Provident Financial Holdings Reports Third Quarter of Fiscal 2020 Results

About this update from Provident Financial Holdings, Inc.

Company Reports $1.14 Million of Net Income in the March 2020 Quarter in Comparison to the $151,000 Net Loss in the March 2019 Quarter Non-Interest Expense Declines by 42% in the March 2020 Quarter in Comparison to the March 2019 Quarter Loans Held for Investment Increase 4% to $914.3 Million from June 30, 2019 Non-Performing Assets Decrease 42% to $3.6 Million at March 31, 2020 in Comparison to $6.2 Million at June 30, 2019 RIVERSIDE, Calif. , April 28, 2020 (GLOBE NEWSWIRE) -- Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the holding company for Provident Savings Bank , F.S.B. (“Bank”), today announced third quarter earnings results for the fiscal year ending June 30, 2020 . For the quarter ended March 31, 2020 , the Company reported net income of $1.14 million , or $0.15 per diluted share (on 7.60 million average diluted shares outstanding), in contrast to the net loss of $151,000 , or $(0.02) per diluted share (on 7.51 million average diluted shares outstanding), in the comparable period a year ago. Compared to the same quarter last year, the increase in earnings was primarily attributable to lower non-interest expenses (mainly, lower salaries and employee benefits expenses related to fewer employees resulting from the scaling back of saleable single-family loan originations), partly offset by lower non-interest income (mainly, lower gain on sale of loans), a higher provision for loan losses and lower net interest income. “Like all companies, we began to see the early implications of the COVID-19 pandemic in the March 2020 quarter. As a result, we increased our provision for loan losses, we tightened our underwriting criteria for new loan originations and purchases, and we began developing programs to help those customers who may be impacted by this event,” said Craig G. Blunden , Chairman and Chief Executive Officer of the Company. “Nonetheless, we remain profitable, strongly capitalized and well-positioned to serve the communities of the Inland Empire,” said Mr. Blunden . Mr. Blunden went on to say, “We have suspended foreclosure sales, offered late fee waivers and implemented a payment forbearance plan, among other actions. Our branches are open and operating with normal branch hours. We’ve implemented social distancing recommendations, sanitizing and cleaning procedures, and are generally operating under state, county, and city recommendations for essential service providers.” “Provident plays an important role in the Inland Empire and I specifically wish to recognize and thank our employees who are working diligently to support our customers and communities under difficult circumstances,” Mr. Blunden concluded. Return on average assets for the third quarter of fiscal 2020 was 0.41 percent in contrast to (0.05) percent for the same period of fiscal 2019; and return on average stockholders’ equity for the third quarter of fiscal 2020 was 3.70 percent in contrast to (0.49) percent for the comparable period of fiscal 2019. On a sequential quarter basis, the $1.14 million net income for the third quarter of fiscal 2020 reflects a $1.26 million or 52 percent decrease from $2.40 million in the second quarter of fiscal 2020. The decrease in earnings for the third quarter of fiscal 2020 compared to the second quarter of fiscal 2020 was primarily attributable to an $896,000 higher provision for loan losses, a $749,000 reduction in net interest income and a $243,000 decrease in non-interest income (mainly reflecting $236,000 of lower loan servicing and other fees). Diluted earnings per share for the third quarter of fiscal 2020 were $0.15 per share, down 52 percent from the $0.31 per share during the second quarter of fiscal 2020. Return on average assets was 0.41 percent for the third quarter of fiscal 2020 compared to 0.87 percent in the second quarter of fiscal 2020; and return on average stockholders’ equity for the third quarter of fiscal 2020 was 3.70 percent, compared to 7.81 percent for the second quarter of fiscal 2020. For the nine months ended March 31, 2020 net income increased $2.48 million , or 68 percent, to $6.11 million from $3.63 million in the comparable period ended March 31, 2019 ; and diluted earnings per share for the nine months ended March 31, 2020 increased 67 percent to $0.80 per share (on 7.61 million average diluted shares outstanding) from $0.48 per share (on 7.56 million average diluted shares outstanding) for the comparable nine month period last year. Compared to the same period last year, the increase in earnings was primarily attributable to a $13.28 million decrease in non-interest expense; partly offset by a $7.68 million decrease in non-interest income (mainly, a $7.23 million decrease in the gain on sale of loans) and a $1.12 million change in the provision for loan losses to a $671,000 provision from a $450,000 recovery. The decrease in non-interest expense was mainly attributable to a $9.80 million decrease in salaries and employee benefits expenses (primarily related to fewer employees resulting from the scaling back of saleable single-family loan originations) and a $1.30 million decrease in premises and occupancy expenses. Net interest income decreased $722,000 , or eight percent, to $8.89 million in the third quarter of fiscal 2020 from $9.61 million for the same quarter of fiscal 2019, attributable to a decrease in the net interest margin, and to a lesser extent, a lower average interest-earning assets balance. The net interest margin during the third quarter of fiscal 2020 decreased 23 basis points to 3.30 percent from 3.53 percent in the same quarter last year, primarily due to a decrease in the average yield of interest-earning assets and a slight increase in the average cost of interest-bearing liabilities. The average yield on interest-earning assets decreased by 22 basis points to 3.87 percent in the third quarter of fiscal 2020 from 4.09 percent in the same quarter last year reflecting in part recent significant decreases in the targeted Federal Funds Rate in response to the COVID-19 pandemic; while the average cost of interest-bearing liabilities increased by one basis point to 0.64 percent in the third quarter of fiscal 2020 from 0.63 percent in the same quarter last year. The average balance of interest-earning assets decreased by $11.3 million , or one percent, to $1.08 billion in the third quarter of fiscal 2020 from $1.09 billion in the same quarter last year. The average balance of interest-bearing liabilities decreased by $11.1 million , or one percent, to $967.9 million in the third quarter of fiscal 2020 from $979.0 million in the same quarter last year. The average balance of loans receivable (including loans held for sale in the prior year) increased by $14.5 million , or two percent, to $929.5 million in the third quarter of fiscal 2020 from $915.0 million in the same quarter of fiscal 2019, primarily due to an increase in loans held for investment, partly offset by a decrease in loans held for sale. There were no loans held for sale during the third quarter of fiscal 2020. The average yield on loans receivable decreased by 24 basis points to 4.14 percent in the third quarter of fiscal 2020 from an average yield of 4.38 percent in the same quarter of fiscal 2019. Net deferred loan cost amortization in the third quarter of fiscal 2020 increased 152% to $451,000 from $179,000 in the same quarter of fiscal 2019 due primarily to higher loan payoffs. Total loans originated and purchased for investment in the third quarter of fiscal 2020 were $28.8 million , down 35 percent from $44.0 million in the same quarter of fiscal 2019. Loan principal payments received in the third quarter of fiscal 2020 were $55.7 million , up 53 percent from $36.5 million in the same quarter of fiscal 2019. The average balance of investment securities decreased by $23.3 million , or 23 percent, to $78.6 million in the third quarter of fiscal 2020 from $101.9 million in the same quarter of fiscal 2019. The average yield on investment securities increased 11 basis points to 2.43 percent in the third quarter of fiscal 2020 from 2.32 percent for the same quarter of fiscal 2019. The increase in the average yield was primarily attributable to a lower premium amortization ( $99,000 vs. $181,000 ). In the third quarter of fiscal 2020, the Federal Home Loan Bank – San Francisco (“FHLB”) distributed a $144,000 cash dividend to the Bank on its FHLB stock, unchanged from the same quarter last year. The average balance of the Company’s interest-earning deposits, primarily cash with the Federal Reserve Bank of San Francisco , decreased $2.5 million , or four percent, to $61.9 million in the third quarter of fiscal 2020 from $64.4 million in the same quarter of fiscal 2019. The average yield earned on interest-earning deposits in the third quarter of fiscal 2020 was 1.20 percent, down 120 basis points from 2.40 percent in the same quarter of fiscal 2019 largely as a result of decreases in the targeted Federal Funds Rate since July 2019 . Average deposits decreased $36.4 million , or four percent, to $836.9 million in the third quarter of fiscal 2020 from $873.3 million in the same quarter of fiscal 2019, primarily due to a managed run-off of higher cost time deposits over the last year consistent with the reduction in the Bank’s funding needs resulting from no loans originated for sale during the first nine months of fiscal 2020. The average cost of deposits improved, decreasing by three basis points to 0.36 percent in the third quarter of fiscal 2020 from 0.39 percent in the same quarter last year. Transaction account balances or “core deposits” increased slightly to $650.2 million at March 31, 2020 from $648.1 million at June 30, 2019 , while time deposits decreased $7.5 million , or four percent, to $185.6 million at March 31, 2020 from $193.1 million at June 30, 2019 . The average balance of borrowings, which consisted of FHLB advances, increased $25.3 million , or 24 percent, to $131.1 million while the average cost of borrowings decreased 17 basis points to 2.44 percent in the third quarter of fiscal 2020, compared to an average balance of $105.8 million with an average cost of 2.61 percent in the same quarter of fiscal 2019. The increase in the average balance of borrowings was primarily due to new long-term borrowings with a lower average cost obtained during the first quarter of fiscal 2020. During the third quarter of fiscal 2020, the Company recorded a provision for loan losses of $874,000 , up from only $4,000 recorded during the same period of fiscal 2019 and up from the recovery of $22,000 recorded in the second quarter of fiscal 2020 (sequential quarter).The increase in the provision for loan losses was primarily due to a qualitative component established in our allowance for loan losses methodology in response to the COVID-19 pandemic which has negatively impacted the current economic environment. Non-performing assets, with underlying collateral located in California , decreased $2.6 million , or 42 percent, to $3.6 million , or 0.33 percent of total assets, at March 31, 2020 , compared to $6.2 million , or 0.57 percent of total assets, at June 30, 2019 . The non-performing loans at March 31, 2020 are comprised of 16 single-family loans ( $3.6 million ) and one commercial business loan ( $34,000 ). At both March 31, 2020 and June 30, 2019 , there was no real estate owned. Net loan recoveries for the quarter ended March 31, 2020 were $15,000 or 0.01 percent (annualized) of average loans receivable, similar to net loan recoveries of $15,000 or 0.01 percent (annualized) of average loans receivable for the quarter ended March 31, 2019 and net loan recoveries of $14,000 or 0.01 percent (annualized) of average loans receivable for the quarter ended December 31, 2019 (sequential quarter). Classified assets at March 31, 2020 were $15.1 million , comprised of $11.4 million of loans in the special mention category, $3.7 million of loans in the substandard category and no real estate owned; while classified assets at June 30, 2019 were $16.2 million , comprised of $8.6 million of loans in the special mention category, $7.6 million of loans in the substandard category and no real estate owned. For the quarter ended March 31, 2020 , no new loans were restructured from their original terms and classified as restructured loans. The outstanding balance of restructured loans at March 31, 2020 was $1.8 million (six loans), down 53 percent from $3.8 million (eight loans) at June 30, 2019 . As of March 31, 2020 , all of the restructured loans were classified as substandard non-accrual. As of March 31, 2020 , 39% or $683,000 of the restructured loans have a current payment status. The allowance for loan losses was $7.8 million at March 31, 2020 , or 0.85 percent of gross loans held for investment, compared to $7.1 million at June 30, 2019 , or 0.80 percent of gross loans held for investment. Management believes that, based on currently available information, the allowance for loan losses is sufficient to absorb potential losses inherent in loans held for investment at March 31, 2020 . Non-interest income decreased by $1.95 million , or 64 percent, to $1.10 million in the third quarter of fiscal 2020 from $3.05 million in the same period of fiscal 2019, primarily as a result of no loan sales during the current quarter. The gain on sale of loans during the third quarter of fiscal 2019 was $1.72 million . On a sequential quarter basis, non-interest income decreased $243,000 , or 18 percent, primarily as a result of a decrease in loan servicing and other loan fees. There were no loans originated for sale during the current or sequential quarters. Non-interest expenses decreased $5.50 million , or 42 percent, to $7.50 million in the third quarter of fiscal 2020 from $13.00 million in the same quarter last year. The decrease was due primarily to lower salaries and employee benefits expenses resulting from fewer employees and lesser reductions in premises and occupancy and other non-interest expense consistent with the scaling back of saleable single-family mortgage loan originations. On a sequential quarter basis, non-interest expenses remained virtually unchanged, decreasing $49,000 or one percent from $7.55 million . The Company’s efficiency ratio in the third quarter of fiscal 2020 was 75 percent, an improvement from 103 percent in the same quarter last year but an increase from 69 percent in the second quarter of fiscal 2020 (sequential quarter). The Company’s provision for income tax was $467,000 for the third quarter of fiscal 2020 in contrast to an income tax benefit of $189,000 in the same quarter last year. The effective tax rate in the third quarter of fiscal 2020 was 28.97%. The Company believes that the tax provision recorded in the third quarter of fiscal 2020 reflects its current federal and state income tax obligations. The Company repurchased 46,756 shares of its common stock during the quarter ended March 31, 2020 at an average cost of $18.95 per share. As of March 31, 2020 , a total of 118,040 shares or 32 percent of the shares authorized for repurchase under the April 2018 stock repurchase plan were purchased at an average cost of $19.57 per share. The April 2018 stock repurchase plan expired on April 26, 2020 . The Bank currently operates 13 retail/business banking offices in Riverside County and San Bernardino County (Inland Empire). The Company will host a conference call for institutional investors and bank analysts on Wednesday, April 29, 2020 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-877-226-8216 and referencing access code number 8875397. An audio replay of the conference call will be available through Wednesday, May 6, 2020 by dialing 1-866-207-1041 and referencing access code number 7751893. For more financial information about the Company please visit the website at www.myprovident.com and click on the “Investor Relations” section. Safe-Harbor Statement This press release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to the Company’s financial condition, liquidity, results of operations, plans, objectives, future performance or business. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors which could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements include, but are not limited to the effect of the COVID-19 pandemic, including on Company’s credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; increased competitive pressures; changes in the interest rate environment; secondary market conditions for loans and our ability to originate for sale and sell loans in the secondary market; changes in general economic conditions and conditions within the securities markets including as a result of the COVID-19 pandemic; legislative and regulatory changes; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (“SEC”) - which are available on our website at www.myprovident.com and on the SEC’s website at www.sec.gov . We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements whether as a result of new information, future events or otherwise. These risks could cause our actual results for fiscal 2020 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of us and could negatively affect our operating and stock price performance. Contacts: Craig G. Blunden Chairman and Chief Executive Officer Donavon P. Ternes President, Chief Operating Officer and Chief Financial Officer(951) 686-606 PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Financial Condition (Unaudited –In Thousands, Except Share Information) March 31 , December 31 , September 30 , June 30 , March 31 , 2020 2019 2019 2019 2019 Assets Cash and cash equivalents $ 84,250 $ 48,233 $ 54,515 $ 70,632 $ 61,458 Investment securities – held to maturity, at cost 69,482 77,161 85,088 94,090 102,510 Investment securities - available for sale, at fair value 4,828 5,237 5,517 5,969 6,294 Loans held for investment, net of allowance for loan losses of $7,810 ; $6,921 ; $6,929 ; $7,076 and $7,080 , respectively; includes $3,835 ; $4,173 ; $4,386 ; $5,094 and $5,239 at fair value, respectively 914,307 941,729 924,314 879,925 883,554 Loans held for sale, at fair value - - - - 30,500 Accrued interest receivable 3,154 3,292 3,380 3,424 3,386 FHLB – San Francisco stock 8,199 8,199 8,199 8,199 8,199 Premises and equipment, net 10,606 10,967 11,215 8,226 8,395 Prepaid expenses and other assets 12,741 12,569 13,068 14,385 15,099 Total assets $ 1,107,567 $ 1,107,387 $ 1,105,296 $ 1,084,850 $ 1,119,395 Liabilities and Stockholders’ Equity Liabilities: Non interest-bearing deposits $ 86,585 $ 85,846 $ 85,338 $ 90,184 $ 90,875 Interest-bearing deposits 749,246 747,804 746,398 751,087 786,009 Total deposits 835,831 833,650 831,736 841,271 876,884 Borrowings 131,070 131,085 131,092 101,107 101,121 Accounts payable, accrued interest and other liabilities 17,508 18,876 20,299 21,831 20,181 Total liabilities 984,409 983,611 983,127 964,209 998,186 Stockholders’ equity: Preferred stock, $.01 par value (2,000,000 shares authorized; none issued and outstanding) - - - - - Common stock, $.01 par value (40,000,000 shares authorized; 18,097,615; 18,097,615; 18,091,865; 18,081,365 and 18,064,365 shares issued, respectively; 7,436,315; 7,483,071; 7,479,682; 7,486,106 and 7,497,357 shares outstanding, respectively) 181 181 181 181 181 Additional paid-in capital 95,355 95,118 94,795 94,351 96,114 Retained earnings 193,802 193,704 192,354 190,839 191,103 Treasury stock at cost (10,661,300; 10,614,544; 10,612,183; 10,559,259 and 10,567,008 shares, respectively) (166,247 ) (165,360 ) (165,309 ) (164,891 ) (166,352 ) Accumulated other comprehensive income, net of tax 67 133 148 161 163 Total stockholders’ equity 123,158 123,776 122,169 120,641 121,209 Total liabilities and stockholders’ equity $ 1,107,567 $ 1,107,387 $ 1,105,296 $ 1,084,850 $ 1,119,395 PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Operations (Unaudited - In Thousands, Except Earnings Per Share) Quarter Ended March 31 , Nine Months Ended March 31 , 2020 2019 2020 2019 Interest income: Loans receivable, net $ 9,622 $ 10,011 $ 30,017 $ 30,516 Investment securities 478 592 1,659 1,381 FHLB – San Francisco stock 144 144 432 565 Interest-earning deposits 186 386 621 1,111 Total interest income 10,430 11,133 32,729 33,573 Interest expense: Checking and money market deposits 106 102 333 327 Savings deposits 131 139 396 437 Time deposits 509 600 1,571 1,851 Borrowings 794 680 2,318 2,158 Total interest expense 1,540 1,521 4,618 4,773 Net interest income 8,890 9,612 28,111 28,800 Provision (recovery) for loan losses 874 4 671 (450 ) Net interest income, after provision (recovery) for loan losses 8,016 9,608 27,440 29,250 Non-interest income: Loan servicing and other fees 131 262 631 863 Gain (loss) on sale of loans, net 14 1,719 (115 ) 7,114 Deposit account fees 423 471 1,321 1,485 Gain (loss) on sale and operations of real estate owned acquired in the settlement of loans - 2 - (4 ) Card and processing fees 360 373 1,121 1,163 Other 173 225 557 575 Total non-interest income 1,101 3,052 3,515 11,196 Non-interest expense: Salaries and employee benefits 4,966 9,292 14,950 24,753 Premises and occupancy 845 1,286 2,603 3,905 Equipment 314 417 855 1,333 Professional expenses 351 513 1,090 1,371 Sales and marketing expenses 177 246 506 668 Deposit insurance premiums and regulatory assessments 54 124 97 461 Other 798 1,122 2,196 3,088 Total non-interest expense 7,505 13,000 22,297 35,579 Income (loss) before taxes 1,612 (340 ) 8,658 4,867 Provision (benefit) for income taxes 467 (189 ) 2,553 1,237 Net income (loss) $ 1,145 $ (151 ) $ 6,105 $ 3,630 Basic earnings (loss) per share $ 0.15 $ (0.02 ) $ 0.82 $ 0.49 Diluted earnings (loss) per share $ 0.15 $ (0.02 ) $ 0.80 $ 0.48 Cash dividends per share $ 0.14 $ 0.14 $ 0.42 $ 0.42 PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Operations – Sequential Quarters (Unaudited – In Thousands, Except Share Information) Quarter Ended March 31 , December 31 , September 30 , June 30 , March 31 , 2020 2019 2019 2019 2019 Interest income: Loans receivable, net $ 9,622 $ 10,320 $ 10,075 $ 9,576 $ 10,011 Investment securities 478 567 614 661 592 FHLB – San Francisco stock 144 145 143 142 144 Interest-earning deposits 186 189 246 426 386 Total interest income 10,430 11,221 11,078 10,805 11,133 Interest expense: Checking and money market deposits 106 117 110 101 102 Savings deposits 131 131 134 135 139 Time deposits 509 530 532 530 600 Borrowings 794 804 720 669 680 Total interest expense 1,540 1,582 1,496 1,435 1,521 Net interest income 8,890 9,639 9,582 9,370 9,612 Provision (recovery) for loan losses 874 (22 ) (181 ) (25 ) 4 Net interest income, after provision (recovery) for loan losses 8,016 9,661 9,763 9,395 9,608 Non-interest income: Loan servicing and other fees 131 367 133 188 262 Gain (loss) on sale of loans, net 14 (43 ) (86 ) 21 1,719 Deposit account fees 423 451 447 443 471 Gain on sale and operations of real estate owned acquired in the settlement of loans, net - - - - 2 Card and processing fees 360 371 390 405 373 Other 173 198 186 258 225 Total non-interest income 1,101 1,344 1,070 1,315 3,052 Non-interest expense: Salaries and employee benefits 4,966 4,999 4,985 5,396 9,292 Premises and occupancy 845 880 878 1,133 1,286 Equipment 314 262 279 1,141 417 Professional expenses 351 331 408 493 513 Sales and marketing expenses 177 212 117 312 246 Deposit insurance premiums and regulatory assessments 54 59 (16 ) 129 124 Other 798 811 587 1,053 1,122 Total non-interest expense 7,505 7,554 7,238 9,657 13,000 Income (loss) before taxes 1,612 3,451 3,595 1,053 (340 ) Provision (benefit) for income taxes 467 1,053 1,033 266 (189 ) Net income (loss) $ 1,145 $ 2,398 $ 2,562 $ 787 $ (151 ) Basic earnings (loss) per share $ 0.15 $ 0.32 $ 0.34 $ 0.10 $ (0.02 ) Diluted earnings (loss) per share $ 0.15 $ 0.31 $ 0.34 $ 0.10 $ (0.02 ) Cash dividends per share $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands, Except Share Information) Quarter Ended March 31 , Nine Months Ended March 31 , 2020 2019 2020 2019 SELECTED FINANCIAL RATIOS: Return (loss) on average assets 0.41 % (0.05 )% 0.74 % 0.42 % Return (loss) on average stockholders’ equity 3.70 % (0.49 )% 6.64 % 3.97 % Stockholders’ equity to total assets 11.12 % 10.83 % 11.12 % 10.83 % Net interest spread 3.23 % 3.46 % 3.44 % 3.39 % Net interest margin 3.30 % 3.53 % 3.51 % 3.45 % Efficiency ratio 75.12 % 102.65 % 70.50 % 88.96 % Average interest-earning assets to average interest-bearing liabilities 111.39 % 111.28 % 111.48 % 111.04 % SELECTED FINANCIAL DATA: Basic earnings (loss) per share $ 0.15 $ (0.02 ) $ 0.82 $ 0.49 Diluted earnings (loss) per share $ 0.15 $ (0.02 ) $ 0.80 $ 0.48 Book value per share $ 16.56 $ 16.17 $ 16.56 $ 16.17 Shares used for basic EPS computation 7,468,932 7,506,770 7,477,922 7,481,095 Shares used for diluted EPS computation 7,590,348 7,506,770 7,606,494 7,555,013 Total shares issued and outstanding 7,436,315 7,497,357 7,436,315 7,497,357 LOANS ORIGINATED AND PURCHASED FOR INVESTMENT: Mortgage Loans: Single-family $ 9,654 $ 15,288 $ 95,954 $ 56,684 Multi-family 12,850 21,546 89,490 44,323 Commercial real estate 5,570 5,197 14,468 13,677 Construction 774 1,970 3,983 5,313 Consumer loans - - 1 - Total loans originated and purchased for investment $ 28,848 $ 44,001 $ 203,896 $ 119,997 LOANS ORIGINATED FOR SALE: Retail originations $ - $ 72,353 $ - $ 287,399 Wholesale originations - 38,353 - 166,045 Total loans originated for sale $ - $ 110,706 $ - $ 453,444 LOANS SOLD: Servicing released $ - $ 134,264 $ - $ 510,798 Servicing retained - 2,409 - 5,193 Total loans sold $ - $ 136,673 $ - $ 515,991 PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited-Dollars in Thousands, Except Share Information) Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended 03/31/20 12/31/19 09/30/19 06/30/19 03/31/19 SELECTED FINANCIAL RATIOS: Return (loss) on average assets 0.41% 0.87% 0.95% 0.29% (0.05)% Return (loss) on average stockholders’ equity 3.70% 7.81% 8.46% 2.60% (0.49)% Stockholders’ equity to total assets 11.12% 11.18% 11.05% 11.12% 10.83% Net interest spread 3.23% 3.53% 3.58% 3.46% 3.46% Net interest margin 3.30% 3.59% 3.64% 3.52% 3.53% Efficiency ratio 75.12% 68.78% 67.95% 90.38% 102.65% Average interest-earning assets to average interest-bearing liabilities 111.39% 111.43% 111.61% 111.45% 111.28% SELECTED FINANCIAL DATA: Basic earnings (loss) per share $ 0.15 $ 0.32 $ 0.34 $ 0.10 $ (0.02 ) Diluted earnings (loss) per share $ 0.15 $ 0.31 $ 0.33 $ 0.10 $ (0.02 ) Book value per share $ 16.56 $ 16.54 $ 16.33 $ 16.12 $ 16.17 Average shares used for basic EPS 7,468,932 7,482,300 7,482,435 7,496,457 7,506,770 Average shares used for diluted EPS 7,590,348 7,658,050 7,647,763 7,626,661 7,506,770 Total shares issued and outstanding 7,436,315 7,483,071 7,479,682 7,486,106 7,497,357 LOANS ORIGINATED AND PURCHASED FOR INVESTMENT: Mortgage Loans: Single-family $ 9,654 $ 52,671 $ 33,629 $ 31,982 $ 15,288 Multi-family 12,850 20,164 56,476 14,513 21,546 Commercial real estate 5,570 6,479 2,419 2,882 5,197 Construction 774 2,313 896 1,846 1,970 Consumer loans - 1 - - - Total loans originated and purchased for investment $ 28,848 $ 81,628 $ 93,420 $ 51,223 $ 44,001 LOANS ORIGINATED FOR SALE: Retail originations $ - $ - $ - $ 9,593 $ 72,353 Wholesale originations - - - 4,057 38,353 Total loans originated for sale $ - $ - $ - $ 13,650 $ 110,706 LOANS SOLD: Servicing released $ - $ - $ - $ 40,956 $ 134,264 Servicing retained - - - 2,003 2,409 Total loans sol $ - $ - $ - $ 42,959 $ 136,673 PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands) As of As of As of As of As of 03/31/20 12/31/19 09/30/19 06/30/19 03/31/19 ASSET QUALITY RATIOS AND DELINQUENT LOANS: Recourse reserve for loans sold $ 250 $ 250 $ 250 $ 250 $ 250 Allowance for loan losses $ 7,810 $ 6,921 $ 6,929 $ 7,076 $ 7,080 Non-performing loans to loans held for investment, net 0.40% 0.36% 0.57% 0.71% 0.69% Non-performing assets to total assets 0.33% 0.31% 0.47% 0.57% 0.55% Allowance for loan losses to gross loans held for investment 0.85% 0.73% 0.74% 0.80% 0.79% Net loan charge-offs (recoveries) to average loans receivable (annualized) (0.01)% (0.01)% (0.02)% (0.01)% (0.01)% Non-performing loans $ 3,635 $ 3,427 $ 5,230 $ 6,218 $ 6,115 Loans 30 to 89 days delinquent $ 2,827 $ 986 $ 990 $ 665 $ 699 Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended 03/31/20 12/31/19 09/30/19 06/30/19 03/31/19 Provision (recovery) for loan losses $ 874 $ (22 ) $ (181 ) $ (25 ) $ 4 Net loan charge-offs (recoveries) $ (15 ) $ (14 ) $ (34 ) $ (21 ) $ (15 ) As of As of As of As of As of 03/31/20 12/31/19 09/30/19 06/30/19 03/31/19 REGULATORY CAPITAL RATIOS (BANK): Tier 1 leverage ratio 10.36% 10.24% 10.21% 10.50% 10.17% Common equity tier 1 capital ratio 17.26% 16.62% 16.32% 18.00% 17.24% Tier 1 risk-based capital ratio 17.26% 16.62% 16.32% 18.00% 17.24% Total risk-based capital ratio 18.45% 17.65% 17.37% 19.13% 18.34% As of March 31 , 2020 2019 Balance Rate(1) Balance Rate(1) INVESTMENT SECURITIES: Held to maturity: Certificates of deposit $ 800 2.63 % $ 400 2.74 % U.S. SBA securities 2,083 2.10 2,917 2.85 U.S. government sponsored enterprise MBS 66,599 2.78 99,193 2.75 Total investment securities held to maturity $ 69,482 2.76 % $ 102,510 2.75 % Available for sale (at fair value): U.S. government agency MBS $ 3,001 3.54 % $ 3,796 3.72 % U.S. government sponsored enterprise MBS 1,630 4.17 2,198 4.60 Private issue collateralized mortgage obligations 197 4.40 300 4.20 Total investment securities available for sale $ 4,828 3.79 % $ 6,294 4.05 % Total investment securities $ 74,310 2.82 % $ 108,804 2.83 % (1) The interest rate described in the rate column is the weighted-average interest rate or yield of all instruments, which are included in the balance of the respective line item. PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands) As of March 31 , 2020 2019 Balance Rate(1) Balance Rate(1) LOANS HELD FOR INVESTMENT: Held to maturity: Single-family (1 to 4 units) $ 326,686 4.16 % $ 314,824 4.52 % Multi-family (5 or more units) 475,941 4.33 449,812 4.35 Commercial real estate 105,691 4.78 115,355 4.92 Construction 6,346 6.49 4,139 7.44 Other - - 167 6.50 Commercial business 502 6.05 483 6.32 Consumer 122 15.00 133 15.47 Total loans held for investment 915,288 4.34 % 884,913 4.50 % Advance payments of escrows 193 225 Deferred loan costs, net 6,636 5,496 Allowance for loan losses (7,810 ) (7,080 ) Total loans held for investment, net $ 914,307 $ 883,554 Purchased loans serviced by others included above $ 26,941 3.71 % $ 17,122 3.35 % (1) The interest rate described in the rate column is the weighted-average interest rate or yield of all instruments, which are included in the balance of the respective line item. As of March 31 , 2020 2019 Balance Rate(1) Balance Rate(1) DEPOSITS: Checking accounts – non interest-bearing $ 86,585 - % $ 90,875 - % Checking accounts – interest-bearing 270,389 0.12 269,648 0.12 Savings accounts 261,659 0.20 271,971 0.20 Money market accounts 31,575 0.21 34,229 0.21 Time deposits 185,623 1.08 210,161 1.14 Total deposits $ 835,831 0.35 % $ 876,884 0.38 % BORROWINGS: Overnight $ - - % $ - - % Three months or less - - - - Over three to six months - - - - Over six months to one year 20,000 3.85 - - Over one year to two years 31,063 1.90 20,000 3.85 Over two years to three years 20,000 1.75 21,121 2.06 Over three years to four years 40,000 2.25 - - Over four years to five years 10,007 2.61 40,000 2.25 Over five years 10,000 2.79 20,000 2.70 Total borrowings $ 131,070 2.40 % 101,121 2.62 % (1) The interest rate described in the rate column is the weighted-average interest rate or cost of all instruments, which are included in the balance of the respective line item. PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands) Quarter Ended Quarter Ended March 31, 2020 March 31, 2019 Balance Rate(1) Balance Rate(1) SELECTED AVERAGE BALANCE SHEETS: Loans receivable, net (2) $ 929,485 4.14 % $ 915,049 4.38 % Investment securities 78,632 2.43 % 101,851 2.32 % FHLB – San Francisco stock 8,199 7.03 % 8,199 7.03 % Interest-earning deposits 61,900 1.20 % 64,390 2.40 % Total interest-earning assets $ 1,078,216 3.87 % $ 1,089,489 4.09 % Total assets $ 1,110,158 $ 1,119,717 Deposits $ 836,855 0.36 % $ 873,252 0.39 % Borrowings 131,075 2.44 % 105,793 2.61 % Total interest-bearing liabilities $ 967,930 0.64 % $ 979,045 0.63 % Total stockholders’ equity $ 123,786 $ 122,681 (1) The interest rate described in the rate column is the weighted-average interest rate or yield/cost of all instruments, which are included in the balance of the respective line item.(2) Includes loans held for sale at fair value for the quarter ended March 31, 2019 . Nine Months Ended Nine Months Ended March 31, 2020 March 31, 2019 Balance Rate(1) Balance Rate(1) SELECTED AVERAGE BALANCE SHEETS: Loans receivable, net (2) $ 922,246 4.34 % $ 941,336 4.32 % Investment securities 87,260 2.53 % 95,494 1.93 % FHLB – San Francisco stock 8,199 7.03 % 8,199 9.19 % Interest-earning deposits 50,642 1.61 % 66,498 2.20 % Total interest-earning assets $ 1,068,347 4.08 % $ 1,111,527 4.03 % Total assets $ 1,100,162 $ 1,142,238 Deposits $ 833,731 0.37 % $ 888,674 0.39 % Borrowings 124,577 2.48 % 112,363 2.56 % Total interest-bearing liabilities $ 958,308 0.64 % $ 1,001,037 0.64 % Total stockholders’ equity $ 122,592 $ 121,895 (1) The interest rate described in the rate column is the weighted-average interest rate or yield/cost of all instruments, which are included in the balance of the respective line item. (2) Includes loans held for sale at fair value for the nine months ended March 31, 2019 . PROVIDENT FINANCIAL HOLDINGS, INC. Asset Quality (1) (Unaudited – Dollars in Thousands) As of As of As of As of As of 03/31/20 12/31/19 09/30/19 06/30/19 03/31/19 Loans on non-accrual status (excluding restructured loans): Mortgage loans: Single-family $ 1,875 $ 1,607 $ 2,737 $ 3,315 $ 2,657 Construction - - 1,139 971 745 Total 1,875 1,607 3,876 4,286 3,402 Accruing loans past due 90 days or more: - - - - - Total - - - - - Restructured loans on non-accrual status: Mortgage loans: Single-family 1,726 1,783 1,316 1,891 2,669 Commercial business loans 34 37 38 41 44 Total 1,760 1,820 1,354 1,932 2,713 Total non-performing loans 3,635 3,427 5,230 6,218 6,115 Real estate owned, net - - - - - Total non-performing assets $ 3,635 $ 3,427 $ 5,230 $ 6,218 $ 6,115 (1) The non-performing loans balances are net of individually evaluated or collectively evaluated allowances, specifically attached to the individual loans and include fair value adjustments. Source: Provident Financial Holdings, Inc.

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