Provident Financial Holdings, Inc.

For the June 2026 quarter, Provident Financial reported loan originations of $46.4 million, up 5% from $44.2 million in the prior sequential quarter, and loan principal payments and payoffs of $43.5 million, down 16% from $52.1 million. Net interest margin rose 8 basis points sequentially to 3.21%, driven by a 7 basis point increase in the yield on interest-earning assets and a 4 basis point decrease in the cost of total interest-bearing liabilities. Cost of borrowings fell 7 basis points to 4.04%, while average deposit cost rose 3 basis points to 1.36%. Nonperforming assets were $505,000, or 4 basis points of total assets, down from $978,000 at March 31, 2026, and the allowance for credit losses was 57 basis points of gross loans held for investment, down from 58 basis points. The company recorded a $95,000 recovery of credit losses. Operating expenses were $7.7 million versus $7.6 million in the March quarter. Management said September 2026 quarter originations should stay at the upper end of the recent range of $29 million to $46 million, prepayments should continue to moderate, and NIM expansion should likely be driven by higher loan yields. It also highlighted about $133 million of loans repricing in the September quarter to a weighted-average rate of 7.10% from 6.31%, and $81.7 million of wholesale funding maturing at a 4.05% weighted-average rate that it expects to reprice at comparable or slightly higher costs.

Donavon Ternes framed the quarter as evidence that the company’s disciplined balance-sheet growth strategy is working: loan production improved, prepayments slowed, and the portfolio grew modestly. He emphasized that the bank is adjusting underwriting in some segments to support sustainable growth, while still prioritizing credit discipline. His tone was constructive and confident, pointing to a stable pipeline, improving loan yields, and strong capital levels that give flexibility to keep growing and returning capital.

Peter Fan did not speak in the transcript; management’s financial commentary came from the CEO and focused on margin, funding, capital, and asset quality. The call cited a 3.21% net interest margin, $7.7 million of operating expenses, a 57 basis point allowance for credit losses, and strong capital ratios above well-capitalized levels. Management also highlighted capital returns of approximately 90,000 shares repurchased for $1.5 million and $874,000 of cash dividends, totaling about 110% of quarterly net income.

Analysts focused mainly on deposit costs and loan yields. Management said deposit costs likely bottomed this cycle unless the Fed reverses course, and that deposit and wholesale funding costs may stabilize or move slightly higher because pricing remains competitive. On loan yields, management pointed to $133 million of repricing loans in the September quarter, with the weighted-average rate expected to rise 79 basis points to 7.10%, plus higher-rate new production; it said net interest margin should keep improving, though likely at a slower pace than in recent quarters.