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1. Company Snapshot

1.a. Company Description

Provident Financial Holdings, Inc.operates as the holding company for Provident Savings Bank, F.S.B. that provides community banking services to consumers and small to mid-sized businesses in the Inland Empire region of Southern California.Its deposit products include checking, savings, and money market accounts, as well as time deposits; and loan portfolio consists of single-family, multi-family, commercial real estate, construction, mortgage, commercial business, and consumer loans.


The company also offers investment services comprising the sale of investment products, such as annuities and mutual funds; and trustee services for real estate transactions.It operates through 12 full-service banking offices in Riverside County and one full-service banking office in San Bernardino County.The company was founded in 1956 and is based in Riverside, California.

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1.b. Last Insights on PROV

Provident Financial Holdings' recent performance was driven by strong Q3 2025 earnings, with net income increasing 113% sequentially and 24% year-over-year to $1.86 million. The company's net interest margin expanded 11 basis points from the previous quarter to 3.02%, while loans held for investment grew 1% to $1.06 billion. Total deposits also increased 2% to $901.3 million, and the non-performing assets to total assets ratio decreased to 0.11%. Additionally, the company announced a quarterly cash dividend and appointed a new CFO, demonstrating its commitment to shareholder value and operational excellence.

1.c. Company Highlights

2. Provident Financial Holdings' Q1 FY2026 Earnings: A Closer Look

Provident Financial Holdings reported a net interest margin of 3% for the quarter, a 6 basis point increase from the previous quarter. The company's earnings per share (EPS) came in at $0.25, slightly below analyst estimates of $0.29. Revenue growth is expected to be around 2.5% next year, according to analyst estimates. The company's average cost of deposits increased to 1.34%, while the cost of borrowing also rose 1 basis point to 4.59%. The net interest income was not directly disclosed, but the increase in net interest margin is a positive sign.

Publication Date: Nov -19

📋 Highlights
  • Loan Originations:: $29.6 million originated (1% increase from prior quarter), but $34.5 million in principal payments (18% decline from June 2025).
  • Loan Pipeline Growth:: Single-family and multifamily pipelines up, projecting December 2025 origination volume between $28 million and $36 million.
  • Nonperforming Assets:: Increased to $1.9 million (Sept 2025) from $1.4 million (June 2025), signaling potential credit risks.
  • Credit Loss Recovery:: $626,000 recovery recorded in Q3 2025, offsetting prior losses.

Loan Origination and Pipeline

The company originated $29.6 million of loans held for investment, a 1% increase from the prior quarter. However, loan principal payments and payoffs were $34.5 million, an 18% decrease from the June 2025 quarter. The single-family and multifamily loan pipelines are moderately higher, suggesting loan origination volume in the December 2025 quarter will be within the range of recent quarters. As Donavon Ternes, President and CEO, noted, "Real estate investors have been cautious due to market uncertainties, but we've seen an increase in activity as mortgage interest rates have declined."

Asset Quality and Credit Losses

Nonperforming assets were $1.9 million at September 30, 2025, up from $1.4 million at June 30, 2025. The company recorded a $626,000 recovery of credit losses in the September 2025 quarter. The company's commercial real estate loans, particularly those secured by office buildings, continue to be monitored closely. The allowance for credit losses is expected to be impacted by changes in interest rates, as lower rates may lead to increased prepayments and a shorter estimated life of the loan portfolio.

Valuation and Outlook

Provident Financial Holdings trades at a Price-to-Tangible Book Value (P/TBV) of approximately 0.76, and a Dividend Yield of 3.73%. The company's Net Interest Margin (NIM) is a key metric to watch, given its impact on profitability. With the expected decline in interest rates, the company's loan origination volume and net interest income may be positively impacted. However, the elevated amount of prepayments in the loan portfolio may make it challenging to grow the portfolio meaningfully.

3. NewsRoom

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Provident Financial (NASDAQ:PROV) vs. WSFS Financial (NASDAQ:WSFS) Financial Comparison

Nov -29

Source: defenseworld.net

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Provident Financial Holdings, Inc. (PROV) Shareholder/Analyst Call Prepared Remarks Transcript

Nov -20

Source: seekingalpha.com

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Provident Financial Holdings, Inc. (PROV) Q1 2026 Earnings Call Transcript

Oct -29

Source: seekingalpha.com

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Provident Financial (PROV) Q1 Earnings: Taking a Look at Key Metrics Versus Estimates

Oct -28

Source: zacks.com

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Provident Financial (PROV) Misses Q1 Earnings and Revenue Estimates

Oct -28

Source: zacks.com

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Provident Financial Holdings Reports First Quarter of Fiscal 2026 Results

Oct -28

Source: globenewswire.com

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Provident Financial Holdings Announces Quarterly Cash Dividend

Oct -23

Source: globenewswire.com

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Reviewing First Savings Financial Group (NASDAQ:FSFG) and Provident Financial (NASDAQ:PROV)

Oct -23

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.77%)

6. Segments

Provident Bank

Expected Growth: 4.77%

Provident Bank's 4.77% growth is driven by strategic expansion into new markets, increased commercial lending, and a focus on digital banking. Additionally, the bank's strong risk management practices and efficient cost structure have contributed to its growth. Furthermore, Provident Financial Holdings, Inc.'s diversified revenue streams and solid capital position have enabled the bank to invest in growth initiatives.

7. Detailed Products

Consumer Loans

Provident Financial Holdings, Inc. offers consumer loans to individuals, providing them with access to credit for various personal needs.

Mortgage Loans

The company offers mortgage loans to individuals and families, enabling them to purchase or refinance their homes.

Home Equity Loans

Provident Financial Holdings, Inc. offers home equity loans, allowing homeowners to tap into the equity in their homes for various purposes.

Credit Insurance

The company offers credit insurance products, providing protection to borrowers in the event of unforeseen circumstances.

Other Financial Services

Provident Financial Holdings, Inc. offers a range of other financial services, including debt consolidation and financial planning.

8. Provident Financial Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Provident Financial Holdings, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's strong brand recognition and customer loyalty.

Bargaining Power Of Customers

Customers have a high bargaining power due to the availability of alternative financial services providers, which can lead to price sensitivity and potential customer churn.

Bargaining Power Of Suppliers

Provident Financial Holdings, Inc. has a diversified supplier base, which reduces the bargaining power of individual suppliers, and the company's scale of operations also gives it negotiating power.

Threat Of New Entrants

While there are barriers to entry in the financial services industry, new entrants can still disrupt the market, and Provident Financial Holdings, Inc. needs to stay innovative to maintain its competitive edge.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players, which leads to a high intensity of rivalry, and Provident Financial Holdings, Inc. needs to differentiate itself to stand out in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 64.44%
Debt Cost 5.54%
Equity Weight 35.56%
Equity Cost 5.91%
WACC 5.67%
Leverage 181.21%

11. Quality Control: Provident Financial Holdings, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

15.3$

Current Price

15.3$

Potential

-0.00%

Expected Cash-Flows