Core Points - Provident Financial Holdings, Inc. has donated over $931,000 to local non-profits since the inception of its Community Partnership Program in 2006, with more than $39,000 donated in 2024 alone [1][2][3] - The Community Partnership Program allows non-profit organizations to receive annual donations by linking their unique ID number to their members who are customers of Provident Bank, incentivizing organizations to increase member participation [3] - Provident Bank, with approximately $1.3 billion in total assets, is the largest independent community bank in Riverside County, California, serving customers since 1956 [4]

Financial Performance - Net income for the quarter ended December 31, 2024, was $872 thousand, down 59.3% from $2,141 thousand in the same quarter of 2023[11]. - Net income for the six months ended December 31, 2024, was $2,772,000, compared to $3,903,000 for the same period in 2023, representing a decrease of approximately 29%[23]. - For the quarter ended December 31, 2024, net income available to common stockholders was $872,000, a decrease of 59.3% compared to $2,141,000 in the same quarter of 2023[32]. - Basic earnings per share for the quarter ended December 31, 2024, was $0.13, down from $0.31 in the same quarter of 2023, a decline of 58.1%[11]. - Diluted EPS for the quarter also stood at $0.13, consistent with the basic EPS, reflecting the same percentage decrease from $0.31 in the previous year[32]. - The total net income for the six months ended December 31, 2024, was $2,772,000, down 29.0% from $3,903,000 in the same period of 2023[32]. - Net interest income decreased by $538,000, or 3%, to $17.4 million for the first six months of fiscal 2025 compared to $17.9 million in the same period of fiscal 2024[201]. Assets and Liabilities - Total assets decreased from $1,272,200 thousand as of June 30, 2024, to $1,254,966 thousand as of December 31, 2024, representing a decline of approximately 1.4%[9]. - Total liabilities decreased from $1,142,259 thousand as of June 30, 2024, to $1,126,336 thousand as of December 31, 2024, a reduction of approximately 1.4%[9]. - Cash and cash equivalents decreased from $51,376 thousand as of June 30, 2024, to $45,539 thousand as of December 31, 2024, a decline of approximately 11.3%[9]. - Total cash and cash equivalents at the end of the period decreased to $45,539,000 from $46,878,000, reflecting a decline of approximately 3%[23]. - Total assets as of December 31, 2024, were $1.25 billion, with total deposits of $867.5 million and total stockholders' equity of $128.6 million[157]. Income and Expenses - Total interest income increased to $14,021 thousand for the quarter ended December 31, 2024, compared to $13,665 thousand for the same quarter in 2023, reflecting a growth of 2.6%[11]. - Total non-interest expense increased to $7,794 thousand for the quarter ended December 31, 2024, compared to $7,344 thousand in the same quarter of 2023, an increase of 6.1%[11]. - The total non-interest income for the quarter ended December 31, 2024, is $845,000, a slight decrease from $875,000 in the same quarter of 2023[141]. - The Corporation's loan servicing and other fees for the quarter ended December 31, 2024, are $60,000, down from $124,000 in the same quarter of 2023[141]. Dividends and Stock Repurchase - The company paid cash dividends of $0.14 per share in the quarter ended December 31, 2024[14]. - Cash dividends of $0.28 per share were paid in the six months ended December 31, 2024, totaling $1,907,000, compared to $1,957,000 in the same period of 2023[18]. - The Corporation purchased 63,556 shares of common stock at a weighted average cost of $16.04 per share during the second quarter of fiscal 2025[154]. - A quarterly cash dividend of $0.14 per share was declared on January 23, 2025, payable on March 6, 2025[155]. - The stock repurchase program initiated in September 2023 was extended until September 26, 2025, but was terminated effective January 24, 2025[156]. Loans and Credit Quality - Loans held for investment totaled $1,050.8 million as of December 31, 2024, with single-family mortgage loans comprising $533.1 million[46]. - The Corporation's commercial real estate loans totaled $77.98 million as of December 31, 2024, with an average loan-to-value (LTV) ratio of 37%[48]. - The total single-family loans amounted to $518,091,000, with $205,817,000 classified as pass loans for the current period[64]. - The total current period gross charge-offs for total loans were reported as $0, indicating no charge-offs for the current period[63]. - The allowance for credit losses (ACL) is calculated quarterly, reflecting historical loss rates and peer loss history, ensuring it is sufficient to cover expected losses[65]. - The provision for credit losses for the quarter was $627,000, compared to a recovery of $679,000 in the same quarter last year[77]. - The total non-performing loans at December 31, 2024, amounted to $2,582,000, with related charge-offs of $25,000[89]. Investment Securities - The total investment securities held to maturity as of December 31, 2024, amounted to $118,888,000, with an estimated fair value of $105,124,000, reflecting an unrealized loss of $13,764,000[33]. - The fair value of investment securities available for sale totaled $1,750,000, with $1,670,000 from U.S. government agency MBS and $80,000 from private issue CMO[120]. - The Corporation's investment securities held to maturity have a carrying amount of $118,888 and a fair value of $105,124 as of December 31, 2024[130]. Market and Economic Conditions - The Corporation aims to enhance its community banking business by increasing single-family, multi-family, and commercial real estate loans[171]. - The Corporation plans to reduce the percentage of retail time deposits while increasing lower-cost checking and savings accounts[171]. - The efficiency ratio for the second quarter of fiscal 2025 was 81.15%, compared to 76.11% in the same period last year, indicating higher non-interest expenses[194]. - Return on average assets was 0.28% in the second quarter of fiscal 2025, down 38 basis points from 0.66% in the same period last year[195].

Financial Data and Key Metrics Changes - The company originated $36.4 million in loans held for investment, an increase from $28.9 million in the prior sequential quarter [9] - Nonperforming assets increased to $2.5 million from $2.1 million in the previous quarter [12] - The net interest margin increased to 2.91% for the quarter ended December 31, 2024, compared to 2.84% for the sequential quarter [14] - The allowance for credit losses to gross loans held for investment increased by 5 basis points to 66 basis points [14] Business Line Data and Key Metrics Changes - Loans held for investment increased by approximately $5 million compared to the quarter ended September 30, 2024, with increases in single-family and commercial business loans [11] - The company has loosened some underwriting requirements to encourage higher loan origination volume [11] Market Data and Key Metrics Changes - Real estate investors have reduced their activity due to higher mortgage and other interest rates, although there is moderate activity in loans held for investment [9] - There is increased consumer demand for single-family adjustable-rate mortgage products due to higher fixed-rate mortgage interest rates [10] Company Strategy and Development Direction - The company is focusing on disciplined growth of the loan portfolio, recognizing the shift in monetary policy and the yield curve [20] - The composition of total interest-earning assets improved, with a higher percentage of loans receivable [21] - The company plans to maintain its cash dividend and has repurchased approximately 64,000 shares of common stock in the December 2024 quarter [22] Management's Comments on Operating Environment and Future Outlook - Management believes that mortgage interest rates need to decline for significant acceleration in loan portfolio growth [29] - The company anticipates continued expansion of the net interest margin in future quarters, although at a slower pace than the current quarter [17][33] Other Important Information - The company has identified $23.7 million or 2.2% of its loans held for investment in areas affected by fires in Los Angeles [7] - The company recorded a $586,000 provision for credit losses in the December 2024 quarter, primarily due to a longer estimated life of the loan portfolio [13] Q&A Session Summary Question: Loan growth commentary and future acceleration - Management indicated that mortgage interest rates need to decline for significant growth acceleration in the loan portfolio, with a current annual growth rate of approximately 1.9% [29] Question: Margin trends and funding opportunities - Management expects net interest margin to expand in future quarters, with some loans repricing downward and funding costs expected to decrease [33]

Financial Performance - Net income decreased approximately 54% [18] - Pre-Provision, Pre-Tax Income decreased approximately 9% [18] - Net Interest Margin increased seven basis points to 2.91% [18] - Net Interest Income increased approximately 2% [18] - Non-Interest Income decreased approximately 6% [18] - Operating Expenses increased due to approximately $267,000 of non-recurring or intermittent expenses [18] Balance Sheet & Activity - Loans Held for Investment balance increased slightly and the yield increased one basis point at December 31, 2024 [41] - Total Deposits balance increased slightly and the cost decreased five basis points at December 31, 2024 [41] - Total Borrowings balance decreased approximately 2% and the cost decreased 12 basis points at December 31, 2024 [41] - At December 31, 2024, Single-Family loans accounted for 51%, Multi-Family loans 41%, and Commercial Real Estate loans 8% of the Loans Held for Investment Composition [44] - The bank purchased approximately 64,000 shares of common stock in the second quarter of fiscal 2025 [88]

Financial Performance - Net income for the second quarter of fiscal 2025 was $872,000, down 54% from the previous quarter and 59% from the same quarter last year[3]. - Net income for the quarter ended December 31, 2024, was $872 million, a significant decrease of 59.3% from $2,141 million in the same quarter of 2023[44]. - Basic earnings per share for the quarter ended December 31, 2024, was $0.13, down from $0.31 in the same quarter of 2023, reflecting a decline of 58.1%[44]. - Basic earnings per share for Q4 2024 was $0.13, a decrease of 53.57% compared to $0.31 in Q4 2023[50]. - The provision for income taxes was $352,000 for Q2 fiscal 2025, down 60 percent from $884,000 in the same quarter last year[31]. Interest Income and Margin - Net interest margin increased to 2.91%, up 7 basis points from the previous quarter and 13 basis points from the same quarter last year[1]. - Total interest income for the quarter ended December 31, 2024, was $14,021 million, an increase of 2.6% from $13,665 million in the same quarter of 2023[44]. - Net interest income after provision for credit losses decreased to $8,173 million for the quarter ended December 31, 2024, down from $9,494 million in the prior year, representing a decline of 13.9%[44]. - The net interest margin for Q4 2024 was 2.91%, an increase from 2.78% in Q4 2023, reflecting improved profitability on interest-earning assets[50]. Loans and Investments - Loans held for investment remained unchanged at $1.05 billion as of December 31, 2024[1]. - Total loans originated for investment increased by 80% to $36.4 million compared to $20.2 million in the same quarter last year[11]. - Total loans originated for investment in the quarter ended December 31, 2024, amounted to $36,443 million, a substantial increase from $20,204 million in the same quarter of 2023, representing an increase of 80.3%[48]. - Total loans held for investment decreased to $1.050 billion in Q4 2024 from $1.073 billion in Q4 2023, reflecting a decline of 2.23%[54]. Deposits and Liabilities - Total deposits decreased by 2% to $867.5 million compared to June 30, 2024[1]. - Total deposits were $867,515,000 as of December 31, 2024, compared to $888,348,000 in the previous quarter[41]. - Total deposits amounted to $867.515 million in Q4 2024, down 4.86% from $911.980 million in Q4 2023[55]. - Total interest-bearing liabilities for the quarter ended December 31, 2024, were $1,089.8 million at a rate of 1.92%, down from $1,145.2 million at 1.69% in 2023[60]. Non-Interest Income and Expenses - Non-interest income decreased by $30,000, or three percent, to $845,000 in Q2 fiscal 2025 from $875,000 in the same period last year[27]. - Non-interest income totaled $845 million for the quarter ended December 31, 2024, a decrease of 3.4% compared to $875 million in the same quarter of 2023[44]. - Non-interest expense increased by $450,000, or six percent, to $7.79 million in Q2 fiscal 2025 from $7.34 million in the same quarter last year[28]. Efficiency and Ratios - The efficiency ratio in Q2 fiscal 2025 was 81.15 percent, an increase from 76.11 percent in the same quarter last year[30]. - The efficiency ratio increased to 81.15% for the quarter ended December 31, 2024, compared to 76.11% in the same quarter of 2023, indicating a decrease in operational efficiency[48]. - Return on average assets for the quarter ended December 31, 2024, was 0.28%, down from 0.66% in the same quarter of 2023[48]. - Stockholders' equity to total assets ratio improved to 10.25% as of December 31, 2024, compared to 9.97% in the same quarter of 2023[48]. Credit Losses and Non-Performing Assets - The provision for credit losses was $586,000, contrasting with a $720,000 recovery in the same period last year[21]. - The allowance for credit losses on loans held for investment was $7.0 million, or 0.66% of gross loans held for investment[26]. - Non-performing assets to total assets ratio was 0.20%, unchanged from June 30, 2024[1]. - Non-performing loans as of December 31, 2024, totaled $2.5 million, an increase from $1.8 million in the same period of 2023[64]. Shareholder Equity and Stock Repurchase - The Company had a total stockholders' equity of $128,630,000 as of December 31, 2024[41]. - The Company repurchased 63,556 shares at an average cost of $16.04 per share during the quarter ended December 31, 2024[32]. - Total stockholders' equity increased slightly to $131.1 million as of December 31, 2024, from $130.6 million in 2023[60].

Financial Data and Key Metrics Changes - The company originated $36.4 million in loans held for investment, an increase from $28.9 million in the prior sequential quarter [5] - Non-performing assets increased to $2.5 million from $2.1 million in the previous quarter [8] - The net interest margin increased to 2.91% for the quarter ended December 31, 2024, compared to 2.84% for the sequential quarter [9] - The average cost of deposits declined to 123 basis points, down by 4 basis points from the prior quarter [10] - The allowance for credit losses to gross loans held for investment increased by 5 basis points to 66 basis points [9] Business Line Data and Key Metrics Changes - Loans held for investment increased by approximately $5 million compared to the quarter ended September 30, 2024, with increases in single-family and commercial business loans [6] - Loan principal payments and payoffs were $34.3 million, slightly up from $34 million in the previous quarter [6] - The company has loosened some underwriting requirements to encourage higher loan origination volume [6] Market Data and Key Metrics Changes - Real estate investors have reduced their activity due to higher mortgage and interest rates, although moderate activity in loans held for investment continues [6] - There is increased consumer demand for single-family adjustable-rate mortgage products due to higher fixed-rate mortgage interest rates [6] Company Strategy and Development Direction - The company aims for disciplined growth of the loan portfolio, recognizing the shift in monetary policy and the reversal of the inverted yield curve [12] - The company is looking for operating efficiencies to lower operating expenses, with a focus on maintaining a run rate of approximately $7.5 million per quarter [12] - The company has repurchased approximately 64,000 shares of common stock in the December 2024 quarter and has a new stock repurchase plan approved [15] Management's Comments on Operating Environment and Future Outlook - Management believes that mortgage interest rates need to decline for significant acceleration in loan portfolio growth, with a current annual growth rate of approximately 1.9% [20] - There is optimism for growth in calendar 2025, supported by a flattening and upwardly sloping yield curve [21] - Management anticipates continued expansion of the net interest margin in future quarters, despite some headwinds from loan repricing [23][24] Other Important Information - The company has identified $23.7 million or 2.2% of its loans held for investment in areas affected by recent fires in Los Angeles [5] - The company has a strong capital position, exceeding well-capitalized capital ratios, allowing for effective execution of its business plan [14] Q&A Session Summary Question: Loan growth commentary and future acceleration - Management indicated that mortgage interest rates need to decline for significant loan portfolio growth, with a current growth rate of approximately 1.9% [20] Question: Margin trends and funding opportunities - Management expects net interest margin to expand in future quarters, with opportunities to reprice maturing wholesale funding downward [24]

Core Viewpoint - Provident Financial reported quarterly earnings of $0.13 per share, missing the Zacks Consensus Estimate of $0.26 per share, representing a 50% earnings surprise [1]. Financial Performance - The company posted revenues of $9.6 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 3.62%, and showing a slight decline from $9.65 million year-over-year [2]. - Over the last four quarters, Provident Financial has surpassed consensus EPS estimates two times and topped revenue estimates just once [2]. Stock Performance - Provident Financial shares have decreased by approximately 0.2% since the beginning of the year, while the S&P 500 has gained 2.2% [3]. - The current Zacks Rank for Provident Financial is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.27 on revenues of $10.12 million, and for the current fiscal year, it is $1.05 on revenues of $39.55 million [7]. - The estimate revisions trend for Provident Financial is mixed, and future changes in estimates will be closely monitored following the recent earnings report [6][7]. Industry Context - The Financial - Savings and Loan industry is currently in the top 11% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8].

Core Points - The company reported a net income of $872,000 for the quarter ended December 31, 2024, which is a decrease of 54% from the previous quarter and 59% from the same quarter last year [3][6][41] - The net interest margin increased to 2.91%, up seven basis points from the previous quarter and 13 basis points from the same quarter last year [3][9] - Loans held for investment remained unchanged at $1.05 billion as of December 31, 2024 [3][16] - Total deposits decreased by 2% to $867.5 million compared to June 30, 2024 [3][15] - The ratio of non-performing assets to total assets was stable at 0.20% [3][21] - Non-interest expenses were well controlled, with a slight increase attributed to higher salaries and employee benefits [3][27] Financial Performance - The company experienced a significant decrease in net income, primarily due to a provision for credit losses of $586,000, compared to a recovery of $720,000 in the same period last year [3][20] - Return on average assets was 0.28%, down from 0.61% in the previous quarter and 0.66% in the same quarter last year [5] - The efficiency ratio increased to 81.15%, reflecting higher non-interest expenses and lower net interest income [28] Interest Income and Expenses - Net interest income slightly decreased to $8.76 million from $8.77 million in the same quarter last year, attributed to a lower average balance of interest-earning assets [9][41] - Interest income from loans receivable increased by 4% to $13.05 million, driven by a higher average loan yield [10] - Interest expense on deposits rose by 18% to $2.67 million, primarily due to higher rates paid on deposits [14][15] Credit Quality - The provision for credit losses was primarily due to a longer estimated life of the loan portfolio resulting from lower loan prepayment estimates [20] - Non-performing assets decreased by 3% to $2.5 million, maintaining a ratio of 0.20% of total assets [21] Stock Repurchase and Capital Management - The company actively engaged in a stock repurchase program, repurchasing 63,556 shares at an average cost of $16.04 per share [30]

Core Viewpoint - Provident Financial Holdings, Inc. has authorized a stock repurchase program to buy back up to 5% of its common stock, approximately 334,773 shares, starting January 24, 2025, while canceling the previous repurchase program from September 2023 [1] Summary by Relevant Sections - **Stock Repurchase Program** The Company will initiate a stock repurchase program to acquire up to 5% of its common stock, which equates to about 334,773 shares. The purchases will occur in the open market or through private transactions over a one-year period, contingent on market conditions and the Company's capital requirements [1] - **Cancellation of Previous Program** The stock repurchase program initiated in September 2023 has been canceled effective January 24, 2025. There were 21,691 shares remaining eligible for repurchase under this program that will no longer be repurchased [1]

Core Viewpoint - Provident Financial Holdings, Inc. will announce its earnings for the second quarter of fiscal 2025 on January 28, 2025, before the market opens [1] Group 1: Earnings Announcement - The earnings release will be made prior to the market opening on January 28, 2025 [1] - A conference call for institutional investors and bank analysts will take place on the same day at 9:00 a.m. Pacific Time to discuss the financial results [1] - The conference call can be accessed by dialing 1-800-715-9871 and referencing Conference ID number 7361828 [1] Group 2: Conference Call Details - An audio replay of the conference call will be available until February 4, 2025, by dialing 1-800-770-2030 and referencing the same Conference ID number [1]