Provident Financial Holdings Reports 24% Increase in Quarterly Net Income

Provident Financial Holdings, Inc. reported its financial results for the third quarter and nine months ended March 31, 2025, revealing a net income of $1.9 million, a 24% increase from $1.5 million in the same period last year. For the nine months, net income was $4.6 million, down 14% from $5.4 million in the prior year. The increase in quarterly net income was attributed to a recovery of credit losses of $391,000, contrasting with a provision for credit losses of $124,000 in the previous year, and a rise in net interest income by $653,000. However, the nine-month decline in net income was primarily due to a $1.8 million increase in non-interest expenses.

Total assets decreased by 1% to $1.26 billion as of March 31, 2025, from $1.27 billion at June 30, 2024. This decline was mainly due to a $16.6 million drop in investment securities, which fell to $115.3 million, while loans held for investment increased by $6 million to $1.06 billion. The growth in loans was driven by increases in single-family and commercial business loans, despite declines in multi-family and commercial real estate loans. The Corporation originated $93.3 million in loans during the first nine months of fiscal 2025, a significant increase from $56.9 million in the same period last year.

Deposits rose by $13 million, or 2%, to $901.3 million, largely due to new government deposits of $50.1 million. However, core deposits, which include noninterest-bearing and interest-bearing transaction accounts, decreased by $23.1 million, or 4%. The Corporation's total borrowings decreased by $22.9 million, or 10%, to $215.6 million, primarily due to scheduled payoffs. Stockholders' equity also saw a slight decline of $1 million to $128.9 million, influenced by cash dividends paid and stock repurchases, which were partially offset by net income.

In terms of operational metrics, the efficiency ratio for the third quarter was 77.64%, up from 76.20% in the previous year, indicating that non-interest expenses grew faster than total income. The return on average assets improved to 0.59% from 0.47%, while the return on average stockholders' equity increased to 5.71% from 4.57%. The Corporation's diluted earnings per share for the quarter were $0.28, a 27% increase from $0.22 in the same period last year.

Looking ahead, Provident Financial Holdings aims to enhance its community banking operations through moderate asset growth, focusing on expanding its lending portfolios while improving the composition of its deposit base. The Corporation remains committed to prudent risk management practices to navigate potential challenges, including fluctuations in the California real estate market and broader economic conditions.