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

September 13, 2011 | About:
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10qk

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Provident Financial Holdings Inc. (PROV) filed Annual Report for the period ended 2011-06-30.

Provident Financial Holdings Inc. has a market cap of $92.3 million; its shares were traded at around $8.08 with a P/E ratio of 7 and P/S ratio of 1. The dividend yield of Provident Financial Holdings Inc. stocks is 1.5%.

Highlight of Business Operations:

Provident Financial Holdings, Inc. (the “Corporation”), a Delaware corporation, was organized in January 1996 for the purpose of becoming the holding company of Provident Savings Bank, F.S.B. (the “Bank”) 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 June 30, 2011, the Corporation had consolidated total assets of $1.3 billion, total deposits of $945.8 million and stockholders equity of $141.7 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 Annual Report on Form 10-K (“Form 10-K”), including financial statements and related data, relates primarily to the Bank and its subsidiaries.

On June 22, 2006, the Bank established the Provident Savings Bank Charitable Foundation (“Foundation”) in order to further its commitment to the local community. The specific purpose of the Foundation is to promote and provide for the betterment of youth, education, housing and the arts in the Bank s primary market areas of Riverside and San Bernardino Counties. The Foundation was funded with a $500,000 charitable contribution made by the Bank in the fourth quarter of fiscal 2006. The Bank has contributed $40,000 annually to the Foundation in fiscal 2011, 2010 and 2009.

An estimated 38,975 new and resale houses and condos were sold statewide in June 2011 as compared to 43,964 sales in June 2010. California sales for the month of June have varied from a low of 35,202 in June 2008 to a high of 76,669 in June 2004, while the monthly average is 49,929. The median price paid for a home in California in June 2011 was $253,000, down 6.3 percent from $270,000 in June 2010. The year-over-year decrease was the ninth in a row after 11 months of increases. The statewide median s low point in the current cycle was $221,000 in April 2009, while the peak was $484,000 in early 2007 (Source: DataQuick; DQNews.com – July 14, 2011 News Release).

General. The lending activity of the Bank is predominately comprised of the origination of first mortgage loans secured by single-family residential properties to be held for sale and, to a lesser extent, to be held for investment. The Bank also originates multi-family and commercial real estate loans and, to a lesser extent, construction, commercial business, consumer and other mortgage loans to be held for investment. Due to the decline in real estate values and deterioration of credit quality, particularly for single-family loans, and the Bank s short-term strategy to improve liquidity and preserve capital, the Bank has reduced new loans held for investment, particularly single-family loans. The Bank s net loans held for investment were $881.6 million at June 30, 2011, representing approximately 67.1% of consolidated total assets. This compares to $1.01 billion, or 71.9% of consolidated total assets, at June 30, 2010.

At June 30, 2011, the maximum amount that the Bank could have loaned to any one borrower and the borrower s related entities under applicable regulations was $23.1 million, or 15% of the Bank s unimpaired capital and surplus. At June 30, 2011, the Bank had no loans or group of loans to related borrowers with outstanding balances in excess of this amount. The Bank s five largest lending relationships at June 30, 2011 consists of: seven multi-family loans totaling $5.0 million and two commercial real estate loans totaling $2.1 million to one group of borrowers; one commercial real estate loan totaling $6.3 million to one group of borrowers; two commercial real estate loans totaling $5.7 million to one group of borrowers, two commercial real estate loans totaling $5.6 million to one group of borrowers; and three multi-family loans totaling $5.3 million to one group of borrowers. The collateral properties of these loans are located in Southern California. At June 30, 2011, all of these loans were performing in accordance with their repayment terms, although one commercial real estate loan for $2.9 million was classified by the Bank as special mention.

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