Provident Financial Holdings (PROV) reported its QQ1 2026 results with revenue of $14.15 million and net income of $1.68 million, translating to an EPS of $0.26 (diluted $0.25). The quarter featured a modest uptick in net interest margin (NIM) to 3.00%, up 6 basis points sequentially from 2.94% in the June quarter, driven by a mix of higher-yielding new loan production and a favorable funding environment. The company continued to emphasize balance-sheet discipline, maintaining a normalized operating expense run rate of approximately $7.6–$7.7 million per quarter and signaling ongoing efficiency initiatives. Management highlighted a constructive rate backdrop as a driver for potential margin expansion into December 2025 and beyond, aided by expectations of wholesale funding repricing to lower costs.
Credit quality remained solid, with nonperforming assets at $1.9 million as of September 30, 2025, and only fully current delinquencies, reflecting prudent underwriting and borrower collateral characteristics. The allowance for credit losses to gross loans held for investment stood at 56 basis points at 9/30/2025, a modest improvement from 62 basis points at 6/30/2025, underscoring continued prudent risk management in a volatile rate environment. The bank repurchased ~67,000 shares and paid $921,000 in cash dividends in the September 2025 quarter, representing a capital-return cadence that remains a core aspect of the company’s strategy.
Looking ahead, management signaled a growth-focused but prudent stance: expect modest to moderate NIM expansion in the December quarter and the 2026 fiscal year, aided by anticipated rate relief and potential refinancings, while continuing to monitor prepayment dynamics and office CRE exposure. Overall, PROV remains well-capitalized with substantial liquidity, a lean cost structure, and a disciplined approach to balance-sheet growth, albeit with a relatively small revenue base and ongoing sensitivity to rate moves and prepayment activity.