Provident Financial Holdings Announces New Stock Repurchase Plan

Rhea-AI Summary

Provident Financial Holdings (NASDAQ: PROV) has announced a new stock repurchase program authorized by its Board of Directors. The plan allows for the repurchase of up to 5% of the company's common stock, approximately 334,773 shares, starting January 24, 2025.

The repurchase program will be executed over a one-year period through open market or privately negotiated transactions. The timing and amount of purchases will depend on market conditions, capital requirements, and available cash. The company also announced the cancellation of its September 2023 stock repurchase program, which had 21,691 remaining eligible shares, effective January 24, 2025.

Positive

• Authorization of new stock repurchase program for 334,773 shares (5% of common stock)
• Potential enhancement of shareholder value through stock buyback
• Demonstrates company's confidence in financial position and commitment to returning value to shareholders

Negative

• Cancellation of previous buyback program with 21,691 remaining shares
• Program execution dependent on market conditions and available cash

Insights

Financial Analyst

This new stock repurchase program represents a significant capital allocation decision by Provident Financial Holdings, authorizing the buyback of $5.27 million worth of shares at current market prices. The program's size of 5% of outstanding shares signals management's confidence in the company's financial position and their view that shares may be undervalued.

The timing and structure of this announcement is noteworthy. By canceling the remaining authorization from the September 2023 program (21,691 shares) and replacing it with a larger authorization (334,773 shares), management is demonstrating increased commitment to returning capital to shareholders. The program's flexible implementation approach - allowing purchases through both open market and private transactions over a full year - provides management with strategic optionality to optimize execution based on market conditions.

For a company with a market cap of approximately $104 million, this represents a meaningful capital return initiative. The discretionary nature of the program - with purchases contingent on capital requirements and available cash - indicates prudent financial management, maintaining balance between shareholder returns and operational needs. This approach is particularly important for a financial institution that must maintain regulatory capital requirements.

RIVERSIDE, Calif., Jan. 23, 2025 (GLOBE NEWSWIRE) -- Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the holding company for Provident Savings Bank, F.S.B., today announced that the Company’s Board of Directors authorized the repurchase of up to five percent (5%) of the Company’s common stock, approximately 334,773 shares. Beginning on January 24, 2025, the Company will purchase the shares from time to time in the open market or through privately negotiated transactions over a one-year period depending on market conditions, the capital requirements of the Company, and available cash that can be allocated to the stock repurchase program, among other considerations. Additionally, the September 2023 stock repurchase program which was extended on September 26, 2024 is canceled effective January 24, 2025. There were 21,691 remaining shares eligible for repurchase in the September 2023 stock repurchase program that will no longer be repurchased.

Safe-Harbor Statement

Certain matters in this News Release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may relate to, among others, expectations of the business environment in which the Company operates, projections of future performance, perceived opportunities in the market, potential future credit experience, and statements regarding the Company’s mission and vision. These forward-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties. The Company’s actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide range of factors including, but not limited to, the general business environment, interest rates, the California real estate market, competitive conditions between banks and non-bank financial services providers, regulatory changes, and other risks detailed in the Company’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Contacts:

Donavon P. Ternes
President and 
Chief Executive Officer 

Tam B. Nguyen
Senior Vice President and
Chief Financial Officer

(951) 686-6060

FAQ

How many shares can Provident Financial Holdings (PROV) repurchase under the new program?

Under the new program, PROV can repurchase up to 334,773 shares, representing 5% of the company's common stock.

When does PROV's new stock repurchase program begin?

The new stock repurchase program begins on January 24, 2025.

How long will PROV's new stock buyback program last?

The stock repurchase program will last for one year from its start date of January 24, 2025.

What happened to PROV's September 2023 stock repurchase program?

The September 2023 stock repurchase program is being canceled effective January 24, 2025, with 21,691 remaining shares that will no longer be repurchased.

How will PROV execute its new stock repurchase program?

PROV will purchase shares from time to time in the open market or through privately negotiated transactions, depending on market conditions, capital requirements, and available cash.