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): July 28, 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 July
28, 2008, Provident Financial Holdings, Inc. issued its earnings release for the
quarter ended June 30, 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
(d) Exhibits
99.1
Earnings Release of Provident Financial Holdings, Inc. dated July 28,
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.
| Date: July 28, 2008 | PROVIDENT FINANCIAL HOLDINGS, INC. |
| /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
FOURTH QUARTER RESULTS
Net
Interest Margin Expands by 56 Basis Points
Operating
Expenses Decline by 13%
Capital
Ratios Improve (Sequential Quarter)
Bank
Remains Significantly Above “Well-Capitalized” Regulatory
Thresholds
Riverside, Calif. – July 28, 2008 – Provident Financial Holdings, Inc.
(“Company”), NASDAQ GS: PROV, the holding company for Provident Savings Bank,
F.S.B. (“Bank”), today announced fourth quarter earnings for the fiscal year
ended June 30, 2008.
For
the quarter ended June 30, 2008, the Company reported a net loss of $(1.14)
million, a loss of $(0.19) per diluted share (on 6.17 million weighted-average
shares outstanding), compared to net income of $1.83 million, or $0.28 per
diluted share (on 6.44 million weighted-average shares outstanding), in the
comparable period a year ago. The loss in the quarter ended June 30,
2008 was primarily attributable to an increase in the provision for loan losses
and a decrease in non-interest income, partly offset by an increase in net
interest income and a decrease in compensation expense. The decrease
in weighted-average shares outstanding primarily reflects prior period
repurchases of common stock through the Company’s stock repurchase
programs.
Page 1 of 17
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“The Company continues to take the necessary steps
to withstand the current operating environment,” said Craig G. Blunden,
Chairman, President and Chief Executive Officer of the Company. “We
will be well positioned to take advantage of more favorable business conditions
once the current credit cycle runs its course.”
Return on average assets for the fourth quarter of fiscal 2008 was
negative (0.28) percent, compared to 0.43 percent for the same period of fiscal
2007. Return on average stockholders’ equity for the fourth quarter
of fiscal 2008 was negative (3.62) percent, compared to 5.59 percent for the
comparable period of fiscal 2007.
On a sequential quarter basis, net income for the fourth quarter of
fiscal 2008 decreased by $2.10 million, or 219 percent, to a net loss of $(1.14)
million from net income of $957,000 in the third quarter of fiscal 2008; and
diluted earnings per share decreased $0.34, or 227 percent, to a loss of $(0.19)
from a gain of $0.15 in the third quarter of fiscal 2008. Return on
average assets decreased 51 basis points to negative (0.28) percent for the
fourth quarter of fiscal 2008 from 0.23 percent in the third quarter of fiscal
2008 and return on average equity for the fourth quarter of fiscal 2008 was
negative (3.62) percent, compared to 2.99 percent for the third quarter of
fiscal 2008.
For the fiscal year ended June 30, 2008, net income was $1.47 million, a
decrease of 86 percent from net income of $10.45 million for the fiscal year
ended June 30, 2007; and diluted earnings per share for the fiscal year ended
June 30, 2008 decreased $1.33, or 85 percent, to $0.24 from $1.57 for the prior
fiscal year. Return on average assets for the fiscal year ended June
30, 2008 decreased 52 basis points to 0.09 percent from 0.61 percent for the
prior fiscal year. Return on average stockholders’ equity for the
Page 2 of 17
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fiscal year ended
June 30, 2008 was 1.15 percent, compared to 7.77 percent for the prior fiscal
year.
Net interest
income before provision for loan losses increased by $1.94 million, or 20
percent, to $11.78 million in the fourth quarter of fiscal 2008 from $9.84
million for the same period in fiscal 2007. Non-interest income
decreased $1.79 million, or 81 percent, to $427,000 in the fourth quarter of
fiscal 2008 from $2.21 million in the comparable period of fiscal
2007. Non-interest expense decreased $1.20 million, or 13 percent, to
$7.74 million in the fourth quarter of fiscal 2008 from $8.94 million in the
comparable period in fiscal 2007.
The
average balance of loans outstanding decreased by $41.7 million to $1.41 billion
in the fourth quarter of fiscal 2008 from $1.46 billion in the same quarter of
fiscal 2007, and the average yield decreased by 20 basis points to 6.07 percent
in the fourth quarter of fiscal 2008 from an average yield of 6.27 percent in
the same quarter of fiscal 2007. The decrease in the average loan
yield was primarily attributable to accrued interest income 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 fourth quarter of fiscal 2008 were $30.1 million, which
consisted primarily of single-family and multi-family loans. This
compares to total loans originated for investment of $56.3 million (including
$2.1 million of loans purchased for investment) in the fourth quarter of fiscal
2007. The outstanding balance of “preferred loans” (multi-family,
commercial real estate, construction and commercial business loans) increased by
$46.7
Page 3 of 17
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million,
or nine percent, to $569.6 million at June 30, 2008 from $522.9 million at June
30, 2007. The ratio of preferred loans to total loans held for
investment increased to 41 percent at June 30, 2008 compared to 38 percent at
June 30, 2007. Loan principal payments received in the fourth quarter
of fiscal 2008 were $66.4 million, compared to $103.6 million in the same
quarter of fiscal 2007.
Average
deposits increased by $32.4 million to $1.02 billion while the average cost of
deposits decreased by 57 basis points to 3.01 percent in the fourth quarter of
fiscal 2008, compared to an average balance of $989.6 million and an average
cost of 3.58 percent in the same quarter last year. Transaction
account balances (core deposits) decreased by $4.1 million, or one percent, to
$348.7 million at June 30, 2008 from $352.8 million at June 30,
2007. The decrease is primarily attributable to an $8.2 million, or
five percent, decline in savings account balances. Time deposits
increased by $15.1 million, or two percent, to $663.7 million at June 30, 2008
compared to $648.6 million at June 30, 2007. The increase in time
deposits is primarily attributable to depositors switching from savings deposits
to time deposits. Also, it should be noted, that the Company does not
have any brokered deposits.
The
average balance of borrowings, which primarily consists of Federal Home Loan
Bank (“FHLB”) of San Francisco advances, decreased $79.9 million to $478.7
million and the average cost of advances decreased 84 basis points to 3.80
percent in the fourth quarter of fiscal 2008, compared to an average balance of
$558.6 million and an average cost of 4.64 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 which had a higher average cost than
the average cost of new advances. Additionally,
Page 4 of 17
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short-term
advance interest rates have fallen as a result of Federal Open Market Committee
actions.
The net
interest margin during the fourth quarter of fiscal 2008 increased 56 basis
points to 2.93 percent from 2.37 percent during the same quarter last
year. On a sequential quarter basis, the net interest margin in the
fourth quarter of fiscal 2008 increased 24 basis points from 2.69 percent in the
third quarter of fiscal 2008.
During
the fourth quarter of fiscal 2008, the Company recorded a loan loss provision of
$5.80 million, compared to a loan loss recovery of $490,000 during the same
period of fiscal 2007. The loan loss provision in the fourth quarter
of fiscal 2008 was primarily attributable to loan classification downgrades in
the loans held for investment portfolio and deterioration in the real estate
collateral values securing those loans.
Non-performing
assets increased to $33.0 million, or 2.02 percent of total assets, at June 30,
2008, compared to $27.3 million, or 1.63 percent of total assets at March 31,
2008 and $19.7 million, or 1.20 percent of total assets, at June 30,
2007. The non-performing assets at June 30, 2008 were primarily
comprised of 52 single-family loans originated for investment ($15.7 million),
12 construction loans originated for investment ($4.7 million), 12 single-family
loans repurchased from, or unable to sell to investors ($2.1 million) and real
estate owned comprised of 30 single-family properties, one multi-family property
and 14 lots acquired in the settlement of loans ($9.4 million). Net
charge-offs for the quarter ended June 30, 2008 were $3.14 million or 0.89
percent of average loans receivable, compared to $3.58 million or 1.02 percent
of average loans receivable for the quarter ended March 31, 2008 and $402,000 or
0.11 percent of average loans receivable in the comparable quarter last
year.
Page 5 of 17
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Classified loans at
June 30, 2008 were $59.7 million, comprised of $29.4 million in the special
mention category and $30.3 million in the substandard
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 June 30, 2008, six loans for $1.2 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
June 30, 2008, a total of $10.5 million of loans have been
modified: six are classified as pass ($2.3 million); 13 are
classified as special mention and remain on accrual status ($4.0 million); eight
are classified as substandard and remain on accrual status ($2.8 million); and
five are classified as substandard on non-accrual status ($1.4
million).
The
allowance for loan losses was $19.4 million at June 30, 2008, or 1.40 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 June 30, 2008 includes $6.0 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 fourth quarter of fiscal 2008 compared to
the same period of fiscal 2007 was primarily the result of a decrease in
brokered and other loan fees, a net loss on sale of loans and net losses on the
sale and operations of real estate owned properties acquired in the settlement
of loans, partly offset by an increase in deposit account fees.
Page 6 of 17
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The net
loss on sale of loans was $(216,000) for the quarter ended June 30, 2008 as
compared to a net gain of $601,000 in the comparable quarter last
year. The loss on sale of loans was primarily attributable to a $1.28
million recourse provision on loans sold that are subject to repurchase,
resulting from early payment defaults or fraud. Total loans sold for
the quarter ended June 30, 2008 were $104.3 million, down 53 percent from $221.6
million for the same quarter last year. The average loan sale margin
for mortgage banking was negative (20) basis points for the quarter ended June
30, 2008, compared to positive 31 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 $74.5 million, or 40 percent, to
$114.0 million in the fourth quarter of fiscal 2008 from $188.5 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 $144.0 million in the fourth quarter of fiscal 2008, a decrease
of $100.7 million, or 41 percent, from $244.7 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 and the unfavorable real estate
environment.
Fifteen
real estate owned properties were sold for a net loss of $(462,000) in the
quarter ended June 30, 2008 as compared to two real estate owned properties sold
for a net gain of $1,000 in the same quarter last year. As of June
30, 2008, the real estate owned balance was $9.4 million (45 properties),
compared to $3.8 million (10 properties) at June 30, 2007.
Page 7 of 17
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The
decrease in non-interest expense was primarily the result of decreases in
compensation, premises and occupancy and marketing, partly offset by increases
in equipment, professional expenses and other operating expenses. The decrease
in compensation expense was the result of the fewer number of mortgage banking
personnel in the fourth 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 fourth quarter of fiscal 2008
decreased $314,000, or 57%, to $234,000 from $548,000 in the same period of
fiscal 2007, resulting from a lower average stock price and fewer shares
allocated. The decrease in premises and occupancy expense was
primarily related to the closure 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 increase in other operating
expenses was a result of an increase in FDIC deposit insurance premiums, partly
offset by a decrease in workers’ compensation insurance premiums.
The
Company’s efficiency ratio improved to 63 percent in the fourth quarter of
fiscal 2008 from 74 percent in the fourth quarter of fiscal 2007. The
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 benefit for the fourth quarter of fiscal 2008 was 14.6
percent, compared to the effective income tax provision of 49.3 percent in the
same quarter last year. The lower tax benefit (as compared to the tax
provision) was primarily the result of a higher percentage of permanent tax
differences relative to income before
Page 8 of 17
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taxes and
an additional tax provision of $348,000 on a disallowed deduction in the fiscal
2006 tax return which was discovered during the ongoing examination by the
Internal Revenue Service. The Company believes that the effective
income tax benefit applied in the fourth quarter of fiscal 2008 reflects its
current income tax obligations.
The
Company did not repurchase any of its common stock during the quarter ended June
30, 2008. For fiscal 2008, the Company repurchased 187,081 shares (59
percent of the shares authorized by the June 2007 stock repurchase program) with
an average cost of $21.78 per share and the June 2007 program expired on June
25, 2008. The Corporation announced a new stock repurchase program of
up to five percent of its common stock (approximately 310,385 shares) on June
26, 2008.
As of
June 30, 2008 the Bank exceeded all regulatory capital requirements and is
deemed “well-capitalized” with Tangible Capital, Core Capital, Total Risk-Based
Capital and Tier 1 Risk-Based Capital ratios of 7.23 percent, 7.23 percent,
12.30 percent and 11.05 percent, respectively. These ratios have
improved from 7.09 percent, 7.09 percent, 11.98 percent and 10.80 percent,
respectively, at March 31, 2008 and are well above the minimum ratios to be
deemed “well-capitalized” (5.00 percent for Core Capital, 10.00 percent for
Total Risk-Based Capital and 6.00 percent for Tier 1 Risk-Based
Capital).
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 Tuesday, July 29, 2008 at 9:00 a.m. (Pacific Time) to discuss its
financial
Page 9 of 17
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results. The
conference call can be accessed by dialing (800) 230-1766 and requesting the
Provident Financial Holdings Earnings Release Conference Call. An
audio replay of the conference call will be available through Wednesday, August
6, 2008 by dialing (800) 475-6701 and referencing access code number
952139.
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
This press release and the
conference call noted above contain statements that the Company believes are
“forward-looking statements.” These statements relate to the Company’s financial
condition, results of operations, plans, objectives, future performance or
business. You should not place undue reliance on these statements, as they are
subject to risks and uncertainties. When considering these forward-looking
statements, you should keep in mind these risks and uncertainties, as well as
any cautionary statements the Company may make. Moreover, you should
treat these statements as speaking only as of the date they are made and based
only on information then actually known to the Company. There are a number of
important factors that could cause future results to differ materially from
historical performance and these forward-looking statements. Factors which could cause actual
results to differ materially include, but are not limited to, the credit risks
of lending activities, including changes in the level and trend of loan
delinquencies and write-offs; changes in general economic conditions, either
nationally or in our market areas; changes in the levels of general interest
rates, deposit interest rates, our net interest margin and funding sources;
fluctuations in the demand for loans, the number of unsold homes and other
properties and fluctuations in real estate values in our market areas;
results of examinations
of us by the Office of Thrift Supervision and our bank subsidiary by the Federal
Deposit Insurance Corporation, the Office of Thrift Supervision or other
regulatory authorities, including the possibility that any such regulatory
authority may, among other things, require us to increase our reserve for loan
losses or to write-down assets; our ability to control operating
costs and expenses; our ability to implement our branch expansion strategy; our
ability to successfully integrate any assets, liabilities, customers, systems,
and management personnel we have acquired or may in the future acquire into our
operations and our ability to realize related revenue synergies and cost savings
within expected time frames and any goodwill charges related thereto; our
ability to manage loan delinquency rates; our ability to retain key members of
our senior management team; costs and effects of litigation, including
settlements and judgments; increased competitive pressures among financial
services companies; changes in consumer spending, borrowing and savings habits;
legislative or regulatory changes that adversely affect our business; adverse
changes in the securities markets; inability of key third-party providers to
perform their obligations to us; changes in accounting policies and practices,
as may be adopted by the financial institution regulatory agencies or the
Financial Accounting Standards Board; war or terrorist activities; other
economic, competitive, governmental, regulatory, and technological factors
affecting our operations, pricing, products and services 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 10 of 17
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PROVIDENT
FINANCIAL HOLDINGS, INC.
Consolidated
Statements of Financial Condition
(Unaudited
– Dollars In Thousands)
|
||||||||
|
June
30,
2008
|
June
30,
2007
|
|||||||
|
Assets
|
||||||||
|
Cash
and due from banks
|
$ | 12,614 | $ | 11,024 | ||||
|
Federal
funds sold
|
2,500 | 1,800 | ||||||
|
Cash
and cash equivalents
|
15,114 | 12,824 | ||||||
|
Investment
securities – held to maturity
|
||||||||
|
(fair
value $ - and $18,837, respectively)
|
- | 19,001 | ||||||
|
Investment
securities – available for sale at fair value
|
153,102 | 131,842 | ||||||
|
Loans
held for investment, net of allowance for loan losses of
|
||||||||
|
$19,402
and $14,845, respectively
|
1,368,633 | 1,350,696 | ||||||
|
Loans
held for sale, at lower of cost or market
|
28,461 | 1,337 | ||||||
|
Receivable
from sale of loans
|
- | 60,513 | ||||||
|
Accrued
interest receivable
|
7,273 | 7,235 | ||||||
|
Real
estate owned, net
|
9,355 | 3,804 | ||||||
|
FHLB
– San Francisco stock
|
32,125 | 43,832 | ||||||
|
Premises
and equipment, net
|
6,513 | 7,123 | ||||||
|
Prepaid
expenses and other assets
|
12,095 | 10,716 | ||||||
|
Total
assets
|
$ | 1,632,671 | $ | 1,648,923 | ||||
|
Liabilities
and Stockholders’ Equity
|
||||||||
|
Liabilities:
|
||||||||
|
Non
interest-bearing deposits
|
$ | 48,056 | $ | 45,112 | ||||
|
Interest-bearing
deposits
|
964,354 | 956,285 | ||||||
|
Total
deposits
|
1,012,410 | 1,001,397 | ||||||
|
Borrowings
|
479,335 | 502,774 | ||||||
|
Accounts
payable, accrued interest and other liabilities
|
16,336 | 15,955 | ||||||
|
Total
liabilities
|
1,508,081 | 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
|
75,164 | 72,935 | ||||||
|
Retained
earnings
|
143,663 | 146,194 | ||||||
|
Treasury
stock at cost (6,228,146 and 6,051,420 shares,
respectively)
|
||||||||
| (94,798 | ) | (90,694 | ) | |||||
|
Unearned
stock compensation
|
(102 | ) | (455 | ) | ||||
|
Accumulated
other comprehensive income, net of tax
|
539 | 693 | ||||||
|
Total
stockholders’ equity
|
124,590 | 128,797 | ||||||
|
Total
liabilities and stockholders’ equity
|
$ | 1,632,671 | $ | 1,648,923 | ||||
Page 11 of 17
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PROVIDENT
FINANCIAL HOLDINGS, INC.
Consolidated
Statements of Operations
(Unaudited
- In Thousands, Except Earnings Per Share)
|
||||||||||||||||
|
Quarter
Ended
June
30,
|
Twelve
Months Ended
June
30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Interest
income:
|
||||||||||||||||
|
Loans
receivable, net
|
$ | 21,481 | $ | 22,841 | $ | 86,340 | $ | 91,525 | ||||||||
|
Investment
securities
|
1,962 | 1,767 | 7,567 | 7,149 | ||||||||||||
|
FHLB
– San Francisco stock
|
502 | 521 | 1,822 | 2,225 | ||||||||||||
|
Interest-earning
deposits
|
2 | 19 | 20 | 69 | ||||||||||||
|
Total
interest income
|
23,947 | 25,148 | 95,749 | 100,968 | ||||||||||||
|
Interest
expense:
|
||||||||||||||||
|
Checking
and money market deposits
|
332 | 413 | 1,607 | 1,524 | ||||||||||||
|
Savings
deposits
|
580 | 784 | 2,896 | 2,823 | ||||||||||||
|
Time
deposits
|
6,734 | 7,640 | 30,073 | 26,867 | ||||||||||||
|
Borrowings
|
4,525 | 6,469 | 19,737 | 28,031 | ||||||||||||
|
Total
interest expense
|
12,171 | 15,306 | 54,313 | 59,245 | ||||||||||||
|
Net interest income, before provision (recovery) for loan losses
|
11,776 | 9,842 | 41,436 | 41,723 | ||||||||||||
|
Provision
(recovery) for loan losses
|
5,803 | (490 | ) | 12,612 | 5,078 | |||||||||||
|
Net interest income, after provision (recovery) for loan losses
|
5,973 | 10,332 | 28,824 | 36,645 | ||||||||||||
|
Non-interest
income:
|
||||||||||||||||
|
Loan
servicing and other fees
|
422 | 706 | 1,776 | 2,132 | ||||||||||||
|
(Loss)
gain on sale of loans, net
|
(216 | ) | 601 | 1,146 | 9,318 | |||||||||||
|
Deposit
account fees
|
743 | 530 | 2,954 | 2,087 | ||||||||||||
|
Net
(loss) gain on sale of real estate
|
(462 | ) | 1 | (932 | ) | 2,359 | ||||||||||
|
Other
|
(60 | ) | 376 | 409 | 1,665 | |||||||||||
|
Total
non-interest income
|
427 | 2,214 | 5,353 | 17,561 | ||||||||||||
|
Non-interest
expense:
|
||||||||||||||||
|
Salaries
and employee benefits
|
4,491 | 5,780 | 18,953 | 22,867 | ||||||||||||
|
Premises
and occupancy
|
647 | 984 | 2,830 | 3,314 | ||||||||||||
|
Equipment
|
382 | 349 | 1,552 | 1,570 | ||||||||||||
|
Professional
expenses
|
457 | 346 | 1,573 | 1,193 | ||||||||||||
|
Sales
and marketing expenses
|
109 | 221 | 524 | 945 | ||||||||||||
|
Other
|
1,652 | 1,258 | 4,693 | 4,742 | ||||||||||||
|
Total
non-interest expense
|
7,738 | 8,938 | 30,125 | 34,631 | ||||||||||||
|
(Loss)
income before taxes
|
(1,338 | ) | 3,608 | 4,052 | 19,575 | |||||||||||
|
(Benefit)
provision for income taxes
|
(195 | ) | 1,777 | 2,582 | 9,124 | |||||||||||
|
Net
(loss) income
|
$ | (1,143 | ) | $ | 1,831 | $ | 1,470 | $ | 10,451 | |||||||
|
Basic
(loss) earnings per share
|
$ | (0.19 | ) | $ | 0.29 | $ | 0.24 | $ | 1.59 | |||||||
|
Diluted
(loss) earnings per share
|
$ | (0.19 | ) | $ | 0.28 | $ | 0.24 | $ | 1.57 | |||||||
|
Cash
dividends per share
|
$ | 0.10 | $ | 0.18 | $ | 0.64 | $ | 0.69 | ||||||||
Page 12 of 17
| |
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Consolidated
Statements of Financial Condition – Sequential Quarter
(Unaudited
– Dollars In Thousands)
|
||||||||
|
June
30,
2008
|
March
31,
2008
|
|||||||
|
Assets
|
||||||||
|
Cash
and due from banks
|
$ | 12,614 | $ | 12,807 | ||||
|
Federal
funds sold
|
2,500 | 4,625 | ||||||
|
Cash
and cash equivalents
|
15,114 | 17,432 | ||||||
|
Investment
securities – available for sale at fair value
|
153,102 | 168,588 | ||||||
|
Loans
held for investment, net of allowance for loan losses of
|
||||||||
|
$19,402
and $16,742, respectively
|
1,368,633 | 1,406,785 | ||||||
|
Loans
held for sale, at lower of cost or market
|
28,461 | 18,841 | ||||||
|
Accrued
interest receivable
|
7,273 | 7,336 | ||||||
|
Real
estate owned, net
|
9,355 | 7,717 | ||||||
|
FHLB
– San Francisco stock
|
32,125 | 31,680 | ||||||
|
Premises
and equipment, net
|
6,513 | 6,585 | ||||||
|
Prepaid
expenses and other assets
|
12,095 | 9,335 | ||||||
|
Total
assets
|
$ | 1,632,671 | $ | 1,674,299 | ||||
|
Liabilities
and Stockholders’ Equity
|
||||||||
|
Liabilities:
|
||||||||
|
Non
interest-bearing deposits
|
$ | 48,056 | $ | 46,884 | ||||
|
Interest-bearing
deposits
|
964,354 | 985,283 | ||||||
|
Total
deposits
|
1,012,410 | 1,032,167 | ||||||
|
Borrowings
|
479,335 | 499,744 | ||||||
|
Accounts
payable, accrued interest and other liabilities
|
16,336 | 15,215 | ||||||
|
Total
liabilities
|
1,508,081 | 1,547,126 | ||||||
|
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 12,435,865 shares issued, respectively;
6,207,719
and 6,207,719 shares outstanding, respectively)
|
||||||||
| 124 | 124 | |||||||
|
Additional
paid-in capital
|
75,164 | 74,763 | ||||||
|
Retained
earnings
|
143,663 | 145,427 | ||||||
|
Treasury
stock at cost (6,228,146 and 6,228,146 shares,
respectively)
|
||||||||
| (94,798 | ) | (94,798 | ) | |||||
|
Unearned
stock compensation
|
(102 | ) | (181 | ) | ||||
|
Accumulated
other comprehensive income, net of tax
|
539 | 1,838 | ||||||
|
Total
stockholders’ equity
|
124,590 | 127,173 | ||||||
|
Total
liabilities and stockholders’ equity
|
$ | 1,632,671 | $ | 1,674,299 | ||||
Page 13 of 17
| |
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Consolidated
Statements of Operations – Sequential Quarter
(Unaudited
– In Thousands, Except Earnings Per Share)
|
||||||||
|
Quarter
Ended
|
||||||||
|
June
30,
|
March
31,
|
|||||||
|
2008
|
2008
|
|||||||
|
Interest
income:
|
||||||||
|
Loans
receivable, net
|
$ | 21,481 | $ | 21,645 | ||||
|
Investment
securities
|
1,962 | 1,959 | ||||||
|
FHLB
– San Francisco stock
|
502 | 419 | ||||||
|
Interest-earning
deposits
|
2 | 4 | ||||||
|
Total
interest income
|
23,947 | 24,027 | ||||||
|
Interest
expense:
|
||||||||
|
Checking
and money market deposits
|
332 | 351 | ||||||
|
Savings
deposits
|
580 | 725 | ||||||
|
Time
deposits
|
6,734 | 7,393 | ||||||
|
Borrowings
|
4,525 | 4,839 | ||||||
|
Total
interest expense
|
12,171 | 13,308 | ||||||
|
Net
interest income, before provision for loan losses
|
11,776 | 10,719 | ||||||
|
Provision
for loan losses
|
5,803 | 3,150 | ||||||
|
Net
interest income, after provision for loan losses
|
5,973 | 7,569 | ||||||
|
Non-interest
income:
|
||||||||
|
Loan
servicing and other fees
|
422 | 350 | ||||||
|
(Loss)
gain on sale of loans, net
|
(216 | ) | 306 | |||||
|
Deposit
account fees
|
743 | 768 | ||||||
|
Net
loss on sale of real estate
|
(462 | ) | (302 | ) | ||||
|
Other
|
(60 | ) | 482 | |||||
|
Total
non-interest income
|
427 | 1,604 | ||||||
|
Non-interest
expense:
|
||||||||
|
Salaries
and employee benefits
|
4,491 | 4,816 | ||||||
|
Premises
and occupancy
|
647 | 645 | ||||||
|
Equipment
|
382 | 379 | ||||||
|
Professional
expenses
|
457 | 323 | ||||||
|
Sales
and marketing expenses
|
109 | 112 | ||||||
|
Other
|
1,652 | 1,024 | ||||||
|
Total
non-interest expense
|
7,738 | 7,299 | ||||||
|
(Loss)
income before taxes
|
(1,338 | ) | 1,874 | |||||
|
(Benefit)
provision for income taxes
|
(195 | ) | 917 | |||||
|
Net
(loss) income
|
$ | (1,143 | ) | $ | 957 | |||
|
Basic
(loss) earnings per share
|
$ | (0.19 | ) | $ | 0.16 | |||
|
Diluted
(loss) earnings per share
|
$ | (0.19 | ) | $ | 0.15 | |||
|
Cash
dividends per share
|
$ | 0.10 | $ | 0.18 | ||||
Page 14 of 17
| |
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Financial
Highlights
(Unaudited
- Dollars in Thousands, Except Share Information )
|
||||||||||||||||
|
Quarter
Ended
June
30,
|
Twelve
Months Ended
June
30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
SELECTED
FINANCIAL RATIOS:
|
||||||||||||||||
|
Return
on average assets
|
(0.28 | )% | 0.43 | % | 0.09 | % | 0.61 | % | ||||||||
|
Return
on average stockholders’ equity
|
(3.62 | )% | 5.59 | % | 1.15 | % | 7.77 | % | ||||||||
|
Stockholders’
equity to total assets
|
7.63 | % | 7.81 | % | 7.63 | % | 7.81 | % | ||||||||
|
Net
interest spread
|
2.70 | % | 2.08 | % | 2.36 | % | 2.23 | % | ||||||||
|
Net
interest margin
|
2.93 | % | 2.37 | % | 2.61 | % | 2.51 | % | ||||||||
|
Efficiency
ratio
|
63.41 | % | 74.14 | % | 64.38 | % | 58.42 | % | ||||||||
|
Average
interest-earning assets to average
|
||||||||||||||||
|
interest-bearing
liabilities
|
107.14 | % | 107.41 | % | 107.35 | % | 107.72 | % | ||||||||
|
SELECTED
FINANCIAL DATA:
|
||||||||||||||||
|
Basic
(loss) earnings per share
|
$ | (0.19 | ) | $ | 0.29 | $ | 0.24 | $ | 1.59 | |||||||
|
Diluted
(loss) earnings per share
|
$ | (0.19 | ) | $ | 0.28 | $ | 0.24 | $ | 1.57 | |||||||
|
Book
value per share
|
$ | 20.07 | $ | 20.20 | $ | 20.07 | $ | 20.20 | ||||||||
|
Shares
used for basic EPS computation
|
6,167,125 | 6,341,326 | 6,171,480 | 6,557,550 | ||||||||||||
|
Shares
used for diluted EPS computation
|
6,167,125 | 6,436,816 | 6,214,425 | 6,675,717 | ||||||||||||
|
Total
shares issued and outstanding
|
6,207,719 | 6,376,945 | 6,207,719 | 6,376,945 | ||||||||||||
|
ASSET
QUALITY RATIOS AND DELINQUENT LOANS:
|
||||||||||||||||
|
Non-performing
loans to loans held for investment, net
|
1.73 | % | 1.18 | % | ||||||||||||
|
Non-performing
assets to total assets
|
2.02 | % | 1.20 | % | ||||||||||||
|
Allowance
for loan losses to non-performing loans
|
81.90 | % | 93.32 | % | ||||||||||||
|
Allowance
for loan losses to gross loans held for
|
||||||||||||||||
|
investment
|
1.40 | % | 1.09 | % | ||||||||||||
|
Net
charge-offs to average loans receivable
|
0.89 | % | 0.11 | % | ||||||||||||
|
Non-performing
loans
|
$ | 29,881 | $ | 19,417 | ||||||||||||
|
Loans
30 to 89 days delinquent
|
$ | 7,367 | $ | 1,493 | ||||||||||||
|
REGULATORY
CAPITAL RATIOS:
|
||||||||||||||||
|
Tangible
equity ratio
|
7.23 | % | 7.62 | % | ||||||||||||
|
Core
capital ratio
|
7.23 | % | 7.62 | % | ||||||||||||
|
Total
risk-based capital ratio
|
12.30 | % | 12.49 | % | ||||||||||||
|
Tier
1 risk-based capital ratio
|
11.05 | % | 11.39 | % | ||||||||||||
|
LOANS
ORIGINATED FOR SALE:
|
||||||||||||||||
|
Retail
originations
|
$ | 40,145 | $ | 59,254 | $ | 135,470 | $ | 296,356 | ||||||||
|
Wholesale
originations
|
73,809 | 129,239 | 263,256 | 830,260 | ||||||||||||
|
Total
loans originated for sale
|
$ | 113,954 | $ | 188,493 | $ | 398,726 | $ | 1,126,616 | ||||||||
|
LOANS
SOLD:
|
||||||||||||||||
|
Servicing
released
|
$ | 104,291 | $ | 220,077 | $ | 368,925 | $ | 1,119,330 | ||||||||
|
Servicing
retained
|
- | 1,479 | 4,534 | 4,108 | ||||||||||||
|
Total
loans sold
|
$ | 104,291 | $ | 221,556 | $ | 373,459 | $ | 1,123,438 | ||||||||
Page 15 of 17
| |
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Financial
Highlights
(Unaudited)
|
|||||||||
|
(Dollars
in Thousands)
|
As of June 30,
|
||||||||
|
2008
|
2007
|
||||||||
|
INVESTMENT
SECURITIES:
|
Balance
|
Rate
|
Balance
|
Rate
|
|||||
|
Held
to maturity:
|
|||||||||
|
U.S.
government sponsored enterprise debt securities
|
$ -
|
-
|
%
|
$ 19,000
|
3.15
|
%
|
|||
|
U.S. government agency mortgage-backed securities (“MBS”)
|
-
|
-
|
1
|
8.81
|
|||||
|
Total
investment securities held to maturity
|
-
|
-
|
19,001
|
3.15
|
|||||
|
Available
for sale (at fair value):
|
|||||||||
|
U.S.
government sponsored enterprise debt securities
|
5,111
|
4.00
|
9,683
|
3.20
|
|||||
|
U.S.
government agency MBS
|
90,938
|
5.09
|
57,539
|
4.99
|
|||||
|
U.S.
government sponsored enterprise MBS
|
54,254
|
5.38
|
59,066
|
5.05
|
|||||
|
Private
issue collateralized mortgage obligations
|
2,225
|
4.77
|
4,641
|
4.28
|
|||||
|
Freddie
Mac common stock
|
98
|
364
|
|||||||
|
Fannie
Mae common stock
|
8
|
26
|
|||||||
|
Other
common stock
|
468
|
523
|
|||||||
|
Total
investment securities available for sale
|
153,102
|
5.13
|
131,842
|
4.83
|
|||||
|
Total
investment securities
|
$
153,102
|
5.13
|
%
|
$
150,843
|
4.61
|
%
|
|||
|
LOANS
HELD FOR INVESTMENT:
|
|||||||||
|
Single-family
(1 to 4 units)
|
$ 808,836
|
5.95
|
%
|
$ 827,656
|
5.89
|
%
|
|||
|
Multi-family
(5 or more units)
|
399,733
|
6.45
|
330,231
|
6.67
|
|||||
|
Commercial
real estate
|
136,176
|
6.95
|
147,545
|
7.10
|
|||||
|
Construction
|
32,907
|
8.59
|
60,571
|
9.22
|
|||||
|
Commercial
business
|
8,633
|
6.87
|
10,054
|
8.59
|
|||||
|
Consumer
|
625
|
9.84
|
509
|
12.15
|
|||||
|
Other
|
3,728
|
8.67
|
9,307
|
10.03
|
|||||
|
Total
loans held for investment
|
1,390,638
|
6.27
|
%
|
1,385,873
|
6.40
|
%
|
|||
|
Undisbursed
loan funds
|
(7,864
|
)
|
(25,484
|
)
|
|||||
|
Deferred
loan costs
|
5,261
|
5,152
|
|||||||
|
Allowance
for loan losses
|
(19,402
|
)
|
(14,845
|
)
|
|||||
|
Total
loans held for investment, net
|
$1,368,633
|
$1,350,696
|
|||||||
|
Purchased
loans serviced by others included above
|
$ 146,514
|
6.56
|
%
|
$ 159,787
|
6.89
|
%
|
|||
|
DEPOSITS:
|
|||||||||
|
Checking
accounts – non interest-bearing
|
$
48,056
|
-
|
%
|
$
45,112
|
-
|
%
|
|||
|
Checking
accounts – interest-bearing
|
122,065
|
0.63
|
122,588
|
0.76
|
|||||
|
Savings
accounts
|
144,883
|
1.61
|
153,036
|
2.04
|
|||||
|
Money
market accounts
|
33,675
|
1.93
|
32,054
|
2.43
|
|||||
|
Time
deposits
|
663,731
|
3.93
|
648,607
|
4.85
|
|||||
|
Total
deposits
|
$1,012,410
|
2.95
|
%
|
$1,001,397
|
3.62
|
%
|
|||
|
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 17
| |
|
|
PROVIDENT
FINANCIAL HOLDINGS, INC.
Financial
Highlights
(Unaudited
– Dollars in Thousands)
|
|||||||||
|
As
of June 30,
|
|||||||||
|
2008
|
2007
|
||||||||
|
Balance
|
Rate
|
Balance
|
Rate
|
||||||
|
BORROWINGS:
|
|||||||||
|
Overnight
|
$ 32,600
|
3.12
|
%
|
$ 1,000
|
5.48
|
%
|
|||
|
Six
months or less
|
95,000
|
2.55
|
173,000
|
4.81
|
|||||
|
Over
six to twelve months
|
15,000
|
3.33
|
72,000
|
4.14
|
|||||
|
Over
one to two years
|
112,000
|
3.87
|
30,000
|
3.45
|
|||||
|
Over
two to three years
|
128,000
|
4.62
|
72,000
|
4.02
|
|||||
|
Over
three to four years
|
65,000
|
4.41
|
88,000
|
5.23
|
|||||
|
Over
four to five years
|
20,000
|
3.39
|
65,000
|
4.41
|
|||||
|
Over
five years
|
11,735
|
4.64
|
1,774
|
6.37
|
|||||
|
Total
borrowings
|
$
479,335
|
3.81
|
%
|
$
502,774
|
4.55
|
%
|
|||
|
Quarter
Ended
|
Twelve
Months Ended
|
|||||||
|
June
30,
|
June
30,
|
|||||||
|
2008
|
2007
|
2008
|
2007
|
|||||
|
SELECTED
AVERAGE BALANCE SHEETS:
|
Balance
|
Balance
|
Balance
|
Balance
|
||||
|
Loans
receivable, net (1)
|
$1,414,780
|
$1,456,518
|
$1,397,877
|
$1,446,781
|
||||
|
Investment
securities
|
160,612
|
161,421
|
155,509
|
175,439
|
||||
|
FHLB
– San Francisco stock
|
31,910
|
43,684
|
32,271
|
41,588
|
||||
|
Interest-earning
deposits
|
513
|
1,439
|
588
|
1,339
|
||||
|
Total
interest-earning assets
|
$1,607,815
|
$1,663,062
|
$1,586,245
|
$1,665,147
|
||||
|
Deposits
|
$1,022,007
|
$ 989,641
|
$1,012,138
|
$ 946,499
|
||||
|
Borrowings
|
478,660
|
558,644
|
465,536
|
599,286
|
||||
|
Total
interest-bearing liabilities
|
$1,500,667
|
$1,548,285
|
$1,477,674
|
$1,545,785
|
||||
|
Quarter
Ended
|
Twelve
Months Ended
|
|||||||
|
June
30,
|
June
30,
|
|||||||
|
2008
|
2007
|
2008
|
2007
|
|||||
|
Yield/Cost
|
Yield/Cost
|
Yield/Cost
|
Yield/Cost
|
|||||
|
Loans
receivable, net (1)
|
6.07%
|
6.27%
|
6.18%
|
6.33%
|
||||
|
Investment
securities
|
4.89%
|
4.38%
|
4.87%
|
4.07%
|
||||
|
FHLB
– San Francisco stock
|
6.29%
|
4.77%
|
5.65%
|
5.35%
|
||||
|
Interest-earning
deposits
|
1.56%
|
5.28%
|
3.40%
|
5.15%
|
||||
|
Total
interest-earning assets
|
5.96%
|
6.05%
|
6.04%
|
6.06%
|
||||
|
Deposits
|
3.01%
|
3.58%
|
3.42%
|
3.30%
|
||||
|
Borrowings
|
3.80%
|
4.64%
|
4.24%
|
4.68%
|
||||
|
Total
interest-bearing liabilities
|
3.26%
|
3.97%
|
3.68%
|
3.83%
|
||||
|
(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 17 of 17