Provident Financial Holdings, Inc. · NASDAQ:PROV
Provident Financial — IPO Roadshow (November 2009)
26 slides from Provident Financial's IPO roadshow presentation, Nov 30, 2009
Slide 1: Issuer Free Writing Prospectus
Filed Pursuant to Rule 433 Registration No. 333-162415 Issuer Free Writing Prospectus dated November 30, 2009 Relating to Preliminary Prospectus dated November 27, 2009
Slide 2: Follow-On Stock Offering
Follow – On Stock Offering Craig G. Blunden – Chairman, President and Chief Executive Officer Donavon P. Ternes – Chief Operating Officer and Chief Financial Officer November 2009 NASDAQ: PROV
Slide 3: Safe Harbor Statement
Safe Harbor Statement The Corporation has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus and other documents the issuer has filed with the SEC for more complete information a
Slide 4: Transaction Overview
Transaction Overview Issuer: Provident Financial Holdings, Inc. Ticker / Exchange: PROV / NASDAQ (GSM) Type of Security: Common Stock Transaction Size: $40.0 million Over-Allotment Option: 15% Use of Proceeds: Support capital needs of the Bank and its mortgage banking operation, opportunistic growth
Slide 5: Offering Objectives and Business Strategy
Offering Objectives and Business Strategy Strengthen current capital position in this challenging economic environment Enhance capital base to capture growth opportunities Capture business opportunities stemming from competitor and market dislocations Expand mortgage banking origination capacity and
Slide 6: Capital Position & Composition
Capital Position & Composition As of September 30, 2009 Stand-Alone Pro Forma¹ Tangible Common Equity / Tangible Assets 7.36% 9.64% Tangible Equity / Tangible Assets 7.36% 9.64% Well- Capitalized Core Capital Ratio 5.00% 7.03% 9.32% Tier 1 Risk-Based Ratio² 6.00% 11.89% 16.15% Total Risk-Based Ratio
Slide 7: Management Team
Management Team Named executive officer and director ownership as a group is 15.4% Years Fin. Services Past Name Position Age Experience Experience Has been with the Bank since 1974 and has held his current positions at Chairman, President and Craig G. Blunden 61 37 the Bank since 1991 and as Presid
Slide 8: Franchise Overview
Franchise Overview $1.5 billion in assets, as of 09/30/09 $932 million in deposits, as of 09/30/09 14 full-service branches Provident Bank Provident Bank Mortgage 53 years serving the community Full Service Offices: Wholesale Offices: Blythe Pleasanton Canyon Crest, Riverside Rancho Cucamonga Corona
Slide 9: Franchise Overview
Franchise Overview Largest independent community bank headquartered in Riverside County, California $1.5 billion in assets, as of 09/30/09 $932 million in deposits, as of 09/30/09 14 full-service branches Sixth largest deposit market share in the Riverside-San Bernardino RMA and second among communi
Slide 10: History of Strong Financial Performance
History of Strong Financial Performance Pre-Tax, Pre-Provision Earnings ($mm) Net Interest Margin $14,000 $13,156 3.05% 2.99% 3.00% $12,000 2.93% 2.95% 2.89% $10,000 2.90% 2.87% $9,110 $8,561 2.85% $8,000 2.80% $6,405 $5,326 2.75% $6,000 2.70% 2.69% $4,137 2.70% $4,000 2.65% 2.60% $2,000 2.55% $0 2.
Slide 11: Mortgage Banking Overview
Mortgage Banking Overview We have enjoyed growing demand for our mortgage banking products over the last several quarters The refinance market has augmented our business opportunities in the current rate environment Locked Pipeline - AFS ($mm) PBM Purchase vs. Refinance $400 100% $338 90% $350 80% 4
Slide 12: Attractive Market Demographics
Attractive Market Demographics The Riverside and San Bernardino county markets offer appealing growth and income demographics Five-Year Deposits Market Percent of Proj. Pop. Proj. HHI Market in Market Share Franchise Change Change County Branches Rank ($000) (%) (%) (%) (%) Riverside 13 6 902,867 4.
Slide 13: Deposit Composition
Deposit Composition Stable deposit base with reduced reliance on CD funding Declining cost of deposits Average cost of deposits for the quarter ended Sept. 30, 2009 was 1.93%, down from 2.85% for the quarter ended Sept. 30, 2008 Non Int.- Bearing Checking (Dollars in Thousands) 4.7% Int.-Bearing As
Slide 14: Credit Management Strategy
Credit Management Strategy We have worked to recognize the credit challenges presented by our markets and are actively working to improve our asset quality As of September 30, 2009, our loan loss reserve / loans held for investment stood at 4.97% Actions Results Aggressively build the loan loss rese
Slide 15: Loan Portfolio Composition
Loan Portfolio Composition Loan Composition¹ Loan Composition by Geography 1 2 3 Commercial Other real Construction business estate Other States 0.4% 0.7% 0.1% 1.2% Other CA Consumer 13.5% Commercial 0.1% Inland Empire real estate 26.4% 10.3% Multi-family mortgage Single-family 30.9% mortgage 57.5%
Slide 16: SCAP Analysis
SCAP Analysis The SCAP test estimates below are based on two-year cumulative loss assumptions established by indicative loss rates published by the Board of Governors of the Federal Reserve System (Dollars in Thousands) Loss Severity¹ Total Loss Balance as of 9/30/09 More More Loan Type ($) (%) Base
Slide 17: Strong Pro Forma Capital Position
Strong Pro Forma Capital Position (Dollars in Thousands) Capital Position Impact Baseline More Adverse Current Tangible Equity $108,903 $108,903 1 + Pre-Tax Pre-Provision Net Income for Two Years 67,994 67,994 + Excess Reserve (1.25% Threshold) 41,805 41,805 - SCAP Indicated Potential Cumulative Los
Slide 18: Credit Quality Overview
Credit Quality Overview (Dollars in Thousands) For the Quarter Ended, 9/30/09 6/30/09 3/31/09 12/31/08 9/30/08 Net charge-offs $4,638 $9,596 $6,316 $4,102 $3,111 % of average loans (annualized) 1.44% 2.81% 1.94% 1.24% 0.90% Allowance for loan losses $58,013 $45,445 $42,178 $34,953 $22,519 % of gross
Slide 19: Asset Quality
Asset Quality Non-Performing and Restructured Loans¹ Non-Performing Assets ($mm) Commercial Other real $120,000 Construction business Commercial estate 2.5% 1.3% real estate 1.4% $98,222 $100,000 3.6% Consumer $88,257 $80,998 0.0% Multi-family $80,000 mortgage $56,963 5.6% $60,000 $44,676 $40,000 $3
Slide 20: Migration Analysis
Migration Analysis (Dollars in Thousands) As of the Period Ended: September 30, 2009 June 30, 2009 March 31, 2009 December 31, 2008 September 30, 2008 30-89 Days Non-Performing 30-89 Days Non-Performing 30-89 Days Non-Performing 30-89 Days Non-Performing 30-89 Days Non-Performing Single-family mortg
Slide 21: Historical Credit Loss and Allowance Allocation
Historical Credit Loss and Allowance Allocation Management believes that the allowance can be allocated by category only on an approximate basis. The allocation of the allowance is based upon an asset classification matrix (Dollars in Thousands) For the Quarter Ended, For the Fiscal Year Ended, Allo
Slide 22: Loan Portfolio – Single-Family Mortgage
Loan Portfolio – Single-Family Mortgage As of 09/30/2009 Year of Origination 2001 & Prior 2002 2003 2004 2005 2006 2007 2008 YTD 2009 TOTAL Loan Balance (In Thousands) $11,416 $3,036 $24,799 $92,642 $211,138 $165,996 $106,142 $47,786 $1,473 $664,428 Weighted Avg. LTV (1) 50% 65% 71% 76% 72% 70% 73%
Slide 23: Loan Portfolio – Multi-Family
Loan Portfolio – Multi-Family As of 09/30/2009 Year of Origination 2001 & Prior 2002 2003 2004 2005 2006 2007 2008 YTD 2009 TOTAL Loan Balance (In Thousands) $1,975 $4,247 $18,401 $42,268 $58,933 $107,900 $103,333 $20,081 $1,741 $358,879 Weighted Avg. LTV (1) 29% 45% 57% 52% 54% 57% 57% 56% 53% 55%
Slide 24: Loan Portfolio – Commercial Real Estate
Loan Portfolio – Commercial Real Estate As of 09/30/2009 Year of Origination 2001 & Prior 2002 2003 2004 2005 2006 2007 2008 YTD 2009 TOTAL (5) (6) Loan Balance (In Thousands) $3,268 $6,858 $13,424 $13,220 $20,727 $25,211 $22,659 $6,329 $8,023 $119,719 Weighted Avg. LTV (1) 38% 52% 47% 52% 50% 55% 5
Slide 25: Investment Portfolio
Investment Portfolio Recent activity: Sold $55 million of MBS for a gain of $1.9 million in the quarter ended September 30, 2009 Weighted average coupon yield: 4.06% as of 09/30/09 Ratings: AAA Private issue U.S. U.S. CMO government government 2.8% sponsored sponsored enterprise enterprise debt secu
Slide 26: Investment Highlights
Investment Highlights Severe dislocation in existing market areas provides opportunity to capture greater market share and opportunistically expand our business Largest independent community bank headquartered in Riverside county with a significant and growing market share Scalable mortgage banking
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