Provident Financial Holdings Reports Second Quarter of Fiscal Year 2025 Results

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]