Provident Financial Holdings (PROV) AI Stock Analysis

• Rating: 70 Outperform
• Price Target: ―

Provident Financial Holdings exhibits strong financial stability with a debt-free balance sheet and healthy cash flow, contributing positively to its stock score. The stock shows short-term bullish momentum in technical analysis, but caution is advised due to potential overbought conditions. While the valuation is reasonable with a solid dividend yield, challenges from economic uncertainty and increased expenses are notable risks. The earnings call and recent corporate events provide optimism but highlight areas needing improvement, such as loan origination and cost management.

Provident Financial Holdings Business Overview & Revenue Model

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.

How the Company Makes Money

Provident Financial Holdings, Inc. generates revenue primarily through the interest income earned from its loan portfolio, which includes residential mortgage loans, commercial real estate loans, and consumer loans. Additionally, the company earns non-interest income from fees associated with deposit accounts and loan servicing. Provident also engages in investment activities, generating income from its securities portfolio. The bank's earnings are influenced by interest rate fluctuations, loan demand, and economic conditions in its service area.

Provident Financial Holdings Financial Statement Overview

Summary

Provident Financial Holdings demonstrates strong financial health with stable revenue growth and a debt-free balance sheet in the TTM period. Profit margins and return on equity have shown some weaknesses, which could impact future profitability. However, the company maintains strong cash flow management, ensuring liquidity and operational flexibility.

Income Statement

The company has shown consistent revenue growth over the years with a notable increase in the TTM period. Gross profit margins are strong at 100% due to the absence of cost of goods sold, indicating a service-oriented revenue stream. However, net profit margins have decreased in the TTM period to 11.46%, and there's a decline in EBIT and EBITDA margins, suggesting rising operational costs or other expenses impacting profitability.

Balance Sheet

Provident Financial Holdings maintains a conservative balance sheet with zero total debt in the TTM period, reducing financial risk. The equity ratio is relatively stable, contributing positively to financial health. However, there is a slight decline in return on equity to 4.84% in the TTM period, reflecting lower profitability relative to shareholder equity.

Cash Flow

The company shows a positive free cash flow in the TTM period, with a significant decrease in capital expenditures, enhancing cash reserves. The operating cash flow is robust compared to net income, although the free cash flow growth rate is fluctuating, indicating potential volatility in cash generation.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
49.02M	38.86M	41.06M	36.31M	35.21M	40.92M
	Gross Profit
44.61M	38.86M	41.06M	36.31M	35.21M	40.92M
	EBIT
25.33M	10.39M	12.42M	15.99M	10.19M	10.90M
	EBITDA
6.06M	0.00	15.60M	17.71M	16.45M	14.29M
	Net Income Common Stockholders
6.22M	7.35M	8.59M	9.09M	7.56M	7.69M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
164.43M	51.38M	68.00M	26.09M	73.86M	120.75M
	Total Assets
1.25B	1.27B	1.33B	1.19B	1.18B	1.18B
	Total Debt
245.50M	238.50M	235.01M	85.00M	100.98M	141.05M
	Net Debt
199.96M	187.12M	169.16M	61.59M	30.71M	25.01M
	Total Liabilities
1.13B	1.14B	1.20B	1.06B	1.06B	1.05B
	Stockholders Equity
128.63M	129.94M	129.69M	128.65M	127.28M	123.98M
Cash Flow		Free Cash Flow
4.60M	4.10M	15.58M	11.63M	11.35M	7.72M
	Operating Cash Flow
5.11M	5.68M	16.32M	11.79M	11.57M	7.95M
	Investing Cash Flow
42.82M	45.06M	-109.90M	-51.75M	-55.87M	-48.91M
	Financing Cash Flow
-49.27M	-65.22M	136.01M	-6.90M	-1.47M	86.36M

Provident Financial Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 15.05
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PROV, the sentiment is Positive. The current price of 15.05 is above the 20-day moving average (MA) of 15.03, above the 50-day MA of 14.44, and above the 200-day MA of 14.70, indicating a bullish trend. The MACD of 0.25 indicates Negative momentum. The RSI at 53.07 is Neutral, neither overbought nor oversold. The STOCH value of 41.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PROV.

Provident Financial Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PROV	70 Outperform	$102.63M	16.05	5.09%	3.61%	5.62%	-5.99%
FGBI	66 Neutral	$118.44M	69.83	1.58%	2.83%	14.50%	-73.50%
Sector *	64 Neutral	$12.78B	9.87	7.67%	17015.06%	12.34%	-5.99%
PBHC	54 Neutral	$93.53M	31.55	2.30%	2.63%	11.12%	―
FNWB	53 Neutral	$90.82M	―	-10.46%	2.91%	10.31%	-557.61%
WMPN	53 Neutral	$113.45M	―	-0.81%	0.97%	2.25%	-261.40%
BSBK	41 Neutral	$91.17M	―	-0.73%	―	-9.96%	-23.54%

Provident Financial Holdings Corporate Events

Provident Financial Reports Strong Q3 2025 Results

On April 28, 2025, Provident Financial Holdings announced its financial results for the third quarter of fiscal year 2025, ending March 31, 2025. The company reported a significant increase in net income to $1.86 million, up 113% from the previous quarter and 24% from the same quarter last year. This growth was driven by a rise in net interest income and a recovery of credit losses. The company also saw improvements in its net interest margin and maintained strong credit quality. Despite a decrease in net income for the nine months ending March 31, 2025, due to higher non-interest expenses, the company continues to actively engage in stock repurchase plans and maintain its quarterly cash dividend.

Spark’s Take on PROV Stock

According to Spark, TipRanks’ AI Analyst, PROV is a Neutral.

Provident Financial Holdings exhibits strong financial health with stable growth and a debt-free balance sheet, but faces challenges with decreased net income and increased credit loss provisions. While technical analysis shows mixed signals, the valuation remains attractive with a reasonable P/E ratio and a solid dividend yield. Despite recent earnings call optimism, the significant drop in net income reported as a corporate event tempers the overall positive outlook.

To see Spark’s full report on PROV stock, click here.

Provident Financial Holdings CFO Resignation Announcement

Provident Financial Holdings announced the resignation of TamHao B. Nguyen, Senior Vice President, Chief Financial Officer, and Corporate Secretary, effective February 21, 2025, to pursue another opportunity. Nguyen’s departure was amicable, and a search for her successor is underway, with Haryanto ‘Lee’ Sunarto stepping in as Interim CFO from February 22, 2025.