Provident Financial Holdings, Inc. (NASDAQ:PROV) Q2 2020 Earnings Conference Call - Final Transcript

Jan 28, 2020 • 12:00 pm ET


Provident Financial Holdings, Inc. (NASDAQ:PROV) Q2 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by and welcome to the Provident Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, today's call is being recorded.

I will now turn the call over to your host, Mr. Blunden. Please go ahead, sir.

Craig G. Blunden

Thank you, Kevin and good morning everyone. This is Craig Blunden, Chairman and CEO of Provident Financial Holdings, and on the call with me is Donavon Ternes, our President, Chief Operating and Chief Financial Officer. Before we begin, I have a brief administrative item to address.

Our presentation today discusses the company's business outlook and will include forward-looking statements. Those statements include descriptions of management's plans, objectives or goals for future operations, products or services, forecast of financial or other performance measures and statements about the company's general outlook for economic and business conditions. We also may make forward-looking statements during the question-and-answer period following management's presentation. These forward-looking statements are subject to a number of risks and uncertainties and actual results may differ materially from those discussed today.

Information on the risk factors could cause actual results to differ from any forward-looking statement is available from the earnings release that was distributed yesterday from the Annual Report on Form 10-K for the year-ended of June 30, 2019 and from the Form 10-Qs, and other SEC filings that are filed subsequent to the Form 10-K. Forward-looking statements are effective only as of date they are made and the company assumes no obligation to update this information.

To begin with, thank you for participating in our call. I hope that each of you has had an opportunity to review our earnings release, which describes our second quarter results. In the most recent quarter, we originated and purchases -- purchased $81.6 million of loans held for investment, a decrease from the $93.4 million in the prior sequential quarter. During the quarter, we also experienced $65.2 million of loan principal payments and payoffs, which is up from the $50.8 million in the September 2019 quarter and still tempering the growth rate of loans held for investment.

For the three months ended December 31, 2019 loans held for investment increased by approximately 2% in comparison to September 30, 2019 what's growth in single-family and construction loans, but small declines in commercial real estate and multifamily loans. Competition for new loan production remains aggressive but we were successful in augmenting our loan origination activity this quarter with single-family and multi-family loan purchases. We're very pleased with credit quality and you will note that early-stage delinquency balances were just $986,000 at December 31, 2019.

In addition, non-performing assets remained at very low levels and are now just $3.4 million, which is down from $6.1 million at December 31, 2018, a 43% decline in the course of the year. We recorded a small $22,000 negative provision in December 2019 quarter