Provident Financial Holdings, Inc. (NASDAQ:PROV) Q4 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 12:00 pm ET


Provident Financial Holdings, Inc. (NASDAQ:PROV) Q4 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the Provident Financial Holdings Fourth Quarter Earnings Conference Call. [Operator Instructions].

I would now like to turn the conference over to our host, Chairman and CEO, Mr. Craig Blunden. Please go ahead, sir.

Craig Blunden

Thank you. 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 that 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 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 the date that they're made, 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 fourth quarter and fiscal year results. In the most recent quarter, we originated and purchased $44.2 million of loans held for investment, an increase from the $28.8 million in the prior sequential quarter.

During the quarter, we also experienced $56.5 million of loan principal payments and payoffs, which is up slightly from the $55.7 million in the March 2020 quarter and still tempering the growth rate of loans held for investment. In the June 2020 quarter, we found it a bit easier to originate purchase loans as the quarter progressed as mortgage markets normalized to some degree. However, we're still cautious regarding single-family loan purchase packages, particularly season production because it is difficult to complete due diligence on individual loans consistent with our underwriting requirements.

For the three months ended June 30, 2020, loans held for investment decreased by approximately 1% in comparison to the March 31, 2020, with declines in single-family and commercial real estate categories, partly offset by growth in the multifamily, construction and other loan categories.

New loan production seems to improve from California lenders from the March quarter because of many of the pandemic operating constraints have been resolved. Current credit quality is holding up well, and you will note that early-stage delinquency balances were just $219,000 at June 30, 2020.

In addition, nonperforming assets remain at very low levels,