Thank you for standing by. My name is Novi, and I will be your conference operator today. At this time, I would like to welcome everyone to the Provident Financial Holdings First Quarter and Fiscal 2025 earnings call. [Operator Instructions] I would now like to turn the call over to Donavon Ternes, President and CEO.

Thank you. Good morning. This is Donavon Ternes, President and CEO of Provident Financial Holdings. And on the call with me is Tam Nguyen, our Senior Vice President and Chief Financial Officer. Before we begin, I have a brief administrative item to address. Our presentation today discusses the company's business outlook and will include forward-looking statements. Those statements include descriptions of management's plans, objectives or goals for future operations, products or services, forecasts of financial or other performance measures and statements about the company's general outlook for economic and business conditions. We also may make forward-looking statements during the question-and-answer period following management's presentation. These forward-looking statements are subject to a number of risks and uncertainties, and actual results may differ materially from those discussed today. Information on the risk factors that could cause actual results to differ from any forward-looking statement is available from the earnings release that was distributed yesterday from the annual report on Form 10-K for the year ended June 30, 2024, and from the Form 10-Qs and other SEC filings that are filed subsequent to the Form 10-K. Forward-looking statements are effective only as of the date that they are made, and the company assumes no obligation to update this information. To begin with, thank you for participating in our call. I hope that each of you has had an opportunity to review our earnings release, which describes our first quarter fiscal 2025 results. In the most recent quarter, we originated $28.9 million of loans held for investment, an increase from $18.6 million in the prior sequential quarter. During the most recent quarter, we also had $34 million of loan principal payments and payoffs, which is up from $30.6 million in the June 2024 quarter. Currently, it seems that real estate investors have reduced their…

[Operator Instructions] Your first question comes from the line of Andrew Liesch with Piper Sandler.

Donavon, you sound a little more constructive on originating loans. I guess how do you feel about the -- your lender base, is there any plans to hire more folks as you look to become more constructive? Or do you think you have a great team set up already?

Well, currently, we have a good team set up. And in fact, we've been holding our teams back a bit for the past 18 months, call it, 2 years since the inversion of the curve and really haven't been growing portfolio. We've been wanting to maintain portfolio. And so, I don't think we're going to have a problem with execution with respect to the team of personnel we have in place. Although it is interesting right now, when we think about the current environment with respect to how aggressive some lenders have been -- have become with respect to pricing, mortgage, multifamily mortgage and commercial real estate mortgage products. So we obviously survey the market, and we have a service that also does this for us. And while our rates are about average to what the market is offering, we are still 80 basis points higher than the best rate in the market with respect to multifamily production. With respect to commercial real estate mortgage production, again, our mortgage rates are about average to the market, but we are 150 basis points higher than the best rate in the market based upon last week survey results. So there's a striking contrast in the market right now with respect to how aggressive some participants have gotten as it relates to their interest rates. We still think, however, that we can grow origination volume as we think about the December quarter.

Got it. Very helpful. And then I'm curious if you have handy what the net interest margin was in September?

September, it was 274 -- or net interest margin for September was 2.84%. It was 10 points higher than the June quarter at 2.74%.

Okay. But then still kind of flat with the full quarter average spend?

Yes. You missed for September -- the September...

Sorry for the month -- I'm sorry. Yes, just for the month.

Yes, yes, yes. For the -- for the month, it was [2.86%], I believe -- month of September.

All right. That makes -- that makes a little bit more sense there. And then just on the buyback, with the stock where it is and kind of the growth plans, I guess, how do you expect -- how are you looking to manage that right now? Is the pace similar to this quarter or is faster than what it was all of last year? Just how are you looking at the pace of share -- share repurchases?

Well, as you know, we begin our business plan each year with moving a cash dividend from the bank to the holding company that cash dividend at the holding company level is earmarked for stock repurchase and cash dividend activity. For -- at the end of September, we moved $9 million cash dividend from the bank to the holding company and that will support repurchase and cash dividend activity for the remainder of the fiscal year through June 30. And again, we're not in complete control of that in that we have a 10b5-1 plan where an agent really controls the activity as it relates to day-to-day repurchase.

Your next question comes from the line of Timothy Coffey with Janney Montgomery Scott.

So you -- in your prepared comments, you talked about being able to toggle pricing to -- to produce more growth. Are you talking about the multifamily and commercial real estate aspects given that you are so much higher than the market?

Well, I'm talking about all 3 of the major categories, including single-family. And in fact, if you look at the earnings release from yesterday and you look at the tables with respect to production volume, you'll see that single-family production volume was actually stronger this quarter and has been stronger the last few quarters with respect to multifamily -- or in comparison to multifamily and commercial. So we're really interested in all 3 of those verticals: multifamily, commercial and single family to increase our loan origination volume and we'll take the opportunity where we see fit as it relates to the best opportunity for us with respect to populating the portfolio.

Okay. And then just looking at mortgage rates since quarter end, how the increase in those rates, how much of a headwind is that to your growth expectations?

Well, it is a headwind in that mortgage rates are not as low as they were, call it, a month ago, they backed up a bit, but they are still lower than where they were a year ago. And in fact, we're still seeing increased refinance activity across the board in multifamily, commercial real estate and single family. And so we think there is demand out there with respect to refinance activity, and we can capitalize on that. But you're right, they backed up a bit from where they were a month ago, but they're still more favorable where -- than where they were a year ago.

Right. Okay. Understood. And then just on the trajectory of deposit pricing. I mean -- the deposit betas for the company were exceptionally low, credit to really loyal deposit base you have. Where is the -- if there is opportunity to lower rates going forward, would you expect those rates to be low in the beginning of the -- of the rate cycle and higher towards the end? Or how should I think about that?

So as it relates to our retail depositors, there's really no opportunity to reprice those deposits lower because, as you mentioned, our deposit beta was very low through the entire cycle. We really didn't match market rates in those retail deposit basis. Our opportunity with respect to repricing liabilities, growth FHLB advances and brokered CDs, are very opportunistic right now. And I'll give you an example. Today, we have $18 million of brokered CDs maturing. They are maturing at 5.30%. We are replacing them with a like amount of balance, and we are replacing them at 4.10%. So we are repricing those brokered CDs down by 120 basis points. And as I described on the call, in the -- or in my prepared remarks, in the December quarter, both FHLB advances and brokered CDs -- currently, we have about $69.6 million, call it, $70 million repricing in the December quarter. The current weighted average cost is 5.20%. We expect that we're going to reprice those down, call it, 100 basis points since rates have backed up a little bit. Additionally, in the March 2025 quarter, we have $85.5 million of FHLB advances and brokered CDs that will be repricing, and the current weighted average interest rate of that bucket of $85.5 million is 4.50%. So we expect we will also be repricing those interest-bearing liabilities down in the March quarter. So we still think we have a bit of a tailwind behind us -- or a bit of a tailwind as it relates to the repricing of our balance sheet, both on the loan side and the interest-bearing liability side such that we can improve our net interest margin, but maybe not at quite the pace that we saw in the September quarter, which was 10 basis points on a sequential quarter basis.

[Operator Instructions] Since we seem to have no more questions, I will now turn the call back over to Donavon Ternes for closing remarks.

Thank you very much for joining the call this quarter, and we look forward to our conversations in future quarters. Have a good week. Goodbye.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.