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): May 16, 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 May
19, 2008, Provident Financial Holdings, Inc. issued its earnings release for the
quarter ended March 31, 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
(c)
Exhibits
99.1 Earnings Release of
Provident Financial Holdings, Inc. dated May 19, 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.
| PROVIDENT FINANCIAL HOLDINGS, INC. | |
| Date: May 19, 2008 | /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 | Contacts: |
| Riverside, CA 92506 | Craig G. Blunden, CEO |
| (951) 686 – 6060 | Donavon P. Ternes, COO, CFO |
PROVIDENT
FINANCIAL HOLDINGS
REPORTS
THIRD QUARTER EARNINGS
Net
Interest Margin Expands by 20 Basis Points
Operating
Expenses Decline by 17%
Deposits
Increase to $1.03 Billion
Riverside, Calif. – May
19, 2008 – Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the
holding company for Provident Savings Bank, F.S.B. (“Bank”), today announced
third quarter earnings for the fiscal year ending June 30,
2008.
For
the quarter ended March 31, 2008, the Company reported net income of $957,000,
or $0.15 per diluted share (on 6.20 million weighted-average shares
outstanding), compared to net income of $2.36 million, or $0.36 per diluted
share (on 6.62 million weighted-average
shares outstanding), in the comparable period a year ago. The decline
in net income in the quarter ended March 31, 2008 was primarily attributable to
an increase in the provision for loan losses, a decrease in gain on sale of
loans and a net loss on the sale of real estate owned properties, partly offset
by a decrease in compensation expense. The decrease in
weighted-average shares outstanding primarily reflects repurchases of common
stock through the Company’s stock repurchase programs.
“The deterioration in
credit quality and difficult mortgage banking environment remain the principal
reasons that earnings have come under pressure,” said Craig G.
Page 1 of 16
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Blunden,
Chairman, President and Chief Executive Officer of the
Company. “Improving fundamentals such as an expanding net interest
margin, lower operating expenses, higher deposit account fees and a growing
retail deposit franchise has not, to date, been enough to overcome the current
operating environment.”
Return on average assets for the third
quarter of fiscal 2008 was 0.23 percent, compared to 0.54 percent for the same
period of fiscal 2007. Return on average stockholders’ equity for the
third quarter of fiscal 2008 was 2.99 percent, compared to 7.07 percent for the
comparable period of fiscal 2007.
On a sequential quarter basis, net
income for the third quarter of fiscal 2008 decreased by $87,000, or eight
percent, to $957,000 from $1.04 million in the second quarter of fiscal 2008;
and diluted earnings per share decreased $0.02, or 12 percent, to $0.15 from
$0.17 in the second quarter of fiscal 2008. Return on average assets
decreased three basis points to 0.23 percent for the third quarter of fiscal
2008 from 0.26 percent in the second quarter of fiscal 2008 and return on
average equity for the third quarter of fiscal 2008 was 2.99 percent, compared
to 3.30 percent for the second quarter of fiscal 2008.
For the nine months ended March 31,
2008, net income was $2.61 million, a decrease of 70 percent from net income of
$8.62 million for the comparable period ended March 31, 2007; and diluted
earnings per share for the nine months ended March 31, 2008 decreased $0.86, or
67 percent, to $0.42 from $1.28 for the comparable period last
year. Return on average assets for the nine months ended March 31,
2008 decreased 45 basis points to 0.22 percent from 0.67 percent for the
nine-month period a year earlier.
Page 2 of 16
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Return on
average stockholders’ equity for the nine months ended March 31, 2008 was 2.73
percent, compared to 8.47 percent for the nine-month period a year
earlier.
Net interest income before provision
for loan losses increased by $62,000, or one percent, to $10.72 million in the
third quarter of fiscal 2008 from $10.66 million for the same period in fiscal
2007. Non-interest income decreased $2.08 million, or 57 percent, to
$1.60 million in the third quarter of fiscal 2008 from $3.68 million in the
comparable period of fiscal 2007. Non-interest expense decreased
$1.46 million, or 17 percent, to $7.30 million in the third quarter of fiscal
2008 from $8.76 million in the comparable period in fiscal 2007.
The
average balance of loans outstanding decreased by $90.0 million to $1.40 billion
in the third quarter of fiscal 2008 from $1.49 billion in the same quarter of
fiscal 2007, and the average yield decreased by 18 basis points to 6.17 percent
in the third quarter of fiscal 2008 from an average yield of 6.35 percent in the
same quarter of fiscal 2007. The decrease in the average loan yield
was primarily attributable to accrued interest 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 and the upwardly repricing adjustable rate loans in the loans
held for investment portfolio. Total loans originated for investment
in the third quarter of fiscal 2008 were $67.5 million (including $28.3 million
of loans purchased for investment), which consisted primarily of multi-family
and single-family loans. This compares to total loans originated for
investment of $79.8 million (including $29.3 million of loans purchased for
investment) in the third quarter of fiscal 2007. The outstanding
balance of “preferred loans” (multi-family, commercial real estate,
Page 3 of 16
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construction
and commercial business loans) increased by $48.7 million, or nine percent, to
$593.2 million at March 31, 2008 from $544.5 million at March 31,
2007. The ratio of preferred loans to total loans held for investment
increased to 42 percent at March 31, 2008 compared to 39 percent at March 31,
2007. Loan payments in the third quarter of fiscal 2008 were $51.9
million, compared to $97.3 million in the same quarter of fiscal
2007.
Average
deposits increased by $53.8 million to $1.01 billion and the average cost of
deposits decreased by five basis points to 3.36 percent in the third quarter of
fiscal 2008, compared to an average balance of $958.5 million and an average
cost of 3.41 percent in the same quarter last year. Transaction
account balances (core deposits) decreased by $18.5 million, or five percent, to
$348.1 million at March 31, 2008 from $366.6 million at March 31,
2007. The decrease is primarily attributable to a $13.4 million, or
eight percent, decline in savings account balances. Time deposits
increased by $66.4 million, or 11 percent, to $684.1 million at March 31, 2008
compared to $617.7 million at March 31, 2007. The increase in time
deposits is primarily attributable to the Company’s time deposit marketing
campaigns and depositors switching from savings deposits to time
deposits.
The
average balance of borrowings, which primarily consists of Federal Home Loan
Bank (“FHLB”) of San Francisco advances, decreased $162.8 million to $473.3
million and the average cost of advances decreased 63 basis points to 4.11
percent in the third quarter of fiscal 2008, compared to an average balance of
$636.1 million and an average cost of 4.74 percent in the same quarter of fiscal
2007. The decrease in the average cost of borrowings was primarily
the result of maturing long-term advances
Page 4 of 16
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which had
a higher average cost and lower short-term advance interest rates, which are
responding to recent Federal Open Market Committee actions.
The net
interest margin during the third quarter of fiscal 2008 increased 20 basis
points to 2.69 percent from 2.49 percent during the same quarter last
year. On a sequential quarter basis, the net interest margin in the
third quarter of fiscal 2008 increased 27 basis points from 2.42 percent in the
second quarter of fiscal 2008.
During
the third quarter of fiscal 2008, the Company recorded a loan loss provision of
$3.15 million, compared to a loan loss provision of $1.19 million during the
same period of fiscal 2007. The loan loss provision in the third
quarter of fiscal 2008 was primarily attributable to loan classification
downgrades and deterioration in real estate collateral values ($2.94 million)
and an increase in loans held for investment ($207,000).
Non-performing
assets increased to $27.3 million, or 1.63 percent of total assets, at March 31,
2008, compared to $14.7 million, or 0.83 percent of total assets at March 31,
2007 and $19.7 million, or 1.20 percent of total assets, at June 30,
2007. The non-performing assets at March 31, 2008 were primarily
comprised of 43 single-family loans originated for investment ($13.4 million),
one multi-family loan originated for investment ($554,000), one commercial real
estate loan originated for investment ($835,000), 16 construction loans
originated for investment ($2.0 million), eight single-family loans repurchased
from, or unable to sell to, investors ($2.8 million) and real estate owned
comprised of 20 single-family properties and 11 lots acquired in the settlement
of loans ($7.7 million). Net charge-offs for the quarter ended March
31, 2008 were $3.58 million or 1.02 percent of average loans receivable,
compared to $3,000 or zero percent of average loans receivable in the comparable
quarter last year.
Page 5 of 16
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Classified
loans at March 31, 2008 were $39.8 million, comprised of $13.7 million in the
special mention category, $25.8 million in the substandard category and $276,000
in the doubtful category. Classified loans at June 30, 2007 were
$32.3 million, consisting of $13.3 million in the special mention category and
$19.0 million in the substandard category.
For the
quarter ended March 31, 2008, 19 loans for $6.6 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
March 31, 2008, a total of $9.3 million of loans have been modified, 25
classified as special mention which remain on accrual status ($8.9 million) and
one classified as substandard on non-accrual status ($445,000).
The
allowance for loan losses was $16.7 million at March 31, 2008, or 1.18 percent
of gross loans held for investment, compared to $14.8 million, or 1.09 percent
of gross loans held for investment at June 30, 2007. The allowance
for loan losses at March 31, 2008 includes $4.3 million of specific loan loss
reserves, compared to $3.3 million of specific loan loss reserves at June 30,
2007. Management believes that the allowance for loan losses is
sufficient to absorb potential losses inherent in loans held for
investment.
The
decrease in non-interest income in the third quarter of fiscal 2008 compared to
the same period of fiscal 2007 was primarily the result of a decrease in the
gain on sale of loans and net losses on the sale of real estate owned
properties, partly offset by an increase in deposit account fees. In
March 2008, the Company recognized $91,000 of income resulting from the VISA
mandatory share redemption and the reversal of the VISA litigation
liabilities.
Page 6 of 16
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The gain
on sale of loans declined by $2.00 million, or 87 percent, to $306,000 for the
quarter ended March 31, 2008 from $2.31 million in the comparable quarter last
year. The decline in the gain on sale of loans was attributable to a
lower volume of loans sold and a lower average loan sale
margin. Total loans sold for the quarter ended March 31, 2008 were
$70.0 million, down 74 percent from $273.8 million for the same quarter last
year. The average loan sale margin for mortgage banking was 41 basis
points for the quarter ended March 31, 2008, down 30 basis points from 71 basis
points 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 decreased $219.3 million, or 72 percent, to
$86.9 million in the third quarter of fiscal 2008 from $306.2 million during the
same period last year. Total loan originations (including loans
originated for investment, loans purchased for investment and loans originated
for sale) were $154.4 million in the third quarter of fiscal 2008, a decrease of
$231.6 million, or 60 percent, from $386.0 million in the same quarter of fiscal
2007. The decrease in loan originations was primarily attributable to
the lack of liquidity in the secondary mortgage markets particularly for
non-conforming mortgage loans.
Twelve
real estate owned properties were sold for a net loss of $302,000 in the quarter
ended March 31, 2008 as compared to two real estate owned properties sold for a
net gain of $18,000 in the same quarter last year. As of March 31,
2008, the real estate owned balance was $7.7 million (31 properties), compared
to $3.8 million (10 properties) at June 30, 2007.
Page 7 of 16
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The
decrease in non-interest expense was primarily the result of decreases in
compensation, premises and occupancy, equipment, marketing and other operating
expenses, partly offset by an increase in professional expenses. The decrease in
compensation expense was the result of the fewer number of mortgage banking
personnel in the third quarter of fiscal 2008 compared to the same quarter of
fiscal 2007, lower incentive compensation expenses given the decline in loan
origination volume and lower ESOP expenses compared to the same quarter of
fiscal 2007. Total ESOP expenses in the third quarter of fiscal 2008
decreased $331,000, or 54%, to $278,000 from $609,000 in the same period of
fiscal 2007. The decrease in premises and occupancy expense was
primarily related to the closures of six Provident Bank Mortgage loan production
offices during the first half of fiscal 2008, while the increase in professional
expenses was primarily related to higher legal expenses corresponding to the
increase in delinquent loans.
The
Company’s efficiency ratio improved slightly to 59 percent in the third quarter
of fiscal 2008 from 61 percent in the third quarter of fiscal
2007. The slight improvement was the net result of an increase in net
interest income, a decrease in non-interest income and a decrease non-interest
expense.
The
effective income tax rate for the third quarter of fiscal 2008 was 48.9 percent,
up from 46.3 percent in the same quarter last year. The increase was
primarily the result of a higher percentage of permanent tax differences
relative to income before taxes. The Company believes that the
effective income tax rate applied in the third quarter of fiscal 2008 reflects
its current income tax obligations.
Page 8 of 16
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The Company did not repurchase any of its common stock during the quarter ended March 31, 2008. To date, the Company has repurchased 59 percent of the shares authorized by the June 2007 Stock Repurchase Program with 131,766 shares available for future purchase.
The Bank
currently operates 13 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 Glendora and Riverside,
California.
The Company
will host a conference call for institutional investors and bank analysts on
Monday, May 19, 2008 at 1:30 p.m. (Pacific Time) to discuss its financial
results. The conference call can be accessed by dialing (800)
762-6568 and requesting the Provident Financial Holdings Earnings Release
Conference Call. An audio replay of the conference call will be
available through Tuesday, May 27, 2008 by dialing (800) 475-6701 and
referencing access code number 923607.
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
Certain
matters in this News Release and the conference call noted above may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements may
relate to, among others, expectations of the business environment in which the
Company operates, projections of future performance, perceived opportunities in
the market, potential future credit experience, and statements regarding the
Company’s mission and vision. These forward-looking statements are based upon
current management expectations, and may, therefore, involve risks and
uncertainties. The Company’s actual results, performance, or achievements may
differ materially from those suggested, expressed, or implied by forward-looking
statements as a result of a wide range of factors including, but not limited to,
the general business environment, interest rates, the California real estate
market, competitive conditions between banks and non-bank financial services
providers, regulatory changes, fraud, 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, 2007, as
amended.
Page 9 of 16
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PROVIDENT
FINANCIAL HOLDINGS, INC.
Consolidated
Statements of Financial Condition
(Unaudited
– Dollars In Thousands)
|
||||||||
|
March
31,
2008
|
June
30,
2007
|
|||||||
|
Assets
|
||||||||
|
Cash
and due from banks
|
$ | 12,807 | $ | 11,024 | ||||
|
Federal
funds sold
|
4,625 | 1,800 | ||||||
|
Cash
and cash equivalents
|
17,432 | 12,824 | ||||||
|
Investment
securities – held to maturity
|
||||||||
|
(fair
value $ - and $18,837, respectively)
|
- | 19,001 | ||||||
|
Investment
securities – available for sale at fair value
|
168,588 | 131,842 | ||||||
|
Loans
held for investment, net of allowance for loan losses of
|
||||||||
|
$16,742
and $14,845, respectively
|
1,406,785 | 1,350,696 | ||||||
|
Loans
held for sale, at lower of cost or market
|
18,841 | 1,337 | ||||||
|
Receivable
from sale of loans
|
- | 60,513 | ||||||
|
Accrued
interest receivable
|
7,336 | 7,235 | ||||||
|
Real
estate owned, net
|
7,717 | 3,804 | ||||||
|
FHLB
– San Francisco stock
|
31,680 | 43,832 | ||||||
|
Premises
and equipment, net
|
6,585 | 7,123 | ||||||
|
Prepaid
expenses and other assets
|
9,335 | 10,716 | ||||||
|
Total
assets
|
$ | 1,674,299 | $ | 1,648,923 | ||||
|
Liabilities
and Stockholders’ Equity
|
||||||||
|
Liabilities:
|
||||||||
|
Non
interest-bearing deposits
|
$ | 46,884 | $ | 45,112 | ||||
|
Interest-bearing
deposits
|
985,283 | 956,285 | ||||||
|
Total
deposits
|
1,032,167 | 1,001,397 | ||||||
|
Borrowings
|
499,744 | 502,774 | ||||||
|
Accounts
payable, accrued interest and other liabilities
|
15,215 | 15,955 | ||||||
|
Total
liabilities
|
1,547,126 | 1,520,126 | ||||||
|
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 12,428,365 shares issued, respectively;
6,207,719
and 6,376,945 shares outstanding, respectively)
|
||||||||
| 124 | 124 | |||||||
|
Additional
paid-in capital
|
74,763 | 72,935 | ||||||
|
Retained
earnings
|
145,427 | 146,194 | ||||||
|
Treasury
stock at cost (6,228,146 and 6,051,420 shares,
respectively)
|
||||||||
| (94,798 | ) | (90,694 | ) | |||||
|
Unearned
stock compensation
|
(181 | ) | (455 | ) | ||||
|
Accumulated
other comprehensive income, net of tax
|
1,838 | 693 | ||||||
|
Total
stockholders’ equity
|
127,173 | 128,797 | ||||||
|
Total
liabilities and stockholders’ equity
|
$ | 1,674,299 | $ | 1,648,923 | ||||
Page 10 of 16
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PROVIDENT
FINANCIAL HOLDINGS, INC.
Consolidated
Statements of Operations
(Unaudited
- In Thousands, Except Earnings Per Share)
|
||||||||||||||||
|
Quarter
Ended
March
31,
|
Nine
Months Ended
March
31,
|
|||||||||||||||
|
2008
|
2007
(As
Restated)
|
2008
|
2007
(As
Restated)
|
|||||||||||||
|
Interest
income:
|
||||||||||||||||
|
Loans
receivable, net
|
$ | 21,645 | $ | 23,725 | $ | 64,859 | $ | 68,684 | ||||||||
|
Investment
securities
|
1,959 | 1,828 | 5,605 | 5,381 | ||||||||||||
|
FHLB
– San Francisco stock
|
419 | 597 | 1,320 | 1,704 | ||||||||||||
|
Interest-earning
deposits
|
4 | 14 | 18 | 51 | ||||||||||||
|
Total
interest income
|
24,027 | 26,164 | 71,802 | 75,820 | ||||||||||||
|
Interest
expense:
|
||||||||||||||||
|
Checking
and money market deposits
|
351 | 379 | 1,275 | 1,111 | ||||||||||||
|
Savings
deposits
|
725 | 724 | 2,316 | 2,039 | ||||||||||||
|
Time
deposits
|
7,393 | 6,963 | 23,339 | 19,227 | ||||||||||||
|
Borrowings
|
4,839 | 7,441 | 15,212 | 21,562 | ||||||||||||
|
Total
interest expense
|
13,308 | 15,507 | 42,142 | 43,939 | ||||||||||||
|
Net
interest income, before provision for loan losses
|
10,719 | 10,657 | 29,660 | 31,881 | ||||||||||||
|
Provision
for loan losses
|
3,150 | 1,185 | 6,809 | 5,568 | ||||||||||||
|
Net
interest income, after provision for loan losses
|
7,569 | 9,472 | 22,851 | 26,313 | ||||||||||||
|
Non-interest
income:
|
||||||||||||||||
|
Loan
servicing and other fees
|
350 | 462 | 1,354 | 1,426 | ||||||||||||
|
Gain
on sale of loans, net
|
306 | 2,306 | 1,362 | 8,717 | ||||||||||||
|
Deposit
account fees
|
768 | 525 | 2,211 | 1,557 | ||||||||||||
|
Net
(loss) gain on sale of real estate
|
(302 | ) | 18 | (470 | ) | 2,358 | ||||||||||
|
Other
|
482 | 368 | 469 | 1,289 | ||||||||||||
|
Total
non-interest income
|
1,604 | 3,679 | 4,926 | 15,347 | ||||||||||||
|
Non-interest
expense:
|
||||||||||||||||
|
Salaries
and employee benefits
|
4,816 | 5,820 | 14,462 | 17,087 | ||||||||||||
|
Premises
and occupancy
|
645 | 801 | 2,183 | 2,330 | ||||||||||||
|
Equipment
|
379 | 444 | 1,170 | 1,221 | ||||||||||||
|
Professional
expenses
|
323 | 305 | 1,116 | 847 | ||||||||||||
|
Sales
and marketing expenses
|
112 | 247 | 415 | 724 | ||||||||||||
|
Other
|
1,024 | 1,144 | 3,041 | 3,484 | ||||||||||||
|
Total
non-interest expense
|
7,299 | 8,761 | 22,387 | 25,693 | ||||||||||||
|
Income
before taxes
|
1,874 | 4,390 | 5,390 | 15,967 | ||||||||||||
|
Provision
for income taxes
|
917 | 2,031 | 2,777 | 7,347 | ||||||||||||
|
Net
income
|
$ | 957 | $ | 2,359 | $ | 2,613 | $ | 8,620 | ||||||||
|
Basic
earnings per share
|
$ | 0.16 | $ | 0.36 | $ | 0.42 | $ | 1.30 | ||||||||
|
Diluted
earnings per share
|
$ | 0.15 | $ | 0.36 | $ | 0.42 | $ | 1.28 | ||||||||
|
Cash
dividends per share
|
$ | 0.18 | $ | 0.18 | $ | 0.54 | $ | 0.51 | ||||||||
Page 11 of 16
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PROVIDENT
FINANCIAL HOLDINGS, INC.
Consolidated
Statements of Financial Condition – Sequential Quarter
(Unaudited
– Dollars In Thousands)
|
||||||||
|
March
31,
2008
|
December
31,
2007
|
|||||||
|
Assets
|
||||||||
|
Cash
and due from banks
|
$ | 12,807 | $ | 12,511 | ||||
|
Federal
funds sold
|
4,625 | - | ||||||
|
Cash
and cash equivalents
|
17,432 | 12,511 | ||||||
|
Investment
securities – held to maturity
|
||||||||
|
(fair
value $ - and $4,969, respectively)
|
- | 5,000 | ||||||
|
Investment
securities – available for sale at fair value
|
168,588 | 148,542 | ||||||
|
Loans
held for investment, net of allowance for loan losses of
|
||||||||
|
$16,742
and $17,171, respectively
|
1,406,785 | 1,395,404 | ||||||
|
Loans
held for sale, at lower of cost or market
|
18,841 | - | ||||||
|
Receivable
from sale of loans
|
- | 19,148 | ||||||
|
Accrued
interest receivable
|
7,336 | 7,507 | ||||||
|
Real
estate owned, net
|
7,717 | 6,749 | ||||||
|
FHLB
– San Francisco stock
|
31,680 | 31,256 | ||||||
|
Premises
and equipment, net
|
6,585 | 6,748 | ||||||
|
Prepaid
expenses and other assets
|
9,335 | 7,626 | ||||||
|
Total
assets
|
$ | 1,674,299 | $ | 1,640,491 | ||||
|
Liabilities
and Stockholders’ Equity
|
||||||||
|
Liabilities:
|
||||||||
|
Non
interest-bearing deposits
|
$ | 46,884 | $ | 42,582 | ||||
|
Interest-bearing
deposits
|
985,283 | 963,102 | ||||||
|
Total
deposits
|
1,032,167 | 1,005,684 | ||||||
|
Borrowings
|
499,744 | 494,384 | ||||||
|
Accounts
payable, accrued interest and other liabilities
|
15,215 | 14,300 | ||||||
|
Total
liabilities
|
1,547,126 | 1,514,368 | ||||||
|
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;
6,207,719
and 6,196,434 shares outstanding, respectively)
|
||||||||
| 124 | 124 | |||||||
|
Additional
paid-in capital
|
74,763 | 74,180 | ||||||
|
Retained
earnings
|
145,427 | 145,587 | ||||||
|
Treasury
stock at cost (6,228,146 and 6,239,431 shares,
respectively)
|
||||||||
| (94,798 | ) | (94,797 | ) | |||||
|
Unearned
stock compensation
|
(181 | ) | (261 | ) | ||||
|
Accumulated
other comprehensive income, net of tax
|
1,838 | 1,290 | ||||||
|
Total
stockholders’ equity
|
127,173 | 126,123 | ||||||
|
Total
liabilities and stockholders’ equity
|
$ | 1,674,299 | $ | 1,640,491 | ||||
Page 12 of 16
| |
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Consolidated
Statements of Operations – Sequential Quarter
(Unaudited
– In Thousands, Except Earnings Per Share)
|
||||||||
|
Quarter
Ended
|
||||||||
|
March
31,
|
December
31,
|
|||||||
|
2008
|
2007
|
|||||||
|
Interest
income:
|
||||||||
|
Loans
receivable, net
|
$ | 21,645 | $ | 21,700 | ||||
|
Investment
securities
|
1,959 | 1,902 | ||||||
|
FHLB
– San Francisco stock
|
419 | 432 | ||||||
|
Interest-earning
deposits
|
4 | 5 | ||||||
|
Total
interest income
|
24,027 | 24,039 | ||||||
|
Interest
expense:
|
||||||||
|
Checking
and money market deposits
|
351 | 499 | ||||||
|
Savings
deposits
|
725 | 804 | ||||||
|
Time
deposits
|
7,393 | 7,888 | ||||||
|
Borrowings
|
4,839 | 5,280 | ||||||
|
Total
interest expense
|
13,308 | 14,471 | ||||||
|
Net
interest income, before provision for loan losses
|
10,719 | 9,568 | ||||||
|
Provision
for loan losses
|
3,150 | 2,140 | ||||||
|
Net
interest income, after provision for loan losses
|
7,569 | 7,428 | ||||||
|
Non-interest
income:
|
||||||||
|
Loan
servicing and other fees
|
350 | 513 | ||||||
|
Gain
on sale of loans, net
|
306 | 934 | ||||||
|
Deposit
account fees
|
768 | 785 | ||||||
|
Net
loss on sale of real estate
|
(302 | ) | (229 | ) | ||||
|
Other
|
482 | (56 | ) | |||||
|
Total
non-interest income
|
1,604 | 1,947 | ||||||
|
Non-interest
expense:
|
||||||||
|
Salaries
and employee benefits
|
4,816 | 4,522 | ||||||
|
Premises
and occupancy
|
645 | 831 | ||||||
|
Equipment
|
379 | 391 | ||||||
|
Professional
expenses
|
323 | 474 | ||||||
|
Sales
and marketing expenses
|
112 | 130 | ||||||
|
Other
|
1,024 | 972 | ||||||
|
Total
non-interest expense
|
7,299 | 7,320 | ||||||
|
Income
before taxes
|
1,874 | 2,055 | ||||||
|
Provision
for income taxes
|
917 | 1,011 | ||||||
|
Net
income
|
$ | 957 | $ | 1,044 | ||||
|
Basic
earnings per share
|
$ | 0.16 | $ | 0.17 | ||||
|
Diluted
earnings per share
|
$ | 0.15 | $ | 0.17 | ||||
|
Cash
dividends per share
|
$ | 0.18 | $ | 0.18 | ||||
Page 13 of 16
| |
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Financial
Highlights
(Unaudited
- Dollars in Thousands, Except Share Information )
|
||||||||||||||||
|
Quarter
Ended
March
31,
|
Nine
Months Ended
March
31,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
SELECTED
FINANCIAL RATIOS:
|
||||||||||||||||
|
Return
on average assets
|
0.23 | % | 0.54 | % | 0.22 | % | 0.67 | % | ||||||||
|
Return
on average stockholders’ equity
|
2.99 | % | 7.07 | % | 2.73 | % | 8.47 | % | ||||||||
|
Stockholders’
equity to total assets
|
7.60 | % | 7.43 | % | 7.60 | % | 7.43 | % | ||||||||
|
Net
interest spread
|
2.43 | % | 2.18 | % | 2.24 | % | 2.28 | % | ||||||||
|
Net
interest margin
|
2.69 | % | 2.49 | % | 2.50 | % | 2.55 | % | ||||||||
|
Efficiency
ratio
|
59.23 | % | 61.11 | % | 64.73 | % | 54.40 | % | ||||||||
|
Average
interest earning assets to average
|
||||||||||||||||
|
interest-bearing
liabilities
|
107.28 | % | 107.26 | % | 107.42 | % | 107.82 | % | ||||||||
|
SELECTED
FINANCIAL DATA:
|
||||||||||||||||
|
Basic
earnings per share
|
$ | 0.16 | $ | 0.36 | $ | 0.42 | $ | 1.30 | ||||||||
|
Diluted
earnings per share
|
$ | 0.15 | $ | 0.36 | $ | 0.42 | $ | 1.28 | ||||||||
|
Book
value per share
|
$ | 20.49 | $ | 20.09 | $ | 20.49 | $ | 20.09 | ||||||||
|
Shares
used for basic EPS computation
|
6,144,743 | 6,505,347 | 6,172,921 | 6,629,362 | ||||||||||||
|
Shares
used for diluted EPS computation
|
6,199,695 | 6,621,875 | 6,230,182 | 6,755,088 | ||||||||||||
|
Total
shares issued and outstanding
|
6,207,719 | 6,543,993 | 6,207,719 | 6,543,993 | ||||||||||||
|
ASSET
QUALITY RATIOS:
|
||||||||||||||||
|
Non-performing
loans to loans held for investment, net
|
1.39 | % | 0.99 | % | ||||||||||||
|
Non-performing
assets to total assets
|
1.63 | % | 0.83 | % | ||||||||||||
|
Allowance
for loan losses to non-performing loans
|
85.53 | % | 114.47 | % | ||||||||||||
|
Allowance
for loan losses to gross loans held for
|
||||||||||||||||
|
investment
|
1.18 | % | 1.12 | % | ||||||||||||
|
Net
charge-offs to average loans receivable
|
1.02 | % | - | |||||||||||||
|
REGULATORY
CAPITAL RATIOS:
|
||||||||||||||||
|
Tangible
equity ratio
|
7.09 | % | 7.15 | % | ||||||||||||
|
Tier
1 (core) capital ratio
|
7.09 | % | 7.15 | % | ||||||||||||
|
Total
risk-based capital ratio
|
11.98 | % | 11.64 | % | ||||||||||||
|
Tier
1 risk-based capital ratio
|
10.80 | % | 10.54 | % | ||||||||||||
|
LOANS
ORIGINATED FOR SALE:
|
||||||||||||||||
|
Retail
originations
|
$ | 30,691 | $ | 77,669 | $ | 95,325 | $ | 237,102 | ||||||||
|
Wholesale
originations
|
56,169 | 228,523 | 189,447 | 701,021 | ||||||||||||
|
Total
loans originated for sale
|
$ | 86,860 | $ | 306,192 | $ | 284,772 | $ | 938,123 | ||||||||
|
LOANS
SOLD:
|
||||||||||||||||
|
Servicing
released
|
$ | 67,986 | $ | 273,382 | $ | 264,634 | $ | 899,253 | ||||||||
|
Servicing
retained
|
2,000 | 446 | 4,534 | 2,629 | ||||||||||||
|
Total
loans sold
|
$ | 69,986 | $ | 273,828 | $ | 269,168 | $ | 901,882 | ||||||||
Page 14 of 16
| |
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Financial
Highlights
(Unaudited)
|
|||||||||
|
(Dollars
in Thousands)
|
As
of March 31,
|
||||||||
|
2008
|
2007
|
||||||||
|
INVESTMENT
SECURITIES:
|
Balance
|
Rate
|
Balance
|
Rate
|
|||||
|
Held
to maturity:
|
|||||||||
|
U.S.
government sponsored enterprise debt securities
|
$ -
|
-
|
%
|
$ 28,029
|
3.05
|
%
|
|||
|
U.S.
government agency mortgage-backed securities (“MBS”)
|
-
|
-
|
2
|
8.97
|
|||||
|
Total
investment securities held to maturity
|
-
|
-
|
28,031
|
3.05
|
|||||
|
Available
for sale (at fair value):
|
|||||||||
|
U.S.
government sponsored enterprise debt securities
|
9,296
|
3.42
|
14,650
|
3.08
|
|||||
|
U.S.
government agency MBS
|
94,634
|
5.14
|
50,144
|
4.68
|
|||||
|
U.S.
government sponsored enterprise MBS
|
60,973
|
5.44
|
66,465
|
5.01
|
|||||
|
Private
issue collateralized mortgage obligations
|
3,047
|
4.47
|
4,882
|
4.28
|
|||||
|
Freddie
Mac common stock
|
152
|
357
|
|||||||
|
Fannie
Mae common stock
|
10
|
21
|
|||||||
|
Other
common stock
|
476
|
490
|
|||||||
|
Total
investment securities available for sale
|
168,588
|
5.12
|
137,009
|
4.63
|
|||||
|
Total
investment securities
|
$
168,588
|
5.12
|
%
|
$
165,040
|
4.36
|
%
|
|||
|
LOANS
HELD FOR INVESTMENT:
|
|||||||||
|
Single-family
(1 to 4 units)
|
$ 820,586
|
5.97
|
%
|
$ 846,503
|
5.86
|
%
|
|||
|
Multi-family
(5 or more units)
|
408,613
|
6.54
|
337,430
|
6.69
|
|||||
|
Commercial
real estate
|
148,153
|
7.02
|
151,531
|
7.17
|
|||||
|
Construction
|
43,814
|
8.65
|
80,350
|
9.35
|
|||||
|
Commercial
business
|
9,154
|
6.95
|
11,742
|
8.52
|
|||||
|
Consumer
|
544
|
10.98
|
472
|
12.49
|
|||||
|
Other
|
3,708
|
8.69
|
9,663
|
9.96
|
|||||
|
Total
loans held for investment
|
1,434,572
|
6.34
|
%
|
1,437,691
|
6.44
|
%
|
|||
|
Undisbursed
loan funds
|
(16,566
|
)
|
(36,573
|
)
|
|||||
|
Deferred
loan costs
|
5,521
|
5,447
|
|||||||
|
Allowance
for loan losses
|
(16,742
|
)
|
(15,737
|
)
|
|||||
|
Total
loans held for investment, net
|
$1,406,785
|
$1,390,828
|
|||||||
|
Purchased
loans serviced by others included above
|
$ 155,390
|
6.70
|
%
|
$ 170,223
|
6.92
|
%
|
|||
|
DEPOSITS:
|
|||||||||
|
Checking
accounts – non interest-bearing
|
$ 46,884
|
-
|
%
|
$ 48,383
|
-
|
%
|
|||
|
Checking
accounts – interest-bearing
|
123,405
|
0.62
|
129,531
|
0.76
|
|||||
|
Savings
accounts
|
146,793
|
1.61
|
160,239
|
1.91
|
|||||
|
Money
market accounts
|
31,018
|
1.87
|
28,464
|
1.98
|
|||||
|
Time
deposits
|
684,067
|
4.21
|
617,703
|
4.81
|
|||||
|
Total
deposits
|
$1,032,167
|
3.15
|
%
|
$
984,320
|
3.49
|
%
|
|||
|
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
– Dollars in Thousands)
|
|||||||||
|
As
of March 31,
|
|||||||||
|
2008
|
2007
|
||||||||
|
Balance
|
Rate
|
Balance
|
Rate
|
||||||
|
BORROWINGS:
|
|||||||||
|
Overnight
|
$ 15,000
|
2.13
|
%
|
$ 31,000
|
5.48
|
%
|
|||
|
Six
months or less
|
153,000
|
2.64
|
257,150
|
4.99
|
|||||
|
Over
six to twelve months
|
25,000
|
3.42
|
52,000
|
4.27
|
|||||
|
Over
one to two years
|
82,000
|
3.88
|
70,000
|
3.94
|
|||||
|
Over
two to three years
|
123,000
|
4.46
|
52,000
|
3.98
|
|||||
|
Over
three to four years
|
60,000
|
4.75
|
93,000
|
4.88
|
|||||
|
Over
four to five years
|
40,000
|
3.96
|
60,000
|
4.75
|
|||||
|
Over
five years
|
1,744
|
6.37
|
21,783
|
4.68
|
|||||
|
Total
borrowings
|
$
499,744
|
3.69
|
%
|
$
636,933
|
4.71
|
%
|
|||
|
Quarter
Ended
|
Nine
Months Ended
|
|||||||
|
March
31,
|
March
31,
|
|||||||
|
2008
|
2007
|
2008
|
2007
|
|||||
|
SELECTED
AVERAGE BALANCE SHEETS:
|
Balance
|
Balance
|
Balance
|
Balance
|
||||
|
Loans
receivable, net (1)
|
$ 1,403,695
|
$ 1,493,713
|
$ 1,392,243
|
$
1,443,535
|
||||
|
Investment
securities
|
158,187
|
172,503
|
153,808
|
180,112
|
||||
|
FHLB
– San Francisco stock
|
31,274
|
43,004
|
32,392
|
40,889
|
||||
|
Interest-earning
deposits
|
562
|
1,099
|
613
|
1,306
|
||||
|
Total
interest-earning assets
|
$1,593,718
|
$1,710,319
|
$1,579,056
|
$1,665,842
|
||||
|
Deposits
|
$1,012,283
|
$ 958,454
|
$1,008,849
|
$ 932,119
|
||||
|
Borrowings
|
473,334
|
636,073
|
461,161
|
612,833
|
||||
|
Total
interest-bearing liabilities
|
$1,485,617
|
$1,594,527
|
$1,470,010
|
$1,544,952
|
||||
|
Quarter
Ended
|
Nine
Months Ended
|
|||||||
|
March
31,
|
March
31,
|
|||||||
|
2008
|
2007
|
2008
|
2007
|
|||||
|
Yield/Cost
|
Yield/Cost
|
Yield/Cost
|
Yield/Cost
|
|||||
|
Loans
receivable, net (1)
|
6.17%
|
6.35%
|
6.21%
|
6.34%
|
||||
|
Investment
securities
|
4.95%
|
4.24%
|
4.86%
|
3.98%
|
||||
|
FHLB
– San Francisco stock
|
5.36%
|
5.55%
|
5.43%
|
5.56%
|
||||
|
Interest-earning
deposits
|
2.85%
|
5.10%
|
3.92%
|
5.21%
|
||||
|
Total
interest-earning assets
|
6.03%
|
6.12%
|
6.06%
|
6.07%
|
||||
|
Deposits
|
3.36%
|
3.41%
|
3.55%
|
3.20%
|
||||
|
Borrowings
|
4.11%
|
4.74%
|
4.39%
|
4.69%
|
||||
|
Total
interest-bearing liabilities
|
3.60%
|
3.94%
|
3.82%
|
3.79%
|
||||
|
(1)
|
Includes
loans held for investment, loans held for sale and receivable from sale of
loans.
|
|
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