UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): October 23, 2008
PROVIDENT
FINANCIAL HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
000-28304
|
33-0704889
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(I.R.S.
Employer
Identification
No.)
|
|
3756
Central Avenue, Riverside, California
|
92506
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (951) 686-6060
|
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions.
|
|
[
] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
|
|
[
] Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|
|
[
] Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item
2.02 Results of Operations and Financial Condition
On
October 23, 2008, Provident Financial Holdings, Inc. issued its earnings release
for the quarter ended September 30, 2008. A copy of the
earnings release is attached hereto as Exhibit 99.1 and is incorporated herein
by reference.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits
99.1 Earnings
Release of Provident Financial Holdings, Inc. dated October 23,
2008.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
| Date: October 23, 2008 | PROVIDENT FINANCIAL HOLDINGS, INC. |
| /s/Craig G. Blunden | |
| Craig G. Blunden | |
| Chairman, President and Chief Executive Officer | |
| (Principal Executive Officer) | |
| /s/Donavon P. Ternes | |
| Donavon P. Ternes | |
| Chief Operating Officer and Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
EXHIBIT
99.1
 |
 |
|
3756 Central
Avenue
Riverside, CA
92506
(951)
686 – 6060
|
Contacts:
Craig G. Blunden, CEO
Donavon P. Ternes, COO,
CFO
|
PROVIDENT
FINANCIAL HOLDINGS
REPORTS
FIRST QUARTER RESULTS
Net
Interest Margin Expands by 49 Basis Points
Operating
Expenses Decline by 5%
Strong
Capital Ratios Improve and Remain Significantly Above “Well-Capitalized”
Regulatory Thresholds
Riverside, Calif. – October 23, 2008 –
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, 2009.
For
the quarter ended September 30, 2008, the Company reported net income of
$329,000, or $0.05 per diluted share (on 6.19 million weighted-average shares
outstanding), compared to net income of $612,000, or $0.10 per diluted share (on
6.29 million weighted-average shares outstanding), in the comparable period a
year ago. The decline in net income for the quarter ended September
30, 2008 was primarily attributable to an increase in the provision for loan
losses, partly offset by an increase in net interest income (before the
provision for loan losses), an increase in non-interest income and a decrease in
operating expenses.
“We are pleased to report positive
earnings in an economic environment that many have described as the worst in
their careers,” said Craig G. Blunden, Chairman, President and Chief Executive
Officer of the Company. “We will continue to take the
Page 1 of 16
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necessary
steps to withstand the current operating environment and protect depositors and
shareholders alike during these uncertain times.”
Return on average assets for the first
quarter of fiscal 2009 was 0.08 percent, compared to 0.15 percent for the same
period of fiscal 2008. Return on average stockholders’ equity for the
first quarter of fiscal 2009 was 1.06 percent, compared to 1.91 percent for the
comparable period of fiscal 2008.
On a sequential quarter basis, net
income for the first quarter of fiscal 2009 increased by $2.10 million, or 119
percent, to $329,000 from a net loss of $(1.75 million) in the fourth quarter of
fiscal 2008; and diluted earnings per share increased $0.33, or 118 percent, to
$0.05 from a loss of $(0.28) in the fourth quarter of fiscal
2008. Return on average assets increased 51 basis points to 0.08
percent for the first quarter of fiscal 2009 from (0.43) percent in the fourth
quarter of fiscal 2008 and return on average equity for the first quarter of
fiscal 2009 was 1.06 percent, compared to (5.55) percent for the fourth quarter
of fiscal 2008.
Net interest income
before provision for loan losses increased by $1.92 million, or 20 percent, to
$11.29 million in the first quarter of fiscal 2009 from $9.37 million for the
same period in fiscal 2008. Non-interest income increased $1.10
million, or 80 percent, to $2.48 million in the first quarter of fiscal 2009
from $1.38 million in the comparable period of fiscal
2008. Non-interest expense decreased $404,000, or five percent, to
$7.36 million in the first quarter of fiscal 2009 from $7.77 million in the
comparable period in fiscal 2008.
The
average balance of loans outstanding increased by $513,000 to $1.38 billion in
the first quarter of fiscal 2009 from $1.37 billion in the same quarter of
fiscal 2008,
Page 2 of 16
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while the
average yield decreased by 25 basis points to 6.01 percent in the first quarter
of fiscal 2009 from an average yield of 6.26 percent in the same quarter of
fiscal 2008. The decrease in the average loan yield was primarily
attributable to accrued interest income reversals on non-accrual loans and loan
payoffs which had a higher average yield than the average yield of loans held
for investment, partly offset by higher interest rates on newly originated
loans. Total loans originated for investment in the first quarter of
fiscal 2009 were $13.4 million, which consisted primarily of single-family,
commercial real estate and multi-family loans. This compares to total
loans originated for investment of $91.4 million (including $42.2 million of
loans purchased for investment) in the first quarter of fiscal
2008. The outstanding balance of “preferred loans” (multi-family,
commercial real estate, construction and commercial business loans) increased by
$5.4 million, or one percent, to $550.6 million at September 30, 2008 from
$545.2 million at September 30, 2007. Outstanding construction loans
declined $16.7 million, or 54 percent, to $14.0 million at September 30, 2008
from $30.7 million at September 30, 2007. The ratio of preferred
loans to total loans held for investment increased to 41 percent at September
30, 2008 compared to 39 percent at September 30, 2007. Loan principal
payments received in the first quarter of fiscal 2009 were $50.9 million,
compared to $72.3 million in the same quarter of fiscal 2008.
Average
deposits decreased by $24.9 million to $981.0 million and the average cost of
deposits decreased by 81 basis points to 2.85 percent in the first quarter of
fiscal 2009, compared to an average balance of $1.01 billion and an average cost
of 3.66 percent in the same quarter last year. Transaction account
balances (core deposits) decreased by $7.6 million, or two percent, to $328.5
million at September 30, 2008 from
Page 3 of 16
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$336.1
million at September 30, 2007. The decrease is primarily attributable
to a decrease in savings and money market account balances, partly offset by an
increase in checking account balances. Time deposits decreased by
$48.7 million, or seven percent, to $627.3 million at September 30, 2008
compared to $676.0 million at September 30, 2007. The decrease in
time deposits is primarily attributable to the strategic decision to temper the
interest rates the Bank pays on time deposits and compete less aggressively with
those competitors paying higher than market rates. Also, it should be
noted, that the Company does not have any brokered deposits.
The
average balance of borrowings, which primarily consists of Federal Home Loan
Bank (“FHLB”) of San Francisco advances, increased $34.2 million to $478.9
million while the average cost of advances decreased 64 basis points to 3.90
percent in the first quarter of fiscal 2009, compared to an average balance of
$444.7 million and an average cost of 4.54 percent in the same quarter of fiscal
2008. The decrease in the average cost of borrowings was primarily
the result of maturing long-term advances which had a higher average cost than
the average cost of new advances. Additionally, short-term advance interest
rates have fallen as a result of Federal Open Market Committee
actions.
The net
interest margin during the first quarter of fiscal 2009 increased 49 basis
points to 2.89 percent from 2.40 percent during the same quarter last
year. On a sequential quarter basis, the net interest margin in the
first quarter of fiscal 2009 decreased four basis points from 2.93 percent in
the fourth quarter of fiscal 2008.
During
the first quarter of fiscal 2009, the Company recorded a loan loss provision of
$5.73 million, compared to a loan loss provision of $1.52 million during the
Page 4 of 16
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same
period of fiscal 2008. The loan loss provision in the first quarter
of fiscal 2009 was primarily attributable to loan classification downgrades in
the loans held for investment portfolio, partly offset by a decrease in loans
held for investment.
Non-performing
assets increased to $44.7 million, or 2.80 percent of total assets, at September
30, 2008, compared to $32.5 million, or 1.99 percent of total assets at June 30,
2008 and $20.6 million, or 1.28 percent of total assets, at September 30,
2007. The non-performing assets at September 30, 2008 were primarily
comprised of 93 single-family loans held for investment ($26.0 million), three
multi-family loans held for investment ($4.7 million), 10 construction loans
held for investment ($2.8 million), 12 single-family loans repurchased from, or
unable to sell to investors ($1.6 million) and real estate owned comprised of 34
single-family properties and 14 undeveloped lots acquired in the settlement of
loans ($8.9 million). Net charge-offs for the quarter ended September
30, 2008 were $3.11 million or 0.90 percent of average loans receivable,
compared to $3.14 million or 0.89 percent of average loans receivable for the
quarter ended June 30, 2008 and compared to $765,000 or 0.22 percent of average
loans receivable in the comparable quarter last year.
Classified
assets at September 30, 2008 were $63.0 million, comprised of $13.7 million in
the special mention category, $40.4 million in the substandard category and $8.9
million in real estate owned. Classified assets at June 30, 2008 were
$68.6 million, consisting of $29.4 million in the special mention category,
$29.8 million in the substandard category and $9.4 million in real estate
owned. Classified assets declined at September 30, 2008 from the June
30, 2008 level primarily as a result of a classified construction loan
participation ($7.7 million), which was paid-in-full in September
2008.
Page 5 of 16
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For the
quarter ended September 30, 2008, 10 loans for $5.2 million were modified from
their original terms, were re-underwritten at current market interest rates and
were identified in our asset quality reports as Restructured
Loans. As of September 30, 2008, a total of $15.5 million of loans
have been modified: 23 are classified as pass ($8.1 million); two are
classified as substandard and remain on accrual status ($268,000); and 17 are
classified as substandard on non-accrual status ($7.1 million).
The
allowance for loan losses was $22.5 million at September 30, 2008, or 1.67
percent of gross loans held for investment, compared to $19.9 million, or 1.43
percent of gross loans held for investment at June 30, 2008. The
allowance for loan losses at September 30, 2008 includes $10.2 million of
specific loan loss reserves, compared to $6.5 million of specific loan loss
reserves at June 30, 2008. Management believes that the allowance for
loan losses is sufficient to absorb potential losses inherent in loans held for
investment.
The
increase in non-interest income in the first quarter of fiscal 2009 compared to
the same period of fiscal 2008 was primarily the result of an increase in the
gain on sale of loans and the gain on the sale of investment securities (the
common stock of Freddie Mac, Fannie Mae and another company).
The gain
on sale of loans increased to $1.19 million for the quarter ended September 30,
2008 from $122,000 in the comparable quarter last year. The increase
was due to a higher loan sale volume and a higher average loan sale
margin. Total loans sold for the quarter ended September 30, 2008
were $155.3 million, up 60 percent from $96.8 million for the same quarter last
year. The average loan sale margin for mortgage banking was 72 basis
points for the quarter ended September 30, 2008, compared to 11
Page 6 of 16
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basis
points in the comparable quarter last year. The gain on sale of loans
includes a $752,000 recourse provision on loans sold that are subject to
repurchase for the first quarter of fiscal 2009, compared to a $43,000 recourse
provision recovery in the comparable quarter last year. The mortgage
banking environment remains highly competitive and volatile as a result of the
well-publicized deterioration of the single-family real estate
market.
The
volume of loans originated for sale increased $66.5 million, or 67 percent, to
$166.0 million in the first quarter of fiscal 2009 from $99.5 million during the
same period last year, the result of better liquidity in the secondary mortgage
markets particularly in FHA/VA loan products. Total loan originations
(including loans originated for investment, loans purchased for investment and
loans originated for sale) were $179.4 million in the first quarter of fiscal
2009, a decrease of $11.5 million, or six percent, from $190.9 million in the
same quarter of fiscal 2008. The decrease in total loan originations
was primarily attributable to the decline in loan purchases.
Twenty
five real estate owned properties were sold for a net loss of $(133,000) in the
quarter ended September 30, 2008 compared to four real estate owned properties
sold for a net gain of $61,000 in the same quarter last year. As of
September 30, 2008, the real estate owned balance was $8.9 million (48
properties), compared to $9.4 million (45 properties) at June 30,
2008.
The
decrease in non-interest expense was primarily the result of decreases in
compensation and other operating expenses, partly offset by increases in deposit
insurance premiums and regulatory assessments. The decrease in
compensation expense was the result of fewer mortgage banking personnel in the
first quarter of fiscal 2009
Page 7 of 16
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compared
to the same quarter of fiscal 2008 and lower ESOP expenses compared to the same
quarter of fiscal 2008. Total ESOP expenses in the first quarter of
fiscal 2009 decreased $338,000, or 71 percent, to $136,000 from $474,000 in the
same period of fiscal 2008, resulting from a lower average stock price and fewer
shares allocated.
The
Company’s efficiency ratio improved to 53 percent in the first quarter of fiscal
2009 from 72 percent in the first quarter of fiscal 2008. The
improvement was the net result of an increase in net interest income, an
increase in non-interest income and a decrease in non-interest
expense.
The
effective income tax rate for the first quarter of fiscal 2009 was 51.1 percent,
compared to the effective income tax rate of 58.1 percent in the same quarter
last year. The lower income tax rate was primarily the result of a
lower percentage of permanent tax differences relative to income before
taxes. The Company believes that the effective income tax rate
applied in the first quarter of fiscal 2009 reflects its current income tax
obligations.
As of
September 30, 2008 the Bank exceeded all regulatory capital requirements and is
deemed “well-capitalized” with Tangible Capital, Core Capital, Total Risk-Based
Capital and Tier 1 Risk-Based Capital ratios of 7.42 percent, 7.42 percent,
12.96 percent and 11.71 percent, respectively. These ratios have
improved from 7.19 percent, 7.19 percent, 12.25 percent and 10.99 percent,
respectively, at June 30, 2008 and are well above 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). The Company did not repurchase any common stock during the
quarter ended September 30, 2008.
Page 8 of 16
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The Bank
currently operates 14 retail/business banking offices in Riverside County and
San Bernardino County (Inland Empire), including the newly opened Iris Plaza
office in Moreno Valley, California. Provident Bank Mortgage operates
wholesale loan production offices in Pleasanton and Rancho Cucamonga, California
and retail loan production offices in Glendora and Riverside,
California.
The
Company will host a conference call for institutional investors and bank
analysts on Tuesday, October 28, 2008 at 9:00 a.m. (Pacific Time) to discuss its
financial results. The conference call can be accessed by dialing
(800) 398-9379 and requesting the Provident Financial Holdings Earnings Release
Conference Call. An audio replay of the conference call will be
available through Tuesday, November 4, 2008 by dialing (800) 475-6701 and
referencing access code number 963505.
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; changes in general economic conditions, either
nationally or in our market areas; changes in the levels of general interest
rates, deposit interest rates, our net interest margin and funding sources;
fluctuations in the demand for loans, the number of unsold homes and other
properties and fluctuations in real estate values in our market areas;
results of examinations
of us by the Office of Thrift Supervision and our bank subsidiary by the Federal
Deposit Insurance Corporation, 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 or to write-down assets; our ability to control operating
costs and expenses; 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; our
ability to manage loan delinquency rates; our ability to retain key members of
our senior management team; costs and effects of litigation, including
settlements and judgments; increased competitive pressures among financial
services companies; changes in consumer spending, borrowing and savings habits;
legislative or regulatory changes that adversely affect
Page 9 of 16
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our business; 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; war or terrorist activities; other economic,
competitive, governmental, regulatory, and technological factors affecting our
operations, pricing, products and services and other risks 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,
2008.
Page 10 of 16
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PROVIDENT
FINANCIAL HOLDINGS, INC.
Consolidated
Statements of Financial Condition
(Unaudited
– Dollars In Thousands)
|
||||||||
|
September
30,
2008
|
June
30,
2008
|
|||||||
|
Assets
|
||||||||
|
Cash
and due from banks
|
$ | 12,108 | $ | 12,614 | ||||
|
Federal
funds sold
|
- | 2,500 | ||||||
|
Cash
and cash equivalents
|
12,108 | 15,114 | ||||||
|
Investment
securities – available for sale at fair value
|
152,801 | 153,102 | ||||||
|
Loans
held for investment, net of allowance for loan losses of
|
||||||||
|
$22,519
and $19,898, respectively
|
1,321,970 | 1,368,137 | ||||||
|
Loans
held for sale, at lower of cost or market
|
39,110 | 28,461 | ||||||
|
Accrued
interest receivable
|
7,002 | 7,273 | ||||||
|
Real
estate owned, net
|
8,927 | 9,355 | ||||||
|
FHLB
– San Francisco stock
|
32,616 | 32,125 | ||||||
|
Premises
and equipment, net
|
6,659 | 6,513 | ||||||
|
Prepaid
expenses and other assets
|
12,707 | 12,367 | ||||||
|
Total
assets
|
$ | 1,593,900 | $ | 1,632,447 | ||||
|
Liabilities
and Stockholders’ Equity
|
||||||||
|
Liabilities:
|
||||||||
|
Non
interest-bearing deposits
|
$ | 43,209 | $ | 48,056 | ||||
|
Interest-bearing
deposits
|
912,588 | 964,354 | ||||||
|
Total
deposits
|
955,797 | 1,012,410 | ||||||
|
Borrowings
|
494,124 | 479,335 | ||||||
|
Accounts
payable, accrued interest and other liabilities
|
19,478 | 16,722 | ||||||
|
Total
liabilities
|
1,469,399 | 1,508,467 | ||||||
|
Stockholders’
equity:
|
||||||||
|
Preferred
stock, $.01 par value (2,000,000 shares authorized;
none
issued and outstanding)
|
||||||||
| - | - | |||||||
|
Common
stock, $.01 par value (15,000,000 shares authorized;
12,435,865
and 12,435,865 shares issued, respectively;
6,208,519
and 6,207,719 shares outstanding, respectively)
|
||||||||
| 124 | 124 | |||||||
|
Additional
paid-in capital
|
74,635 | 75,164 | ||||||
|
Retained
earnings
|
143,072 | 143,053 | ||||||
|
Treasury
stock at cost (6,227,346 and 6,228,146 shares,
respectively)
|
||||||||
| (93,930 | ) | (94,798 | ) | |||||
|
Unearned
stock compensation
|
(22 | ) | (102 | ) | ||||
|
Accumulated
other comprehensive income, net of tax
|
622 | 539 | ||||||
|
Total
stockholders’ equity
|
124,501 | 123,980 | ||||||
|
Total
liabilities and stockholders’ equity
|
$ | 1,593,900 | $ | 1,632,447 | ||||
Page 11 of 16
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PROVIDENT
FINANCIAL HOLDINGS, INC.
Consolidated
Statements of Operations
(Unaudited
– Dollars in Thousands, Except Earnings Per Share)
|
||||
|
Quarter
Ended
|
||||
|
September
30,
|
September
30,
|
|||
|
2008
|
2007
|
|||
|
Interest
income:
|
||||
|
Loans
receivable, net
|
$
20,658
|
$
21,514
|
||
|
Investment
securities
|
1,905
|
1,744
|
||
|
FHLB
– San Francisco stock
|
449
|
469
|
||
|
Interest-earning
deposits
|
1
|
9
|
||
|
Total
interest income
|
23,013
|
23,736
|
||
|
Interest
expense:
|
||||
|
Checking
and money market deposits
|
330
|
425
|
||
|
Savings
deposits
|
569
|
787
|
||
|
Time
deposits
|
6,127
|
8,058
|
||
|
Borrowings
|
4,694
|
5,093
|
||
|
Total
interest expense
|
11,720
|
14,363
|
||
|
Net
interest income, before provision for loan losses
|
11,293
|
9,373
|
||
|
Provision
for loan losses
|
5,732
|
1,519
|
||
|
Net
interest income, after provision for loan losses
|
5,561
|
7,854
|
||
|
Non-interest
income:
|
||||
|
Loan
servicing and other fees
|
248
|
491
|
||
|
Gain
on sale of loans, net
|
1,191
|
122
|
||
|
Deposit
account fees
|
758
|
658
|
||
|
Gain
on sale of investment securities
|
356
|
-
|
||
|
Loss
on sale and operations of real estate owned acquired in
the
settlement of loans, net
|
(390
|
)
|
(304
|
)
|
|
Other
|
313
|
408
|
||
|
Total
non-interest income
|
2,476
|
1,375
|
||
|
Non-interest
expense:
|
||||
|
Salaries
and employee benefits
|
4,625
|
5,124
|
||
|
Premises
and occupancy
|
716
|
707
|
||
|
Equipment
|
360
|
400
|
||
|
Professional
expenses
|
360
|
319
|
||
|
Sales
and marketing expenses
|
181
|
173
|
||
|
Deposit
insurance premiums and regulatory assessments
|
322
|
115
|
||
|
Other
|
800
|
930
|
||
|
Total
non-interest expense
|
7,364
|
7,768
|
||
|
Income
before taxes
|
673
|
1,461
|
||
|
Provision
for income taxes
|
344
|
849
|
||
|
Net
income
|
$ 329
|
$ 612
|
||
|
Basic
earnings per share
|
$
0.05
|
$
0.10
|
||
|
Diluted
earnings per share
|
$
0.05
|
$
0.10
|
||
|
Cash
dividends per share
|
$
0.05
|
$
0.18
|
||
Page 12 of 16
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|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Consolidated
Statements of Operations – Sequential Quarter
(Unaudited
– In Thousands, Except Earnings Per Share)
|
||||
|
Quarter
Ended
|
||||
|
September
30,
|
June
30,
|
|||
|
2008
|
2008
|
|||
|
Interest
income:
|
||||
|
Loans
receivable, net
|
$
20,658
|
$
21,481
|
||
|
Investment
securities
|
1,905
|
1,962
|
||
|
FHLB
– San Francisco stock
|
449
|
502
|
||
|
Interest-earning
deposits
|
1
|
2
|
||
|
Total
interest income
|
23,013
|
23,947
|
||
|
Interest
expense:
|
||||
|
Checking
and money market deposits
|
330
|
332
|
||
|
Savings
deposits
|
569
|
580
|
||
|
Time
deposits
|
6,127
|
6,734
|
||
|
Borrowings
|
4,694
|
4,525
|
||
|
Total
interest expense
|
11,720
|
12,171
|
||
|
Net
interest income, before provision for loan losses
|
11,293
|
11,776
|
||
|
Provision
for loan losses
|
5,732
|
6,299
|
||
|
Net
interest income, after provision for loan losses
|
5,561
|
5,477
|
||
|
Non-interest
income:
|
||||
|
Loan
servicing and other fees
|
248
|
422
|
||
|
Gain
(loss) on sale of loans, net
|
1,191
|
(358
|
)
|
|
|
Deposit
account fees
|
758
|
743
|
||
|
Gain
on sale of investment securities
|
356
|
-
|
||
|
Loss
on sale and operations of real estate owned acquired in
the
settlement of loans, net
|
(390
|
)
|
(995
|
)
|
|
Other
|
313
|
473
|
||
|
Total
non-interest income
|
2,476
|
285
|
||
|
Non-interest
expense:
|
||||
|
Salaries
and employee benefits
|
4,625
|
4,532
|
||
|
Premises
and occupancy
|
716
|
647
|
||
|
Equipment
|
360
|
382
|
||
|
Professional
expenses
|
360
|
457
|
||
|
Sales
and marketing expenses
|
181
|
109
|
||
|
Deposit
insurance premiums and regulatory assessments
|
322
|
462
|
||
|
Other
|
800
|
1,335
|
||
|
Total
non-interest expense
|
7,364
|
7,924
|
||
|
Income
(loss) before taxes
|
673
|
(2,162
|
)
|
|
|
Provision
(benefit) for income taxes
|
344
|
(409
|
)
|
|
|
Net
income (loss)
|
$ 329
|
$ (1,753
|
)
|
|
|
Basic
earnings (loss) per share
|
$
0.05
|
$
(0.28
|
)
|
|
|
Diluted
earnings (loss) per share
|
$
0.05
|
$
(0.28
|
)
|
|
|
Cash
dividends per share
|
$
0.05
|
$ 0.10
|
||
Page 13 of 16
| |
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Financial
Highlights
(Unaudited)
|
|||||||
|
(Dollars
in Thousands, Except Share Information)
|
Quarter
Ended
September 30,
|
||||||
|
2008
|
2007
|
||||||
|
SELECTED
FINANCIAL RATIOS:
|
|||||||
|
Return
on average assets
|
0.08%
|
0.15%
|
|||||
|
Return
on average stockholders’ equity
|
1.06%
|
1.91%
|
|||||
|
Stockholders’
equity to total assets
|
7.81%
|
7.84%
|
|||||
|
Net
interest spread
|
2.70%
|
2.16%
|
|||||
|
Net
interest margin
|
2.89%
|
2.40%
|
|||||
|
Efficiency
ratio
|
53.48%
|
72.27%
|
|||||
|
Average
interest-earning assets to average
|
|||||||
|
interest-bearing
liabilities
|
107.11%
|
107.52%
|
|||||
|
SELECTED
FINANCIAL DATA:
|
|||||||
|
Basic
earnings per share
|
$ 0.05
|
$ 0.10
|
|||||
|
Diluted
earnings per share
|
$ 0.05
|
$ 0.10
|
|||||
|
Book
value per share
|
$
20.05
|
$
20.21
|
|||||
|
Shares
used for basic EPS computation
|
6,185,632
|
6,239,347
|
|||||
|
Shares
used for diluted EPS computation
|
6,185,632
|
6,292,865
|
|||||
|
Total
shares issued and outstanding
|
6,208,519
|
6,232,803
|
|||||
|
ASSET
QUALITY RATIOS:
|
|||||||
|
Non-performing
loans to loans held for investment, net
|
2.70%
|
1.10%
|
|||||
|
Non-performing
assets to total assets
|
2.80%
|
1.28%
|
|||||
|
Allowance
for loan losses to non-performing loans
|
62.99%
|
103.83%
|
|||||
|
Allowance
for loan losses to gross loans held for investment
|
1.67%
|
1.13%
|
|||||
|
Net
charge-offs as a percentage of average loans receivable
|
0.90%
|
0.22%
|
|||||
|
Non-performing
loans, net of specific loan loss reserves
|
$
35,749
|
$
15,024
|
|||||
|
Loans
30 to 89 days delinquent
|
$ 6,182
|
$ 5,545
|
|||||
|
REGULATORY
CAPITAL RATIOS:
|
|||||||
|
Tangible
equity ratio
|
7.42%
|
7.17%
|
|||||
|
Core
capital ratio
|
7.42%
|
7.17%
|
|||||
|
Total
risk-based capital ratio
|
12.96%
|
11.95%
|
|||||
|
Tier
1 risk-based capital ratio
|
11.71%
|
10.77%
|
|||||
|
LOANS
ORIGINATED FOR SALE:
|
|||||||
|
Retail
originations
|
$ 51,558
|
$
34,559
|
|||||
|
Wholesale
originations
|
114,444
|
64,954
|
|||||
|
Total
loans originated for sale
|
$
166,002
|
$
99,513
|
|||||
|
LOANS
SOLD:
|
|||||||
|
Servicing
released
|
$
155,058
|
$
94,639
|
|||||
|
Servicing
retained
|
193
|
2,139
|
|||||
|
Total
loans sold
|
$
155,251
|
$
96,778
|
|||||
Page 14 of 16
| |
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Financial
Highlights
(Unaudited)
|
|||||||||||||
|
(Dollars
in Thousands)
|
As
of September 30,
|
||||||||||||
|
2008
|
2007
|
||||||||||||
|
INVESTMENT
SECURITIES:
|
Balance
|
Rate
|
Balance
|
Rate
|
|||||||||
|
Held
to maturity:
|
|||||||||||||
|
U.S.
government sponsored enterprise debt securities
|
$ -
|
-
|
%
|
$ 9,000
|
3.22
|
%
|
|||||||
|
U.S.
government agency MBS
|
-
|
-
|
1
|
8.73
|
|||||||||
|
Total
investment securities held to maturity
|
-
|
-
|
9,001
|
3.22
|
|||||||||
|
Available
for sale (at fair value):
|
|||||||||||||
|
U.S.
government sponsored enterprise debt securities
|
5,087
|
4.00
|
9,768
|
3.20
|
|||||||||
|
U.S.
government agency MBS
|
94,754
|
5.01
|
59,544
|
5.13
|
|||||||||
|
U.S.
government sponsored enterprise MBS
|
50,957
|
5.29
|
60,627
|
5.30
|
|||||||||
|
Private
issue CMO
|
2,003
|
4.76
|
4,296
|
4.28
|
|||||||||
|
Freddie
Mac common stock
|
-
|
354
|
|||||||||||
|
Fannie
Mae common stock
|
-
|
24
|
|||||||||||
|
Other
common stock
|
-
|
494
|
|||||||||||
|
Total
investment securities available for sale
|
152,801
|
5.07
|
135,107
|
5.01
|
|||||||||
|
Total
investment securities
|
$
152,801
|
5.07
|
%
|
$
144,108
|
4.90
|
%
|
|||||||
|
LOANS
HELD FOR INVESTMENT:
|
|||||||||||||
|
Single-family
(1 to 4 units)
|
$ 783,188
|
5.93
|
%
|
$ 823,683
|
5.93
|
%
|
|||||||
|
Multi-family
(5 or more units)
|
394,713
|
6.50
|
364,204
|
6.65
|
|||||||||
|
Commercial
real estate
|
135,258
|
6.95
|
143,086
|
7.09
|
|||||||||
|
Construction
|
17,984
|
8.45
|
53,412
|
8.98
|
|||||||||
|
Commercial
business
|
8,180
|
7.15
|
8,556
|
8.19
|
|||||||||
|
Consumer
|
1,014
|
8.53
|
587
|
11.87
|
|||||||||
|
Other
|
4,630
|
7.90
|
7,473
|
12.76
|
|||||||||
|
Total
loans held for investment
|
1,344,967
|
6.25
|
%
|
1,401,001
|
6.40
|
%
|
|||||||
|
Undisbursed
loan funds
|
(5,556
|
)
|
(24,085
|
)
|
|||||||||
|
Deferred
loan costs
|
5,078
|
5,475
|
|||||||||||
|
Allowance
for loan losses
|
(22,519
|
)
|
(15,599
|
)
|
|||||||||
|
Total
loans held for investment, net
|
$
1,321,970
|
$
1,366,792
|
|||||||||||
|
Purchased
loans serviced by others included above
|
$ 137,548
|
6.30
|
%
|
$ 161,100
|
6.81
|
%
|
|||||||
|
DEPOSITS:
|
|||||||||||||
|
Checking
accounts – non interest-bearing
|
$ 43,209
|
-
|
%
|
$ 41,556
|
-
|
%
|
|||||||
|
Checking
accounts – interest-bearing
|
119,118
|
0.64
|
116,404
|
0.67
|
|||||||||
|
Savings
accounts
|
138,827
|
1.61
|
144,678
|
2.07
|
|||||||||
|
Money
market accounts
|
27,300
|
1.93
|
33,491
|
2.71
|
|||||||||
|
Time
deposits
|
627,343
|
3.67
|
676,042
|
4.79
|
|||||||||
|
Total
deposits
|
$
955,797
|
2.78
|
%
|
$
1,012,171
|
3.67
|
%
|
|||||||
|
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 15 of 16
| |
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Financial
Highlights
(Unaudited)
|
|||||||||||||
|
As
of September 30,
|
|||||||||||||
|
(Dollars
in Thousands)
|
2008
|
2007
|
|||||||||||
|
Balance
|
Rate
|
Balance
|
Rate
|
||||||||||
|
BORROWINGS:
|
|||||||||||||
|
Overnight
|
$ 9,400
|
1.33
|
%
|
$ 10,000
|
4.84
|
%
|
|||||||
|
Six
months or less
|
88,000
|
2.85
|
146,000
|
4.59
|
|||||||||
|
Over
six months to one year
|
35,000
|
3.82
|
45,000
|
4.23
|
|||||||||
|
Over
one year to two years
|
92,000
|
3.79
|
50,000
|
3.74
|
|||||||||
|
Over
two years to three years
|
148,000
|
4.56
|
47,000
|
4.01
|
|||||||||
|
Over
three years to four years
|
50,000
|
4.43
|
103,000
|
5.10
|
|||||||||
|
Over
four years to five years
|
70,000
|
3.89
|
50,000
|
4.43
|
|||||||||
|
Over
five years
|
1,724
|
6.37
|
1,764
|
6.37
|
|||||||||
|
Total
borrowings
|
$
494,124
|
3.90
|
%
|
$
452,764
|
4.51
|
%
|
|||||||
|
Quarter
Ended
|
|||||||||||||
|
September
30,
|
|||||||||||||
|
2008
|
2007
|
||||||||||||
|
SELECTED
AVERAGE BALANCE SHEETS:
|
Balance
|
Balance
|
|||||||||||
|
Loans
receivable, net (1)
|
$
1,375,224
|
$
1,374,711
|
|||||||||||
|
Investment
securities
|
154,759
|
149,421
|
|||||||||||
|
FHLB
– San Francisco stock
|
32,376
|
34,915
|
|||||||||||
|
Interest-earning
deposits
|
1,296
|
746
|
|||||||||||
|
Total
interest-earning assets
|
$
1,563,655
|
$
1,559,793
|
|||||||||||
|
Deposits
|
$ 980,964
|
$
1,005,945
|
|||||||||||
|
Borrowings
|
478,906
|
444,698
|
|||||||||||
|
Total
interest-bearing liabilities
|
$
1,459,870
|
$
1,450,643
|
|||||||||||
|
Quarter
Ended
|
|||||||||||||
|
September
30,
|
|||||||||||||
|
2008
|
2007
|
||||||||||||
|
Yield/Cost
|
Yield/Cost
|
||||||||||||
|
Loans
receivable, net (1)
|
6.01%
|
6.26%
|
|||||||||||
|
Investment
securities
|
4.92%
|
4.67%
|
|||||||||||
|
FHLB
– San Francisco stock
|
5.55%
|
5.37%
|
|||||||||||
|
Interest-earning
deposits
|
0.31%
|
4.83%
|
|||||||||||
|
Total
interest-earning assets
|
5.89%
|
6.09%
|
|||||||||||
|
Deposits
|
2.85%
|
3.66%
|
|||||||||||
|
Borrowings
|
3.90%
|
4.54%
|
|||||||||||
|
Total
interest-bearing liabilities
|
3.19%
|
3.93%
|
|||||||||||
| (1) Includes loans held for investment, loans held for sale and receivable from sale of loans. | |||||||||||||
|
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 16 of
16
|