Provident Financial (US:PROV)2023-01-30 17:40Financial Data and Key Metrics Changes - In the most recent quarter, the company originated $74.3 million of loans held for investment, a decline from $84.6 million in the prior sequential quarter [9] - The allowance for loan losses to gross loans held for investment decreased to 56 basis points on December 31, 2022, from 57 basis points on September 30, 2022 [10] - The net interest margin remained unchanged at 3.05% for the quarter ended December 31, 2022, despite a 27 basis point increase in the average yield on total interest-earning assets [11] - Operating expenses decreased to $6.8 million in the December 2022 quarter, lower than the stable run rate of approximately $6.9 million per quarter [12] Business Line Data and Key Metrics Changes - Loans held for investment increased by approximately 5% compared to September 30, 2022, with the increase in single-family loans offsetting small declines in multifamily commercial real estate and construction loan categories [18] - The company experienced $28 million of loan principal payoffs and payments, down from $31.7 million in the September 2022 quarter [9] Market Data and Key Metrics Changes - Competition remains elevated for loan originations, with many borrowers reducing their new activity due to rising mortgage interest rates [17] - There is increased demand for single-family adjustable-rate mortgage products as a result of higher fixed-rate mortgage interest rates [17] Company Strategy and Development Direction - The short-term strategy for balance sheet management remains unchanged, focusing on leveraging the balance sheet with prudent loan portfolio growth [13] - The company aims to maintain its cash dividend and recognizes stock buyback programs as valid capital management tools, having repurchased approximately 103,000 shares of common stock in the December 2022 quarter [14][24] Management's Comments on Operating Environment and Future Outlook - Current credit quality is holding up well, with only $4,000 of early-stage delinquency balances as of December 31, 2022, and nonperforming assets decreased to $956,000 [19] - The company anticipates that loan originations in the March 2023 quarter will decline from this quarter and may drop below the range of recent prior quarters, which has been between $65 million and $95 million [17] Other Important Information - The company distributed approximately $2 million of cash dividends to shareholders and repurchased approximately $2.2 million worth of common stock for the fiscal year-to-date [24] - The total interest-earning assets composition improved during the quarter with an increase in the average balance of loans receivable [13] Q&A Session Summary - There were no questions from the phone lines during the Q&A session [21]