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Provident Financial Holdings Inc. Reports Operating Results (10-Q)

February 09, 2011 | About:
10qk

10qk

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Provident Financial Holdings Inc. (PROV) filed Quarterly Report for the period ended 2010-12-31.

Provident Financial Holdings Inc. has a market cap of $87.9 million; its shares were traded at around $7.92 with a P/E ratio of 7.1 and P/S ratio of 0.9. The dividend yield of Provident Financial Holdings Inc. stocks is 0.5%.

Highlight of Business Operations:

Provident Financial Holdings, Inc., a Delaware corporation, was organized in January 1996 for the purpose of becoming the holding company of Provident Savings Bank, F.S.B. upon the Bank s conversion from a federal mutual to a federal stock savings bank (“Conversion”). The Conversion was completed on June 27, 1996. At December 31, 2010, the Corporation had total assets of $1.36 billion, total deposits of $926.6 million and total stockholders equity of $136.8 million. The Corporation has not engaged in any significant activity other than holding the stock of the Bank. Accordingly, the information set forth in this report, including financial statements and related data, relates primarily to the Bank and its subsidiaries.

Total assets decreased $41.3 million, or three percent, to $1.36 billion at December 31, 2010 from $1.40 billion at June 30, 2010. The decrease was primarily attributable to decreases in loans held for investment and loans held for sale, partly offset by an increase in cash and cash equivalents. The managed decline in total assets and the relatively high balance in cash and cash equivalents were consistent with the Corporation s strategy of deleveraging the balance sheet to improve capital ratios and to mitigate credit and liquidity risk.

Total cash and cash equivalents, primarily excess cash at the Federal Reserve Bank of San Francisco, increased $57.5 million, or 60 percent, to $153.7 million at December 31, 2010 from $96.2 million at June 30, 2010. The increase was primarily attributable to the decreases in loans held for investment and loans held for sale, partly offset by the decrease in borrowings.

Total investment securities decreased $3.9 million, or 11 percent, to $31.1 million at December 31, 2010 from $35.0 million at June 30, 2010. The decrease was primarily the result of the scheduled and accelerated principal payments on mortgage-backed securities. The Bank evaluates individual investment securities quarterly for other-than-temporary declines in market value. The Bank does not believe that there are any other-than-temporary impairments at December 31, 2010; therefore, no impairment losses have been recorded for the quarter and six months ended December 31, 2010. For a further analysis on investment securities, see Note 5 of the Notes to Unaudited Interim Condensed Consolidated Financial Statements on pages 11 to 12.

Loans held for investment decreased $74.1 million, or seven percent, to $932.2 million at December 31, 2010 from $1.01 billion at June 30, 2010. Total loan principal payments during the first six months of fiscal 2011 were $57.0 million, compared to $63.1 million during the comparable period in fiscal 2010. In addition, real estate owned acquired in the settlement of loans in the first six months of fiscal 2011 was $25.5 million, a two percent decline from $26.0 million in the same period last year. During the first six months of fiscal 2011, the Bank originated $679,000 of loans held for investment, consisting solely of multi-family and commercial real estate loans, compared to $1.7 million, primarily in commercial real estate loans, for the same period last year. The Bank did not purchase any loans to be held for investment in the first six months of fiscal 2011 and 2010, given the economic uncertainty of the current banking environment. The balance of preferred loans decreased six percent to $432.1 million at December 31, 2010, compared to $460.9 million at June 30, 2010, and represented 44.6 percent and 43.9 percent of loans held for investment at such dates, respectively. The balance of single-family loans held for investment decreased nine percent to $531.7 million at December 31, 2010, compared to $583.1 million at June 30, 2010, and

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