
 
 
 
9,382
 
Substandard
3,469
 
 
926
 
 
43
 
 
4,438
 
 
Total loans held for
   investment, gross
$
347,344
 
$
479,151
 
$
107,613
 
$
6,914
 
$
578
 
$
140
 
$
941,740
 

13

   
June 30, 2019
(In Thousands)
Single-
family
Multi-
family
Commercial
Real Estate
Construction
Other
Mortgage
Commercial Business
Consumer
Total
                   
Pass
$
314,036
 
$
435,177
 
$
111,001
 
$
3,667
 
$
167
 
$
429
 
$
134
 
$
864,611
 
Special Mention
3,795
 
3,864
 
927
 
 
 
 
 
8,586
 
Substandard
7,121
 
 
 
971
 
 
49
 
 
8,141
 
 
Total loans held for
   investment, gross
$
324,952
 
$
439,041
 
$
111,928
 
$
4,638
 
$
167
 
$
478
 
$
134
 
$
881,338
 

The allowance for loan losses is maintained at a level sufficient to provide for estimated losses based on evaluating known and inherent risks in the loans held for investment and upon management’s continuing analysis of the factors underlying the quality of the loans held for investment.  These factors include changes in the size and composition of the loans held for investment, actual loan loss experience, current economic conditions, detailed analysis of individual loans for which full collectability may not be assured, and determination of the realizable value of the collateral securing the loans.  The provision (recovery) for (from) the allowance for loan losses is charged (credited) against operations on a quarterly basis, as necessary, to maintain the allowance at appropriate levels.  Although management believes it uses the best information available to make such determinations, there can be no assurance that regulators, in reviewing the Corporation’s loans held for investment, will not request a significant increase in its allowance for loan losses.  Future adjustments to the allowance for loan losses may be necessary and results of operations could be significantly and adversely affected as a result of economic, operating, regulatory, and other conditions beyond the Corporation’s control.

Non-performing loans are charged-off to their fair market values in the period the loans, or portion thereof, are deemed uncollectible, generally after the loan becomes 150 days delinquent for real estate secured first trust deed loans and 120 days delinquent for commercial business or real estate secured second trust deed loans.  For loans that were modified from their original terms, were re-underwritten and identified in the Corporation’s asset quality reports as troubled debt restructurings (“restructured loans”), the charge-off occurs when the loan becomes 90 days delinquent; and where borrowers file bankruptcy, the charge-off occurs when the loan becomes 60 days delinquent.  The amount of the charge-off is determined by comparing the loan balance to the estimated fair value of the underlying collateral, less disposition costs, with the loan balance in excess of the estimated fair value charged-off against the allowance for loan losses.  The allowance for loan losses for non-performing loans is determined by applying ASC 310, “Receivables.”  For restructured loans that are less than 90 days delinquent, the allowance for loan losses are segregated into (a) individually evaluated allowances for those loans with applicable discounted cash flow calculations still in their restructuring period, classified lower than pass, and  containing an embedded loss component or (b) collectively evaluated allowances based on the aggregated pooling method.  For non-performing loans less than 60 days delinquent where the borrower has filed bankruptcy, the collectively evaluated allowances are assigned based on the aggregated pooling method.  For non-performing commercial real estate loans, an individually evaluated allowance is derived based on the loan's discounted cash flow fair value (for restructured loans) or collateral fair value less estimated selling costs and if the fair value is higher than the loan balance, no allowance is required.


14


The following table is provided to disclose additional details for the periods indicated on the Corporation’s allowance for loan losses:
 
For the Quarter Ended
December 31,
For the Six Months Ended
December 31,
(Dollars in Thousands)
2019
2018
2019
2018
         
Allowance at beginning of period
$
6,929
 
$
7,155
 
$
7,076
 
$
7,385
 
         
Provision (recovery) for loan losses
(22
)
(217
)
(203
)
(454
)
         
Recoveries:
       
Mortgage loans:
       
     Single-family
13
 
123
 
49
 
155
 
Consumer loans
1
 
 
1
 
1
 
   Total recoveries
14
 
123
 
50
 
156
 
         
Charge-offs:
       
Mortgage loans:
       
     Single-family
 
 
(1
)
(25
)
Consumer loans
 
 
(1
)
(1
)
   Total charge-offs
 
 
(2
)
(26
)
         
   Net recoveries (charge-offs)
14
 
123
 
48
 
130
 
     Balance at end of period
$
6,921
 
$
7,061
 
$
6,921
 
$
7,061
 
         
Allowance for loan losses as a percentage of gross
  loans held for investment at the end of the period
0.73
%
0.80
%
0.73
%
0.80
%
Net (recoveries) charge-offs as a percentage of average
  loans receivable, net, during the period (annualized)
(0.01)
%
(0.05)
%
(0.01)
%
(0.03)
%

The following tables denote the past due status of the Corporation's gross loans held for investment, net of fair value adjustments, at the dates indicated.
   
December 31, 2019
(In Thousands)
Current
30-89 Days
Past Due
Non-Accrual (1)
Total Loans Held for
Investment, Gross
           
Mortgage loans:
       
 
Single-family
$
342,893
 
$
982
 
$
3,469
 
$
347,344
 
 
Multi-family
479,151
 
 
 
479,151
 
 
Commercial real estate
107,613
 
 
 
107,613
 
 
Construction
6,914
 
 
 
6,914
 
Commercial business loans
535
 
 
43
 
578
 
Consumer loans
136
 
4
 
 
140
 
 
Total loans held for investment, gross
$
937,242
 
$
986
 
$
3,512
 
$
941,740
 

(1)  All loans 90 days or greater past due are placed on non-accrual status.

15

   
June 30, 2019
(In Thousands)
Current
30-89 Days
Past Due
Non-Accrual(1)
Total Loans Held for Investment, Gross
           
Mortgage loans:
       
 
Single-family
$
318,671
 
$
660
 
$
5,621
 
$
324,952
 
 
Multi-family
439,041
 
 
 
439,041
 
 
Commercial real estate
111,928
 
 
 
111,928
 
 
Construction
3,667
 
 
971
 
4,638
 
 
Other
167
 
 
 
167
 
Commercial business loans
429
 
 
49
 
478
 
Consumer loans
129
 
5
 
 
134
 
 
Total loans held for investment, gross
$
874,032
 
$
665
 
$
6,641
 
$
881,338
 

(1)  All loans 90 days or greater past due are placed on non-accrual status.

The following tables summarize the Corporation’s allowance for loan losses and recorded investment in gross loans, by portfolio type, at the dates and for the periods indicated.
  Quarter Ended December 31, 2019  
(In Thousands)
Single-
family
   
Multi-
family
   
Commercial
Real Estate
   
Construction
   
Commercial Business
   
Consumer
   
Total
 
Allowance for loan losses:
                                       
Allowance at beginning of  period
$
2,234
   
$
3,507
   
$
1,085
   
$
74
   
$
20
   
$
9
   
$
6,929
 
Provision (recovery) for loan losses
 
(90
)
   
(5
)
   
(27
)
   
94
     
8
     
(2
)
   
(22
)
Recoveries
 
13
     
     
     
     
     
1
     
14
 
Charge-offs
 
     
     
     
     
     
     
 
Allowance for loan losses,
  end of period
$
2,157
   
$
3,502
   
$
1,058
   
$
168
   
$
28
   
$
8
   
$
6,921
 
                                                       
Allowance for loan losses:
                                                     
Individually evaluated for impairment
$
46
   
$
   
$
   
$
   
$
$
6
   
$
   
$
52
 
Collectively evaluated for impairment
 
2,111
     
3,502
     
1,058
     
168
     
22
     
8
     
6,869
 
Allowance for loan losses,
  end of period
$
2,157
   
$
3,502
   
$
1,058
   
$
168
   
$
28
   
$
8
   
$
6,921
 
                                                       
Loans held for investment:
                                                     
Individually evaluated for impairment
$
3,053
   
$
   
$
   
$
   
$
$
43
   
$
   
$
3,096
 
Collectively evaluated for impairment
 
344,291
     
479,151
     
107,613
     
6,914
     
535
     
140
     
938,644
 
Total loans held for investment,
  gross
$
347,344
   
$
479,151
   
$
107,613
   
$
6,914
   
$
578
   
$
140
   
$
941,740
 
Allowance for loan losses as
  a percentage of gross loans
  held for investment
 
0.62
%
   
0.73
%
   
0.98
%
   
2.43
%
   
4.84
%
   
5.71
%
   
0.73
%

16

 
Quarter Ended December 31, 2018
 
(In Thousands)
Single-
family
   
Multi-
family
   
Commercial
Real Estate
   
Construction
   
Other
   
Commercial Business
   
Consumer
   
Total
 
Allowance for loan losses:
                                             
Allowance at beginning of  period
$
2,741
   
$
3,336
   
$
1,012
   
$
38
   
$
3
   
$
19
   
$
6
   
$
7,155
 
Provision (recovery) for loan losses
 
(185
)
   
(56
)
   
7
     
10
     
     
7
     
     
(217
)
Recoveries
 
123
     
     
     
     
     
     
     
123
 
Charge-offs
 
     
     
     
     
     
     
     
 
Allowance for loan losses,
  end of period
$
2,679
   
$
3,280
   
$
1,019
   
$
48
   
$
3
   
$
26
   
$
6
   
$
7,061
 
                                                               
Allowance for loan losses:
                                                             
Individually evaluated for impairment
$
159
   
$
   
$
   
$
   
$
   
$
9
   
$
   
$
168
 
Collectively evaluated for impairment
 
2,520
     
3,280
     
1,019
     
48
     
3
     
17
     
6
     
6,893
 
Allowance for loan losses,
  end of period
$
2,679
   
$
3,280
   
$
1,019
   
$
48
   
$
3
   
$
26
   
$
6
   
$
7,061
 
                                                               
Loans held for investment:
                                                             
Individually evaluated for impairment
$
5,817
   
$
   
$
   
$
745
   
$
   
$
56
   
$
   
$
6,618
 
Collectively evaluated for impairment
 
306,682
     
447,033
     
112,830
     
3,241
     
167
     
399
     
103
     
870,455
 
Total loans held for investment,
  gross
$
312,499
   
$
447,033
   
$
112,830
   
$
3,986
   
$
167
   
$
455
   
$
103
   
$
877,073
 
Allowance for loan losses as
  a percentage of gross loans
  held for investment
 
0.86
%
   
0.73
%
   
0.90
%
   
1.20
%
   
1.80
%
   
5.71
%
   
5.83
%
   
0.80
%




17

 
Six Months Ended December 31, 2019
 
(In Thousands)
Single-
family
   
Multi-
family
   
Commercial
Real Estate
   
Construction
   
Other
   
Commercial Business
   
Consumer
   
Total
 
Allowance for loan losses:
                                             
Allowance at beginning of  period
$
2,709
   
$
3,219
   
$
1,050
   
$
61
   
$
3
   
$
26
   
$
8
   
$
7,076
 
Provision (recovery) for loan losses
 
(600
)
   
283
     
8
     
107
     
(3
)
   
2
     
     
(203
)
Recoveries
 
49
     
     
     
     
     
     
1
     
50
 
Charge-offs
 
(1
)
   
     
     
     
     
     
(1
)
   
(2
)
Allowance for loan losses,
  end of period
$
2,157
   
$
3,502
   
$
1,058
   
$
168
   
$
   
$
28
   
$
8
   
$
6,921
 
                                                               
Allowance for loan losses:
                                                             
Individually evaluated for impairment
$
46
   
$
   
$
   
$
   
$
   
$
6
   
$
   
$
52
 
Collectively evaluated for impairment
 
2,111
     
3,502
     
1,058
     
168
     
     
22
     
8