Provident Financial (PROV) - 2024 Q4 - Annual Report

Deposits and Borrowings - Time deposits represented approximately 31% of the Bank's deposit portfolio at June 30, 2024, up from 23% at June 30, 2023[102]. - The Bank's total deposits decreased by $62.2 million to$ 888.3 million at June 30, 2024, compared to $950.6 million at June 30, 2023[107]. - Brokered certificates of deposit amounted to$ 131.8 million at June 30, 2024, compared to $106.4 million at June 30, 2023[104]. - Uninsured deposits were approximately$ 122.7 million at June 30, 2024, down from $140.1 million at June 30, 2023[104]. - The Bank's outstanding borrowings from the FHLB – San Francisco were$ 238.5 million at June 30, 2024, with a weighted average interest rate of 4.88%[109]. - The remaining financing availability through the FHLB – San Francisco was $261.3 million as of June 30, 2024, compared to$ 287.9 million in the previous year[110]. - The Bank's borrowing capacity from the FHLB – San Francisco was $516.0 million as of June 30, 2024, down from$ 534.1 million in 2023[109]. - Outstanding borrowings from the FHLB – San Francisco amounted to $238.5 million with a weighted average interest rate of 4.88% as of June 30, 2024[109]. Interest Rates and Earnings - The weighted average interest rate for time deposits was 4.55% for terms of 30 days or less, and 4.61% for terms over 1 to 2 years[102]. - The Bank's interest credited increased to$ 9.7 million in 2024 from $3.1 million in 2023[107]. - The Bank's savings accounts had a weighted average interest rate of 0.18%[102]. Loans and Asset Quality - The Bank's total mortgage loans pledged to the FHLB – San Francisco decreased to$ 774.1 million at June 30, 2024, from $967.6 million at June 30, 2023[109]. - The Bank's total non-performing assets were$ 2.6 million, representing 0.20% of total assets, an increase from $1.3 million or 0.10% of total assets as of June 30, 2023[63]. - As of June 30, 2024, total non-performing loans increased to$ 2,596,000 from $1,300,000 in 2023, representing a 99% increase[64]. - Non-performing loans as a percentage of loans held for investment rose to 0.25% in 2024, compared to 0.12% in 2023[64]. - The allowance for credit losses (ACL) methodology was updated to the current expected credit loss (CECL) model effective July 1, 2023, impacting the assessment of credit losses[72]. - The Bank's provision for credit losses is adjusted quarterly to maintain the ACL at appropriate levels based on historical loss experience and current conditions[82]. Regulatory Compliance and Capital - The Corporation adopted the new accounting standard ASC 326 (CECL) on July 1, 2023, resulting in a one-time adjustment of$ 824,000 to retained earnings[135]. - As of June 30, 2024, the Bank was categorized as "well capitalized" under the regulatory framework for prompt corrective action[137]. - The Bank's capital conservation buffer must exceed 2.5% of risk-weighted assets to avoid limitations on paying dividends[132]. - The Bank's ability to make capital distributions is restricted if it does not meet capital requirements or exceeds net income-based limitations[138]. - The OCC may impose mandatory supervisory actions on undercapitalized institutions, including increased monitoring and restrictions on growth[136]. Employee and Workforce Information - As of June 30, 2024, the Bank had 160 full-time equivalent employees, with an average employee tenure of approximately 8.3 years, down from 8.5 years in the previous year[176]. - The workforce composition was 73.0% female and 27.0% male, with ethnic diversity including 40.5% White, 42.2% Hispanic or Latino, 6.5% African American or Black, and 6.0% Asian[177]. - The turnover rate for employees was 23.3% in fiscal 2024, significantly down from 41.4% in fiscal 2023[180]. Investment Securities - The Bank's investment securities portfolio decreased to $131.9 million in 2024 from$ 156.6 million in 2023, with no new purchases made during the fiscal years[90]. - The total investment securities held to maturity amounted to $130.1 million, with an estimated fair value of$ 114.4 million, reflecting a decrease from $154.3 million and$ 135.5 million respectively in the previous year[92]. - The Bank reported $15.8 million of unrealized holding losses on investment securities, which were in a loss position for 12 months or more[96]. Community Reinvestment and Compliance - The Bank received a satisfactory rating in its last evaluation for compliance with the Community Reinvestment Act (CRA)[142]. - The federal banking agencies issued a final rule on October 24, 2023, to modernize CRA regulations, with applicability starting January 1, 2026[143]. - The USA Patriot Act requires financial institutions to develop programs to prevent money laundering and terrorist activities, with obligations to file suspicious activity reports[144]. Tax and Regulatory Fees - The Bank's OCC annual assessments were$ 179,000 for fiscal 2024, down from $198,000 in fiscal 2023[121]. - The Bank's FDIC annual assessments increased to$ 601,000 in fiscal 2024 from $459,000 in fiscal 2023[126]. - The Corporation paid$ 200,000 in franchise taxes to the State of Delaware during fiscal 2024[175].