[x]
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
33-0704889
|
|
(State or other jurisdiction of incorporation
|
(I.R.S. Employer
|
|
or organization)
|
Identification Number)
|
|
3756 Central Avenue, Riverside, California
|
92506
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
Common Stock, par value $.01 per share
|
Trading Symbol(s)
PROV
|
Name of each exchange on which registered
The NASDAQ Stock Market LLC
|
Large accelerated filer [ ]
|
|
Accelerated filer [X]
|
Non-accelerated filer [ ]
|
|
Smaller reporting company [X]
|
|
|
Emerging growth company [ ]
|
1.
|
Portions of the Annual Report to Shareholders are incorporated by reference into Part II.
|
2.
|
Portions of the definitive Proxy Statement for the fiscal 2019 Annual Meeting of Shareholders (“Proxy Statement”) are incorporated by reference into Part III.
|
Page
|
|
PART I
|
|
Item 1. Business:
|
1 |
General
|
1 |
Subsequent Events
|
1 |
Market Area
|
2 |
Competition
|
2 |
Personnel
|
3 |
Segment Reporting
|
3 |
Internet Website
|
3 |
Lending Activities
|
3 |
Loan Servicing
|
12 |
Delinquencies and Classified Assets
|
13 |
Investment Securities Activities
|
20 |
Deposit Activities and Other Sources of Funds
|
22 |
Subsidiary Activities
|
26 |
Regulation
|
27 |
Taxation
|
36 |
Executive Officers
|
38 |
Item 1A. Risk Factors
|
39 |
Item 1B. Unresolved Staff Comments
|
52 |
Item 2. Properties
|
52 |
Item 3. Legal Proceedings
|
52 |
Item 4. Mine Safety Disclosures
|
54 |
PART II
|
|
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
54 |
Item 6. Selected Financial Data
|
56 |
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations:
|
57
|
General
|
58 |
Critical Accounting Policies
|
59 |
Executive Summary and Operating Strategy
|
61 |
Off-Balance Sheet Financing Arrangements and Contractual Obligations
|
62 |
Comparison of Financial Condition at June 30, 2019 and 2018
|
63 |
Comparison of Operating Results for the Years Ended June 30, 2019 and 2018
|
64 |
Average Balances, Interest and Average Yields/Costs
|
69 |
Rate/Volume Analysis
|
70 |
Liquidity and Capital Resources
|
71 |
Impact of Inflation and Changing Prices
|
72 |
Impact of New Accounting Pronouncements
|
72 |
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
|
73 |
Item 8. Financial Statements and Supplementary Data
|
77 |
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
77 |
Item 9A. Controls and Procedures
|
77 |
Item 9B. Other Information
|
80 |
Page
|
|
PART III
|
|
Item 10. Directors, Executive Officers and Corporate Governance
|
80 |
Item 11. Executive Compensation
|
81 |
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
81 |
Item 13. Certain Relationships and Related Transactions, and Director Independence
|
82 |
Item 14. Principal Accountant Fees and Services
|
82 |
PART IV
|
|
Item 15. Exhibits, Financial Statement Schedules
|
83 |
Signatures
|
85 |
At June 30,
|
||||||||||||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||||||||||||
(Dollars In Thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||||||||
Mortgage loans:
|
||||||||||||||||||||||||||||||
Single-family
|
$
|
324,952
|
36.87
|
%
|
$
|
314,808
|
34.80
|
%
|
$
|
322,197
|
35.51
|
%
|
$
|
324,497
|
38.44
|
%
|
$
|
365,961
|
44.65
|
%
|
||||||||||
Multi-family
|
439,041
|
49.81
|
476,008
|
52.63
|
479,959
|
52.89
|
415,627
|
49.23
|
347,020
|
42.34
|
||||||||||||||||||||
Commercial real
estate
|
111,928
|
12.70
|
109,726
|
12.13
|
97,562
|
10.75
|
99,528
|
11.79
|
100,897
|
12.31
|
||||||||||||||||||||
Construction
|
4,638
|
0.53
|
3,174
|
0.35
|
6,994
|
0.77
|
3,395
|
0.40
|
4,831
|
0.59
|
||||||||||||||||||||
Other
|
167
|
0.02
|
167
|
0.02
|
—
|
—
|
332
|
0.04
|
—
|
—
|
||||||||||||||||||||
Total mortgage loans
|
880,726
|
99.93
|
903,883
|
99.93
|
906,712
|
99.92
|
843,379
|
99.90
|
818,709
|
99.89
|
||||||||||||||||||||
Commercial business
loans
|
478
|
0.05
|
500
|
0.06
|
576
|
0.07
|
636
|
0.08
|
666
|
0.08
|
||||||||||||||||||||
Consumer loans
|
134
|
0.02
|
109
|
0.01
|
129
|
0.01
|
203
|
0.02
|
244
|
0.03
|
||||||||||||||||||||
Total loans held for
investment, gross
|
881,338
|
100.00
|
%
|
904,492
|
100.00
|
%
|
907,417
|
100.00
|
%
|
844,218
|
100.00
|
%
|
819,619
|
100.00
|
%
|
|||||||||||||||
Advance payments of
escrows
|
53
|
18
|
61
|
56
|
199
|
|||||||||||||||||||||||||
Deferred loan costs, net
|
5,610
|
5,560
|
5,480
|
4,418
|
3,140
|
|||||||||||||||||||||||||
Allowance for loan
losses
|
(7,076
|
)
|
(7,385
|
)
|
(8,039
|
)
|
(8,670
|
)
|
(8,724
|
)
|
||||||||||||||||||||
Total loans held for
investment, net
|
$
|
879,925
|
$
|
902,685
|
$
|
904,919
|
$
|
840,022
|
$
|
814,234
|
(In Thousands)
|
Within
One Year
|
After
One Year
Through
3 Years
|
After
3 Years
Through
5 Years
|
After
5 Years
Through
10 Years
|
Beyond
10 Years
|
Total
|
||||||||||||
Mortgage loans:
|
||||||||||||||||||
Single-family
|
$
|
1,500
|
$
|
251
|
$
|
2,012
|
$
|
4,687
|
$
|
316,502
|
$
|
324,952
|
||||||
Multi-family
|
183
|
604
|
2,182
|
6,970
|
429,102
|
439,041
|
||||||||||||
Commercial real estate
|
153
|
2,194
|
11,335
|
83,111
|
15,135
|
111,928
|
||||||||||||
Construction
|
3,705
|
522
|
—
|
—
|
411
|
4,638
|
||||||||||||
Other
|
167
|
—
|
—
|
—
|
—
|
167
|
||||||||||||
Commercial business loans
|
74
|
50
|
68
|
—
|
286
|
478
|
||||||||||||
Consumer loans
|
134
|
—
|
—
|
—
|
—
|
134
|
||||||||||||
Total loans held for investment, gross
|
$
|
5,916
|
$
|
3,621
|
$
|
15,597
|
$
|
94,768
|
$
|
761,436
|
$
|
881,338
|
(Dollars In Thousands)
|
Fixed-Rate
|
%(1)
|
Floating or
Adjustable
Rate
|
%(1)
|
||||||
Mortgage loans:
|
||||||||||
Single-family
|
$
|
12,116
|
4
|
%
|
$
|
311,336
|
96
|
%
|
||
Multi-family
|
187
|
—
|
%
|
438,671
|
100
|
%
|
||||
Commercial real estate
|
449
|
—
|
%
|
111,326
|
100
|
%
|
||||
Construction
|
—
|
—
|
%
|
933
|
100
|
%
|
||||
Commercial business loans
|
354
|
88
|
%
|
50
|
12
|
%
|
||||
Total loans held for investment, gross
|
$
|
13,106
|
1
|
%
|
$
|
862,316
|
99
|
%
|
Inland
Empire
|
Southern
California(1)
|
Other
California
|
Other
States
|
Total
|
|||||||||||||||||||||
Loan Category
|
Balance
|
%
|
Balance
|
%
|
Balance
|
%
|
Balance
|
%
|
Balance
|
%
|
|||||||||||||||
Single-family
|
$
|
104,967
|
33
|
%
|
$
|
146,963
|
45
|
%
|
$
|
71,997
|
22
|
%
|
$
|
1,025
|
—
|
%
|
$
|
324,952
|
100
|
%
|
|||||
Multi-family
|
70,241
|
16
|
%
|
272,282
|
62
|
%
|
96,192
|
22
|
%
|
326
|
—
|
%
|
439,041
|
100
|
%
|
||||||||||
Commercial real
estate
|
30,551
|
27
|
%
|
54,010
|
48
|
%
|
27,367
|
25
|
%
|
—
|
—
|
%
|
111,928
|
100
|
%
|
||||||||||
Construction
|
525
|
11
|
%
|
3,579
|
77
|
%
|
534
|
12
|
%
|
—
|
—
|
%
|
4,638
|
100
|
%
|
||||||||||
Other
|
—
|
—
|
%
|
—
|
—
|
%
|
167
|
100
|
%
|
—
|
—
|
%
|
167
|
100
|
%
|
||||||||||
Total
|
$
|
206,284
|
24
|
%
|
$
|
476,834
|
54
|
%
|
$
|
196,257
|
22
|
%
|
$
|
1,351
|
—
|
%
|
$
|
880,726
|
100
|
%
|
(1)
|
Other than the Inland Empire.
|
Inland
Empire
|
Southern
California(1)
|
Other
California
|
Other
States
|
Total
|
|||||||||||||||||||||
Loan Category
|
Balance
|
%
|
Balance
|
%
|
Balance
|
%
|
Balance
|
%
|
Balance
|
%
|
|||||||||||||||
Single-family
|
$
|
110,510
|
35
|
%
|
$
|
149,261
|
48
|
%
|
$
|
53,960
|
17
|
%
|
$
|
1,077
|
—
|
%
|
$
|
314,808
|
100
|
%
|
|||||
Multi-family
|
76,473
|
16
|
%
|
287,174
|
60
|
%
|
109,684
|
23
|
%
|
2,677
|
1
|
%
|
476,008
|
100
|
%
|
||||||||||
Commercial real
estate
|
32,224
|
29
|
%
|
47,903
|
44
|
%
|
29,599
|
27
|
%
|
—
|
—
|
%
|
109,726
|
100
|
%
|
||||||||||
Construction
|
208
|
3
|
%
|
6,763
|
90
|
%
|
505
|
7
|
%
|
—
|
—
|
%
|
7,476
|
100
|
%
|
||||||||||
Other
|
—
|
—
|
%
|
—
|
—
|
%
|
167
|
100
|
%
|
—
|
—
|
%
|
167
|
100
|
%
|
||||||||||
Total
|
$
|
219,415
|
24
|
%
|
$
|
491,101
|
54
|
%
|
$
|
193,915
|
21
|
%
|
$
|
3,754
|
1
|
%
|
$
|
908,185
|
100
|
%
|
(1)
|
Other than the Inland Empire.
|
Year Ended June 30,
|
|||||||||
(In Thousands)
|
2019
|
2018
|
2017
|
||||||
Loans originated and purchased for sale:
|
|||||||||
Retail originations
|
$
|
296,992
|
$
|
679,504
|
$
|
997,142
|
|||
Wholesale originations
|
170,102
|
506,492
|
915,896
|
||||||
Total loans originated and purchased for sale
|
467,094
|
1,185,996
|
1,913,038
|
||||||
Loans sold:
|
|||||||||
Servicing released
|
(551,754
|
)
|
(1,174,618
|
)
|
(1,935,349
|
)
|
|||
Servicing retained
|
(7,196
|
)
|
(27,566
|
)
|
(38,250
|
)
|
|||
Total loans sold
|
(558,950
|
)
|
(1,202,184
|
)
|
(1,973,599
|
)
|
|||
Loans originated for investment:
|
|||||||||
Mortgage loans:
|
|||||||||
Single-family
|
55,410
|
90,434
|
80,280
|
||||||
Multi-family
|
42,191
|
66,355
|
87,511
|
||||||
Commercial real estate
|
15,402
|
24,749
|
11,989
|
||||||
Construction
|
7,159
|
4,667
|
12,123
|
||||||
Other
|
—
|
167
|
—
|
||||||
Commercial business loans
|
—
|
—
|
45
|
||||||
Consumer loans
|
—
|
4
|
1
|
||||||
Total loans originated for investment
|
120,162
|
186,376
|
191,949
|
||||||
Loans purchased for investment:
|
|||||||||
Mortgage loans:
|
|||||||||
Single-family
|
33,256
|
—
|
19,516
|
||||||
Multi-family
|
16,645
|
12,654
|
42,188
|
||||||
Commercial real estate
|
1,157
|
868
|
—
|
||||||
Total loans purchased for investment
|
51,058
|
13,522
|
61,704
|
||||||
Loan principal repayments
|
(195,386
|
)
|
(208,503
|
)
|
(196,993
|
)
|
|||
Real estate acquired in the settlement of loans
|
—
|
(2,171
|
)
|
(1,845
|
)
|
||||
(Decrease) increase in other items, net(1)
|
(3,036
|
)
|
4,480
|
(2,267
|
)
|
||||
Net decrease in loans held for investment and loans held for sale at fair value
|
$
|
(119,058
|
)
|
$
|
(22,484
|
)
|
$
|
(8,013
|
)
|
(1)
|
Includes net changes in undisbursed loan funds, deferred loan fees or costs, allowance for loan losses, fair value of loans held for investment, fair value of loans held for sale, advance
payments of escrows and repurchases.
|
At June 30,
|
|||||||||||||||||||||||||||||||||||
2019
|
2018
|
2017
|
|||||||||||||||||||||||||||||||||
30 – 89 Days
|
Non-performing
|
30 - 89 Days
|
Non-performing
|
30 - 89 Days
|
Non-performing
|
||||||||||||||||||||||||||||||
(Dollars In Thousands)
|
Number
of
Loans
|
Principal
Balance
of Loans
|
Number
of
Loans
|
Principal
Balance
of Loans
|
Number
of
Loans
|
Principal
Balance
of Loans
|
Number
of
Loans
|
Principal
Balance
of Loans
|
Number
of
Loans
|
Principal
Balance
of Loans
|
Number
of
Loans
|
Principal
Balance
of Loans
|
|||||||||||||||||||||||
Mortgage loans:
|
|||||||||||||||||||||||||||||||||||
Single-family
|
2
|
$
|
660
|
20
|
$
|
5,640
|
1
|
$
|
804
|
21
|
$
|
6,141
|
3
|
$
|
1,035
|
27
|
$
|
8,016
|
|||||||||||||||||
Commercial real estate
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
1
|
201
|
|||||||||||||||||||||||
Construction
|
—
|
—
|
1
|
971
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||
Commercial business
loans
|
—
|
—
|
1
|
49
|
—
|
—
|
1
|
70
|
—
|
—
|
1
|
80
|
|||||||||||||||||||||||
Consumer loans(1)
|
61
|
5
|
—
|
—
|
2
|
1
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||
Total
|
63
|
$
|
665
|
22
|
$
|
6,660
|
3
|
$
|
805
|
22
|
$
|
6,211
|
3
|
$
|
1,035
|
29
|
$
|
8,297
|
(1)
|
At June 30, 2019, the balance includes 61 overdrawn consumer deposit accounts which were not reported in prior years due to
immateriality.
|
At June 30,
|
|||||||||||||||
(Dollars In Thousands)
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
Loans on non-performing status
(excluding restructured loans):
|
|||||||||||||||
Mortgage loans:
|
|||||||||||||||
Single-family
|
$
|
3,315
|
$
|
2,665
|
$
|
4,668
|
$
|
6,292
|
$
|
7,010
|
|||||
Multi-family
|
—
|
—
|
—
|
709
|
653
|
||||||||||
Commercial real estate
|
—
|
—
|
201
|
—
|
680
|
||||||||||
Construction
|
971
|
—
|
—
|
—
|
—
|
||||||||||
Total
|
4,286
|
2,665
|
4,869
|
7,001
|
8,343
|
||||||||||
Accruing loans past due 90 days or more
|
—
|
—
|
—
|
—
|
—
|
||||||||||
Restructured loans on non-performing status:
|
|||||||||||||||
Mortgage loans:
|
|||||||||||||||
Single-family
|
1,891
|
3,328
|
3,061
|
3,232
|
2,902
|
||||||||||
Multi-family
|
—
|
—
|
—
|
—
|
1,593
|
||||||||||
Commercial real estate
|
—
|
—
|
—
|
—
|
1,019
|
||||||||||
Commercial business loans
|
41
|
64
|
65
|
76
|
89
|
||||||||||
Total
|
1,932
|
3,392
|
3,126
|
3,308
|
5,603
|
||||||||||
Total non-performing loans
|
6,218
|
6,057
|
7,995
|
10,309
|
13,946
|
||||||||||
Real estate owned, net
|
—
|
906
|
1,615
|
2,706
|
2,398
|
||||||||||
Total non-performing assets
|
$
|
6,218
|
$
|
6,963
|
$
|
9,610
|
$
|
13,015
|
$
|
16,344
|
|||||
Non-performing loans as a percentage of
loans held for investment, net
|
0.71
|
%
|
0.67
|
%
|
0.88
|
%
|
1.23
|
%
|
1.71
|
%
|
|||||
Non-performing loans as a percentage
of total assets
|
0.57
|
%
|
0.52
|
%
|
0.67
|
%
|
0.88
|
%
|
1.19
|
%
|
|||||
Non-performing assets as a percentage
of total assets
|
0.57
|
%
|
0.59
|
%
|
0.80
|
%
|
1.11
|
%
|
1.39
|
%
|
At June 30, 2019
|
At June 30, 2018
|
||||||||||
(Dollars In Thousands)
|
Balance
|
Count
|
Balance
|
Count
|
|||||||
Special mention loans:
|
|||||||||||
Mortgage loans:
|
|||||||||||
Single-family
|
$
|
3,795
|
13
|
$
|
2,584
|
8
|
|||||
Multi-family
|
3,864
|
3
|
3,947
|
3
|
|||||||
Commercial real estate
|
927
|
1
|
940
|
1
|
|||||||
Total special mention loans
|
8,586
|
17
|
7,471
|
12
|
|||||||
Substandard loans:
|
|||||||||||
Mortgage loans:
|
|||||||||||
Single-family
|
6,631
|
23
|
7,391
|
24
|
|||||||
Construction
|
971
|
1
|
—
|
—
|
|||||||
Commercial business loans
|
41
|
1
|
64
|
1
|
|||||||
Total substandard loans
|
7,643
|
25
|
7,455
|
25
|
|||||||
Total classified loans
|
16,229
|
42
|
14,926
|
37
|
|||||||
Real estate owned:
|
|||||||||||
Single-family
|
—
|
—
|
906
|
2
|
|||||||
Total real estate owned
|
—
|
—
|
906
|
2
|
|||||||
Total classified assets
|
$
|
16,229
|
42
|
$
|
15,832
|
39
|
|||||
Total classified assets as a percentage of total assets
|
1.50
|
%
|
1.35
|
%
|
Year Ended June 30,
|
|||||||||||||||
(Dollars In Thousands)
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
Allowance at beginning of period
|
$
|
7,385
|
$
|
8,039
|
$
|
8,670
|
$
|
8,724
|
$
|
9,744
|
|||||
Recovery from the allowance for loan losses
|
(475
|
)
|
(536
|
)
|
(1,042
|
)
|
(1,715
|
)
|
(1,387
|
)
|
|||||
Recoveries:
|
|||||||||||||||
Mortgage Loans:
|
|||||||||||||||
Single-family
|
198
|
278
|
507
|
539
|
635
|
||||||||||
Multi-family
|
—
|
—
|
18
|
1,228
|
360
|
||||||||||
Commercial real estate
|
—
|
—
|
—
|
216
|
—
|
||||||||||
Commercial business loans
|
—
|
—
|
75
|
85
|
—
|
||||||||||
Consumer loans
|
2
|
—
|
13
|
1
|
1
|
||||||||||
Total recoveries
|
200
|
278
|
613
|
2,069
|
996
|
||||||||||
Charge-offs:
|
|||||||||||||||
Mortgage loans:
|
|||||||||||||||
Single-family
|
(31
|
)
|
(392
|
)
|
(199
|
)
|
(406
|
)
|
(552
|
)
|
|||||
Multi-family
|
—
|
—
|
—
|
—
|
(4
|
)
|
|||||||||
Commercial real estate
|
—
|
—
|
—
|
—
|
(73
|
)
|
|||||||||
Consumer loans
|
(3
|
)
|
(4
|
)
|
(3
|
)
|
(2
|
)
|
—
|
||||||
Total charge-offs
|
(34
|
)
|
(396
|
)
|
(202
|
)
|
(408
|
)
|
(629
|
)
|
|||||
Net (charge-offs) recoveries
|
166
|
(118
|
)
|
411
|
1,661
|
367
|
|||||||||
Allowance at end of period
|
$
|
7,076
|
$
|
7,385
|
$
|
8,039
|
$
|
8,670
|
$
|
8,724
|
|||||
Allowance for loan losses as a percentage of
gross loans held for investment
|
0.80
|
%
|
0.81
|
%
|
0.88
|
%
|
1.02
|
%
|
1.06
|
%
|
|||||
Net charge-offs (recoveries) as a percentage
of average loans receivable, net, during the
period
|
(0.02
|
)%
|
0.01
|
%
|
(0.04
|
)%
|
(0.17
|
)%
|
(0.04
|
)%
|
At June 30,
|
|||||||||||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
|||||||||||||||||||||||||
(Dollars In Thousands)
|
Amount
|
% of
Loans in
Each
Category
to Total
Loans
|
Amount
|
% of
Loans in
Each
Category
to Total
Loans
|
Amount
|
% of
Loans in
Each
Category
to Total
Loans
|
Amount
|
% of
Loans in
Each
Category
to Total
Loans
|
Amount
|
% of
Loans in
Each
Category
to Total
Loans
|
|||||||||||||||||||
Mortgage loans:
|
|||||||||||||||||||||||||||||
Single-family
|
$
|
2,709
|
36.87
|
%
|
$
|
2,783
|
34.80
|
%
|
$
|
3,601
|
35.51
|
%
|
$
|
4,933
|
38.44
|
%
|
$
|
5,280
|
44.65
|
%
|
|||||||||
Multi-family
|
3,219
|
49.81
|
3,492
|
52.63
|
3,420
|
52.89
|
2,800
|
49.23
|
2,616
|
42.34
|
|||||||||||||||||||
Commercial real estate
|
1,050
|
12.70
|
1,030
|
12.13
|
879
|
10.75
|
848
|
11.79
|
734
|
12.31
|
|||||||||||||||||||
Construction
|
61
|
0.53
|
47
|
0.35
|
96
|
0.77
|
31
|
0.40
|
42
|
0.59
|
|||||||||||||||||||
Other
|
3
|
0.02
|
3
|
0.02
|
—
|
—
|
7
|
0.04
|
—
|
—
|
|||||||||||||||||||
Commercial business loans
|
26
|
0.05
|
24
|
0.06
|
36
|
0.07
|
43
|
0.08
|
43
|
0.08
|
|||||||||||||||||||
Consumer loans
|
8
|
0.02
|
6
|
0.01
|
7
|
0.01
|
8
|
0.02
|
9
|
0.03
|
|||||||||||||||||||
Total allowance for
loan losses
|
$
|
7,076
|
100.00
|
%
|
$
|
7,385
|
100.00
|
%
|
$
|
8,039
|
100.00
|
%
|
$
|
8,670
|
100.00
|
%
|
$
|
8,724
|
100.00
|
%
|
At June 30,
|
||||||||||||||||||||||||||
2019
|
2018
|
2017
|
||||||||||||||||||||||||
(Dollars In Thousands)
|
Amortized
Cost
|
Estimated
Fair
Value
|
Percent
|
Amortized
Cost
|
Estimated
Fair
Value
|
Percent
|
Amortized
Cost
|
Estimated
Fair
Value
|
Percent
|
|||||||||||||||||
Held to maturity securities:
|
||||||||||||||||||||||||||
U.S. government sponsored
enterprise MBS (1)
|
$
|
90,394
|
$
|
91,669
|
90.47
|
%
|
$
|
84,227
|
$
|
83,668
|
88.32
|
%
|
$
|
59,841
|
$
|
60,029
|
85.82
|
%
|
||||||||
U.S. SBA securities(2)
|
2,896
|
2,890
|
2.85
|
2,986
|
2,971
|
3.14
|
—
|
—
|
—
|
|||||||||||||||||
Certificates of deposits
|
800
|
800
|
0.79
|
600
|
600
|
0.63
|
600
|
600
|
0.86
|
|||||||||||||||||
Total investment securities -
held to maturity
|
$
|
94,090
|
$
|
95,359
|
94.11
|
%
|
$
|
87,813
|
$
|
87,239
|
92.09
|
%
|
$
|
60,441
|
$
|
60,629
|
86.68
|
%
|
||||||||
Available for sale securities:
|
||||||||||||||||||||||||||
U.S. government agency MBS(1)
|
$
|
3,498
|
$
|
3,613
|
3.57
|
%
|
$
|
4,234
|
$
|
4,384
|
4.63
|
%
|
$
|
5,197
|
$
|
5,383
|
7.69
|
%
|
||||||||
U.S. government sponsored
enterprise MBS(1)
|
1,998
|
2,087
|
2.06
|
2,640
|
2,762
|
2.91
|
3,301
|
3,474
|
4.97
|
|||||||||||||||||
Private issue CMO(3)
|
261
|
269
|
0.26
|
346
|
350
|
0.37
|
456
|
461
|
0.66
|
|||||||||||||||||
Total investment securities -
available for sale
|
$
|
5,757
|
$
|
5,969
|
5.89
|
%
|
$
|
7,220
|
$
|
7,496
|
7.91
|
%
|
$
|
8,954
|
$
|
9,318
|
13.32
|
%
|
||||||||
Total investment securities
|
$
|
99,847
|
$
|
101,328
|
100.00
|
%
|
$
|
95,033
|
$
|
94,735
|
100.00
|
%
|
$
|
69,395
|
$
|
69,947
|
100.00
|
%
|
(1)
|
Mortgage-backed securities (“MBS”)
|
(2)
|
Small Business Administration ("SBA")
|
(3)
|
Collateralized mortgage obligations (“CMO”)
|
Due in
One Year
or Less
|
Due
After One to
Five Years
|
Due
After Five to
Ten Years
|
Due
After
Ten Years
|
Total
|
||||||||||||||||||||||
(Dollars in Thousands)
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
||||||||||||||||
Held to maturity securities:
|
||||||||||||||||||||||||||
U.S. government sponsored
enterprise MBS
|
$
|
—
|
—
|
%
|
$
|
32,184
|
2.15
|
%
|
$
|
35,306
|
2.97
|
%
|
$
|
22,904
|
3.62
|
%
|
$
|
90,394
|
2.84
|
%
|
||||||
U.S. SBA securities
|
—
|
—
|
—
|
—
|
—
|
—
|
2,896
|
2.85
|
2,896
|
2.85
|
||||||||||||||||
Certificates of deposits
|
400
|
2.51
|
400
|
2.74
|
—
|
—
|
—
|
—
|
800
|
2.63
|
||||||||||||||||
Total investment securities
held to maturity
|
$
|
400
|
2.51
|
%
|
$
|
32,584
|
2.16
|
%
|
$
|
35,306
|
2.97
|
%
|
$
|
25,800
|
3.53
|
%
|
$
|
94,090
|
2.84
|
%
|
||||||
Available for sale securities:
|
||||||||||||||||||||||||||
U.S. government agency MBS
|
$
|
—
|
—
|
%
|
$
|
—
|
—
|
%
|
$
|
—
|
—
|
%
|
$
|
3,613
|
3.86
|
%
|
$
|
3,613
|
3.86
|
%
|
||||||
U.S. government sponsored
enterprise MBS
|
—
|
—
|
—
|
—
|
—
|
—
|
2,087
|
4.75
|
2,087
|
4.75
|
||||||||||||||||
Private issue CMO
|
—
|
—
|
—
|
—
|
—
|
—
|
269
|
4.66
|
269
|
4.66
|
||||||||||||||||
Total investment securities
available for sale
|
$
|
—
|
—
|
%
|
$
|
—
|
—
|
%
|
$
|
—
|
—
|
%
|
$
|
5,969
|
4.21
|
%
|
$
|
5,969
|
4.21
|
%
|
||||||
Total investment securities
|
$
|
400
|
2.51
|
%
|
$
|
32,584
|
2.16
|
%
|
$
|
35,306
|
2.97
|
%
|
$
|
31,769
|
3.66
|
%
|
$
|
100,059
|
2.92
|
%
|
Weighted
Average Interest Rate
|
Original Term
|
Deposit Account Type
|
Minimum
Amount
|
Balance
(In Thousands)
|
Percentage
of Total Deposits
|
|||||
Transaction accounts:
|
||||||||||
—%
|
N/A
|
Checking accounts – non interest-bearing
|
$
|
—
|
$
|
90,184
|
10.72
|
%
|
||
0.12%
|
N/A
|
Checking accounts – interest-bearing
|
$
|
—
|
257,909
|
30.66
|
||||
0.20%
|
N/A
|
Savings accounts
|
$
|
10
|
264,387
|
31.43
|
||||
0.28%
|
N/A
|
Money market accounts
|
$
|
—
|
35,646
|
4.24
|
||||
Time deposits:
|
||||||||||
0.05%
|
30 days or less
|
Fixed-term, fixed rate
|
$
|
1,000
|
20
|
—
|
||||
0.13%
|
31 to 90 days
|
Fixed-term, fixed rate
|
$
|
1,000
|
4,104
|
0.49
|
||||
1.67%
|
91 to 180 days
|
Fixed-term, fixed rate
|
$
|
1,000
|
15,432
|
1.83
|
||||
0.21%
|
181 to 365 days
|
Fixed-term, fixed rate
|
$
|
1,000
|
25,293
|
3.01
|
||||
0.54%
|
Over 1 to 2 years
|
Fixed-term, fixed rate
|
$
|
1,000
|
27,657
|
3.29
|
||||
0.98%
|
Over 2 to 3 years
|
Fixed-term, fixed rate
|
$
|
1,000
|
28,383
|
3.37
|
||||
1.49%
|
Over 3 to 5 years
|
Fixed-term, fixed rate
|
$
|
1,000
|
79,601
|
9.46
|
||||
1.85%
|
Over 5 to 10 years
|
Fixed-term, fixed rate
|
$
|
1,000
|
12,655
|
1.50
|
||||
0.37%
|
$
|
841,271
|
100.00
|
%
|
Maturity Period
|
Amount
|
||
(In Thousands)
|
|||
Three months or less
|
$
|
19,219
|
|
Over three to six months
|
20,791
|
||
Over six to twelve months
|
17,978
|
||
Over twelve months
|
40,957
|
||
Total
|
$
|
98,945
|
At June 30,
|
||||||||||||||||||||||
2019
|
2018
|
|||||||||||||||||||||
(Dollars In Thousands)
|
Amount
|
Percent
of
Total
|
Increase
(Decrease)
|
Amount
|
Percent
of
Total
|
Increase
(Decrease)
|
||||||||||||||||
Checking accounts – non interest-bearing
|
$
|
90,184
|
10.72
|
%
|
$
|
4,010
|
$
|
86,174
|
9.49
|
%
|
$
|
8,257
|
||||||||||
Checking accounts – interest-bearing
|
257,909
|
30.66
|
(1,463
|
)
|
259,372
|
28.58
|
(65
|
)
|
||||||||||||||
Savings accounts
|
264,387
|
31.43
|
(25,404
|
)
|
289,791
|
31.93
|
3,824
|
|||||||||||||||
Money market accounts
|
35,646
|
4.24
|
1,013
|
34,633
|
3.82
|
(690
|
)
|
|||||||||||||||
Time deposits:
|
||||||||||||||||||||||
Fixed-term, fixed rate which mature:
|
||||||||||||||||||||||
Within one year
|
106,080
|
12.61
|
(10,253
|
)
|
116,333
|
12.82
|
2,387
|
|||||||||||||||
Over one to two years
|
37,117
|
4.41
|
(28,083
|
)
|
65,200
|
7.18
|
451
|
|||||||||||||||
Over two to five years
|
49,253
|
5.85
|
(5,027
|
)
|
54,280
|
5.98
|
(24,535
|
)
|
||||||||||||||
Over five years
|
695
|
0.08
|
(1,120
|
)
|
1,815
|
0.20
|
(8,552
|
)
|
||||||||||||||
Total
|
$
|
841,271
|
100.00
|
%
|
$
|
(66,327
|
)
|
$
|
907,598
|
100.00
|
%
|
$
|
(18,923
|
)
|
At June 30,
|
|||||||||
(Dollars In Thousands)
|
2019
|
2018
|
2017
|
||||||
Below 1.00%
|
$
|
80,701
|
$
|
114,975
|
$
|
143,133
|
|||
1.00 to 1.99%
|
95,904
|
113,211
|
115,555
|
||||||
2.00 to 2.99%
|
16,540
|
7,875
|
7,622
|
||||||
3.00 to 3.99%
|
—
|
1,567
|
1,567
|
||||||
Total
|
$
|
193,145
|
$
|
237,628
|
$
|
267,877
|
(Dollars In Thousands)
|
One Year
or Less
|
Over One
to
Two Years
|
Over Two
to
Three Years
|
Over Three
to
Four Years
|
After
Four
Years
|
Total
|
||||||||||||
Below 1.00%
|
$
|
62,477
|
$
|
15,306
|
$
|
2,791
|
$
|
125
|
$
|
2
|
$
|
80,701
|
||||||
1.00 to 1.99%
|
32,270
|
21,811
|
23,543
|
9,803
|
8,477
|
95,904
|
||||||||||||
2.00 to 2.99%
|
11,333
|
—
|
—
|
5,207
|
—
|
16,540
|
||||||||||||
Total
|
$
|
106,080
|
$
|
37,117
|
$
|
26,334
|
$
|
15,135
|
$
|
8,479
|
$
|
193,145
|
At or For the Year Ended June 30,
|
|||||||||
(In Thousands)
|
2019
|
2018
|
2017
|
||||||
Beginning balance
|
$
|
907,598
|
$
|
926,521
|
$
|
926,384
|
|||
Net withdrawals before interest credited
|
(69,708
|
)
|
(22,418
|
)
|
(3,671
|
)
|
|||
Interest credited
|
3,381
|
3,495
|
3,808
|
||||||
Net (decrease) increase in deposits
|
(66,327
|
)
|
(18,923
|
)
|
137
|
||||
Ending balance
|
$
|
841,271
|
$
|
907,598
|
$
|
926,521
|
At or For the Year Ended June 30,
|
||||||||||||||
(Dollars In Thousands)
|
2019
|
2018
|
2017
|
|||||||||||
Balance outstanding at the end of period:
|
||||||||||||||
FHLB – San Francisco advances
|
$
|
101,107
|
$
|
126,163
|
$
|
126,226
|
||||||||
Weighted average rate at the end of period:
|
||||||||||||||
FHLB – San Francisco advances
|
2.62
|
%
|
2.47
|
%
|
2.39
|
%
|
||||||||
Maximum amount of borrowings outstanding at any month end:
|
||||||||||||||
FHLB – San Francisco advances
|
$
|
136,158
|
$
|
126,163
|
$
|
181,287
|
||||||||
Average short-term borrowings during the period
with respect to:(1)
|
||||||||||||||
FHLB – San Francisco advances
|
$
|
8,425
|
$
|
8,687
|
$
|
14,022
|
||||||||
Weighted average short-term borrowing rate during the period
with respect to:(1)
|
||||||||||||||
FHLB – San Francisco advances
|
1.69
|
%
|
2.53
|
%
|
0.45
|
%
|
•
|
before any savings and loan holding company or bank holding company could acquire 5% or more of the common stock of the Corporation; and
|
•
|
before any other company could acquire 25% or more of the common stock of the Corporation, and may be required for an acquisition of as little as 10% of such stock.
|
Position
|
|||
Name
|
Age(1)
|
Corporation
|
Bank
|
Craig G. Blunden
|
71
|
Chairman and
|
Chairman and
|
Chief Executive Officer
|
Chief Executive Officer
|
||
Robert "Scott" Ritter
|
50
|
—
|
Senior Vice President
|
Single-Family Division
|
|||
Donavon P. Ternes
|
59
|
President
|
President
|
Chief Operating Officer
|
Chief Operating Officer
|
||
Chief Financial Officer
|
Chief Financial Officer
|
||
Corporate Secretary
|
Corporate Secretary
|
||
David S. Weiant
|
60
|
—
|
Senior Vice President
|
Chief Lending Officer
|
|||
Gwendolyn L. Wertz
|
53
|
—
|
Senior Vice President
|
Retail Banking Division
|
(1)
|
As of June 30, 2019.
|
•
|
an increase in loan delinquencies, problem assets and foreclosures;
|
•
|
we may increase our allowance for loan losses
|
•
|
the slowing of sales of foreclosed assets;
|
•
|
a decline in demand for our products and services;
|
•
|
a decline in the value of collateral for loans may in turn reduce customers' borrowing power, and the value of assets and collateral associated with existing loans;
|
•
|
the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and
|
•
|
a decrease in the amount of our low cost or non interest-bearing deposits.
|
•
|
cash flow of the borrower and/or the project being financed;
|
•
|
the changes and uncertainties as to the future value of the collateral, in the case of a collateralized loan;
|
•
|
the duration of the loan;
|
•
|
the character and creditworthiness of a particular borrower; and
|
•
|
changes in economic and industry conditions.
|
•
|
our collectively evaluated allowance, based on our historical default and loss experience and certain macroeconomic factors based on management's expectations of future events; and
|
•
|
our individually evaluated allowance, based on our evaluation of non-performing loans and the underlying fair value of collateral or based on discounted cash flow for restructured loans.
|
•
|
we record interest income only on a cash basis for non-accrual loans except for non-performing loans under the cost recovery method where interest is applied to the principal of the loan
as a recovery of the charge-offs, if any, and we do not record interest income for REO;
|
•
|
we must provide for probable loan losses through a current period charge to the provision for loan losses;
|
•
|
non-interest expense increases when we write down the value of properties in our REO portfolio to reflect changing market values or recognize other-than-temporary impairment (“OTTI”) on
non-performing investment securities;
|
•
|
there are legal fees associated with the resolution of problem assets, as well as carrying costs, such as taxes, insurance, and maintenance fees related to our REO; and
|
•
|
the resolution of non-performing assets requires the active involvement of management, which can distract them from more profitable activity.
|
•
|
available interest rate hedging may not correspond directly with the interest rate risk for which protection is sought;
|
•
|
the duration of the hedge may not match the duration of the related liability;
|
•
|
the party owing money in the hedging transaction may default on its obligation to pay;
|
•
|
the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction;
|
•
|
the value of derivatives used for hedging may be adjusted from time to time in accordance with accounting rules to reflect changes in fair value; and
|
•
|
downward adjustments, or “mark-to-market losses,” would reduce our stockholders' equity.
|
Period
|
(a) Total Number of
Shares Purchased
|
(b) Average Price
Paid per Share
|
(c) Total Number of
Shares Purchased as
Part of Publicly
Announced Plan
|
(d) Maximum
Number of Shares
that May Yet Be
Purchased Under
the Plan (1)
|
|||||
April 1, 2019 – April 30, 2019
|
—
|
$
|
—
|
—
|
349,252
|
||||
May 1, 2019 – May 31, 2019
|
4,483
|
$
|
20.18
|
4,483
|
344,769
|
||||
June 1, 2019 – June 30, 2019
|
23,768
|
$
|
20.04
|
23,768
|
321,001
|
||||
Total
|
28,251
|
$
|
20.06
|
28,251
|
321,001
|
(1)
|
Represents the remaining shares available for future purchases under the April 2018 stock repurchase plan.
|
6/30/2014
|
6/30/2015
|
6/30/2016
|
6/30/2017
|
6/30/2018
|
6/30/2019
|
|||||||||||||
PROV
|
$
|
100.00
|
$
|
118.52
|
$
|
133.23
|
$
|
144.05
|
$
|
147.14
|
$
|
166.74
|
||||||
NASDAQ Stock Index
|
$
|
100.00
|
$
|
107.13
|
$
|
109.063
|
$
|
130.03
|
$
|
149.33
|
$
|
162.76
|
||||||
NASDAQ Bank Index
|
$
|
100.00
|
$
|
112.73
|
$
|
99.53
|
$
|
145.89
|
$
|
161.76
|
$
|
160.99
|
(1) Assumes that the value of the investment in the Corporation’s common stock and each index was $100 on June 30, 2014 and that all
dividends were reinvested.
|
•
|
A reduction in the stated interest rate.
|
•
|
An extension of the maturity at an interest rate below market.
|
•
|
A reduction in the accrued interest.
|
•
|
Extensions, deferrals, renewals and rewrites.
|
Year Ended June 30,
|
||||||||||||||||||||||||||
2019
|
2018
|
2017
|
||||||||||||||||||||||||
(Dollars In Thousands)
|
Average
Balance |
Interest
|
Yield/
Cost
|
Average
Balance |
Interest
|
Yield/
Cost |
Average
Balance |
Interest
|
Yield/
Cost
|
|||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||||
Loans receivable, net(1)
|
$
|
926,003
|
$
|
40,092
|
4.33
|
%
|
$
|
986,815
|
$
|
40,016
|
4.06
|
%
|
$
|
1,025,885
|
$
|
40,249
|
3.92
|
%
|
||||||||
Investment securities
|
97,870
|
2,042
|
2.09
|
%
|
90,719
|
1,344
|
1.48
|
%
|
51,575
|
575
|
1.11
|
%
|
||||||||||||||
FHLB – San Francisco stock
|
8,199
|
707
|
8.62
|
%
|
8,126
|
568
|
6.99
|
%
|
8,097
|
967
|
11.94
|
%
|
||||||||||||||
Interest-earning deposits
|
67,816
|
1,537
|
2.24
|
%
|
53,438
|
784
|
1.45
|
%
|
81,027
|
626
|
0.76
|
%
|
||||||||||||||
Total interest-earning assets
|
1,099,888
|
44,378
|
4.03
|
%
|
1,139,098
|
42,712
|
3.75
|
%
|
1,166,584
|
42,417
|
3.64
|
%
|
||||||||||||||
Non interest-earning assets
|
30,778
|
32,905
|
32,003
|
|||||||||||||||||||||||
Total assets
|
$
|
1,130,666
|
$
|
1,172,003
|
$
|
1,198,587
|
||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||
Checking and money market
accounts(2)
|
$
|
381,790
|
428
|
0.11
|
%
|
$
|
372,781
|
407
|
0.11
|
%
|
$
|
358,532
|
387
|
0.11
|
%
|
|||||||||||
Savings accounts
|
277,896
|
572
|
0.21
|
%
|
290,959
|
595
|
0.20
|
%
|
283,520
|
579
|
0.20
|
%
|
||||||||||||||
Time deposits
|
220,432
|
2,381
|
1.08
|
%
|
251,604
|
2,493
|
0.99
|
%
|
290,080
|
2,842
|
0.98
|
%
|
||||||||||||||
Total deposits
|
880,118
|
3,381
|
0.38
|
%
|
915,344
|
3,495
|
0.38
|
%
|
932,132
|
3,808
|
0.41
|
%
|
||||||||||||||
Borrowings
|
109,558
|
2,827
|
2.58
|
%
|
113,984
|
2,917
|
2.56
|
%
|
117,329
|
2,871
|
2.45
|
%
|
||||||||||||||
Total interest-bearing
liabilities
|
989,676
|
6,208
|
0.63
|
%
|
1,029,328
|
6,412
|
0.62
|
%
|
1,049,461
|
6,679
|
0.64
|
%
|
||||||||||||||
Non interest-bearing
liabilities
|
19,288
|
19,392
|
16,828
|
|||||||||||||||||||||||
Total liabilities
|
1,008,964
|
1,048,720
|
1,066,289
|
|||||||||||||||||||||||
Stockholders’ equity
|
121,702
|
123,283
|
132,298
|
|||||||||||||||||||||||
Total liabilities and
stockholders’ equity
|
$
|
1,130,666
|
$
|
1,172,003
|
$
|
1,198,587
|
||||||||||||||||||||
Net interest income
|
$
|
38,170
|
$
|
36,300
|
$
|
35,738
|
||||||||||||||||||||
Interest rate spread(3)
|
3.40
|
%
|
3.13
|
%
|
3.00
|
%
|
||||||||||||||||||||
Net interest margin(4)
|
3.47
|
%
|
3.19
|
%
|
3.06
|
%
|
||||||||||||||||||||
Ratio of average interest-
earning assets to average
interest-bearing liabilities
|
111.14
|
%
|
110.66
|
%
|
111.16
|
%
|
(1)
|
Includes loans held for sale and non-performing loans, as well as net deferred loan costs of $1.2 million, $1.1 million and $874 for the years ended June 30, 2019, 2018 and 2017,
respectively.
|
(2)
|
Includes the average balance of non interest-bearing checking accounts of $84.1 million, $79.9 million and $72.9 million in fiscal 2019, 2018 and 2017, respectively.
|
(3)
|
Represents the difference between the weighted-average yield on all interest-earning assets and the weighted-average rate on all interest-bearing liabilities.
|
(4)
|
Represents net interest income as a percentage of average interest-earning assets.
|
Year Ended June 30, 2019 Compared
To Year Ended June 30, 2018 Increase (Decrease) Due to |
||||||||||||
(In Thousands)
|
Rate
|
Volume
|
Rate/
Volume
|
Net
|
||||||||
Interest-earning assets:
|
||||||||||||
Loans receivable(1)
|
$
|
2,709
|
$
|
(2,469
|
)
|
$
|
(164
|
)
|
$
|
76
|
||
Investment securities
|
548
|
106
|
44
|
698
|
||||||||
FHLB – San Francisco stock
|
133
|
5
|
1
|
139
|
||||||||
Interest-earning deposits
|
431
|
208
|
114
|
753
|
||||||||
Total net change in income on interest-earning assets
|
3,821
|
(2,150
|
)
|
(5
|
)
|
1,666
|
||||||
Interest-bearing liabilities:
|
||||||||||||
Checking and money market accounts
|
—
|
21
|
—
|
21
|
||||||||
Savings accounts
|
29
|
(51
|
)
|
(1
|
)
|
(23
|
)
|
|||||
Time deposits
|
225
|
(309
|
)
|
(28
|
)
|
(112
|
)
|
|||||
Borrowings
|
24
|
(113
|
)
|
(1
|
)
|
(90
|
)
|
|||||
Total net change in expense on interest-bearing liabilities
|
278
|
(452
|
)
|
(30
|
)
|
(204
|
)
|
|||||
Net increase (decrease) in net interest income
|
$
|
3,543
|
$
|
(1,698
|
)
|
$
|
25
|
$
|
1,870
|
(1)
|
Includes loans held for sale and non-performing loans. For purposes of calculating volume, rate and rate/volume variances, non-performing loans were included in the weighted-average balance outstanding.
|
Year Ended June 30, 2018 Compared
To Year Ended June 30, 2017 Increase (Decrease) Due to |
||||||||||||
(In Thousands)
|
Rate
|
Volume
|
Rate/
Volume
|
Net
|
||||||||
Interest-earning assets:
|
||||||||||||
Loans receivable(1)
|
$
|
1,354
|
$
|
(1,532
|
)
|
$
|
(55
|
)
|
$
|
(233
|
)
|
|
Investment securities
|
190
|
434
|
145
|
769
|
||||||||
FHLB – San Francisco stock
|
(401
|
)
|
3
|
(1
|
)
|
(399
|
)
|
|||||
Interest-earning deposits
|
558
|
(210
|
)
|
(190
|
)
|
158
|
||||||
Total net change in income on interest-earning assets
|
1,701
|
(1,305
|
)
|
(101
|
)
|
295
|
||||||
Interest-bearing liabilities:
|
||||||||||||
Checking and money market accounts
|
—
|
20
|
—
|
20
|
||||||||
Savings accounts
|
—
|
16
|
—
|
16
|
||||||||
Time deposits
|
32
|
(377
|
)
|
(4
|
)
|
(349
|
)
|
|||||
Borrowings
|
132
|
(82
|
)
|
(4
|
)
|
46
|
||||||
Total net change in expense on interest-bearing liabilities
|
164
|
(423
|
)
|
(8
|
)
|
(267
|
)
|
|||||
Net increase (decrease) in net interest income
|
$
|
1,537
|
$
|
(882
|
)
|
$
|
(93
|
)
|
$
|
562
|
(1)
|
Includes loans held for sale and non-performing loans. For purposes of calculating volume, rate and rate/volume variances, non-performing loans were included in the weighted-average balance outstanding.
|
Basis Points ("bp")
Change in Rates
|
Net
Portfolio
Value
|
NPV
Change(1)
|
Portfolio
Value of
Assets
|
NPV as Percentage
of Portfolio Value
Assets(2)
|
Sensitivity
Measure(3)
|
|||||||||||||||||
+300 bp
|
|
$
|
227,236
|
$
|
97,090
|
$
|
1,182,584
|
19.22%
|
|
+742 bp
|
|
|||||||||||
+200 bp
|
|
$
|
199,418
|
$
|
69,272
|
$
|
1,160,389
|
17.19%
|
|
+539 bp
|
|
|||||||||||
+100 bp
|
|
$
|
167,306
|
$
|
37,160
|
$
|
1,134,099
|
14.75%
|
|
+295 bp
|
|
|||||||||||
-
|
$
|
130,146
|
$
|
—
|
$
|
1,102,969
|
11.80%
|
|
-
|
|||||||||||||
-100 bp
|
|
$
|
116,842
|
$
|
(13,304
|
)
|
$
|
1,094,979
|
10.67%
|
|
-113 bp
|
|
||||||||||
-200 bp
|
|
$
|
120,618
|
$
|
(9,528
|
)
|
$
|
1,099,778
|
10.97%
|
|
-83 bp
|
|
(1)
|
Represents the increase (decrease) of the NPV at the indicated interest rate change in comparison to the NPV at June 30, 2019 (“base case”).
|
(2)
|
Calculated as the NPV divided by the portfolio value of total assets.
|
(3)
|
Calculated as the change in the NPV ratio (NPV as a Percentage of Portfolio Value Assets) from the base case amount assuming the indicated change in interest rates (expressed in basis
points).
|
At June 30, 2019
|
At June 30, 2018
|
|
(-100 bp rate shock)
|
(-100 bp rate shock)
|
|
Pre-Shock NPV Ratio: NPV as a % of PV Assets
|
11.80%
|
10.24%
|
Post-Shock NPV Ratio: NPV as a % of PV Assets
|
10.67%
|
9.62%
|
Sensitivity Measure: Change in NPV Ratio
|
-113 bp
|
-62 bp
|
Term to Contractual Repricing, Estimated Repricing, or Contractual
Maturity (1)
|
|||||||||||||||||
As of June 30, 2019
|
|||||||||||||||||
(Dollars In Thousands)
|
12 months or
less
|
Greater than
1 year to 3
years
|
Greater than
3 years to 5
years
|
Greater than
5 years or
non-sensitive
|
Total
|
||||||||||||
Repricing Assets:
|
|||||||||||||||||
Cash and cash equivalents
|
$
|
65,044
|
$
|
—
|
$
|
—
|
$
|
5,588
|
$
|
70,632
|
|||||||
Investment securities
|
32,169
|
400
|
—
|
67,490
|
100,059
|
||||||||||||
Loans held for investment
|
256,934
|
235,201
|
290,831
|
96,959
|
879,925
|
||||||||||||
FHLB - San Francisco stock
|
8,199
|
—
|
—
|
—
|
8,199
|
||||||||||||
Other assets
|
3,424
|
—
|
—
|
22,611
|
26,035
|
||||||||||||
Total assets
|
365,770
|
235,601
|
290,831
|
192,648
|
1,084,850
|
||||||||||||
Repricing Liabilities and Equity:
|
|||||||||||||||||
Checking deposits - non-interest bearing
|
—
|
—
|
—
|
90,184
|
90,184
|
||||||||||||
Checking deposits - interest bearing
|
38,686
|
77,373
|
77,373
|
64,477
|
257,909
|
||||||||||||
Savings deposits
|
52,877
|
105,755
|
105,755
|
—
|
264,387
|
||||||||||||
Money market deposits
|
17,823
|
17,823
|
—
|
—
|
35,646
|
||||||||||||
Time deposits
|
106,080
|
63,451
|
22,919
|
695
|
193,145
|
||||||||||||
Borrowings
|
—
|
41,107
|
40,000
|
20,000
|
101,107
|
||||||||||||
Other liabilities
|
345
|
—
|
—
|
21,486
|
21,831
|
||||||||||||
Stockholders' equity
|
—
|
—
|
—
|
120,641
|
120,641
|
||||||||||||
Total liabilities and stockholders' equity
|
215,811
|
305,509
|
246,047
|
317,483
|
1,084,850
|
||||||||||||
Repricing gap positive (negative)
|
$
|
149,959
|
$
|
(69,908
|
)
|
$
|
44,784
|
$
|
(124,835
|
)
|
$
|
—
|
|||||
Cumulative repricing gap:
|
|||||||||||||||||
Dollar amount
|
$
|
149,959
|
$
|
80,051
|
$
|
124,835
|
$
|
—
|
$
|
—
|
|||||||
Percent of total assets
|
14
|
%
|
7
|
%
|
12
|
%
|
—
|
%
|
—
|
%
|
•
|
The Corporation’s current balance sheet and repricing characteristics;
|
•
|
Forecasted balance sheet growth consistent with the business plan;
|
•
|
Current interest rates and yield curves and management estimates of projected interest rates;
|
•
|
Embedded options, interest rate floors, periodic caps and lifetime caps;
|
•
|
Repricing characteristics for market rate sensitive instruments;
|
•
|
Loan, investment, deposit and borrowing cash flows;
|
•
|
Loan prepayment estimates for each type of loan; and
|
•
|
Immediate, permanent and parallel movements in interest rates of plus 300, 200 and 100 and minus 100 and 200 basis points.
|
At June 30, 2019
|
At June 30, 2018
|
|||
Basis Point (bp)
Change in Rates
|
Change in
Net Interest Income
|
Basis Point (bp)
Change in Rates
|
Change in
Net Interest Income
|
|
+300 bp
|
6.85%
|
+300 bp
|
6.83%
|
|
+200 bp
|
4.39%
|
+200 bp
|
5.73%
|
|
+100 bp
|
2.36%
|
+100 bp
|
4.53%
|
|
-100 bp
|
(3.63)%
|
-100 bp
|
(3.98)%
|
|
-200 bp
|
(6.69)%
|
-200 bp
|
(10.61)%
|
Plan Category
|
Number of Securities
to Be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column (a))
|
||||||
(a)
|
(b)
|
(c)
|
|||||||
Equity compensation plans approved by security holders:
|
|||||||||
2006 Equity Incentive Plan:
|
|||||||||
Stock Options
|
33,500
|
$15.69
|
—
|
||||||
Restricted Stock
|
1,500
|
N/A
|
—
|
||||||
2010 Equity Incentive Plan:
|
|||||||||
Stock Options
|
323,250
|
$12.16
|
—
|
||||||
Restricted Stock
|
6,750
|
N/A
|
—
|
||||||
2013 Equity Incentive Plan:
|
|||||||||
Stock Options
|
214,000
|
$16.65
|
57,500
|
||||||
Restricted Stock
|
225,250
|
N/A
|
43,250
|
||||||
Equity compensation plans not approved by security holders
|
N/A
|
N/A
|
N/A
|
||||||
Total
|
804,250
|
$12.77
|
(1)
|
100,750
|
4.1
|
Form of Certificate of Provident's Common Stock (incorporated by reference to the Corporation’s Registration Statement on Form S-1 (333-2230) filed on March 11, 1996))
|
101
|
The following materials from the Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019, formatted in Extensible Business Reporting Language (XBRL): (1) Consolidated Statements of
Financial Condition; (2) Consolidated Statements of Operations; (3) Consolidated Statements of Comprehensive Income; (4) Consolidated Statements of Stockholders’ Equity; (5) Consolidated Statements of Cash Flows; and (6) Selected Notes to
Consolidated Financial Statements.
|
Date:
|
August 30, 2019
|
Provident Financial Holdings, Inc.
|
/s/ Craig G. Blunden
|
||
Craig G. Blunden
|
||
Chairman and Chief Executive Officer
|
SIGNATURES
|
TITLE
|
DATE
|
|
/s/ Craig G. Blunden
|
Chairman and
|
August 30, 2019
|
|
Craig G. Blunden
|
Chief Executive Officer
(Principal Executive Officer)
|
||
/s/ Donavon P. Ternes
|
President, Chief Operating Officer
|
August 30, 2019
|
|
Donavon P. Ternes
|
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
|
||
/s/ Joseph P. Barr
|
Director
|
August 30, 2019
|
|
Joseph P. Barr
|
|||
/s/ Bruce W. Bennett
|
Director
|
August 30, 2019
|
|
Bruce W. Bennett
|
|||
/s/ Judy A. Carpenter
|
Director
|
August 30, 2019
|
|
Judy A. Carpenter
|
|||
/s/ Debbi H. Guthrie
|
Director
|
August 30, 2019
|
|
Debbi H. Guthrie
|
|||
/s/ Roy H. Taylor
|
Director
|
August 30, 2019
|
|
Roy H. Taylor
|
|||
/s/ William E. Thomas
|
Director
|
August 30, 2019
|
|
William E. Thomas
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
87 |
Consolidated Statements of Financial Condition as of June 30, 2019 and 2018
|
88 |
Consolidated Statements of Operations for the years ended June 30, 2019 and 2018
|
89 |
Consolidated Statements of Comprehensive Income for the years ended June 30, 2019 and 2018
|
90 |
Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2019 and 2018
|
91 |
Consolidated Statements of Cash Flows for the years ended June 30, 2019 and 2018
|
92 |
Notes to Consolidated Financial Statements
|
93 |
(In Thousands, Except Share Information)
|
June 30,
2019 |
June 30,
2018 |
||||
Assets
|
||||||
Cash and cash equivalents
|
$
|
70,632
|
$
|
43,301
|
||
Investment securities - held to maturity, at cost
|
94,090
|
87,813
|
||||
Investment securities – available for sale, at fair value
|
5,969
|
7,496
|
||||
Loans held for investment, net of allowance for loan losses of $7,076 and $7,385,
respectively; includes $5,094 and $5,234 of loans held at fair value, respectively)
|
879,925
|
902,685
|
||||
Loans held for sale, at fair value
|
—
|
96,298
|
||||
Accrued interest receivable
|
3,424
|
3,212
|
||||
Real estate owned, net
|
—
|
906
|
||||
Federal Home Loan Bank (“FHLB”) – San Francisco stock
|
8,199
|
8,199
|
||||
Premises and equipment, net
|
8,226
|
8,696
|
||||
Prepaid expenses and other assets
|
14,385
|
16,943
|
||||
Total assets
|
$
|
1,084,850
|
$
|
1,175,549
|
||
Liabilities and Stockholders’ Equity
|
||||||
Liabilities:
|
||||||
Non interest-bearing deposits
|
$
|
90,184
|
$
|
86,174
|
||
Interest-bearing deposits
|
751,087
|
821,424
|
||||
Total deposits
|
841,271
|
907,598
|
||||
Borrowings
|
101,107
|
126,163
|
||||
Accounts payable, accrued interest and other liabilities
|
21,831
|
21,331
|
||||
Total liabilities
|
964,209
|
1,055,092
|
||||
Commitments and Contingencies (Note 14)
|
||||||
Stockholders’ equity:
|
||||||
Preferred stock, $0.01 par value (2,000,000 shares authorized;
none issued and outstanding)
|
—
|
—
|
||||
Common stock, $0.01 par value (40,000,000 shares authorized;
18,081,365 and 18,033,115 shares issued; 7,486,106 and 7,421,426 shares outstanding, respectively)
|
181
|
181
|
||||
Additional paid-in capital
|
94,351
|
94,957
|
||||
Retained earnings
|
190,839
|
190,616
|
||||
Treasury stock at cost (10,595,259 and 10,611,689 shares, respectively)
|
(164,891
|
)
|
(165,507
|
)
|
||
Accumulated other comprehensive income, net of tax
|
161
|
210
|
||||
Total stockholders’ equity
|
120,641
|
120,457
|
||||
Total liabilities and stockholders’ equity
|
$
|
1,084,850
|
$
|
1,175,549
|
Year Ended June 30,
|
||||||||||
(In Thousands, Except Per Share Information)
|
2019
|
2018
|
||||||||
Interest income:
|
||||||||||
Loans receivable, net
|
$
|
40,092
|
$
|
40,016
|
||||||
Investment securities
|
2,042
|
1,344
|
||||||||
FHLB – San Francisco stock
|
707
|
568
|
||||||||
Interest-earning deposits
|
1,537
|
784
|
||||||||
Total interest income
|
44,378
|
42,712
|
||||||||
Interest expense:
|
||||||||||
Deposits
|
3,381
|
3,495
|
||||||||
Borrowings
|
2,827
|
2,917
|
||||||||
Total interest expense
|
6,208
|
6,412
|
||||||||
Net interest income
|
38,170
|
36,300
|
||||||||
Recovery from the allowance for loan losses
|
(475
|
)
|
(536
|
)
|
||||||
Net interest income, after recovery from the allowance for loan losses
|
38,645
|
36,836
|
||||||||
Non-interest income:
|
||||||||||
Loan servicing and other fees
|
1,051
|
1,575
|
||||||||
Gain on sale of loans, net
|
7,135
|
15,802
|
||||||||
Deposit account fees
|
1,928
|
2,119
|
||||||||
Loss on sale and operations of real estate owned acquired in the settlement of loans, net
|
(4
|
)
|
(86
|
)
|
||||||
Card and processing fees
|
1,568
|
1,541
|
||||||||
Other
|
833
|
944
|
||||||||
Total non-interest income
|
12,511
|
21,895
|
||||||||
Non-interest expense:
|
||||||||||
Salaries and employee benefits(1)
|
30,149
|
34,821
|
||||||||
Premises and occupancy(2)
|
5,038
|
5,134
|
||||||||
Equipment expense(3)
|
2,474
|
1,576
|
||||||||
Professional expense
|
1,864
|
1,912
|
||||||||
Sales and marketing expense
|
980
|
1,039
|
||||||||
Deposit insurance premium and regulatory assessments
|
590
|
749
|
||||||||
Other(4)
|
4,141
|
7,973
|
||||||||
Total non-interest expense
|
45,236
|
53,204
|
||||||||
Income before income taxes
|
5,920
|
5,527
|
||||||||
Provision for income taxes(5)
|
1,503
|
3,396
|
||||||||
Net income
|
$
|
4,417
|
$
|
2,131
|
||||||
Basic earnings per share
|
$
|
0.59
|
$
|
0.28
|
||||||
Diluted earnings per share
|
$
|
0.58
|
$
|
0.28
|
||||||
Cash dividends per share
|
$
|
0.56
|
$
|
0.56
|
(1)
|
Includes $1.7 million of non-recurring expenses related to scaling back of the origination of saleable single-family mortgage loans for the fiscal year ended June 30, 2019.
|
(2)
|
Includes $0.3 million of non-recurring expenses related to scaling back of the origination of saleable single-family mortgage loans for the fiscal year ended June 30, 2019.
|
(3)
|
Includes $0.8 million of non-recurring expenses related to scaling back of the origination of saleable single-family mortgage loans for the fiscal year ended June 30, 2019.
|
(4)
|
Includes $3.4 million of litigation settlement expenses for the fiscal year ended June 30, 2018.
|
(5)
|
Includes a net tax charge of $1.8 million resulting from the revaluation of net deferred tax assets consistent with the Tax Cuts and Jobs Act of 2017 ("Tax Act") for the
fiscal year ended June 30, 2018.
|
Year Ended June 30,
|
||||||||
(In Thousands)
|
2019
|
2018
|
||||||
Net income
|
$
|
4,417
|
$
|
2,131
|
||||
Change in unrealized holding losses on securities available for sale and interest-only strips
|
(70
|
)
|
(137
|
)
|
||||
Reclassification of losses to net income
|
—
|
41
|
||||||
Other comprehensive loss, before income tax benefit
|
(70
|
)
|
(96
|
)
|
||||
Income tax benefit(1)
|
(21
|
)
|
(36
|
)
|
||||
Other comprehensive loss
|
(49
|
)
|
(60
|
)
|
||||
Total comprehensive income
|
$
|
4,368
|
$
|
2,071
|
Common
Stock
|
Additional
Paid-In
|
Retained
|
Treasury
|
Accumulated
Other
Compre-
hensive
Income (Loss),
|
||||||||||||||||
(In Thousands, Except Share Information)
|
Shares
|
Amount
|
Capital
|
Earnings
|
Stock
|
Net of Tax
|
Total
|
|||||||||||||
Balance at June 30, 2017
|
7,714,052
|
180
|
93,209
|
192,754
|
(158,142
|
)
|
229
|
128,230
|
||||||||||||
Net income
|
2,131
|
2,131
|
||||||||||||||||||
Other comprehensive loss
|
(41
|
)
|
(19
|
)
|
(60
|
)
|
||||||||||||||
Purchase of treasury stock (1)
|
(386,876
|
)
|
(7,347
|
)
|
(7,347
|
)
|
||||||||||||||
Forfeiture of restricted stock
|
18
|
(18
|
)
|
—
|
||||||||||||||||
Distribution of restricted stock
|
10,500
|
—
|
||||||||||||||||||
Amortization of restricted stock
|
589
|
589
|
||||||||||||||||||
Exercise of stock options
|
83,750
|
1
|
676
|
677
|
||||||||||||||||
Stock options expense
|
465
|
465
|
||||||||||||||||||
Cash dividends(2)
|
(4,228
|
)
|
(4,228
|
)
|
||||||||||||||||
Balance at June 30, 2018
|
7,421,426
|
$
|
181
|
$
|
94,957
|
$
|
190,616
|
$
|
(165,507
|
)
|
$
|
210
|
$
|
120,457
|
||||||
Net income
|
4,417
|
4,417
|
||||||||||||||||||
Other comprehensive loss
|
(49
|
)
|
(49
|
)
|
||||||||||||||||
Purchase of treasury stock (1)
|
(73,070
|
)
|
(1,412
|
)
|
(1,412
|
)
|
||||||||||||||
Distribution of restricted stock
|
89,500
|
—
|
||||||||||||||||||
Amortization of restricted stock
|
515
|
515
|
||||||||||||||||||
Award of restricted stock
|
(2,028
|
)
|
2,028
|
—
|
||||||||||||||||
Exercise of stock options
|
48,250
|
553
|
553
|
|||||||||||||||||
Stock options expense
|
354
|
354
|
||||||||||||||||||
Cash dividends(2)
|
(4,194
|
)
|
(4,194
|
)
|
||||||||||||||||
Balance at June 30, 2019
|
7,486,106
|
181
|
94,351
|
190,839
|
(164,891
|
)
|
161
|
120,641
|
(1)
|
Includes the repurchase of 21,071 shares and 3,291 shares of distributed restricted stock in fiscal 2019 and 2018, respectively in settlement of employees' withholding tax obligations.
|
(2)
|
Cash dividends of $0.56 per share were paid in both fiscal 2019 and 2018.
|
Year Ended June 30,
|
||||||||
(In Thousands)
|
2019
|
2018
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
4,417
|
$
|
2,131
|
||||
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||||||||
Depreciation and amortization
|
3,075
|
3,130
|
||||||
Recovery from the allowance for loan losses
|
(475
|
)
|
(536
|
)
|
||||
Recovery of losses on real estate owned
|
—
|
(561
|
)
|
|||||
Gain on sale of loans, net
|
(7,135
|
)
|
(15,802
|
)
|
||||
(Gain) loss on sale of real estate owned, net
|
(9
|
)
|
558
|
|||||
Stock-based compensation
|
869
|
1,054
|
||||||
Provision for deferred income taxes
|
650
|
165
|
||||||
Increase in accounts payable, accrued interest and other liabilities
|
1,865
|
2,174
|
||||||
Decrease (increase) in prepaid expenses and other assets
|
774
|
(824
|
)
|
|||||
Loans originated for sale
|
(467,094
|
)
|
(1,185,996
|
)
|
||||
Proceeds from sale of loans
|
570,154
|
1,222,493
|
||||||
Net cash provided by operating activities
|
107,091
|
27,986
|
||||||
Cash flows from investing activities:
|
||||||||
Decrease (increase) in loans held for investment, net
|
22,479
|
(223
|
)
|
|||||
Purchase of investment securities held to maturity
|
(40,682
|
)
|
(54,148
|
)
|
||||
Maturity of investment securities held to maturity
|
800
|
200
|
||||||
Principal payments from investment securities held to maturity
|
32,765
|
25,497
|
||||||
Principal payments from investment securities available for sale
|
1,463
|
1,734
|
||||||
Purchase of FHLB – San Francisco stock
|
—
|
(91
|
)
|
|||||
Proceeds from sale of real estate owned
|
915
|
2,635
|
||||||
Purchase of premises and equipment
|
(449
|
)
|
(2,909
|
)
|
||||
Net cash provided by (used for) investing activities
|
17,291
|
(27,305
|
)
|
Year Ended June 30,
|
|||||||
(In Thousands)
|
2019
|
2018
|
|||||
Cash flows from financing activities:
|
|||||||
Decrease in deposits, net
|
(66,327
|
)
|
(18,923
|
)
|
|||
Proceeds from long-term borrowings
|
—
|
10,000
|
|||||
Repayments of long-term borrowings
|
(10,056
|
)
|
(10,063
|
)
|
|||
Repayments of short-term borrowings, net
|
(15,000
|
)
|
—
|
||||
Treasury stock purchases
|
(1,412
|
)
|
(7,347
|
)
|
|||
Proceeds from exercise of stock options
|
553
|
677
|
|||||
Withholding taxes on stock-based compensation
|
(615
|
)
|
(322
|
)
|
|||
Cash dividends
|
(4,194
|
)
|
(4,228
|
)
|
|||
Net cash used for financing activities
|
(97,051
|
)
|
(30,206
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
27,331
|
(29,525
|
)
|
||||
Cash and cash equivalents at beginning of year
|
43,301
|
72,826
|
|||||
Cash and cash equivalents at end of year
|
$
|
70,632
|
$
|
43,301
|
|||
Supplemental information:
|
|||||||
Cash paid for interest
|
$
|
6,221
|
$
|
6,410
|
|||
Cash paid for income taxes
|
$
|
1,555
|
$
|
2,765
|
|||
Transfer of loans held for sale to held for investment
|
$
|
1,909
|
$
|
1,692
|
|||
Real estate acquired in the settlement of loans
|
$
|
—
|
$
|
2,171
|
For Year Ended June 30,
|
||||||
(In Thousands)
|
2019
|
2018
|
||||
Balance, beginning of year
|
$
|
283
|
$
|
305
|
||
Recourse recovery
|
(33
|
)
|
(22
|
)
|
||
Balance, end of the year
|
$
|
250
|
$
|
283
|
a)
|
A reduction in the stated interest rate.
|
b)
|
An extension of the maturity at an interest rate below market.
|
c)
|
A reduction in the accrued interest.
|
d)
|
Extensions, deferrals, renewals and rewrites.
|
e)
|
Loans that have been discharged in a Chapter 7 Bankruptcy that have not been reaffirmed by the borrower.
|
Buildings
|
10 to 40 years
|
|
Furniture and fixtures
|
3 to 10 years
|
|
Automobiles
|
3 to 5 years
|
|
Computer equipment
|
3 to 5 years
|
June 30, 2019
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
(Losses)
|
Estimated
Fair
Value
|
Carrying
Value
|
||||||||||
(In Thousands)
|
|||||||||||||||
Held to maturity
|
|||||||||||||||
U.S. government sponsored enterprise MBS
|
$
|
90,394
|
$
|
1,289
|
$
|
(14
|
)
|
$
|
91,669
|
$
|
90,394
|
||||
U.S. SBA securities(1)
|
2,896
|
—
|
(6
|
)
|
2,890
|
2,896
|
|||||||||
Certificate of deposits
|
800
|
—
|
—
|
800
|
800
|
||||||||||
Total investment securities - held to maturity
|
$
|
94,090
|
$
|
1,289
|
$
|
(20
|
)
|
$
|
95,359
|
$
|
94,090
|
||||
Available for sale
|
|||||||||||||||
U.S. government agency MBS
|
$
|
3,498
|
$
|
116
|
$
|
(1
|
)
|
$
|
3,613
|
$
|
3,613
|
||||
U.S. government sponsored enterprise MBS
|
1,998
|
89
|
—
|
2,087
|
2,087
|
||||||||||
Private issue CMO(2)
|
261
|
8
|
—
|
269
|
269
|
||||||||||
Total investment securities - available for sale
|
$
|
5,757
|
$
|
213
|
$
|
(1
|
)
|
$
|
5,969
|
$
|
5,969
|
||||
Total investment securities
|
$
|
99,847
|
$
|
1,502
|
$
|
(21
|
)
|
$
|
101,328
|
$
|
100,059
|
(1)
|
Small Business Administration ("SBA").
|
(2)
|
Collateralized Mortgage Obligations (“CMO”).
|
June 30, 2018
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
(Losses)
|
Estimated
Fair
Value
|
Carrying
Value
|
||||||||||
(In Thousands)
|
|||||||||||||||
Held to maturity
|
|||||||||||||||
U.S. government sponsored enterprise MBS
|
$
|
84,227
|
$
|
203
|
$
|
(762
|
)
|
$
|
83,668
|
$
|
84,227
|
||||
U.S. SBA securities(1)
|
2,986
|
—
|
(15
|
)
|
2,971
|
2,986
|
|||||||||
Certificate of deposits
|
600
|
—
|
—
|
600
|
600
|
||||||||||
Total investment securities - held to maturity
|
$
|
87,813
|
$
|
203
|
$
|
(777
|
)
|
$
|
87,239
|
$
|
87,813
|
||||
Available for sale
|
|||||||||||||||
U.S. government agency MBS
|
$
|
4,234
|
$
|
150
|
$
|
—
|
$
|
4,384
|
$
|
4,384
|
|||||
U.S. government sponsored enterprise MBS
|
2,640
|
122
|
—
|
2,762
|
2,762
|
||||||||||
Private issue CMO(2)
|
346
|
4
|
—
|
350
|
350
|
||||||||||
Total investment securities - available for sale
|
$
|
7,220
|
$
|
276
|
$
|
—
|
$
|
7,496
|
$
|
7,496
|
|||||
Total investment securities
|
$
|
95,033
|
$
|
479
|
$
|
(777
|
)
|
$
|
94,735
|
$
|
95,309
|
(1)
|
Small Business Administration ("SBA").
|
(2)
|
Collateralized Mortgage Obligations (“CMO”).
|
As of June 30, 2019
|
Unrealized Holding
Losses
|
Unrealized Holding
Losses |
Unrealized Holding
Losses
|
|||||||||||||||||
(In Thousands)
|
Less Than 12 Months
|
12 Months or More
|
Total
|
|||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||
Description of Securities
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
||||||||||||||
Held to maturity
|
||||||||||||||||||||
U.S. government sponsored enterprise MBS
|
$
|
6,507
|
$
|
8
|
$
|
1,657
|
$
|
6
|
$
|
8,164
|
$
|
14
|
||||||||
U.S. SBA securities
|
—
|
$
|
—
|
2,883
|
6
|
2,883
|
6
|
|||||||||||||
Total investment securities – held to maturity
|
$
|
6,507
|
$
|
8
|
$
|
4,540
|
$
|
12
|
$
|
11,047
|
$
|
20
|
||||||||
Available for sale
|
||||||||||||||||||||
U.S. government agency MBS
|
$
|
289
|
$
|
1
|
$
|
—
|
$
|
—
|
$
|
289
|
$
|
1
|
||||||||
Total investment securities – available for sale
|
$
|
289
|
$
|
1
|
$
|
—
|
$
|
—
|
$
|
289
|
$
|
1
|
||||||||
Total investment securities
|
$
|
6,796
|
$
|
9
|
$
|
4,540
|
$
|
12
|
$
|
11,336
|
$
|
21
|
||||||||
|
||||||||||||||||||||
As of June 30, 2018
|
Unrealized Holding
Losses
|
Unrealized Holding
Losses
|
Unrealized Holding
Losses
|
|||||||||||||||||
(In Thousands)
|
Less Than 12 Months
|
12 Months or More
|
Total
|
|||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||
Description of Securities
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
||||||||||||||
Held to maturity
|
||||||||||||||||||||
U.S. government sponsored enterprise MBS
|
$
|
47,045
|
$
|
762
|
$
|
—
|
$
|
—
|
$
|
47,045
|
$
|
762
|
||||||||
U.S. SBA securities
|
2,964
|
15
|
—
|
—
|
2,964
|
15
|
||||||||||||||
Total investment securities
|
$
|
50,009
|
$
|
777
|
$
|
—
|
$
|
—
|
$
|
50,009
|
$
|
777
|
June 30, 2019
|
June 30, 2018
|
||||||||||||
(In Thousands)
|
Amortized
Cost |
Estimated
Fair Value |
Amortized
Cost |
Estimated
Fair Value |
|||||||||
Held to maturity
|
|||||||||||||
Due in one year or less
|
$
|
400
|
$
|
400
|
$
|
600
|
$
|
600
|
|||||
Due after one through five years
|
32,584
|
32,728
|
24,961
|
24,569
|
|||||||||
Due after five through ten years
|
35,306
|
36,090
|
22,847
|
22,477
|
|||||||||
Due after ten years
|
25,800
|
26,141
|
39,405
|
39,593
|
|||||||||
Total investment securities - held to maturity
|
$
|
94,090
|
$
|
95,359
|
$
|
87,813
|
$
|
87,239
|
|||||
Available for sale
|
|||||||||||||
Due in one year or less
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
|||||
Due after one through five years
|
—
|
—
|
—
|
—
|
|||||||||
Due after five through ten years
|
—
|
—
|
—
|
—
|
|||||||||
Due after ten years
|
5,757
|
5,969
|
7,220
|
7,496
|
|||||||||
No stated maturity (common stock)
|
—
|
—
|
—
|
—
|
|||||||||
Total investment securities - available for sale
|
$
|
5,757
|
$
|
5,969
|
$
|
7,220
|
$
|
7,496
|
|||||
Total investment securities
|
$
|
99,847
|
$
|
101,328
|
$
|
95,033
|
$
|
94,735
|
(In Thousands)
|
June 30,
2019
|
June 30,
2018 |
||||
Mortgage loans:
|
||||||
Single-family
|
$
|
324,952
|
$
|
314,808
|
||
Multi-family
|
439,041
|
476,008
|
||||
Commercial real estate
|
111,928
|
109,726
|
||||
Construction
|
4,638
|
3,174
|
||||
Other
|
167
|
167
|
||||
Commercial business loans
|
478
|
500
|
||||
Consumer loans
|
134
|
109
|
||||
Total loans held for investment, gross
|
881,338
|
904,492
|
||||
Advance payments of escrows
|
53
|
18
|
||||
Deferred loan costs, net
|
5,610
|
5,560
|
||||
Allowance for loan losses
|
(7,076
|
)
|
(7,385
|
)
|
||
Total loans held for investment, net
|
$
|
879,925
|
$
|
902,685
|
Adjustable Rate
|
||||||||||||||||||
(In Thousands)
|
Within One
Year
|
After
One Year Through 3
Years
|
After
3 Years Through 5
Years
|
After
5 Years Through 10
Years
|
Fixed Rate
|
Total
|
||||||||||||
Mortgage loans:
|
||||||||||||||||||
Single-family
|
$
|
97,426
|
$
|
38,371
|
$
|
117,809
|
$
|
59,230
|
$
|
12,116
|
$
|
324,952
|
||||||
Multi-family
|
116,357
|
164,462
|
135,239
|
22,795
|
188
|
439,041
|
||||||||||||
Commercial real estate
|
40,053
|
32,331
|
37,815
|
1,280
|
449
|
111,928
|
||||||||||||
Construction
|
3,919
|
—
|
—
|
60
|
659
|
4,638
|
||||||||||||
Other
|
—
|
—
|
—
|
—
|
167
|
167
|
||||||||||||
Commercial business loans
|
122
|
—
|
—
|
—
|
356
|
478
|
||||||||||||
Consumer loans
|
134
|
—
|
—
|
—
|
—
|
134
|
||||||||||||
Total loans held for investment,
gross
|
$
|
258,011
|
$
|
235,164
|
$
|
290,863
|
$
|
83,365
|
$
|
13,935
|
$
|
881,338
|
▪
|
Pass - These loans range from minimal credit risk to average however still acceptable credit risk. The likelihood of loss is considered remote.
|
▪
|
Special Mention - A special mention asset has potential weaknesses that may be temporary or, if left uncorrected, may result in a loss. While concerns exist, the Bank is currently
protected and loss is considered unlikely and not imminent.
|
▪
|
Substandard - A substandard loan is inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified must
have a well-defined weakness, or weaknesses, that may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
|
▪
|
Doubtful - A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on
the basis of the currently existing facts, conditions and values, highly questionable and improbable.
|
▪
|
Loss - A loss loan is considered uncollectible and of such little value that continuance as an asset of the Bank is not warranted.
|
June 30, 2019
|
|||||||||||||||||||||||||
(In Thousands)
|
Single-
family
|
Multi-
family
|
Commercial
Real Estate
|
Construction
|
Other
Mortgage
|
Commercial
Business
|
Consumer
|
Total
|
|||||||||||||||||
Pass
|
$
|
314,036
|
$
|
435,177
|
$
|
111,001
|
$
|
3,667
|
$
|
167
|
$
|
429
|
$
|
134
|
$
|
864,611
|
|||||||||
Special Mention
|
3,795
|
3,864
|
927
|
—
|
—
|
—
|
—
|
8,586
|
|||||||||||||||||
Substandard
|
7,121
|
—
|
—
|
971
|
—
|
49
|
—
|
8,141
|
|||||||||||||||||
Total loans held for
investment, gross
|
$
|
324,952
|
$
|
439,041
|
$
|
111,928
|
$
|
4,638
|
$
|
167
|
$
|
478
|
$
|
134
|
$
|
881,338
|
June 30, 2018
|
|||||||||||||||||||||||||
(In Thousands)
|
Single-
family
|
Multi-
family
|
Commercial
Real Estate
|
Construction
|
Other
Mortgage
|
Commercial
Business
|
Consumer
|
Total
|
|||||||||||||||||
Pass
|
$
|
304,619
|
$
|
472,061
|
$
|
108,786
|
$
|
3,174
|
$
|
167
|
$
|
430
|
$
|
109
|
$
|
889,346
|
|||||||||
Special Mention
|
2,548
|
3,947
|
940
|
—
|
—
|
—
|
—
|
7,435
|
|||||||||||||||||
Substandard
|
7,641
|
—
|
—
|
—
|
—
|
70
|
—
|
7,711
|
|||||||||||||||||
Total loans held for
investment, gross
|
$
|
314,808
|
$
|
476,008
|
$
|
109,726
|
$
|
3,174
|
$
|
167
|
$
|
500
|
$
|
109
|
$
|
904,492
|
Year Ended June 30, 2019
|
|||||||||||||||||||||||||
(In Thousands)
|
Single-
family
|
Multi-
family
|
Commercial
Real Estate
|
Construction
|
Other
Mortgage
|
Commercial Business
|
Consumer
|
Total
|
|||||||||||||||||
Allowance at beginning of period
|
$
|
2,783
|
$
|
3,492
|
$
|
1,030
|
$
|
47
|
$
|
3
|
$
|
24
|
$
|
6
|
$
|
7,385
|
|||||||||
Provision (recovery) for loan losses
|
(241
|
)
|
(273
|
)
|
20
|
14
|
—
|
—
|
5
|
(475
|
)
|
||||||||||||||
Recoveries
|
198
|
—
|
—
|
—
|
—
|
2
|
—
|
200
|
|||||||||||||||||
Charge-offs
|
(31
|
)
|
—
|
—
|
—
|
—
|
—
|
(3
|
)
|
(34
|
)
|
||||||||||||||
Allowance for loan losses, end of
period
|
$
|
2,709
|
$
|
3,219
|
$
|
1,050
|
$
|
61
|
$
|
3
|
$
|
26
|
$
|
8
|
$
|
7,076
|
|||||||||
Allowance:
|
|||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
122
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
8
|
$
|
—
|
$
|
130
|
|||||||||
Collectively evaluated for impairment
|
2,587
|
3,219
|
1,050
|
61
|
3
|
18
|
8
|
6,946
|
|||||||||||||||||
Allowance for loan losses, end of
period
|
$
|
2,709
|
$
|
3,219
|
$
|
1,050
|
$
|
61
|
$
|
3
|
$
|
26
|
$
|
8
|
$
|
7,076
|
|||||||||
Gross Loans:
|
|||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
5,199
|
$
|
—
|
$
|
—
|
$
|
971
|
$
|
—
|
$
|
49
|
$
|
—
|
$
|
6,219
|
|||||||||
Collectively evaluated for impairment
|
319,753
|
439,041
|
111,928
|
3,667
|
167
|
429
|
134
|
875,119
|
|||||||||||||||||
Total loans held for investment,
gross
|
$
|
324,952
|
$
|
439,041
|
$
|
111,928
|
$
|
4,638
|
$
|
167
|
$
|
478
|
$
|
134
|
$
|
881,338
|
|||||||||
Allowance for loan losses as a
percentage of gross loans held for
investment
|
0.83
|
%
|
0.73
|
%
|
0.94
|
%
|
1.32
|
%
|
1.80
|
%
|
5.44
|
%
|
5.97
|
%
|
0.80
|
%
|
Year Ended June 30, 2018
|
|||||||||||||||||||||||||
(In Thousands)
|
Single-
family
|
Multi-
family
|
Commercial
Real Estate
|
Construction
|
Other
Mortgage
|
Commercial Business
|
Consumer
|
Total
|
|||||||||||||||||
Allowance at beginning of period
|
$
|
3,601
|
$
|
3,420
|
$
|
879
|
$
|
96
|
$
|
—
|
$
|
36
|
$
|
7
|
$
|
8,039
|
|||||||||
Provision (recovery) for loan losses
|
(704
|
)
|
72
|
151
|
(49
|
)
|
3
|
(12
|
)
|
3
|
(536
|
)
|
|||||||||||||
Recoveries
|
278
|
—
|
—
|
—
|
—
|
—
|
—
|
278
|
|||||||||||||||||
Charge-offs
|
(392
|
)
|
—
|
—
|
—
|
—
|
—
|
(4
|
)
|
(396
|
)
|
||||||||||||||
Allowance for loan losses, end of
period
|
$
|
2,783
|
$
|
3,492
|
$
|
1,030
|
$
|
47
|
$
|
3
|
$
|
24
|
$
|
6
|
$
|
7,385
|
|||||||||
Allowance:
|
|||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
151
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
6
|
$
|
—
|
$
|
157
|
|||||||||
Collectively evaluated for impairment
|
2,632
|
3,492
|
1,030
|
47
|
3
|
18
|
6
|
7,228
|
|||||||||||||||||
Allowance for loan losses, end of
period
|
$
|
2,783
|
$
|
3,492
|
$
|
1,030
|
$
|
47
|
$
|
3
|
$
|
24
|
$
|
6
|
$
|
7,385
|
|||||||||
Gross Loans:
|
|||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
7,072
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
70
|
$
|
—
|
$
|
7,142
|
|||||||||
Collectively evaluated for impairment
|
307,736
|
476,008
|
109,726
|
3,174
|
167
|
430
|
109
|
897,350
|
|||||||||||||||||
Total loans held for investment,
gross
|
$
|
314,808
|
$
|
476,008
|
$
|
109,726
|
$
|
3,174
|
$
|
167
|
$
|
500
|
$
|
109
|
$
|
904,492
|
|||||||||
Allowance for loan losses as a
percentage of gross loans held for
investment
|
0.88
|
%
|
0.73
|
%
|
0.94
|
%
|
1.48
|
%
|
1.80
|
%
|
4.80
|
%
|
5.50
|
%
|
0.81
|
%
|
Year Ended June 30,
|
|||||||||
(In Thousands)
|
2019
|
2018
|
|||||||
Balance, beginning of year
|
$
|
7,385
|
$
|
8,039
|
|||||
Recovery from the allowance for loan losses
|
(475
|
)
|
(536
|
)
|
|||||
Recoveries
|
200
|
278
|
|||||||
Charge-offs
|
(34
|
)
|
(396
|
)
|
|||||
Balance, end of year
|
$
|
7,076
|
$
|
7,385
|
At or For the Year Ended June 30, 2019
|
|||||||||||||||||||||||
Unpaid
|
Net
|
Average
|
Interest
|
||||||||||||||||||||
Principal
|
Related
|
Recorded
|
Recorded
|
Recorded
|
Income
|
||||||||||||||||||
(In Thousands)
|
Balance
|
Charge-offs
|
Investment
|
Allowance(1)
|
Investment
|
Investment
|
Recognized
|
||||||||||||||||
Mortgage loans:
|
|||||||||||||||||||||||
Single-family:
|
|||||||||||||||||||||||
With a related allowance
|
$
|
2,640
|
$
|
—
|
$
|
2,640
|
$
|
(434
|
)
|
$
|
2,206
|
$
|
1,583
|
$
|
110
|
||||||||
Without a related allowance(2)
|
3,518
|
(518
|
)
|
3,000
|
—
|
3,000
|
4,301
|
293
|
|||||||||||||||
Total single-family
|
6,158
|
(518
|
)
|
5,640
|
(434
|
)
|
5,206
|
5,884
|
403
|
||||||||||||||
Construction:
|
|||||||||||||||||||||||
Without a related allowance(2)
|
971
|
—
|
971
|
—
|
971
|
664
|
—
|
||||||||||||||||
Total commercial real estate
|
971
|
—
|
971
|
—
|
971
|
664
|
—
|
||||||||||||||||
Commercial business loans:
|
|||||||||||||||||||||||
With a related allowance
|
49
|
—
|
49
|
(8
|
)
|
41
|
58
|
5
|
|||||||||||||||
Total commercial business loans
|
49
|
—
|
49
|
(8
|
)
|
41
|
58
|
5
|
|||||||||||||||
Total non-performing loans
|
$
|
7,178
|
$
|
(518
|
)
|
$
|
6,660
|
$
|
(442
|
)
|
$
|
6,218
|
$
|
6,606
|
$
|
408
|
At or For the Year Ended June 30, 2018
|
|||||||||||||||||||||||
Unpaid
|
Net
|
Average
|
Interest
|
||||||||||||||||||||
Principal
|
Related
|
Recorded
|
Recorded
|
Recorded
|
Income
|
||||||||||||||||||
(In Thousands)
|
Balance
|
Charge-offs
|
Investment
|
Allowance(1)
|
Investment
|
Investment
|
Recognized
|
||||||||||||||||
Mortgage loans:
|
|||||||||||||||||||||||
Single-family:
|
|||||||||||||||||||||||
With a related allowance
|
$
|
1,333
|
$
|
—
|
$
|
1,333
|
$
|
(185
|
)
|
$
|
1,148
|
$
|
871
|
$
|
51
|
||||||||
Without a related allowance(2)
|
5,569
|
(724
|
)
|
4,845
|
—
|
4,845
|
6,767
|
203
|
|||||||||||||||
Total single-family
|
6,902
|
(724
|
)
|
6,178
|
(185
|
)
|
5,993
|
7,638
|
254
|
||||||||||||||
Commercial real estate:
|
|||||||||||||||||||||||
Without a related allowance(2)
|
—
|
—
|
—
|
—
|
—
|
17
|
13
|
||||||||||||||||
Total commercial real estate
|
—
|
—
|
—
|
—
|
—
|
17
|
13
|
||||||||||||||||
Commercial business loans:
|
|||||||||||||||||||||||
With a related allowance
|
70
|
—
|
70
|
(6
|
)
|
64
|
75
|
5
|
|||||||||||||||
Total commercial business loans
|
70
|
—
|
70
|
(6
|
)
|
64
|
75
|
5
|
|||||||||||||||
Total non-performing loans
|
$
|
6,972
|
$
|
(724
|
)
|
$
|
6,248
|
$
|
(191
|
)
|
$
|
6,057
|
$
|
7,730
|
$
|
272
|
June 30, 2019
|
|||||||||||||
(In Thousands)
|
Current
|
30-89 Days
Past Due
|
Non-Accrual(1)
|
Total Loans Held for
Investment, Gross
|
|||||||||
Mortgage loans:
|
|||||||||||||
Single-family
|
$
|
318,671
|
$
|
660
|
$
|
5,621
|
$
|
324,952
|
|||||
Multi-family
|
439,041
|
—
|
—
|
439,041
|
|||||||||
Commercial real estate
|
111,928
|
—
|
—
|
111,928
|
|||||||||
Construction
|
3,667
|
—
|
971
|
4,638
|
|||||||||
Other
|
167
|
—
|
—
|
167
|
|||||||||
Commercial business loans
|
429
|
—
|
49
|
478
|
|||||||||
Consumer loans
|
129
|
5
|
—
|
134
|
|||||||||
Total loans held for investment, gross
|
$
|
874,032
|
$
|
665
|
$
|
6,641
|
$
|
881,338
|
June 30, 2018
|
|||||||||||||
(In Thousands)
|
Current
|
30-89 Days
Past Due
|
Non-Accrual(1)
|
Total Loans Held for
Investment, Gross
|
|||||||||
Mortgage loans:
|
|||||||||||||
Single-family
|
$
|
307,863
|
$
|
804
|
$
|
6,141
|
$
|
314,808
|
|||||
Multi-family
|
476,008
|
—
|
—
|
476,008
|
|||||||||
Commercial real estate
|
109,726
|
—
|
—
|
109,726
|
|||||||||
Construction
|
3,174
|
—
|
—
|
3,174
|
|||||||||
Other
|
167
|
—
|
—
|
167
|
|||||||||
Commercial business loans
|
430
|
—
|
70
|
500
|
|||||||||
Consumer loans
|
108
|
1
|
—
|
109
|
|||||||||
Total loans held for investment, gross
|
$
|
897,476
|
$
|
805
|
$
|
6,211
|
$
|
904,492
|
At June 30,
|
||||||
(In Thousands)
|
2019
|
2018
|
||||
Restructured loans on non-accrual status:
|
||||||
Mortgage loans:
|
||||||
Single-family
|
$
|
1,891
|
$
|
3,328
|
||
Commercial business loans
|
41
|
64
|
||||
Total
|
1,932
|
3,392
|
||||
Restructured loans on accrual status:
|
||||||
Mortgage loans:
|
||||||
Single-family
|
1,861
|
1,788
|
||||
Total
|
1,861
|
1,788
|
||||
Total restructured loans
|
$
|
3,793
|
$
|
5,180
|
At June 30, 2019
|
|||||||||||||||||
Unpaid
|
Net
|
||||||||||||||||
Principal
|
Related
|
Recorded
|
Recorded
|
||||||||||||||
(In Thousands)
|
Balance
|
Charge-offs
|
Investment
|
Allowance(1)
|
Investment
|
||||||||||||
Mortgage loans:
|
|||||||||||||||||
Single-family:
|
|||||||||||||||||
With a related allowance
|
$
|
2,199
|
$
|
—
|
$
|
2,199
|
$
|
(122
|
)
|
$
|
2,077
|
||||||
Without a related allowance(2)
|
2,040
|
(365
|
)
|
1,675
|
—
|
1,675
|
|||||||||||
Total single-family
|
4,239
|
(365
|
)
|
3,874
|
(122
|
)
|
3,752
|
||||||||||
Commercial business loans:
|
|||||||||||||||||
With a related allowance
|
49
|
—
|
49
|
(8
|
)
|
41
|
|||||||||||
Total commercial business loans
|
49
|
—
|
49
|
(8
|
)
|
41
|
|||||||||||
Total restructured loans
|
$
|
4,288
|
$
|
(365
|
)
|
$
|
3,923
|
$
|
(130
|
)
|
$
|
3,793
|
At June 30, 2018
|
|||||||||||||||||
Unpaid
|
Net
|
||||||||||||||||
Principal
|
Related
|
Recorded
|
Recorded
|
||||||||||||||
(In Thousands)
|
Balance
|
Charge-offs
|
Investment
|
Allowance(1)
|
Investment
|
||||||||||||
Mortgage loans:
|
|||||||||||||||||
Single-family:
|
|||||||||||||||||
With a related allowance
|
$
|
2,228
|
$
|
—
|
$
|
2,228
|
$
|
(151
|
)
|
$
|
2,077
|
||||||
Without a related allowance(2)
|
3,450
|
(411
|
)
|
3,039
|
—
|
3,039
|
|||||||||||
Total single-family
|
5,678
|
(411
|
)
|
5,267
|
(151
|
)
|
5,116
|
||||||||||
Commercial business loans:
|
|||||||||||||||||
With a related allowance
|
70
|
—
|
70
|
(6
|
)
|
64
|
|||||||||||
Total commercial business loans
|
70
|
—
|
70
|
(6
|
)
|
64
|
|||||||||||
Total restructured loans
|
$
|
5,748
|
$
|
(411
|
)
|
$
|
5,337
|
$
|
(157
|
)
|
$
|
5,180
|
Year Ended June 30,
|
|||||||
(In Thousands)
|
2019
|
2018
|
|||||
Balance, beginning of year
|
$
|
677
|
$
|
578
|
|||
Originations
|
—
|
2,415
|
|||||
Sales and payments
|
(675
|
)
|
(2,316
|
)
|
|||
Balance, end of year
|
$
|
2
|
$
|
677
|
At June 30,
|
|||||||||
(In Thousands)
|
2019
|
2018
|
|||||||
Loans serviced for Freddie Mac
|
$
|
18,613
|
$
|
19,244
|
|||||
Loans serviced for Fannie Mae
|
89,910
|
96,384
|
|||||||
Loans serviced for FHLB – San Francisco
|
9,724
|
11,786
|
|||||||
Loans serviced for other investors
|
1,989
|
995
|
|||||||
Total loans serviced for others
|
$
|
120,236
|
$
|
128,409
|
Year Ended June 30,
|
|||||||||
(Dollars In Thousands)
|
2019
|
2018
|
|||||||
MSA balance, beginning of fiscal year
|
$
|
998
|
$
|
897
|
|||||
Additions
|
52
|
237
|
|||||||
Amortization
|
(125
|
)
|
(136
|
)
|
|||||
MSA balance, end of fiscal year, before allowance
|
925
|
998
|
|||||||
Allowance
|
(298
|
)
|
(82
|
)
|
|||||
MSA balance, end of fiscal year
|
$ |
627 |
$ |
916 |
|||||
Fair value, beginning of fiscal year
|
$
|
1,015
|
$
|
811
|
|||||
Fair value, end of fiscal year
|
$
|
627
|
$
|
1,015
|
|||||
Allowance, beginning of fiscal year
|
$
|
82
|
$
|
158
|
|||||
Impairment provision (recovery)
|
216
|
(76
|
)
|
||||||
Allowance, end of fiscal year
|
$
|
298
|
$
|
82
|
|||||
Key Assumptions:
|
|||||||||
Weighted-average discount rate
|
9.11
|
%
|
9.11
|
%
|
|||||
Weighted-average prepayment speed
|
23.86
|
%
|
13.42
|
%
|
Amount
|
|||
Year Ending June 30,
|
(In Thousands)
|
||
2020
|
$
|
190
|
|
2021
|
154
|
||
2022
|
114
|
||
2023
|
82
|
||
2024
|
59
|
||
Thereafter
|
326
|
||
Total estimated amortization expense
|
$
|
925
|
Year Ended June 30,
|
||||||
(Dollars In Thousands)
|
2019
|
2018
|
||||
MSA net carrying value
|
$
|
627
|
$
|
916
|
||
CPR assumption (weighted-average)
|
23.86
|
%
|
13.42
|
%
|
||
Impact on fair value with 10% adverse change in prepayment speed
|
$
|
(30
|
)
|
$
|
(31
|
)
|
Impact on fair value with 20% adverse change in prepayment speed
|
$
|
(58
|
)
|
$
|
(61
|
)
|
Discount rate assumption (weighted-average)
|
9.11
|
%
|
9.11
|
%
|
||
Impact on fair value with 10% adverse change in discount rate
|
$
|
(20
|
)
|
$
|
(45
|
)
|
Impact on fair value with 20% adverse change in discount rate
|
$
|
(40
|
)
|
$
|
(88
|
)
|
Year Ended June 30,
|
||||||
(In Thousands)
|
2019
|
2018
|
||||
Loans sold:
|
||||||
Servicing – released
|
$
|
551,754
|
$
|
1,174,618
|
||
Servicing – retained
|
7,196
|
27,566
|
||||
Total loans sold
|
$
|
558,950
|
$
|
1,202,184
|
(In Thousands)
|
June 30,
|
|||||
2019
|
2018
|
|||||
Fixed rate
|
$
|
—
|
$
|
94,730
|
||
Adjustable rate
|
—
|
1,568
|
||||
Total loans held for sale, at fair value
|
$
|
—
|
$
|
96,298
|
(In Thousands)
|
June 30,
|
|||||
2019
|
2018
|
|||||
Real estate owned
|
$
|
—
|
$
|
906
|
||
Allowance for estimated real estate owned losses
|
—
|
—
|
||||
Total real estate owned, net
|
$
|
—
|
$
|
906
|
Year Ended June 30,
|
||||||
(In Thousands)
|
2019
|
2018
|
||||
Net gain (loss) on sale
|
$
|
9
|
$
|
(558
|
)
|
|
Net operating expenses
|
(13
|
)
|
(89
|
)
|
||
Recovery of losses on real estate owned
|
-
|
561
|
||||
Loss on sale and operations of real estate owned acquired in
the settlement of loans, net
|
$
|
(4
|
)
|
$
|
(86
|
)
|
(In Thousands)
|
June 30,
|
|||||
2019
|
2018
|
|||||
Land
|
$
|
2,853
|
$
|
2,853
|
||
Buildings
|
9,759
|
9,843
|
||||
Leasehold improvements
|
3,252
|
3,458
|
||||
Furniture and equipment
|
5,438
|
5,657
|
||||
Automobiles
|
170
|
170
|
||||
21,472
|
21,981
|
|||||
Less accumulated depreciation and amortization
|
(13,246
|
)
|
(13,285
|
)
|
||
Total premises and equipment, net
|
$
|
8,226
|
$
|
8,696
|
(Dollars in Thousands)
|
June 30, 2019
|
June 30, 2018
|
||||||
Interest Rate
|
Amount
|
Interest Rate
|
Amount
|
|||||
Checking deposits – non interest-bearing
|
—
|
$
|
90,184
|
—
|
$
|
86,174
|
||
Checking deposits – interest-bearing(1)
|
0% - 0.30%
|
257,909
|
0% - 0.30%
|
259,372
|
||||
Savings deposits(1)
|
0% - 1.29%
|
264,387
|
0% - 1.29%
|
289,791
|
||||
Money market deposits(1)
|
0% - 2.00%
|
35,646
|
0% - 2.00%
|
34,633
|
||||
Time deposits:(1)
|
||||||||
Under $100(2)
|
0.00% - 2.13%
|
94,200
|
0.00% - 3.90%
|
116,454
|
||||
$100 and over
|
0.15% - 2.52%
|
98,945
|
0.15% - 2.13%
|
121,174
|
||||
Total deposits
|
$
|
841,271
|
$
|
907,598
|
||||
Weighted-average interest rate on deposits
|
0.37
|
%
|
0.39
|
%
|
(1)
|
Certain interest-bearing checking, savings, money market and time deposits require a minimum balance to earn interest.
|
(2)
|
Includes brokered deposits of $0 and $1.6 million at June 30, 2019 and 2018, respectively.
|
(In Thousands)
|
June 30,
|
|||||
2019
|
2018
|
|||||
One year or less
|
$
|
106,080
|
$
|
116,333
|
||
Over one to two years
|
37,117
|
65,200
|
||||
Over two to three years
|
26,334
|
26,163
|
||||
Over three to four years
|
15,135
|
13,890
|
||||
Over four to five years
|
7,784
|
14,227
|
||||
Over five years
|
695
|
1,815
|
||||
Total time deposits
|
$
|
193,145
|
$
|
237,628
|
Year Ended June 30,
|
||||||||
(In Thousands)
|
2019
|
2018
|
||||||
Checking deposits – interest-bearing
|
$
|
305
|
$
|
293
|
||||
Savings deposits
|
572
|
595
|
||||||
Money market deposits
|
123
|
114
|
||||||
Time deposits
|
2,381
|
2,493
|
||||||
Total interest expense on deposits
|
$
|
3,381
|
$
|
3,495
|
(In Thousands)
|
June 30,
|
|||||
2019
|
2018
|
|||||
FHLB – San Francisco advances
|
$
|
101,107
|
$
|
126,163
|
At or For the Year
Ended June 30,
|
||||||
(Dollars in Thousands)
|
2019
|
2018
|
||||
Balance outstanding at the end of year:
FHLB – San Francisco advances
|
$
|
101,107
|
$
|
126,163
|
||
Weighted-average rate at the end of year:
FHLB – San Francisco advances
|
2.62
|
%
|
2.47
|
%
|
||
Maximum amount of borrowings outstanding at any month end:
FHLB – San Francisco advances
|
$
|
136,158
|
$
|
126,163
|
||
Average short-term borrowings during the year
with respect to:(1)
|
||||||
FHLB – San Francisco advances
|
$
|
8,425
|
$
|
8,687
|
||
Weighted-average short-term borrowing rate during the year
with respect to:(1)
|
||||||
FHLB – San Francisco advances
|
1.69
|
%
|
2.53
|
%
|
(Dollars in Thousands)
|
June 30,
|
|||||
2019
|
2018
|
|||||
Within one year
|
$
|
—
|
$
|
25,000
|
||
Over one to two years
|
20,000
|
—
|
||||
Over two to three years
|
21,107
|
20,000
|
||||
Over three to four years
|
10,000
|
21,163
|
||||
Over four to five years
|
30,000
|
10,000
|
||||
Over five years
|
20,000
|
50,000
|
||||
Total borrowings
|
$
|
101,107
|
$
|
126,163
|
||
Weighted average interest rate
|
2.62
|
%
|
2.47
|
%
|
Statutory Tax Rates
|
FY2019
|
FY2018
|
||
Federal Tax Rate
|
21.00%
|
28.06%
|
||
State Tax Rate
|
10.84%
|
10.84%
|
||
Combined Statutory Tax Rate (1)
|
29.56%
|
35.86%
|
Year Ended June 30, | ||||||||
(In Thousands)
|
2019
|
2018
|
||||||
Current:
|
||||||||
Federal
|
$
|
445
|
$
|
2,271
|
||||
State
|
408
|
960
|
||||||
853
|
3,231
|
|||||||
Deferred:
|
||||||||
Federal
|
478
|
582
|
||||||
State
|
172
|
(417
|
)
|
|||||
650
|
165
|
|||||||
Provision for income taxes
|
$
|
1,503
|
$
|
3,396
|
Year Ended June 30,
|
|||||||||||||
2019
|
2018
|
||||||||||||
(In Thousands)
|
Amount
|
Tax
Rate |
Amount
|
Tax
Rate |
|||||||||
Federal income tax at statutory rate
|
$
|
1,243
|
21.00
|
%
|
$
|
1,551
|
28.06
|
%
|
|||||
State income tax, net of federal income tax benefits
|
456
|
7.70
|
%
|
429
|
7.77
|
%
|
|||||||
Changes in taxes resulting from:
|
|||||||||||||
Bank-owned life insurance
|
(39
|
)
|
(0.66
|
)%
|
(50
|
)
|
(0.90
|
)%
|
|||||
Non-deductible expenses
|
21
|
0.35
|
%
|
30
|
0.53
|
%
|
|||||||
Non-deductible stock-based compensation
|
(2
|
)
|
(0.03
|
)%
|
15
|
0.26
|
%
|
||||||
Excess tax benefit on stock-based compensation
|
(104
|
)
|
(1.77
|
)%
|
(189
|
)
|
(3.41
|
)%
|
|||||
Deferred tax asset revaluation due to the Tax Act
|
—
|
—
|
%
|
1,765
|
31.93
|
%
|
|||||||
Return to provision adjustment
|
(77
|
)
|
(1.29
|
)%
|
—
|
—
|
%
|
||||||
Other(1)
|
5
|
0.08
|
%
|
(155
|
)
|
(2.81
|
)%
|
||||||
Effective income tax
|
$
|
1,503
|
25.38
|
%
|
$
|
3,396
|
61.43
|
%
|
(In Thousands)
|
June 30,
|
||||||||
2019
|
2018
|
||||||||
Deferred taxes - federal
|
$
|
2,178
|
$
|
2,636
|
|||||
Deferred taxes - state
|
1,361
|
1,532
|
|||||||
Total net deferred tax assets
|
$
|
3,539
|
$
|
4,168
|
(In Thousands)
|
June 30,
|
||||||||
2019
|
2018
|
||||||||
Loss reserves
|
$
|
2,685
|
$
|
2,873
|
|||||
Non-accrued interest
|
483
|
502
|
|||||||
Deferred compensation
|
2,396
|
2,509
|
|||||||
Accrued vacation
|
124
|
224
|
|||||||
Depreciation
|
95
|
99
|
|||||||
Litigation reserves
|
876
|
1,441
|
|||||||
Other
|
588
|
358
|
|||||||
Total deferred tax assets
|
7,247
|
8,006
|
|||||||
FHLB - San Francisco stock dividends
|
(664
|
)
|
(664
|
)
|
|||||
Unrealized gain on derivative financial instruments, at fair value
|
—
|
(123
|
)
|
||||||
Prepaid expenses
|
(56
|
)
|
(49
|
)
|
|||||
Unrealized gain on investment securities
|
(63
|
)
|
(82
|
)
|
|||||
Unrealized gain on interest-only strips
|
(5
|
)
|
(6
|
)
|
|||||
Deferred loan costs
|
(2,723
|
)
|
(2,806
|
)
|
|||||
State tax
|
(197
|
)
|
(108
|
)
|
|||||
Total deferred tax liabilities
|
(3,708
|
)
|
(3,838
|
)
|
|||||
Net deferred tax assets
|
$
|
3,539
|
$
|
4,168
|
Regulatory Requirements
|
|||||||||||||||||||||||
Actual
|
Minimum for Capital
Adequacy Purposes
|
Minimum to Be
Well Capitalized
|
|||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Provident Savings Bank, F.S.B.:
|
|||||||||||||||||||||||
As of June 30, 2019
|
|||||||||||||||||||||||
Tier 1 leverage capital (to adjusted average assets)
|
$
|
115,009
|
10.50
|
%
|
$
|
43,824
|
4.00
|
%
|
$
|
54,779
|
5.00
|
%
|
|||||||||||
CET1 capital (to risk-weighted assets)
|
$
|
115,009
|
18.00
|
%
|
$
|
44,730
|
7.00
|
%
|
$
|
41,535
|
6.50
|
%
|
|||||||||||
Tier 1 capital (to risk-weighted assets)
|
$
|
115,009
|
18.00
|
%
|
$
|
54,314
|
8.50
|
%
|
$
|
51,119
|
8.00
|
%
|
|||||||||||
Total capital (to risk-weighted assets)
|
$
|
122,225
|
19.13
|
%
|
$
|
67,094
|
10.50
|
%
|
$
|
63,899
|
10.00
|
%
|
|||||||||||
As of June 30, 2018
|
|||||||||||||||||||||||
Tier 1 leverage capital (to adjusted average assets)
|
$
|
116,369
|
9.96
|
%
|
$
|
46,716
|
4.00
|
%
|
$
|
58,394
|
5.00
|
%
|
|||||||||||
CET1 capital (to risk-weighted assets)
|
$
|
116,369
|
16.81
|
%
|
$
|
44,125
|
6.38
|
%
|
$
|
44,990
|
6.50
|
%
|
|||||||||||
Tier 1 capital (to risk-weighted assets)
|
$
|
116,369
|
16.81
|
%
|
$
|
54,507
|
7.88
|
%
|
$
|
55,372
|
8.00
|
%
|
|||||||||||
Total capital (to risk-weighted assets)
|
$
|
123,911
|
17.90
|
%
|
$
|
68,350
|
9.88
|
%
|
$
|
69,215
|
10.00
|
%
|
Fiscal 2019
|
Fiscal 2018
|
||||
Expected volatility
|
16.5
|
%
|
—
|
%
|
|
Weighted-average volatility
|
16.5
|
%
|
—
|
%
|
|
Expected dividend yield
|
2.8
|
%
|
—
|
%
|
|
Expected term (in years) | 7.5 |
— |
|||
Risk-free interest rate
|
2.1
|
%
|
—
|
%
|
Options
|
Shares
|
Weighted-
Average Exercise Price |
Weighted-
Average Remaining Contractual Term (Years) |
Aggregate
Intrinsic Value ($000) |
|||
Outstanding at June 30, 2017
|
615,250
|
$12.14
|
|||||
Granted
|
—
|
$—
|
|||||
Exercised
|
(83,750
|
)
|
$8.08
|
||||
Forfeited
|
(2,500
|
)
|
$14.59
|
||||
Outstanding at June 30, 2018
|
529,000
|
$12.77
|
5.27
|
$
|
3,353
|
||
Vested and expected to vest at June 30, 2018
|
490,850
|
$12.57
|
5.17
|
$
|
3,204
|
||
Exercisable at June 30, 2018
|
338,250
|
$11.36
|
4.55
|
$
|
2,612
|
||
Outstanding at June 30, 2018
|
529,000
|
$12.77
|
|||||
Granted
|
90,000
|
$20.19
|
|||||
Exercised
|
(48,250
|
)
|
$11.45
|
||||
Forfeited
|
—
|
$—
|
|||||
Outstanding at June 30, 2019
|
570,750
|
$14.05
|
5.21
|
$
|
3,960
|
||
Vested and expected to vest at June 30, 2019
|
550,150
|
$13.82
|
5.05
|
$
|
3,942
|
||
Exercisable at June 30, 2019
|
467,750
|
$12.72
|
4.25
|
$
|
3,870
|
Unvested Shares
|
Shares
|
Weighted-Average
Award Date Fair Value |
|
Unvested at June 30, 2017
|
111,000
|
$14.16
|
|
Awarded
|
—
|
$—
|
|
Vested
|
(10,500
|
)
|
$15.37
|
Forfeited
|
(2,000
|
)
|
$13.30
|
Unvested at June 30, 2018
|
98,500
|
$14.35
|
|
Expected to vest at June 30, 2018
|
78,800
|
$14.35
|
|
Unvested at June 30, 2018
|
98,500
|
$14.35
|
|
Awarded
|
224,500
|
$18.57
|
|
Vested
|
(89,500
|
)
|
$13.97
|
Forfeited
|
—
|
$—
|
|
Unvested at June 30, 2019
|
233,500
|
$18.55
|
|
Expected to vest at June 30, 2019
|
186,800
|
$18.55
|
(Dollars in Thousands, Except Share Amount)
|
For the Year Ended June 30, 2019
|
|||||||||||
Income
(Numerator)
|
Shares
(Denominator)
|
Per-Share
Amount
|
||||||||||
Basic EPS
|
$
|
4,417
|
7,484,925
|
$
|
0.59
|
|||||||
Effect of dilutive shares:
|
||||||||||||
Stock options
|
95,960
|
|||||||||||
Restricted stock
|
15,383
|
|||||||||||
Diluted EPS
|
$
|
4,417
|
7,596,268
|
$
|
0.58
|
(Dollars in Thousands, Except Share Amount)
|
For the Year Ended June 30, 2018
|
|||||||||||
Income
(Numerator)
|
Shares
(Denominator)
|
Per-Share
Amount
|
||||||||||
Basic EPS
|
$
|
2,131
|
7,542,071
|
$
|
0.28
|
|||||||
Effect of dilutive shares:
|
||||||||||||
Stock options
|
104,796
|
|||||||||||
Restricted stock
|
53,504
|
|||||||||||
Diluted EPS
|
$
|
2,131
|
7,700,371
|
$
|
0.28
|
Amount
|
|||
Year Ending June 30,
|
(In Thousands)
|
||
2020
|
$
|
2,040
|
|
2021
|
1,776
|
||
2022
|
1,516
|
||
2023
|
802
|
||
2024
|
367
|
||
Thereafter
|
415
|
||
Total minimum payments required
|
$
|
6,916
|
June 30,
|
||||||
Commitments
|
2019
|
2018
|
||||
(In Thousands)
|
||||||
Undisbursed loan funds – Construction loans
|
$
|
6,592
|
$
|
4,302
|
||
Undisbursed lines of credit – Commercial business loans
|
1,003
|
495
|
||||
Undisbursed lines of credit – Consumer loans
|
479
|
503
|
||||
Commitments to extend credit on loans to be held for investment
|
4,254
|
9,352
|
||||
Total
|
$
|
12,328
|
$
|
14,652
|
Year Ended June 30,
|
||||||
(In Thousands)
|
2019
|
2018
|
||||
Balance, beginning of the year
|
$
|
157
|
$
|
277
|
||
Provision (recovery)
|
(16
|
)
|
(120
|
)
|
||
Balance, end of the year
|
$
|
141
|
$
|
157
|
Year Ended June 30,
|
|||||||
Derivative Financial Instruments
|
2019
|
2018
|
|||||
Commitments to extend credit on loans to be held for sale
|
$
|
(825
|
)
|
$
|
16
|
||
Mandatory loan sale commitments and TBA MBS trades
|
440
|
(1,026
|
)
|
||||
Option contracts
|
—
|
(37
|
)
|
||||
Total net loss
|
$
|
(385
|
)
|
$
|
(1,047
|
)
|
(In Thousands)
|
June 30, 2019
|
June 30, 2018
|
|||||||||||
Derivative Financial Instruments
|
Amount
|
Fair
Value |
Amount
|
Fair
Value |
|||||||||
Commitments to extend credit on loans to be held for sale(1)
|
$
|
—
|
$
|
—
|
$
|
56,906
|
$
|
825
|
|||||
Best efforts loan sale commitments
|
—
|
—
|
(29,502
|
)
|
—
|
||||||||
Mandatory loan sale commitments and TBA MBS trades
|
—
|
—
|
(117,759
|
)
|
(440
|
)
|
|||||||
Option contracts
|
—
|
—
|
—
|
—
|
|||||||||
Total
|
$
|
—
|
$
|
—
|
$
|
(90,355
|
)
|
$
|
385
|
(1)
|
Net of 24.7% at June 30, 2018, which management has estimated may not fund.
|
(In Thousands)
|
Aggregate
Fair Value
|
Aggregate
Unpaid
Principal
Balance
|
Net
Unrealized
Gain (Loss)
|
||||||
As of June 30, 2019:
|
|||||||||
Loans held for investment, at fair value
|
$
|
5,094
|
$
|
5,218
|
$
|
(124
|
)
|
||
Loans held for sale, at fair value
|
$
|
-
|
$
|
-
|
$
|
-
|
|||
As of June 30, 2018:
|
|||||||||
Loans held for investment, at fair value
|
$
|
5,234
|
$
|
5,546
|
$
|
(312
|
)
|
||
Loans held for sale, at fair value
|
$
|
96,298
|
$
|
93,791
|
$
|
2,507
|
Level 1
|
-
|
Unadjusted quoted prices in active markets for identical assets or liabilities that the Corporation has the ability to access at the measurement date.
|
Level 2
|
-
|
Observable inputs other than Level 1 such as: quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that
are not active, or other inputs that are observable or can be corroborated to observable market data for substantially the full term of the asset or liability.
|
Level 3
|
-
|
Unobservable inputs for the asset or liability that use significant assumptions, including assumptions of risks. These unobservable assumptions reflect the Corporation’s estimate of
assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of pricing models, discounted cash flow models and similar techniques.
|
Fair Value Measurement at June 30, 2019 Using:
|
||||||||||||
(In Thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Assets:
|
||||||||||||
Investment securities - available for sale:
|
||||||||||||
U.S. government agency MBS
|
$
|
—
|
$
|
3,613
|
$
|
—
|
$
|
3,613
|
||||
U.S. government sponsored enterprise MBS
|
—
|
2,087
|
—
|
2,087
|
||||||||
Private issue CMO
|
—
|
—
|
269
|
269
|
||||||||
Investment securities - available for sale
|
—
|
5,700
|
269
|
5,969
|
||||||||
Loans held for investment, at fair value
|
—
|
—
|
5,094
|
5,094
|
||||||||
Interest-only strips
|
—
|
—
|
16
|
16
|
||||||||
Total assets
|
$
|
—
|
$
|
5,700
|
$
|
5,379
|
$
|
11,079
|
||||
Liabilities:
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Total liabilities
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
Fair Value Measurement at June 30, 2018 Using:
|
||||||||||||
(In Thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Assets:
|
||||||||||||
Investment securities - available for sale:
|
||||||||||||
U.S. government agency MBS
|
$
|
—
|
$
|
4,384
|
$
|
—
|
$
|
4,384
|
||||
U.S. government sponsored enterprise MBS
|
—
|
2,762
|
—
|
2,762
|
||||||||
Private issue CMO
|
—
|
—
|
350
|
350
|
||||||||
Investment securities - available for sale
|
—
|
7,146
|
350
|
7,496
|
||||||||
Loans held for investment, at fair value
|
—
|
—
|
5,234
|
5,234
|
||||||||
Loans held for sale, at fair value
|
—
|
96,298
|
—
|
96,298
|
||||||||
Interest-only strips
|
—
|
—
|
23
|
23
|
||||||||
Derivative assets:
|
||||||||||||
Commitments to extend credit on loans to be held for sale
|
—
|
—
|
849
|
849
|
||||||||
Derivative assets
|
—
|
—
|
849
|
849
|
||||||||
Total assets
|
$
|
—
|
$
|
103,444
|
$
|
6,456
|
$
|
109,900
|
||||
Liabilities:
|
||||||||||||
Derivative liabilities:
|
||||||||||||
Commitments to extend credit on loans to be held for sale
|
$
|
—
|
$
|
—
|
$
|
24
|
$
|
24
|
||||
Mandatory loan sale commitments
|
—
|
—
|
32
|
32
|
||||||||
TBA MBS trades
|
—
|
408
|
—
|
408
|
||||||||
Derivative liabilities
|
—
|
408
|
56
|
464
|
||||||||
Total liabilities
|
$
|
—
|
$
|
408
|
$
|
56
|
$
|
464
|
Fair Value Measurement
Using Significant Other Unobservable Inputs
(Level 3)
|
|||||||||||||||||||||
(In Thousands)
|
Private
Issue
CMO
|
Loans Held
For
Investment, at
fair value(1)
|
Interest-
Only
Strips
|
Loan
Commit-
ments to
Originate(2)
|
Manda-
tory
Commit-
ments(3)
|
Option
Contracts
|
Total
|
||||||||||||||
Beginning balance at June 30, 2018
|
$
|
350
|
$
|
5,234
|
$
|
23
|
$
|
825
|
$
|
(32
|
)
|
$
|
—
|
$
|
6,400
|
||||||
Total gains or losses (realized/
unrealized):
|
|||||||||||||||||||||
Included in earnings
|
—
|
188
|
—
|
(825
|
)
|
19
|
—
|
(618
|
)
|
||||||||||||
Included in other comprehensive
income (loss)
|
4
|
—
|
(7
|
)
|
—
|
—
|
—
|
(3
|
)
|
||||||||||||
Purchases
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||
Issuances
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||
Settlements
|
(85
|
)
|
(1,288
|
)
|
—
|
—
|
13
|
—
|
(1,360
|
)
|
|||||||||||
Transfers in and/or out of Level 3
|
—
|
960
|
—
|
—
|
—
|
—
|
960
|
||||||||||||||
Ending balance at June 30, 2019
|
$
|
269
|
$
|
5,094
|
$
|
16
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
5,379
|
(1)
|
The valuation of loans held for investment at fair value includes management estimates of the specific credit risk attributes of each loan, in addition to the quoted secondary-market
prices which account for interest rate characteristics.
|
(2)
|
Consists of commitments to extend credit on loans to be held for sale.
|
(3)
|
Consists of mandatory loan sale commitments.
|
Fair Value Measurement
Using Significant Other Unobservable Inputs
(Level 3)
|
|||||||||||||||||||||
(In Thousands)
|
Private
Issue
CMO
|
Loans Held
For
Investment, at
fair value(1)
|
Interest-
Only
Strips
|
Loan
Commit-
ments to
Originate(2)
|
Manda-
tory
Commit-
ments(3)
|
Option
Contracts
|
Total
|
||||||||||||||
Beginning balance at June 30, 2017
|
$
|
461
|
$
|
6,445
|
$
|
31
|
$
|
809
|
$
|
47
|
$
|
37
|
$
|
7,830
|
|||||||
Total gains or losses (realized/
unrealized):
|
|||||||||||||||||||||
Included in earnings
|
—
|
(60
|
)
|
—
|
16
|
(87
|
)
|
(37
|
)
|
(168
|
)
|
||||||||||
Included in other comprehensive
income (loss)
|
(1
|
)
|
—
|
(8
|
)
|
—
|
—
|
—
|
(9
|
)
|
|||||||||||
Purchases
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||
Issuances
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||
Settlements
|
(110
|
)
|
(2,242
|
)
|
—
|
—
|
8
|
—
|
(2,344
|
)
|
|||||||||||
Transfers in and/or out of Level 3
|
—
|
1,091
|
—
|
—
|
—
|
—
|
1,091
|
||||||||||||||
Ending balance at June 30, 2018
|
$
|
350
|
$
|
5,234
|
$
|
23
|
$
|
825
|
$
|
(32
|
)
|
$
|
—
|
$
|
6,400
|
(1)
|
The valuation of loans held for investment at fair value includes management estimates of the specific credit risk attributes of each loan, in addition to the quoted secondary-market
prices which account for interest rate characteristics.
|
(2)
|
Consists of commitments to extend credit on loans to be held for sale.
|
(3)
|
Consists of mandatory loan sale commitments.
|
Fair Value Measurement at June 30, 2019 Using:
|
||||||||||||
(In Thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Non-performing loans
|
$
|
—
|
$
|
3,971
|
$
|
2,247
|
$
|
6,218
|
||||
Mortgage servicing assets
|
—
|
—
|
627
|
627
|
||||||||
Real estate owned, net
|
—
|
—
|
—
|
—
|
||||||||
Total
|
$
|
—
|
$
|
3,971
|
$
|
2,874
|
$
|
6,845
|
Fair Value Measurement at June 30, 2018 Using:
|
||||||||||||
(In Thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Non-performing loans
|
$
|
—
|
$
|
4,845
|
$
|
1,212
|
$
|
6,057
|
||||
Mortgage servicing assets
|
—
|
—
|
135
|
135
|
||||||||
Real estate owned, net
|
—
|
906
|
—
|
906
|
||||||||
Total
|
$
|
—
|
$
|
5,751
|
$
|
1,347
|
$
|
7,098
|
(Dollars In Thousands)
|
Fair Value
As of June 30, 2019 |
Valuation
Techniques
|
Unobservable Inputs
|
Range(1)
(Weighted Average)
|
Impact to
Valuation
from an
Increase in
Inputs(2)
|
||
Assets:
|
|||||||
Securities available-for sale:
Private issue CMO
|
$
|
269
|
Market comparable pricing
|
Comparability adjustment
|
2.5% - 2.9% (2.8%)
|
Increase
|
|
Loans held for investment, at fair
value
|
$
|
5,094
|
Relative value analysis
|
Broker quotes
Credit risk factor
|
98.7% - 104.3%
(102.0%) of par
1.2% - 100.0% (4.3%)
|
Increase
Decrease |
|
Non-performing loans(3)
|
$
|
693
|
Discounted cash flow
|
Default rates
|
5.0%
|
Decrease
|
|
Non-performing loans(4)
|
$
|
1,554
|
Relative value analysis
|
Credit risk factor
|
20.0% - 30.0% (19.9%)
|
Decrease
|
|
Mortgage servicing assets
|
$
|
627
|
Discounted cash flow
|
Prepayment speed (CPR)
Discount rate
|
14.6% - 60.0% (23.9%)
9.0% - 10.5% (9.1%) |
Decrease
Decrease |
|
Interest-only strips
|
$
|
16
|
Discounted cash flow
|
Prepayment speed (CPR)
Discount rate
|
19.7% - 39.1% (37.7%)
9.0% |
Decrease
Decrease |
|
Liabilities:
|
|||||||
None
|
|||||||
(1)
|
The range is based on the historical estimated fair values and management estimates.
|
(2)
|
Unless otherwise noted, this column represents the directional change in the fair value of the Level 3 investments that would result from an increase to the corresponding unobservable
input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.
|
(3)
|
Consist of restructured loans.
|
(4)
|
Consist of other non-performing loans, excluding restructured loans.
|
June 30, 2019
|
|||||||||||||||
(In Thousands)
|
Carrying
Amount |
Fair
Value |
Level 1 |
Level 2 |
Level 3 |
||||||||||
Financial assets:
|
|||||||||||||||
Loans held for investment, not recorded at fair
value
|
$
|
874,831
|
$
|
861,374
|
$
|
—
|
$
|
—
|
$
|
861,374
|
|||||
Investment securities - held to maturity
|
$
|
94,090
|
$
|
95,359
|
$
|
—
|
$
|
95,359
|
$
|
—
|
|||||
FHLB – San Francisco stock
|
$
|
8,199
|
$
|
8,199
|
$
|
—
|
$
|
8,199
|
$
|
—
|
|||||
Financial liabilities:
|
|||||||||||||||
Deposits
|
$
|
841,271
|
$
|
813,087
|
$
|
—
|
$
|
—
|
$
|
813,087
|
|||||
Borrowings
|
$
|
101,107
|
$
|
102,826
|
$
|
—
|
$
|
—
|
$
|
102,826
|
June 30, 2018
|
|||||||||||||||
(In Thousands)
|
Carrying
Amount |
Fair
Value |
Level 1 |
Level 2 |
Level 3 |
||||||||||
Financial assets:
|
|||||||||||||||
Loans held for investment, not recorded at fair
value
|
$
|
897,451
|
$
|
873,112
|
$
|
—
|
$
|
—
|
$
|
873,112
|
|||||
Investment securities - held to maturity
|
$
|
87,813
|
$
|
87,239
|
$
|
—
|
$
|
87,239
|
$
|
—
|
|||||
FHLB – San Francisco stock
|
$
|
8,199
|
$
|
8,199
|
$
|
—
|
$
|
8,199
|
$
|
—
|
|||||
Financial liabilities:
|
|||||||||||||||
Deposits
|
$
|
907,598
|
$
|
877,641
|
$
|
—
|
$
|
—
|
$
|
877,641
|
|||||
Borrowings
|
$
|
126,163
|
$
|
123,778
|
$
|
—
|
$
|
—
|
$
|
123,778
|
Year Ended June 30,
|
||||||
Type of Services
|
2019
|
2018
|
||||
(In Thousands)
|
||||||
Asset management fees
|
$
|
296
|
$
|
407
|
||
Debit card and ATM fees
|
1,725
|
1,635
|
||||
Deposit related fees
|
1,978
|
2,169
|
||||
Loan related fees
|
35
|
(37
|
)
|
|||
BOLI (1)
|
186
|
260
|
||||
Loan servicing fees (1)
|
1,051
|
1,575
|
||||
Net gain on sale of loans (1)
|
7,135
|
15,802
|
||||
Other
|
105
|
84
|
||||
Total non-interest income
|
$
|
12,511
|
$
|
21,895
|
(1)
|
Not in scope of ASC 606.
|
Year Ended June 30,
|
|||||||||
(In Thousands)
|
2019
|
2018
|
|||||||
Net interest income
|
$
|
38,170
|
$
|
36,300
|
|||||
Provision (recovery) for loan losses
|
(475
|
)
|
(536
|
)
|
|||||
Net interest income, after provision (recovery) for loan losses
|
38,645
|
36,836
|
|||||||
Non-interest income:
|
|||||||||
Loan servicing and other fees
|
1,051
|
1,575
|
|||||||
Gain on sale of loans, net
|
7,135
|
15,802
|
|||||||
Deposit account fees
|
1,928
|
2,119
|
|||||||
Loss on sale and operations of real estate owned
acquired in the settlement of loans, net |
(4
|
)
|
(86
|
)
|
|||||
Card and processing fees
|
1,568
|
1,541
|
|||||||
Other
|
833
|
944
|
|||||||
Total non-interest income
|
12,511
|
21,895
|
|||||||
Non-interest expense:
|
|||||||||
Salaries and employee benefits(1)
|
30,149
|
34,821
|
|||||||
Premises and occupancy(2)
|
5,038
|
5,134
|
|||||||
Operating and administrative expenses(3)
|
10,049
|
13,249
|
|||||||
Total non-interest expense
|
45,236
|
53,204
|
|||||||
Income (loss) before taxes
|
5,920
|
5,527
|
|||||||
Provision (benefit) for income taxes(4)
|
1,503
|
3,396
|
|||||||
Net income (loss)
|
$
|
4,417
|
$
|
2,131
|
|||||
Total assets, end of period
|
$
|
1,084,850
|
$
|
1,175,549
|
(1)
|
Includes $1.7 million of non-recurring expenses related to scaling back of the origination of saleable single-family mortgage loans for the fiscal year ended June 30,
2019.
|
(2)
|
Includes $0.3 million of non-recurring expenses related to scaling back of the origination of saleable single-family mortgage loans for the fiscal year ended June 30,
2019.
|
(3)
|
Includes $0.8 million of non-recurring equipment expenses related to scaling back of the origination of saleable single-family mortgage loans for the fiscal year ended
June 30, 2019; and includes $3.4 million of litigation settlement expenses for the fiscal year ended June 30, 2018.
|
(4)
|
Includes a net tax charge of $1.8 million resulting from the revaluation of net deferred tax assets consistent with the Tax Act for the fiscal year ended June 30, 2018.
|
June 30,
|
||||||
(In Thousands)
|
2019
|
2018
|
||||
Assets
|
||||||
Cash and cash equivalents
|
$
|
5,421
|
$
|
3,789
|
||
Investment in subsidiary
|
115,185
|
116,608
|
||||
Other assets
|
131
|
123
|
||||
$
|
120,737
|
$
|
120,520
|
|||
Liabilities and Stockholders’ Equity
|
||||||
Other liabilities
|
$
|
96
|
$
|
63
|
||
Stockholders’ equity
|
120,641
|
120,457
|
||||
$
|
120,737
|
$
|
120,520
|
Year Ended June 30,
|
||||||||||
(In Thousands)
|
2019
|
2018
|
||||||||
Dividend from the Bank
|
$ |
7,500 |
$ |
5,000 |
||||||
Interest and other income
|
17
|
19
|
||||||||
Total income
|
7,517
|
5,019
|
||||||||
General and administrative expenses
|
1,209
|
1,077
|
||||||||
Earnings before income taxes and equity in undistributed earnings of the Bank
|
6,308
|
3,942
|
||||||||
Income tax benefit
|
(352
|
)
|
(379
|
)
|
||||||
Earnings before equity in undistributed earnings of the Bank
|
6,660
|
4,321
|
||||||||
Equity in undistributed earnings of the Bank
|
(2,243
|
)
|
(2,190
|
)
|
||||||
Net income |
$ |
4,417 |
$ |
2,131 |
Year Ended June 30,
|
||||||||
(In Thousands)
|
2019
|
2018
|
||||||
Net income
|
$
|
4,417
|
$
|
2,131
|
||||
Other comprehensive income
|
—
|
—
|
||||||
Total comprehensive income
|
$
|
4,417
|
$
|
2,131
|
Year Ended June 30,
|
||||||||
(In Thousands)
|
2019
|
2018
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
4,417
|
$
|
2,131
|
||||
Adjustments to reconcile net income to net cash
provided by operating activities:
|
||||||||
Equity in undistributed earnings of the Bank
|
2,243
|
2,190
|
||||||
(Increase) decrease in other assets
|
(8
|
)
|
18
|
|||||
Increase in other liabilities
|
33
|
10
|
||||||
Net cash provided by operating activities
|
6,685
|
4,349
|
||||||
Cash flow from financing activities:
|
||||||||
Exercise of stock options
|
553
|
677
|
||||||
Treasury stock purchases
|
(1,412
|
)
|
(7,347
|
)
|
||||
Cash dividends
|
(4,194
|
)
|
(4,228
|
)
|
||||
Net cash used for financing activities
|
(5,053
|
)
|
(10,898
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
1,632
|
(6,549
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
3,789
|
10,338
|
||||||
Cash and cash equivalents at end of year
|
$
|
5,421
|
$
|
3,789
|
Unrealized Gains and Losses on
|
|||||||||
(Dollars In Thousands, Net of Statutory Taxes)
|
Investment Securities
Available for Sale
|
Interest-Only
Strips
|
Total
|
||||||
Beginning balance at June 30, 2017
|
$
|
211
|
$
|
18
|
$
|
229
|
|||
Other comprehensive loss before reclassifications
|
(55
|
)
|
(5
|
)
|
(60
|
)
|
|||
Amount reclassified from accumulated other comprehensive
income
|
38
|
3
|
41
|
||||||
Net other comprehensive loss
|
(17
|
)
|
(2
|
)
|
(19
|
)
|
|||
Ending balance at June 30, 2018
|
194
|
16
|
210
|
||||||
Other comprehensive loss before reclassifications
|
(44
|
)
|
(5
|
)
|
(49
|
)
|
|||
Amount reclassified from accumulated other comprehensive
income
|
—
|
—
|
—
|
||||||
Net other comprehensive loss
|
(44
|
)
|
(5
|
)
|
(49
|
)
|
|||
Ending balance at June 30, 2019
|
$
|
150
|
$
|
11
|
$
|
161
|
Net
|
||||||||||||||||||
Gross
|
Amount
|
|||||||||||||||||
Amount
|
of Assets
|
Gross Amount Not
|
||||||||||||||||
Offset in the
|
Presented in
|
Offset in the Consolidated
|
||||||||||||||||
Gross
|
Consolidated
|
the Consolidated
|
Statements of Financial Condition
|
|||||||||||||||
Amount of
|
Statements
|
Statements
|
Cash
|
|||||||||||||||
Recognized
|
of Financial
|
of Financial
|
Financial
|
Collateral
|
Net
|
|||||||||||||
(In Thousands)
|
Assets
|
Condition
|
Condition
|
Instruments
|
Received
|
Amount
|
||||||||||||
Assets
|
||||||||||||||||||
Derivatives
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Total
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
Net
|
||||||||||||||||||
Gross
|
Amount
|
|||||||||||||||||
Amount
|
of Liabilities
|
Gross Amount Not
|
||||||||||||||||
Offset in the
|
Presented in
|
Offset in the Consolidated
|
||||||||||||||||
Gross
|
Consolidated
|
the Consolidated
|
Statements of Financial Condition
|
|||||||||||||||
Amount of
|
Statements
|
Statements
|
Cash
|
|||||||||||||||
Recognized
|
of Financial
|
of Financial
|
Financial
|
Collateral
|
Net
|
|||||||||||||
(In Thousands)
|
Liabilities
|
Condition
|
Condition
|
Instruments
|
Pledged
|
Amount
|
||||||||||||
Liabilities
|
||||||||||||||||||
Derivatives
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Total
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
Net
|
||||||||||||||||||
Gross
|
Amount
|
|||||||||||||||||
Amount
|
of Assets
|
Gross Amount Not
|
||||||||||||||||
Offset in the
|
Presented in
|
Offset in the Consolidated
|
||||||||||||||||
Gross
|
Consolidated
|
the Consolidated
|
Statements of Financial Condition
|
|||||||||||||||
Amount of
|
Statements
|
Statements
|
Cash
|
|||||||||||||||
Recognized
|
of Financial
|
of Financial
|
Financial
|
Collateral
|
Net
|
|||||||||||||
(In Thousands)
|
Assets
|
Condition
|
Condition
|
Instruments
|
Received
|
Amount
|
||||||||||||
Assets
|
||||||||||||||||||
Derivatives
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Total
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
Net
|
||||||||||||||||||
Gross
|
Amount
|
|||||||||||||||||
Amount
|
of Liabilities
|
Gross Amount Not
|
||||||||||||||||
Offset in the
|
Presented in
|
Offset in the Consolidated
|
||||||||||||||||
Gross
|
Consolidated
|
the Consolidated
|
Statements of Financial Condition
|
|||||||||||||||
Amount of
|
Statements
|
Statements
|
Cash
|
|||||||||||||||
Recognized
|
of Financial
|
of Financial
|
Financial
|
Collateral
|
Net
|
|||||||||||||
(In Thousands)
|
Liabilities
|
Condition
|
Condition
|
Instruments
|
Pledged
|
Amount
|
||||||||||||
Liabilities
|
||||||||||||||||||
Derivatives
|
$
|
440
|
$
|
—
|
$
|
440
|
$
|
—
|
$
|
—
|
$
|
440
|
||||||
Total
|
$
|
440
|
$
|
—
|
$
|
440
|
$
|
—
|
$
|
—
|
$
|
440
|
4.2
|
Description of Capital
Stock of Provident Financial Holdings, Inc. |
101
|
The following materials from the Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019, formatted in Extensible Business Reporting Language (XBRL): (1)
Consolidated Statements of Financial Condition; (2) Consolidated Statements of Operations; (3) Consolidated Statements of Comprehensive Income; (4) Consolidated Statements of Stockholders’ Equity; (5) Consolidated Statements of Cash Flows;
and (6) Notes to Consolidated Financial Statements.
|
/s/ Craig G. Blunden
|
At or For The Year Ended June 30,
|
||||||||||||||||||||
(In Thousands, Except Per Share Information)
|
2019
|
2018
|
2017
|
2016
|
2015
|
|||||||||||||||
FINANCIAL CONDITION DATA:
|
||||||||||||||||||||
Total assets
|
$
|
1,084,850
|
$
|
1,175,549
|
$
|
1,200,633
|
$
|
1,171,381
|
$
|
1,174,555
|
||||||||||
Loans held for investment, net
|
879,925
|
902,685
|
904,919
|
840,022
|
814,234
|
|||||||||||||||
Loans held for sale, at fair value
|
—
|
96,298
|
116,548
|
189,458
|
224,715
|
|||||||||||||||
Cash and cash equivalents
|
70,632
|
43,301
|
72,826
|
51,206
|
81,403
|
|||||||||||||||
Investment securities
|
100,059
|
95,309
|
69,759
|
51,522
|
14,961
|
|||||||||||||||
Deposits
|
841,271
|
907,598
|
926,521
|
926,384
|
924,086
|
|||||||||||||||
Borrowings
|
101,107
|
126,163
|
126,226
|
91,299
|
91,367
|
|||||||||||||||
Stockholders’ equity
|
120,641
|
120,457
|
128,230
|
133,451
|
141,137
|
|||||||||||||||
Book value per share
|
16.12
|
16.23
|
16.62
|
16.73
|
16.35
|
|||||||||||||||
OPERATING DATA:
|
||||||||||||||||||||
Interest income
|
$
|
44,378
|
$
|
42,712
|
$
|
42,417
|
$
|
39,304
|
$
|
39,696
|
||||||||||
Interest expense
|
6,208
|
6,412
|
6,679
|
6,975
|
6,421
|
|||||||||||||||
Net interest income
|
38,170
|
36,300
|
35,738
|
32,329
|
33,275
|
|||||||||||||||
Recovery from the allowance for loan losses
|
(475
|
)
|
(536
|
)
|
(1,042
|
)
|
(1,715
|
)
|
(1,387
|
)
|
||||||||||
Net interest income after recovery from the
allowance for loan losses
|
38,645
|
36,836
|
36,780
|
34,044
|
34,662
|
|||||||||||||||
Loan servicing and other fees
|
1,051
|
1,575
|
1,251
|
1,068
|
1,085
|
|||||||||||||||
Gain on sale of loans, net
|
7,135
|
15,802
|
25,680
|
31,521
|
34,210
|
|||||||||||||||
Deposit account fees
|
1,928
|
2,119
|
2,194
|
2,319
|
2,412
|
|||||||||||||||
Gain (loss) on sale and operations of real estate
owned acquired in the settlement of loans, net
|
(4
|
)
|
(86
|
)
|
(557
|
)
|
(95
|
)
|
282
|
|||||||||||
Card and processing fees
|
1,568
|
1,541
|
1,451
|
1,448
|
1,406
|
|||||||||||||||
Other non-interest income
|
833
|
944
|
802
|
800
|
992
|
|||||||||||||||
Operating expenses
|
45,236
|
53,204
|
58,785
|
58,259
|
57,969
|
|||||||||||||||
Income before income taxes
|
5,920
|
5,527
|
8,816
|
12,846
|
17,080
|
|||||||||||||||
Provision for income taxes
|
1,503
|
3,396
|
3,609
|
5,372
|
7,277
|
|||||||||||||||
Net income
|
$
|
4,417
|
$
|
2,131
|
$
|
5,207
|
$
|
7,474
|
$
|
9,803
|
||||||||||
Basic earnings per share
|
$
|
0.59
|
$
|
0.28
|
$
|
0.66
|
$
|
0.90
|
$
|
1.09
|
||||||||||
Diluted earnings per share
|
$
|
0.58
|
$
|
0.28
|
$
|
0.64
|
$
|
0.88
|
$
|
1.07
|
||||||||||
Cash dividend per share
|
$
|
0.56
|
$
|
0.56
|
$
|
0.52
|
$
|
0.48
|
$
|
0.45
|
At or For The Year Ended June 30,
|
|||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
|||||||||||
KEY OPERATING RATIOS:
|
|||||||||||||||
Performance Ratios
|
|||||||||||||||
Return on average assets
|
0.39
|
%
|
0.18
|
%
|
0.43
|
%
|
0.64
|
%
|
0.87
|
%
|
|||||
Return on average stockholders’ equity
|
3.63
|
1.73
|
3.94
|
5.43
|
6.81
|
||||||||||
Interest rate spread
|
3.40
|
3.13
|
3.00
|
2.78
|
2.96
|
||||||||||
Net interest margin
|
3.47
|
3.19
|
3.06
|
2.85
|
3.03
|
||||||||||
Average interest-earning assets to average interest-
bearing liabilities
|
111.14
|
110.66
|
111.16
|
111.75
|
113.02
|
||||||||||
Operating and administrative expenses as a
percentage of average total assets
|
4.00
|
4.54
|
4.90
|
4.98
|
5.12
|
||||||||||
Efficiency ratio(1)
|
89.26
|
91.42
|
88.32
|
83.96
|
78.70
|
||||||||||
Stockholders’ equity to total assets ratio
|
11.12
|
10.25
|
10.68
|
11.39
|
12.02
|
||||||||||
Dividend payout ratio
|
96.55
|
200.00
|
81.25
|
54.55
|
42.06
|
||||||||||
The Bank's Regulatory Capital Ratios
|
|||||||||||||||
Tier 1 leverage capital (to adjusted average assets)
|
10.50
|
%
|
9.96
|
%
|
9.90
|
%
|
10.29
|
%
|
10.68
|
%
|
|||||
CET1 capital (to risk-weighted assets)
|
18.00
|
16.81
|
16.14
|
16.16
|
17.22
|
||||||||||
Tier 1 capital (to risk-weighted assets)
|
18.00
|
16.81
|
16.14
|
16.16
|
17.22
|
||||||||||
Total capital (to risk-weighted assets)
|
19.13
|
17.90
|
17.28
|
17.36
|
18.47
|
||||||||||
Asset Quality Ratios
|
|||||||||||||||
Non-performing loans as a percentage of loans held
for investment, net
|
0.71
|
%
|
0.67
|
%
|
0.88
|
%
|
1.23
|
%
|
1.71
|
%
|
|||||
Non-performing assets as a percentage of total
assets
|
0.57
|
0.59
|
0.80
|
1.11
|
1.39
|
||||||||||
Allowance for loan losses as a percentage of gross
loans held for investment
|
0.80
|
0.81
|
0.88
|
1.02
|
1.06
|
||||||||||
Net charge-offs (recoveries) to average loans
receivable, net
|
(0.02
|
)
|
0.01
|
(0.04
|
)
|
(0.17
|
)
|
(0.04
|
)
|
(1)
|
Non-interest expense as a percentage of net interest income and non-interest income.
|
Board of Directors
|
Senior Officers
|
|
Joseph P. Barr, CPA
|
Provident Financial Holdings, Inc.
|
|
Partner Emeritus
|
||
Swenson Accountancy Corporation
|
Craig G. Blunden
|
|
Chairman and Chief Executive Officer
|
||
Bruce W. Bennett
|
||
Retired Health Care Executive
|
Donavon P. Ternes
|
|
Private Investor
|
President, Chief Operating Officer,
|
|
Chief Financial Officer, and
|
||
Craig G. Blunden
|
Corporate Secretary
|
|
Chairman and Chief Executive Officer
|
||
Provident Financial Holdings, Inc.
|
Provident Bank
|
|
Provident Bank
|
||
Craig G. Blunden
|
||
Judy A. Carpenter
|
Chairman and Chief Executive Officer
|
|
President and Chief Operating Officer
|
||
Riverside Medical Clinic
|
Deborah L. Hill
|
|
Senior Vice President
|
||
Debbi H. Guthrie
|
Chief Human Resources and
|
|
Retired Executive
|
Administrative Officer
|
|
Raincross Hospitality Corporation
|
||
Robert "Scott" Ritter
|
||
Roy H. Taylor
|
Senior Vice President
|
|
Retired Executive
|
Single-Family Division
|
|
Hub International of California, Inc.
|
||
Lilian Salter
|
||
William E. Thomas, Esq.
|
Senior Vice President
|
|
Executive Vice President and General Counsel
|
Chief Information Officer
|
|
The KPC Group
|
||
Donavon P. Ternes
|
||
President, Chief Operating Officer,
|
||
Chief Financial Officer, and
|
||
Corporate Secretary
|
||
David S. Weiant
|
||
Senior Vice President
|
||
Chief Lending Officer
|
||
Gwendolyn L. Wertz
|
||
Senior Vice President
|
||
Retail Banking Division
|
||
RETAIL BANKING CENTERS
|
||
Blythe
|
Rancho Mirage
|
|
350 E. Hobson Way
|
71991 Highway 111
|
|
Blythe, CA 92225
|
Ranch Mirage, CA 92270
|
|
Canyon Crest
|
Redlands
|
|
5225 Canyon Crest Drive, Suite 86
|
125 E. Citrus Avenue
|
|
Riverside, CA 92507
|
Redlands, CA 92373
|
|
Corona
|
Sun City
|
|
487 Magnolia Avenue, Suite 101
|
27010 Sun City Boulevard
|
|
Corona, CA 92879
|
Sun City, CA 92586
|
|
Downtown Business Center
|
Temecula
|
|
4001 Main Street
|
40705 Winchester Road, Suite 6
|
|
Riverside, CA 92501
|
Temecula, CA 92591
|
|
Hemet
|
||
1690 E. Florida Avenue
|
||
Hemet, CA 92544
|
||
Home Office
|
||
6570 Magnolia Avenue
|
||
Riverside, CA 92506
|
||
La Sierra
|
||
3312 La Sierra Avenue, Suite 105
|
||
Riverside, CA 92503
|
||
Moreno Valley
|
||
12460 Heacock Street
|
||
Moreno Valley, CA 92553
|
||
Orangecrest
|
||
19348 Van Buren Boulevard, Suite 119
|
||
Riverside, CA 92508
|
||
Customer Information 1-800-442-5201 or www.myprovident.com
|
Parent Company:
|
||||
Provident Financial Holdings, Inc.
|
||||
Subsidiaries:
|
Percentage of ownership
|
Jurisdiction or State of Incorporation
|
||
Provident Savings Bank, F.S.B.
|
100%
|
United States of America
|
||
Provident Financial Corp (1)
|
100%
|
California
|
||
Profed Mortgage, Inc. (1) (2)
|
100%
|
California
|
||
First Service Corporation (1) (2)
|
100%
|
California
|
||
_____________________________
|
||||
(1) This corporation is a wholly owned subsidiary of Provident Savings Bank, F.S.B.
|
||||
(2) Currently inactive.
|
1.
|
I have reviewed this Annual Report on Form 10-K of Provident Financial Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the
audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 30, 2019
|
/s/Craig G. Blunden
|
Craig G. Blunden
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Provident Financial Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
|
Date: August 30, 2019
|
/s/ Donavon P. Ternes
|
Donavon P. Ternes
|
|
President, Chief Operating Officer and
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Corporation as of the dates and for the periods presented in the financial statements included in such Report.
|
Date: August 30, 2019
|
/s/ Craig G. Blunden
|
Craig G. Blunden
|
|
Chairman and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Corporation as of the dates and for the periods presented in the financial statements included in such Report.
|
Date: August 30, 2019
|
/s/ Donavon P. Ternes
|
Donavon P. Ternes
|
|
President, Chief Operating Officer and
Chief Financial Officer
|
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