Provident Financial (PROV) investor relations material

Executive summary

• Net income for Q4 2026 rose 61% sequentially to $2.18 million, driven by credit loss recoveries and higher non-interest income, with pre-provision, pre-tax income up 27%.

• Net interest margin increased to 3.21%, supported by higher loan yields and lower liability costs, while non-interest income surged due to gains on equity investments.

• Credit quality remained strong, with non-performing assets at $505,000 (0.04% of total assets), down from $978,000 in the prior quarter, and no loans in early delinquency.

• The company focused on disciplined balance sheet growth, reducing FTE count to 158 from 163 a year ago.

• Asset quality improved, with no REO and non-performing assets decreasing 64% year-over-year.

Financial highlights

• Net interest margin for Q4 2026 was 3.21%, up 8 bps sequentially and 27 bps year-over-year.

• Net income for the quarter reached $2.2 million, with EPS at $0.35, and return on equity improved to 6.85%.

• Loans held for investment totaled $1.03 billion, and total deposits increased 2% to $910.4 million.

• Efficiency ratio improved to 73% in Q4 2026 from 78% a year ago.

• Allowance for credit losses on loans was $5.9 million, or 0.57% of gross loans at June 30, 2026.

Outlook and guidance

• Loan origination volume in the September 2026 quarter is expected at the upper end of the recent $29–46 million range, with continued moderation in prepayment activity.

• Approximately $133 million of loans will reprice in September 2026, with yields expected to rise by 79 bps to a weighted average of 7.10%.

• Management expects to further strengthen fundamentals in fiscal 2027, citing disciplined credit culture, strong capital position, and a more favorable interest rate environment.

• Deposit and wholesale funding costs are expected to stabilize or slightly increase due to competitive pressures and the current rate environment.

• Caution was noted regarding economic, regulatory, and market risks that could impact future results.