What the changes say
- California insurance costs and availability now directly threaten borrowers’ debt service, collateral values, and results.
- New risks cover litigation, outsourced systems, cybersecurity, artificial intelligence, and deferred-tax realization.
- Interest-rate exposure reflects changed deposit balances: $317.1 million time deposits, $86.9 million noninterest-bearing checking, and $470.3 million interest-bearing accounts.
- Natural-disaster risk expands to severe weather and climate change, while fraud and risk-control weaknesses receive stronger emphasis.
What changed since the prior 10-K
New
- NewRisks Related to our Lending Activities
The rising cost and reduced availability of property and casualty insurance in California could adversely affect our borrowers, the value of our collateral, and our results of operations
California’s rising insurance costs, limited availability, and reduced coverage could weaken borrowers’ debt service and collateral values.
- NewRisks Related to Regulatory, Legal and Compliance Matters
We are subject to litigation and other legal proceedings that could adversely affect our business
Ordinary-course litigation, including lender-liability and environmental claims from loan workouts, could increase expenses and adversely affect results.
- NewRisks Related to Cybersecurity, Data and Fraud
disruption to our business, additional regulatory scrutiny or penalties, or civil litigation and financial liability, any of which could have a material adverse effect on our business, financial condition and results of operations
Third-party provider failures, system interruptions, communication breakdowns, cyberattacks, or security breaches could disrupt transactions and customer services.
- NewRisks Related to Cybersecurity, Data and Fraud
Our current and future uses of Artificial Intelligence (“AI”) and other emerging technologies may create operational, legal, regulatory, cybersecurity, and reputational risks
Artificial intelligence errors, bias, unreliable data, cybersecurity issues, or privacy problems could harm lending, compliance, customer service, and reputation.
- NewRisks Related to Our Business and Industry Generally
We may not be able to realize the full value of our deferred tax assets[, and the outcome of tax audits or examinations could adversely affect us]
The company may not realize deferred tax assets; $5.2 million of gross assets were offset by $6.4 million of liabilities, producing a $1.2 million net liability.
Dropped
- DroppedRisks Related to our Lending Activities
payments upon maturity, which would require the borrower to either sell or refinance the underlying property to make the balloon payment at maturity, thus increasing the risk of default or non-payment
- DroppedRisks Related to Market and Interest Rate Changes
In addition, most of our mortgage loans have adjustable interest rates. As a result, these loans may experience a higher rate of default in a rising interest rate environment
- DroppedRisks Related to Market and Interest Rate Changes
Certain hedging strategies that we may use to manage investment in mortgage servicing assets, mortgage loans held for sale and interest rate lock commitments may be ineffective to offset any adverse changes in the fair value of these assets due to changes in interest rates and market liquidity
- DroppedRisks Related to Regulatory, Legal and Compliance Matters
regulatory changes could necessitate retrospective application, which might result in the restatement of prior period financial statements
- DroppedRisks Related to Regulatory, Legal and Compliance Matters
Climate change and related legislative and regulatory initiatives may materially affect our business and results of operations
Balloon payments and illiquid multifamily and commercial real estate loans could increase defaults and prolong collateral holding periods.
- DroppedRisks Related to Regulatory, Legal and Compliance Matters
Our litigation related costs may increase
- DroppedRisks Related to Our Business and Industry Generally
Having net deferred tax asset or liability, the full value of which we may not be able to realize
Reworded
- 93% rewrittenRisks Related to Our Business and Industry Generally
Natural disasters and climate-related risks in our primary market area may result in material losses because of damage to collateral properties and borrowers' inability to repay loans
The risk now lists flooding and extreme heat, adds climate change as a potential driver, and expands impacts to borrowers, communities, and regional economies.
Was: Earthquakes, fires, mudslides and other natural disasters in our primary market area may result in material losses because of damage to collateral properties and borrowers' inability to repay loans
- 74% rewrittenRisks Related to Market and Interest Rate Changes
We principally manage interest rate risk by managing our volume and mix of our earning assets and funding liabilities. If we are unable to manage interest rate risk effectively, our business, financial condition and results of operations could be materially affected
Deposit figures changed to $317.1 million time deposits, $86.9 million noninterest-bearing checking, and $470.3 million interest-bearing accounts; adjustable-rate mortgages were added.
- 72% rewrittenRisks Related to Cybersecurity, Data and Fraud
We are subject to certain risks in connection with our use of technology
The wording now expressly links cyberattacks and other breaches to financial losses, disruption, regulatory consequences, and reputational damage.
- 67% rewrittenRisks Related to Our Business and Industry Generally
Regulatory changes to diversity, equity and inclusion (“DEI”) and environmental, social and governance (“ESG”) practices could impact our reputation, compliance costs, and operations
The executive-order date changed from March to January 2025, and the risk now expressly includes state laws and vendor relationships.
- 65% rewrittenRisks Related to Regulatory, Legal and Compliance Matters
We are subject to an extensive body of accounting rules, standards and reporting requirements. Periodic changes to such rules, standards or reporting requirements may change the treatment and recognition of critical financial line items and affect our profitability
The discussion now expressly says accounting changes may require retrospective application and restatement, and identifies CECL adoption on July 1, 2023.
Was: We are subject to an extensive body of accounting rules and best practices. Periodic changes to such rules may change the treatment and recognition of critical financial line items and affect our profitability
- 64% rewrittenRisks Related to Cybersecurity, Data and Fraud
Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes
The risk now emphasizes increasingly sophisticated fraud using technology to target the bank and customers, replacing the prior national-reporting emphasis.
- 47% rewrittenRisks Related to Regulatory, Legal and Compliance Matters
If our enterprise risk management framework is not effective at mitigating risk and loss, we could suffer unexpected losses and our results of operations could be materially adversely affected
The risk adds that controls may fail to mitigate risks under all circumstances or identify every risk, while shortening compliance-program detail.
- 46% rewrittenRisks Related to our Lending Activities
Our allowance for credit losses may not be sufficient to absorb losses in our loan portfolio
No substantive change is visible in the provided excerpt; both versions describe CECL and collective and individual loan allowances.
- 42% rewrittenRisks Related to our Lending Activities
Our multi-family and commercial real estate loans involve higher principal amounts than other loans and repayment of these loans may be dependent on factors outside our control or the control of our borrowers
- 38% rewrittenRisks Related to Regulatory, Legal and Compliance Matters
Non-compliance with the USA Patriot Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions
All 30 risk factors
Headings as the filing states them, in filing order.
Risks Related to Macroeconomic Conditions
- 01Our business may be adversely affected by downturns in the national economy and the regional economies on which we depend
- 02Monetary policy, inflation, deflation, and other external economic factors could adversely impact our financial performance and operations
Risks Related to our Lending Activities
- 03Our business may be adversely affected by credit risk associated with residential property
- 04Our multi-family and commercial real estate loans involve higher principal amounts than other loans and repayment of these loans may be dependent on factors outside our control or the control of our borrowers42% rewritten
- 05We may from time to time purchase loans in bulk or “pools.” We may experience lower yields or losses on loan “pools” because the assumptions we use when purchasing loans in bulk may not prove correct
- 06Our allowance for credit losses may not be sufficient to absorb losses in our loan portfolio46% rewritten
- 07Bank regulatory agencies also periodically review our ACL and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on their judgment about information available to them at the time of their examination
- 08Non-performing assets take significant time to resolve and adversely affect our results of operations and financial condition and could result in further losses in the future
- 09The rising cost and reduced availability of property and casualty insurance in California could adversely affect our borrowers, the value of our collateral, and our results of operationsNew
Risks Related to Market and Interest Rate Changes
- 10Fluctuating interest rates can adversely affect our profitability
- 11We principally manage interest rate risk by managing our volume and mix of our earning assets and funding liabilities. If we are unable to manage interest rate risk effectively, our business, financial condition and results of operations could be materially affected74% rewritten
- 12We may incur losses on our securities portfolio as a result of changes in interest rates
Risks Related to Regulatory, Legal and Compliance Matters
- 13We are subject to an extensive body of accounting rules, standards and reporting requirements. Periodic changes to such rules, standards or reporting requirements may change the treatment and recognition of critical financial line items and affect our profitability65% rewritten
- 14Non-compliance with the USA Patriot Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions38% rewritten
- 15If our enterprise risk management framework is not effective at mitigating risk and loss, we could suffer unexpected losses and our results of operations could be materially adversely affected47% rewritten
- 16We are subject to litigation and other legal proceedings that could adversely affect our businessNew
Risks Related to Cybersecurity, Data and Fraud
- 17We are subject to certain risks in connection with our use of technology72% rewritten
- 18disruption to our business, additional regulatory scrutiny or penalties, or civil litigation and financial liability, any of which could have a material adverse effect on our business, financial condition and results of operationsNew
- 19Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes64% rewritten
- 20Our current and future uses of Artificial Intelligence (“AI”) and other emerging technologies may create operational, legal, regulatory, cybersecurity, and reputational risksNew
Risks Related to Our Business and Industry Generally
- 21Ineffective liquidity management could adversely affect our financial results and condition
- 22We rely on other companies to provide key components of our business infrastructure
- 23Managing reputational risk is important to attracting and maintaining customers, investors and employees
- 24Our growth or future losses may require us to raise additional capital in the future, but that capital may not be available when it is needed or the cost of that capital may be exceedingly high
- 25The financial services market is undergoing rapid technological changes, and if we are unable to stay current with those changes, we will not be able to effectively compete
- 26Natural disasters and climate-related risks in our primary market area may result in material losses because of damage to collateral properties and borrowers' inability to repay loans93% rewritten
- 27Any breach of representations and warranties made by us to our loan purchasers or credit default on our loan sales may require us to repurchase or substitute such loans we have sold
- 28We may not be able to realize the full value of our deferred tax assets[, and the outcome of tax audits or examinations could adversely affect us]New
- 29Regulatory changes to diversity, equity and inclusion (“DEI”) and environmental, social and governance (“ESG”) practices could impact our reputation, compliance costs, and operations67% rewritten
- 30We rely on dividends from the Bank for substantially all of our revenue at the holding company level
Other Provident Financial Holdings 10-Ks
- FY2025 10-K risk factors32 risks
California real estate lending concentration dominates the risk profile, exposing the bank to regional economic and natural disaster shocks.
Filed Aug 29, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.