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

February 09, 2010 | About:
10qk

10qk

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Provident Financial Holdings Inc. (PROV) filed Quarterly Report for the period ended 2009-12-31.

Provident Financial Holdings Inc. has a market cap of $19.1 million; its shares were traded at around $3.07 with and P/S ratio of 0.2. The dividend yield of Provident Financial Holdings Inc. stocks is 1.3%. Provident Financial Holdings Inc. had an annual average earning growth of 14.1% over the past 10 years.
This is the annual revenues and earnings per share of PROV over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of PROV.


Highlight of Business Operations:

Loans held for investment decreased $96.1 million, or eight percent, to $1.07 billion at December 31, 2009 from $1.17 billion at June 30, 2009. Total loan principal payments during the first six months of fiscal 2010 were $70.9 million, compared to $89.7 million during the comparable period in fiscal 2009. During the first six months of fiscal 2010, the Bank originated $1.7 million of loans held for investment, primarily commercial real estate loans. The Bank did not purchase any loans to be held for investment in the first six months of fiscal 2010 and 2009, given the economic uncertainty of the current banking environment. The balance of preferred loans decreased to $482.5 million, or 43 percent of loans held for investment at December 31, 2009, as compared to $508.7 million, or 42 percent of loans held for investment at June 30, 2009. Purchased loans serviced by others at December 31, 2009 were $23.9 million, or two percent of loans held for investment, compared to $125.4 million, or 11 percent of loans held for investment at June 30, 2009. The decrease in the purchased loans serviced by others was primarily attributable to the Bank s decision in September 2009 to acquire approximately $95.3 million of loan servicing from one of its loan servicers who no longer met their contractual loan servicing covenants, resulting in a 25 basis point increase to the loan yield of those loans.

Total deposits decreased $52.5 million, or five percent, to $936.7 million at December 31, 2009 from $989.2 million at June 30, 2009. Time deposits declined $116.2 million to $520.7 million at December 31, 2009 from $636.9 million at June 30, 2009, while transaction accounts increased $63.6 million to $416.0 million at December 31, 2009 from $352.4 million at June 30, 2009. The decrease in time deposits was primarily attributable to the strategic decision to compete less aggressively on time deposit interest rates and the Bank s marketing strategy to promote transaction accounts.

For the Quarters Ended December 31, 2009 and 2008. Net interest income (before the provision for loan losses) decreased $664,000, or six percent, to $9.6 million for the quarter ended December 31, 2009 from $10.2 million in the comparable period in fiscal 2009 due primarily to a decline in average earning assets, partly offset by an increase in net interest margin. The average balance of earning assets decreased $108.8 million to $1.41 billion in the second quarter of fiscal 2010 from $1.52 billion in the comparable period of fiscal 2009. The net interest margin was 2.72 percent in the second quarter of fiscal 2010, up two basis points from 2.70 percent for the same period of fiscal 2009. The increase in the net interest margin during the second quarter of fiscal 2010 was primarily attributable to a decrease in the average cost of funds, which declined more than the average yield on earning assets.

For the Six Months Ended December 31, 2009 and 2008. Net interest income (before the provision for loan losses) decreased $1.8 million, or eight percent, to $19.7 million for the six months ended December 31, 2009 from $21.5 million in the comparable period in fiscal 2009 due primarily to declines in the net interest margin and average earning assets. The net interest margin was 2.70 percent in the first six months of fiscal 2010, down nine basis points from 2.79 percent for the same period of fiscal 2009. The decrease in the net interest margin during the first six months of fiscal 2010 was primarily attributable to a decrease in the average yield on earning assets which declined more than the average cost of funds. The average balance of earning assets decreased $86.0 million to $1.46 billion in the first six months of fiscal 2010 from $1.54 billion in the comparable period of fiscal 2009.

Interest income from investment securities decreased $1.3 million, or 74 percent, to $463,000 during the quarter ended December 31, 2009 from $1.8 million in the same quarter of fiscal 2009. This decrease was primarily a result of a decrease in the average balance and a decrease in average yield. The average balance of investment securities decreased $97.7 million, or 65 percent, to $51.6 million during the second quarter of fiscal 2010 from $149.3 million during the same quarter of fiscal 2009. The decrease in the average balance was primarily due to the sale of $65.3 million of investment securities for a net gain of $2.3 million as well as scheduled and accelerated principal payments on mortgage-backed securities. The average yield on investment securities decreased 124 basis points to 3.59 percent during the quarter ended December 31, 2009 from 4.83 percent during the quarter ended December 31, 2008. The decrease in the average yield of investment securities was primarily attributable to the sale of investment securities with a higher average yield, the repricing of mortgage-backed securities to lower interest rates and a higher net premium amortization ($38,000 in the second quarter of fiscal 2010 as compared to $24,000 in the comparable quarter of fiscal 2009). The higher net premium amortization was attributable to higher MBS principal payments with higher outstanding premiums during the quarter ended December 31, 2009 as compared to the same quarter last year. During the second quarter of fiscal 2010, the Bank did not purchase any investment securities, while $3.9 million of principal payments were received on mortgage-backed securities.

Interest income from investment securities decreased $2.1 million, or 57 percent, to $1.6 million during the six months ended December 31, 2009 from $3.7 million in the same period of fiscal 2009. This decrease was primarily a result of a decrease in the average balance and a decrease in average yield. The average balance of investment securities decreased $74.7 million, or 49 percent, to $77.3 million for the first six months of fiscal 2010 from $152.0 million in the same period of fiscal 2009. The decrease in the average balance was primarily due to the sale of $65.3

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