EX-99.1 2 prov8k73019exh991.htm EXHIBIT 99.1
Exhibit 99.1

3756 Central Avenue Riverside, CA 92506 (951) 686-6060 | NEWS RELEASE

PROVIDENT FINANCIAL HOLDINGS REPORTS
FOURTH QUARTER AND FISCAL 2019 RESULTS
Riverside, Calif. – July 30, 2019 – Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the holding company for Provident Savings Bank, F.S.B. (“Bank”), today announced fourth quarter and full year earnings results for the fiscal year ended June 30, 2019.
For the quarter ended June 30, 2019, the Company reported net income of $787,000, or $0.10 per diluted share (on 7.63 million average diluted shares outstanding), down 44 percent from the net income of $1.40 million, or $0.18 per diluted share (on 7.59 million average diluted shares outstanding), in the comparable period a year ago. Compared to the same quarter last year, the decrease in earnings was primarily attributable to a $3.02 million decrease in the gain on sale of loans and a $744,000 increase in equipment expenses, partly offset by a $2.72 million decrease in salaries and employee benefits expense and a $604,000 decrease in the provision for income taxes.
“I am pleased with how we have positioned the Company to take advantage of future opportunities. Capital levels are strong and consistent with our business plan and capital management goals. Our credit quality metrics are very good resulting from our disciplined credit culture, our net interest margin has improved during the fiscal year as a result of our strong deposit franchise, and we are well positioned to capitalize on growth opportunities in the markets we serve,” said Craig G. Blunden, Chairman and Chief
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Executive Officer of the Company. “Additionally, we have largely completed the process of scaling back our operations regarding the origination of salable single-family mortgage loans but we still have some work to do in improving the volume of portfolio single-family mortgage loan originations,” Mr. Blunden concluded.
Return on average assets for the fourth quarter of fiscal 2019 was 0.29 percent compared to 0.48 percent for the same period of fiscal 2018; and return on average stockholders’ equity for the fourth quarter of fiscal 2019 was 2.60 percent compared to 4.65 percent for the comparable period of fiscal 2018.
On a sequential quarter basis, the $787,000 net income for the fourth quarter of fiscal 2019 reflects a $938,000 increase from the net loss of $151,000 in the third quarter of fiscal 2019. The increase in earnings for the fourth quarter of fiscal 2019 compared to the net loss in the third quarter of fiscal 2019 was primarily attributable to a $3.90 million decrease in salaries and employee benefit expenses, partly offset by a $1.70 million decrease in the gain on sale of loans, a $724,000 increase in equipment expenses and the $266,000 provision for income taxes in the fourth quarter of fiscal 2019 in contrast to the $189,000 benefit from income taxes in the third quarter of fiscal 2019 (a $455,000 difference). Diluted earnings (loss) per share for the fourth quarter of fiscal 2019 were $0.10 per share, up from the $(0.02) loss per share during the third quarter of fiscal 2019. Return (loss) on average assets was 0.29 percent for the fourth quarter of fiscal 2019 compared to (0.05) percent in the third quarter of fiscal 2019; and return (loss) on average stockholders’ equity for the fourth quarter of fiscal 2019 was 2.60 percent, compared to (0.49) percent for the third quarter of fiscal 2019.
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For the fiscal year ended June 30, 2019 net income increased $2.29 million, or 107 percent, to $4.42 million from $2.13 million in the comparable period ended June 30, 2018; and diluted earnings per share for the fiscal year ended June 30, 2019 increased 107 percent to $0.58 per share (on 7.60 million average diluted shares outstanding) from $0.28 per share (on 7.70 million average diluted shares outstanding) for the prior fiscal year. Compared to the last fiscal year, the increase in earnings was primarily attributable to (a) the one-time, non-cash, net tax charge of $1.87 million from the net deferred tax assets revaluation required by the Tax Cuts and Jobs Act consistent with the lower corporate federal income tax rate applied in the second quarter of fiscal 2018 (not replicated this fiscal year), (b) the $3.42 million litigation reserve recognized in fiscal 2018 (not replicated this fiscal year), (c) a $1.87 million increase in net interest income, (d) a $4.67 million decrease in salaries and employee benefits expense and (e) the application of the lower statutory income tax rate of 29.56% this fiscal year as compared to the blended statutory income tax rate of 35.86% during last fiscal year, partly offset by an $8.67 million decrease in the gain on sale of loans, a $524,000 decrease in loan servicing and other fees and an $898,000 increase in equipment expenses.
Net interest income increased $63,000, or one percent, to $9.37 million in the fourth quarter of fiscal 2019 from $9.31 million for the same quarter of fiscal 2018, attributable to an increase in the net interest margin, partly offset by a lower average interest-earning assets balance. The net interest margin during the fourth quarter of fiscal 2019 increased 24 basis points to 3.52 percent from 3.28 percent in the same quarter last year, primarily due to an increase in the average yield of interest-earning assets resulting primarily from the rise in interest rates over the last year and a slight decrease in the
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average cost of interest-bearing liabilities. The average yield on interest-earning assets increased by 22 basis points to 4.06 percent in the fourth quarter of fiscal 2019 from 3.84 percent in the same quarter last year; while the average cost of interest-bearing liabilities decreased by three basis points to 0.60 percent in the fourth quarter of fiscal 2019 from 0.63 percent in the same quarter last year. The average balance of interest-earning assets decreased by $71.0 million, or six percent, to $1.06 billion in the fourth quarter of fiscal 2019 from $1.14 billion in the same quarter last year. The average balance of interest-bearing liabilities decreased by $72.1 million, or seven percent, to $955.5 million in the fourth quarter of fiscal 2019 from $1.03 billion in the same quarter last year.
The average balance of loans receivable, including loans held for sale, decreased by $106.6 million, or 11 percent, to $879.8 million in the fourth quarter of fiscal 2019 from $986.4 million in the same quarter of fiscal 2018, primarily due to decreases in both the average balance of loans held for sale (attributable to the previously disclosed scaling back of saleable single-family loan originations) and, to a lesser extent, loans held for investment. The average yield on loans receivable increased by 22 basis points to 4.35 percent in the fourth quarter of fiscal 2019 from an average yield of 4.13 percent in the same quarter of fiscal 2018 reflecting the rise in interest rates over the last year as the predominantly adjustable rate loan portfolio repriced upward and new loans were originated at higher market interest rates. Also, the increase in the average loan yield was attributable to an increase in the average yield of loans held for investment, partly offset by a decrease in the average yield of loans held for sale. The average balance of loans held for investment in the fourth quarter of fiscal 2019 was $872.0 million with an average yield of 4.35 percent, down from $904.8 million with an average yield of 4.09
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percent in the same quarter of fiscal 2018. The average balance of loans held for sale in the fourth quarter of fiscal 2019 was $7.8 million with an average yield of 4.29 percent, down from $81.6 million with an average yield of 4.56 percent in the same quarter of fiscal 2018. Loan principal payments received in the fourth quarter of fiscal 2019 were $54.8 million, compared to $64.6 million in the same quarter of fiscal 2018.
The average balance of investment securities increased by $5.2 million, or five percent, to $105.0 million in the fourth quarter of fiscal 2019 from $99.8 million in the same quarter of fiscal 2018. The increase was primarily attributable to purchases of mortgage-backed securities, partly offset by principal payments received on mortgage-backed securities. The average yield on investment securities increased 97 basis points to 2.52 percent in the fourth quarter of fiscal 2019 from 1.55 percent for the same quarter of fiscal 2018. The increase in the average yield was primarily attributable to purchases of mortgage-backed securities which had higher average yields than the existing portfolio and the repricing of variable rate investment securities to higher market interest rates.
In the fourth quarter of fiscal 2019, the Federal Home Loan Bank – San Francisco (“FHLB”) distributed $142,000 of quarterly cash dividends to the Bank on its FHLB stock, slightly higher than the amount received in 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, increased $30.3 million, or 73 percent, to $71.8 million in the fourth quarter of fiscal 2019 from $41.5 million in the same quarter of fiscal 2018. The average yield earned on interest-earning deposits in the fourth quarter of fiscal 2019 was 2.35 percent, up 51 basis points from 1.84 percent in the same
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quarter of fiscal 2018 as a result of the impact of increases in the targeted federal funds rate.
Average deposits decreased $55.6 million, or six percent, to $854.4 million in the fourth quarter of fiscal 2019 from $910.0 million in the same quarter of fiscal 2018. The average cost of deposits remained relatively stable, decreasing by two basis points to 0.36 percent in the fourth quarter of fiscal 2019 from 0.38 percent in the same quarter last year. Transaction account balances or “core deposits” decreased $21.9 million, or three percent, to $648.1 million at June 30, 2019 from $670.0 million at June 30, 2018, while time deposits decreased $44.5 million, or 19 percent, to $193.1 million at June 30, 2019 from $237.6 million at June 30, 2018, consistent with the Bank’s strategy to decrease the percentage of time deposits in its deposit base and its asset/liability objectives.
The average balance of borrowings, which consisted of FHLB advances, decreased $16.6 million, or 14 percent, to $101.1 million while the average cost of borrowings increased 12 basis points to 2.65 percent in the fourth quarter of fiscal 2019, compared to an average balance of $117.7 million with an average cost of 2.53 percent in the same quarter of fiscal 2018. The decrease in the average balance of borrowings was primarily due to the early payoff of $10.0 million of long-term FHLB advances and the maturity of short-term FHLB advances.
During the fourth quarter of fiscal 2019, the Company recorded a recovery from the allowance for loan losses of $25,000, as compared to a recovery from the allowance for loan losses of $189,000 recorded during the same period of fiscal 2018 and a provision for loan losses of $4,000 recorded in the third quarter of fiscal 2019 (sequential quarter).
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Non-performing assets, with underlying collateral located in California, decreased $745,000, or 11 percent, to $6.2 million, or 0.57 percent of total assets, at June 30, 2019, compared to $7.0 million, or 0.59 percent of total assets, at June 30, 2018. Non-performing loans increased slightly to $6.2 million at June 30, 2019 from $6.1 million at June 30, 2018. The non-performing loans at June 30, 2019 are comprised of 20 single-family loans ($5.2 million), one construction loan ($971,000) and one commercial business loan ($41,000). At June 30, 2019, there was no outstanding real estate owned as compared to $906,000 at June 30, 2018.
Net loan recoveries for the quarter ended June 30, 2019 were $21,000 or 0.01 percent (annualized) of average loans receivable, compared to net loan recoveries of $43,000 or 0.02 percent (annualized) of average loans receivable for the quarter ended June 30, 2018 and net loan recoveries of $15,000 or 0.01 percent (annualized) of average loans receivable for the quarter ended March 31, 2019 (sequential quarter).
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; while classified assets at June 30, 2018 were $15.8 million, comprised of $7.5 million of loans in the special mention category, $7.4 million of loans in the substandard category and $906,000 in real estate owned.
For the quarter ended June 30, 2019, no new loans were restructured from their original terms and classified as restructured loans, while two previously restructured loans were upgraded to the pass category. The outstanding balance of restructured loans at June 30, 2019 was $3.8 million (eight loans), down 27 percent from $5.2 million (11 loans) at June 30, 2018, and down 17 percent from $4.6 million (10 loans) at March 31,
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2019 (sequential quarter). As of June 30, 2019, one restructured loan was classified as special mention ($437,000), one restructured loan was classified as substandard accrual ($1.4 million) and six restructured loans were classified as substandard non-accrual ($1.9 million). As of June 30, 2019, 63% or $2.4 million of the restructured loans have a current payment status.
The allowance for loan losses was $7.1 million at June 30, 2019, or 0.80 percent of gross loans held for investment, compared to $7.4 million at June 30, 2018, or 0.81 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 June 30, 2019.
Non-interest income decreased by $3.27 million, or 71 percent, to $1.32 million in the fourth quarter of fiscal 2019 from $4.59 million in the same period of fiscal 2018, primarily as a result of a decrease in the gain on sale of loans during the current quarter as compared to the comparable period last year. On a sequential quarter basis, non-interest income decreased $1.73 million, or 57 percent, primarily as a result of the decline in the gain on sale of loans.
The gain on sale of loans decreased $3.02 million, to $21,000 for the quarter ended June 30, 2019 from $3.04 million in the comparable quarter last year (reflecting primarily the impact of a substantially lower loan sale volume resulting from the previously disclosed scaling back of the saleable single-family loan originations) and decreased $1.70 million from the quarter ended March 31, 2019 (sequential quarter). Total loan sale volume, which includes the net change in commitments to extend credit on loans to be held for sale, was $1.7 million in the quarter ended June 30, 2019, down
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from $236.3 million in the comparable quarter last year and $95.8 million in the quarter ended March 31, 2019 (sequential quarter). The average loan sale margin from mortgage banking was 123 basis points for the quarter ended June 30, 2019, a decrease of six basis points from 129 basis points in the same quarter last year, and 56 basis points lower than the 179 basis points in the third quarter of fiscal 2019 (sequential quarter). The gain on sale of loans includes unfavorable/favorable fair-value adjustments on loans held for sale and derivative financial instruments (commitments to extend credit, commitments to sell loans, commitments to sell mortgage-backed securities, and option contracts) that amounted to a net loss of $951,000 in the fourth quarter of fiscal 2019, compared to a net gain of $85,000 in the same period last year and a net loss of $778,000 in the third quarter of fiscal 2019 (sequential quarter).
In the fourth quarter of fiscal 2019, $13.7 million of loans were originated for sale, compared to $241.6 million for the same period last year and $110.7 million during the third quarter of fiscal 2019 (sequential quarter). The loan origination volume decreased from the previous year as a result of market conditions and the scaling back of the saleable single-family mortgage loan originations. Total loans sold during the quarter ended June 30, 2019 were $43.0 million, compared to $233.9 million sold during the same quarter last year and $136.7 million sold during the third quarter of fiscal 2019 (sequential quarter). Total loan originations (including loans originated and purchased for investment and loans originated for sale) were $64.9 million in the fourth quarter of fiscal 2019, a decrease from $312.4 million in the same quarter of fiscal 2018, and lower than the $154.7 million in the third quarter of fiscal 2019 (sequential quarter).
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Non-interest expenses decreased $2.16 million, or 18 percent, to $9.66 million in the fourth quarter of fiscal 2019 from $11.82 million in the same quarter last year. The decrease was primarily due to a $2.72 million decrease in salaries and employee benefits expense, partly offset by a $744,000 increase in equipment expenses. The decrease in salaries and employee benefits expense was primarily attributable to the staff reductions in mortgage banking operations and lower variable compensation expenses resulting from a lower volume of loans originated for sale. On a sequential quarter basis, non-interest expenses decreased $3.34 million or 26 percent from $13.00 million, primarily as a result of a $3.90 million decrease in salaries and employee benefits expense (attributable primarily to the staff reductions in mortgage banking operations and lower variable compensation expenses resulting from lower loans originated for sale).
Consistent with the Company’s announcement on February 4, 2019 that it was in the best interests of the Company to scale back the saleable single-family mortgage loan originations and improve on its efforts to increase the volume of portfolio single-family mortgage loan originations, the Company recognized non-recurring costs of $2.80 million ($1.20 million in the June 2019 quarter and $1.60 million in the March 2019 quarter), which is comprised of $1.70 million in salaries and employee benefits expenses (attributable to severance and other personnel expenses), $337,000 in premises and occupancy expenses (attributable to accelerated lease expenses and accelerated depreciation of furniture and fixtures), and $758,000 in equipment expenses (attributable to termination, charge-off, or modification of data processing and other contractual arrangements). Additionally, in fiscal 2020, the Company will incur approximately $147,000 in salaries and employee benefits expense (approximately $12,000 per month)
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as a result of retention bonuses paid to certain key staff critical to growing portfolio single-family loan originations. The $2.9 million of non-recurring costs ($2.8 million recognized in fiscal 2019 and approximately $147,000 to be recognized in fiscal 2020) is lower than the initial range reported which was estimated at $3.6 million to $4.0 million. The Company does not anticipate any additional non-recurring costs.
The Company’s efficiency ratio in the fourth quarter of fiscal 2019 was 90 percent, an increase from 85 percent in the same quarter last year but an improvement from 103 percent in the third quarter of fiscal 2019 (sequential quarter).
The Company’s provision for income tax was $266,000 for the fourth quarter of fiscal 2019, down 69 percent from $870,000 in the same quarter last year, which includes the application of the lower statutory income tax rate of 29.56% in fiscal 2019 versus a blended statutory income tax rate of 35.86% in fiscal 2018. The Company believes that the tax provision recorded in the fourth quarter of fiscal 2019 reflects its current federal and state income tax obligations.
The Company repurchased 28,251 shares of its common stock during the quarter ended June 30, 2019 at an average cost of $20.06 per share. As of June 30, 2019, a total of 51,999 shares of the April 2018 stock repurchase plan have been purchased at an average cost of $19.74 per share, leaving 321,001 shares available for future purchases.
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, July 31, 2019 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-800-230-1093 and requesting
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the Provident Financial Holdings Earnings Release Conference Call. An audio replay of the conference call will be available through Wednesday, August 7, 2019 by dialing 1-800-475-6701 and referencing access code number 470314.
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 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; 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

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PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Financial Condition
(Unaudited –In Thousands, Except Share Information)

|  | June 30, |  |  | March 31, |  |  | December 31, |  |  | September 30, |  |  | June 30, |
|  | 2019 |  |  | 2019 |  |  | 2018 |  |  | 2018 |  |  | 2018 |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 70,632 |  |  | $ | 61,458 |  |  | $ | 67,359 |  |  | $ | 78,928 |  |  | $ | 43,301 |
Investment securities – held to maturity, at cost |  |  | 94,090 |  |  |  | 102,510 |  |  |  | 84,990 |  |  |  | 79,611 |  |  |  | 87,813 |
Investment securities - available for sale, at fair value |  |  | 5,969 |  |  |  | 6,294 |  |  |  | 6,563 |  |  |  | 7,033 |  |  |  | 7,496 |
Loans held for investment, net of allowance for loan losses of $7,076; $7,080; $7,061; $7,155 and $7,385 respectively; includes $5,094; $5,239; $4,995; $4,945 and $5,234 at fair value, respectively |  |  | 879,925 |  |  |  | 883,554 |  |  |  | 875,413 |  |  |  | 877,091 |  |  |  | 902,685 |
Loans held for sale, at fair value |  |  | - |  |  |  | 30,500 |  |  |  | 57,562 |  |  |  | 78,794 |  |  |  | 96,298 |
Accrued interest receivable |  |  | 3,424 |  |  |  | 3,386 |  |  |  | 3,156 |  |  |  | 3,350 |  |  |  | 3,212 |
Real estate owned, net |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 524 |  |  |  | 906 |
FHLB – San Francisco stock |  |  | 8,199 |  |  |  | 8,199 |  |  |  | 8,199 |  |  |  | 8,199 |  |  |  | 8,199 |
Premises and equipment, net |  |  | 8,226 |  |  |  | 8,395 |  |  |  | 8,601 |  |  |  | 8,779 |  |  |  | 8,696 |
Prepaid expenses and other assets |  |  | 14,385 |  |  |  | 15,099 |  |  |  | 15,327 |  |  |  | 15,171 |  |  |  | 16,943 |
Total assets |  | $ | 1,084,850 |  |  | $ | 1,119,395 |  |  | $ | 1,127,170 |  |  | $ | 1,157,480 |  |  | $ | 1,175,549 |
Liabilities and Stockholders’ Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non interest-bearing deposits |  | $ | 90,184 |  |  | $ | 90,875 |  |  | $ | 78,866 |  |  | $ | 87,250 |  |  | $ | 86,174 |
Interest-bearing deposits |  |  | 751,087 |  |  |  | 786,009 |  |  |  | 794,018 |  |  |  | 814,862 |  |  |  | 821,424 |
Total deposits |  |  | 841,271 |  |  |  | 876,884 |  |  |  | 872,884 |  |  |  | 902,112 |  |  |  | 907,598 |
Borrowings |  |  | 101,107 |  |  |  | 101,121 |  |  |  | 111,135 |  |  |  | 111,149 |  |  |  | 126,163 |
Accounts payable, accrued interest and other liabilities |  |  | 21,831 |  |  |  | 20,181 |  |  |  | 20,474 |  |  |  | 22,539 |  |  |  | 21,331 |
Total liabilities |  |  | 964,209 |  |  |  | 998,186 |  |  |  | 1,004,493 |  |  |  | 1,035,800 |  |  |  | 1,055,092 |
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; 18,081,365; 18,064,365; 18,053,115; 18,048,115 and 18,033,115 shares issued, respectively; 7,486,106; 7,497,357; 7,506,855; 7,500,860 and 7,421,426 shares outstanding, respectively) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 181 |  |  |  | 181 |  |  |  | 181 |  |  |  | 181 |  |  |  | 181 |
Additional paid-in capital |  |  | 94,351 |  |  |  | 96,114 |  |  |  | 95,913 |  |  |  | 95,795 |  |  |  | 94,957 |
Retained earnings |  |  | 190,839 |  |  |  | 191,103 |  |  |  | 192,306 |  |  |  | 191,399 |  |  |  | 190,616 |
Treasury stock at cost (10,559,259; 10,567,008; 10,546,260; 10,547,255 and 10,611,689 shares, respectively) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | (164,891 | ) |  |  | (166,352 | ) |  |  | (165,892 | ) |  |  | (165,884 | ) |  |  | (165,507 | )
Accumulated other comprehensive income, net of tax |  |  | 161 |  |  |  | 163 |  |  |  | 169 |  |  |  | 189 |  |  |  | 210 |
Total stockholders’ equity |  |  | 120,641 |  |  |  | 121,209 |  |  |  | 122,677 |  |  |  | 121,680 |  |  |  | 120,457 |
Total liabilities and stockholders’ equity |  | $ | 1,084,850 |  |  | $ | 1,119,395 |  |  | $ | 1,127,170 |  |  | $ | 1,157,480 |  |  | $ | 1,175,549 |

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PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Operations (Unaudited - In Thousands, Except Earnings Per Share) |
|  | Quarter Ended June 30, |  |  | Fiscal Year Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |
Loans receivable, net |  | $ | 9,576 |  |  | $ | 10,191 |  |  | $ | 40,092 |  |  | $ | 40,016 |
Investment securities |  |  | 661 |  |  |  | 386 |  |  |  | 2,042 |  |  |  | 1,344 |
FHLB – San Francisco stock |  |  | 142 |  |  |  | 140 |  |  |  | 707 |  |  |  | 568 |
Interest-earning deposits |  |  | 426 |  |  |  | 193 |  |  |  | 1,537 |  |  |  | 784 |
Total interest income |  |  | 10,805 |  |  |  | 10,910 |  |  |  | 44,378 |  |  |  | 42,712 |
Interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Checking and money market deposits |  |  | 101 |  |  |  | 96 |  |  |  | 428 |  |  |  | 407 |
Savings deposits |  |  | 135 |  |  |  | 150 |  |  |  | 572 |  |  |  | 595 |
Time deposits |  |  | 530 |  |  |  | 616 |  |  |  | 2,381 |  |  |  | 2,493 |
Borrowings |  |  | 669 |  |  |  | 741 |  |  |  | 2,827 |  |  |  | 2,917 |
Total interest expense |  |  | 1,435 |  |  |  | 1,603 |  |  |  | 6,208 |  |  |  | 6,412 |
Net interest income |  |  | 9,370 |  |  |  | 9,307 |  |  |  | 38,170 |  |  |  | 36,300 |
Recovery from the allowance for loan losses |  |  | (25 | ) |  |  | (189 | ) |  |  | (475 | ) |  |  | (536 | )
Net interest income, after recovery from the allowance for loan losses |  |  | 9,395 |  |  |  | 9,496 |  |  |  | 38,645 |  |  |  | 36,836 |
Non-interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loan servicing and other fees |  |  | 188 |  |  |  | 402 |  |  |  | 1,051 |  |  |  | 1,575 |
Gain on sale of loans, net |  |  | 21 |  |  |  | 3,041 |  |  |  | 7,135 |  |  |  | 15,802 |
Deposit account fees |  |  | 443 |  |  |  | 496 |  |  |  | 1,928 |  |  |  | 2,119 |
Loss on sale and operations of real estate owed acquired in the settlement of loans |  |  | - |  |  |  | (5 | ) |  |  | (4 | ) |  |  | (86 | )
Card and processing fees |  |  | 405 |  |  |  | 415 |  |  |  | 1,568 |  |  |  | 1,541 |
Other |  |  | 258 |  |  |  | 243 |  |  |  | 833 |  |  |  | 944 |
Total non-interest income |  |  | 1,315 |  |  |  | 4,592 |  |  |  | 12,511 |  |  |  | 21,895 |
Non-interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  |  | 5,396 |  |  |  | 8,111 |  |  |  | 30,149 |  |  |  | 34,821 |
Premises and occupancy |  |  | 1,133 |  |  |  | 1,305 |  |  |  | 5,038 |  |  |  | 5,134 |
Equipment |  |  | 1,141 |  |  |  | 397 |  |  |  | 2,474 |  |  |  | 1,576 |
Professional expenses |  |  | 493 |  |  |  | 471 |  |  |  | 1,864 |  |  |  | 1,912 |
Sales and marketing expenses |  |  | 312 |  |  |  | 322 |  |  |  | 980 |  |  |  | 1,039 |
Deposit insurance premiums and regulatory assessments |  |  | 129 |  |  |  | 158 |  |  |  | 590 |  |  |  | 749 |
Other |  |  | 1,053 |  |  |  | 1,054 |  |  |  | 4,141 |  |  |  | 7,973 |
Total non-interest expense |  |  | 9,657 |  |  |  | 11,818 |  |  |  | 45,236 |  |  |  | 53,204 |
Income before taxes |  |  | 1,053 |  |  |  | 2,270 |  |  |  | 5,920 |  |  |  | 5,527 |
Provision for income taxes |  |  | 266 |  |  |  | 870 |  |  |  | 1,503 |  |  |  | 3,396 |
Net income |  | $ | 787 |  |  | $ | 1,400 |  |  | $ | 4,417 |  |  | $ | 2,131 |
Basic earnings per share |  | $ | 0.10 |  |  | $ | 0.19 |  |  | $ | 0.59 |  |  | $ | 0.28 |
Diluted earnings per share |  | $ | 0.10 |  |  | $ | 0.18 |  |  | $ | 0.58 |  |  | $ | 0.28 |
Cash dividends per share |  | $ | 0.14 |  |  | $ | 0.14 |  |  | $ | 0.56 |  |  | $ | 0.56 |

Page 14 of 21

PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Operations – Sequential Quarters
(Unaudited – In Thousands, Except Share Information)

|  | Quarter Ended |
|  | June 30, 2019 |  |  | March 31, 2019 |  |  | December 31, 2018 |  |  | September 30, 2018 |  |  | June 30, 2018 |
Interest income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans receivable, net |  | $ | 9,576 |  |  | $ | 10,011 |  |  | $ | 10,331 |  |  | $ | 10,174 |  |  | $ | 10,191 |
Investment securities |  |  | 661 |  |  |  | 592 |  |  |  | 444 |  |  |  | 345 |  |  |  | 386 |
FHLB – San Francisco stock |  |  | 142 |  |  |  | 144 |  |  |  | 278 |  |  |  | 143 |  |  |  | 140 |
Interest-earning deposits |  |  | 426 |  |  |  | 386 |  |  |  | 387 |  |  |  | 338 |  |  |  | 193 |
Total interest income |  |  | 10,805 |  |  |  | 11,133 |  |  |  | 11,440 |  |  |  | 11,000 |  |  |  | 10,910 |
Interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Checking and money market deposits |  |  | 101 |  |  |  | 102 |  |  |  | 117 |  |  |  | 108 |  |  |  | 96 |
Savings deposits |  |  | 135 |  |  |  | 139 |  |  |  | 147 |  |  |  | 151 |  |  |  | 150 |
Time deposits |  |  | 530 |  |  |  | 600 |  |  |  | 630 |  |  |  | 621 |  |  |  | 616 |
Borrowings |  |  | 669 |  |  |  | 680 |  |  |  | 715 |  |  |  | 763 |  |  |  | 741 |
Total interest expense |  |  | 1,435 |  |  |  | 1,521 |  |  |  | 1,609 |  |  |  | 1,643 |  |  |  | 1,603 |
Net interest income |  |  | 9,370 |  |  |  | 9,612 |  |  |  | 9,831 |  |  |  | 9,357 |  |  |  | 9,307 |
Provision (recovery) for loan losses |  |  | (25 | ) |  |  | 4 |  |  |  | (217 | ) |  |  | (237 | ) |  |  | (189 | )
Net interest income, after provision (recovery) for loan losses |  |  | 9,395 |  |  |  | 9,608 |  |  |  | 10,048 |  |  |  | 9,594 |  |  |  | 9,496 |
Non-interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loan servicing and other fees |  |  | 188 |  |  |  | 262 |  |  |  | 277 |  |  |  | 324 |  |  |  | 402 |
Gain on sale of loans, net |  |  | 21 |  |  |  | 1,719 |  |  |  | 2,263 |  |  |  | 3,132 |  |  |  | 3,041 |
Deposit account fees |  |  | 443 |  |  |  | 471 |  |  |  | 509 |  |  |  | 505 |  |  |  | 496 |
Gain (loss) on sale and operations of real estate owned acquired in the settlement of loans, net |  |  | - |  |  |  | 2 |  |  |  | (7 | ) |  |  | 1 |  |  |  | (5 | )
Card and processing fees |  |  | 405 |  |  |  | 373 |  |  |  | 392 |  |  |  | 398 |  |  |  | 415 |
Other |  |  | 258 |  |  |  | 225 |  |  |  | 161 |  |  |  | 189 |  |  |  | 243 |
Total non-interest income |  |  | 1,315 |  |  |  | 3,052 |  |  |  | 3,595 |  |  |  | 4,549 |  |  |  | 4,592 |
Non-interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  |  | 5,396 |  |  |  | 9,292 |  |  |  | 7,211 |  |  |  | 8,250 |  |  |  | 8,111 |
Premises and occupancy |  |  | 1,133 |  |  |  | 1,286 |  |  |  | 1,274 |  |  |  | 1,345 |  |  |  | 1,305 |
Equipment |  |  | 1,141 |  |  |  | 417 |  |  |  | 495 |  |  |  | 421 |  |  |  | 397 |
Professional expenses |  |  | 493 |  |  |  | 513 |  |  |  | 411 |  |  |  | 447 |  |  |  | 471 |
Sales and marketing expenses |  |  | 312 |  |  |  | 246 |  |  |  | 253 |  |  |  | 169 |  |  |  | 322 |
Deposit insurance premiums and regulatory assessments |  |  | 129 |  |  |  | 124 |  |  |  | 172 |  |  |  | 165 |  |  |  | 158 |
Other |  |  | 1,053 |  |  |  | 1,122 |  |  |  | 1,059 |  |  |  | 907 |  |  |  | 1,054 |
Total non-interest expense |  |  | 9,657 |  |  |  | 13,000 |  |  |  | 10,875 |  |  |  | 11,704 |  |  |  | 11,818 |
Income (loss) before taxes |  |  | 1,053 |  |  |  | (340 | ) |  |  | 2,768 |  |  |  | 2,439 |  |  |  | 2,270 |
Provision (benefit) for income taxes |  |  | 266 |  |  |  | (189 | ) |  |  | 810 |  |  |  | 616 |  |  |  | 870 |
Net income (loss) |  | $ | 787 |  |  | $ | (151 | ) |  | $ | 1,958 |  |  | $ | 1,823 |  |  | $ | 1,400 |
Basic earnings (loss) per share |  | $ | 0.10 |  |  | $ | (0.02 | ) |  | $ | 0.26 |  |  | $ | 0.25 |  |  | $ | 0.19 |
Diluted earnings (loss) per share |  | $ | 0.10 |  |  | $ | (0.02 | ) |  | $ | 0.26 |  |  | $ | 0.24 |  |  | $ | 0.18 |
Cash dividends per share |  | $ | 0.14 |  |  | $ | 0.14 |  |  | $ | 0.14 |  |  | $ | 0.14 |  |  | $ | 0.14 |

Page 15 of 21

PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands, Except Share Information )
|  | Quarter Ended June 30, |  |  | Fiscal Year Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
SELECTED FINANCIAL RATIOS: |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets |  |  | 0.29 | % |  |  | 0.48 | % |  |  | 0.39 | % |  |  | 0.18 | %
Return on average stockholders’ equity |  |  | 2.60 | % |  |  | 4.65 | % |  |  | 3.63 | % |  |  | 1.73 | %
Stockholders’ equity to total assets |  |  | 11.12 | % |  |  | 10.25 | % |  |  | 11.12 | % |  |  | 10.25 | %
Net interest spread |  |  | 3.46 | % |  |  | 3.21 | % |  |  | 3.40 | % |  |  | 3.13 | %
Net interest margin |  |  | 3.52 | % |  |  | 3.28 | % |  |  | 3.47 | % |  |  | 3.19 | %
Efficiency ratio |  |  | 90.38 | % |  |  | 85.03 | % |  |  | 89.26 | % |  |  | 91.42 | %
Average interest-earning assets to average |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
interest-bearing liabilities |  |  | 111.45 | % |  |  | 110.53 | % |  |  | 111.14 | % |  |  | 110.66 | %
SELECTED FINANCIAL DATA: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings per share |  |  | $ 0.10 |  |  |  | $ 0.19 |  |  |  | $ 0.59 |  |  | $ | 0.28 |
Diluted earnings per share |  |  | $ 0.10 |  |  |  | $ 0.18 |  |  |  | $ 0.58 |  |  | $ | 0.28 |
Book value per share |  |  | $ 16.12 |  |  |  | $16.23 |  |  |  | $16.12 |  |  | $ | 16.23 |
Shares used for basic EPS computation |  |  | 7,496,457 |  |  |  | 7,448,037 |  |  |  | 7,484,925 |  |  |  | 7,542,071 |
Shares used for diluted EPS computation |  |  | 7,626,661 |  |  |  | 7,594,698 |  |  |  | 7,596,268 |  |  |  | 7,700,371 |
Total shares issued and outstanding |  |  | 7,486,106 |  |  |  | 7,421,426 |  |  |  | 7,486,106 |  |  |  | 7,421,426 |
LOANS ORIGINATED FOR SALE: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail originations |  |  | $ 9,593 |  |  |  | $152,600 |  |  |  | $296,992 |  |  |  | $ 679,504 |
Wholesale originations |  |  | 4,057 |  |  |  | 89,047 |  |  |  | 170,102 |  |  |  | 506,492 |
Total loans originated for sale |  |  | $13,650 |  |  |  | $241,647 |  |  |  | $467,094 |  |  |  | $1,185,996 |
LOANS SOLD: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicing released |  |  | $40,956 |  |  |  | $228,903 |  |  |  | $551,754 |  |  |  | $1,174,618 |
Servicing retained |  |  | 2,003 |  |  |  | 4,992 |  |  |  | 7,196 |  |  |  | 27,566 |
Total loans sold |  |  | $42,959 |  |  |  | $233,895 |  |  |  | $558,950 |  |  |  | $1,202,184 |

Page 16 of 21

PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands, Except Share Information )

| Quarter Ended |  | Quarter Ended |  | Quarter Ended |  | Quarter Ended |  | Quarter Ended |
| 06/30/19 |  | 03/31/19 |  | 12/31/18 |  | 09/30/18 |  | 06/30/18 |
SELECTED FINANCIAL RATIOS: |  |  |  |  |  |  |  |  |  |
Return (loss) on average assets | 0.29% |  | (0.05)% |  | 0.69% |  | 0.63% |  | 0.48% |
Return (loss) on average stockholders’ equity | 2.60% |  | (0.49)% |  | 6.42% |  | 6.03% |  | 4.65% |
Stockholders’ equity to total assets | 11.12% |  | 10.83% |  | 10.88% |  | 10.51% |  | 10.25% |
Net interest spread | 3.46% |  | 3.46% |  | 3.48% |  | 3.24% |  | 3.21% |
Net interest margin | 3.52% |  | 3.53% |  | 3.54% |  | 3.30% |  | 3.28% |
Efficiency ratio | 90.38% |  | 102.65% |  | 81.00% |  | 84.17% |  | 85.03% |
Average interest-earning assets to average interest-bearing liabilities | 111.45% |  | 111.28% |  | 110.98% |  | 110.86% |  | 110.53% |
SELECTED FINANCIAL DATA: |  |  |  |  |  |  |  |  |  |
Basic earnings (loss) per share | $ 0.10 |  | $ (0.02 | ) | $ 0.26 |  | $ 0.25 |  | $ 0.19 |
Diluted earnings (loss) per share | $ 0.10 |  | $ (0.02 | ) | $ 0.26 |  | $ 0.24 |  | $ 0.18 |
Book value per share | $ 16.12 |  | $ 16.17 |  | $ 16.34 |  | $ 16.22 |  | $ 16.23 |
Average shares used for basic EPS | 7,496,457 |  | 7,506,770 |  | 7,506,106 |  | 7,430,967 |  | 7,448,037 |
Average shares used for diluted EPS | 7,626,661 |  | 7,506,770 |  | 7,601,759 |  | 7,557,068 |  | 7,594,698 |
Total shares issued and outstanding | 7,486,106 |  | 7,497,357 |  | 7,506,855 |  | 7,500,860 |  | 7,421,426 |
LOANS ORIGINATED FOR SALE: |  |  |  |  |  |  |  |  |  |
Retail originations | $ 9,593 |  | $ 72,353 |  | $ 87,913 |  | $ 127,133 |  | $ 152,600 |
Wholesale originations | 4,057 |  | 38,353 |  | 58,504 |  | 69,188 |  | 89,047 |
Total loans originated for sale | $ 13,650 |  | $ 110,706 |  | $ 146,417 |  | $ 196,321 |  | $ 241,647 |
LOANS SOLD: |  |  |  |  |  |  |  |  |  |
Servicing released | $ 40,956 |  | $ 134,264 |  | $ 165,484 |  | $ 211,050 |  | $ 228,903 |
Servicing retained | 2,003 |  | 2,409 |  | 2,026 |  | 758 |  | 4,992 |
Total loans sold | $ 42,959 |  | $ 136,673 |  | $ 167,510 |  | $ 211,808 |  | $ 233,895 |
| As of |  | As of |  | As of |  | As of |  | As of |
| 06/30/19 |  | 03/31/19 |  | 12/31/18 |  | 09/30/18 |  | 06/30/18 |
ASSET QUALITY RATIOS AND DELINQUENT LOANS: |  |  |  |  |  |  |  |  |  |
Recourse reserve for loans sold | $ 250 |  | $ 250 |  | $ 250 |  | $ 250 |  | $ 283 |
Allowance for loan losses | $ 7,076 |  | $ 7,080 |  | $ 7,061 |  | $ 7,155 |  | $ 7,385 |
Non-performing loans to loans held for investment, net | 0.71% |  | 0.69% |  | 0.69% |  | 0.78% |  | 0.67% |
Non-performing assets to total assets | 0.57% |  | 0.55% |  | 0.54% |  | 0.64% |  | 0.59% |
Allowance for loan losses to gross loans held |  |  |  |  |  |  |  |  |  |
for investment | 0.80% |  | 0.79% |  | 0.80% |  | 0.81% |  | 0.81% |
Net loan charge-offs (recoveries) to average loans receivable (annualized) | (0.01)% |  | (0.01)% |  | (0.05)% |  | - % |  | (0.02)% |
Non-performing loans | $ 6,218 |  | $ 6,115 |  | $ 6,062 |  | $ 6,862 |  | $ 6,057 |
Loans 30 to 89 days delinquent | $ 665 |  | $ 699 |  | $ 2 |  | $ - |  | $ 805 |

Page 17 of 21

PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands) |
| Quarter Ended |  | Quarter Ended |  | Quarter Ended |  | Quarter Ended |  | Quarter Ended |  |
| 06/30/19 |  | 03/31/19 |  | 12/31/18 |  | 09/30/18 |  | 06/30/18 |  |
Recourse provision (recovery) for loans sold | $ - |  | $ - |  | $ - |  | $ (33 | ) | $ - |  |
Provision (recovery) for loan losses | $ (25 | ) | $ 4 |  | $ (217 | ) | $ (237 | ) | $ (189 | ) |
Net loan charge-offs (recoveries) | $ (21 | ) | $ (15 | ) | $ (123 | ) | $ (7 | ) | $ (43 | ) |
| As of |  | As of |  | As of |  | As of |  | As of |
| 06/30/19 |  | 03/31/19 |  | 12/31/18 |  | 09/30/18 |  | 06/30/18 |
REGULATORY CAPITAL RATIOS (BANK): |
Tier 1 leverage ratio | 10.50% |  | 10.17% |  | 9.96% |  | 9.59% |  | 9.96% |
Common equity tier 1 capital ratio | 18.00% |  | 17.24% |  | 17.17% |  | 16.62% |  | 16.81% |
Tier 1 risk-based capital ratio | 18.00% |  | 17.24% |  | 17.17% |  | 16.62% |  | 16.81% |
Total risk-based capital ratio | 19.13% |  | 18.34% |  | 18.26% |  | 17.71% |  | 17.90% |

| As of June 30, |
| 2019 |  | 2018 |
| Balance |  | Rate(1) |  | Balance |  | Rate(1) |
INVESTMENT SECURITIES: |  |  |  |  |  |  |  |  |  |
Held to maturity: |  |  |  |  |  |  |  |  |  |
Certificates of deposit | $ 800 |  | 2.63 | % |  | $ 600 |  | 1.91 | % |
U.S. SBA securities | 2,896 |  | 2.85 |  |  | 2,986 |  | 2.11 |  |
U.S. government sponsored enterprise MBS | 90,394 |  | 2.84 |  |  | 84,227 |  | 2.17 |  |
Total investment securities held to maturity | $ 94,090 |  | 2.84 | % |  | $ 87,813 |  | 2.17 | % |
Available for sale (at fair value): |  |  |  |  |  |  |  |  |  |
U.S. government agency MBS | $ 3,613 |  | 3.86 | % |  | $ 4,384 |  | 2.95 | % |
U.S. government sponsored enterprise MBS | 2,087 |  | 4.75 |  |  | 2,762 |  | 3.78 |  |
Private issue collateralized mortgage obligations | 269 |  | 4.66 |  |  | 350 |  | 3.97 |  |
Total investment securities available for sale | $ 5,969 |  | 4.21 | % |  | $ 7,496 |  | 3.30 | % |
Total investment securities | $ 100,059 |  | 2.92 | % |  | $ 95,309 |  | 2.26 | % |

(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. |

Page 18 of 21

PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands) |  |

|  | As of June 30, |
|  | 2019 |  |  | 2018 |
|  | Balance |  |  | Rate(1) |  |  | Balance |  |  | Rate(1) |
LOANS HELD FOR INVESTMENT: |  |  |  |  |  |  |  |  |  |  |  |
Held to maturity: |  |  |  |  |  |  |  |  |  |  |  |
Single-family (1 to 4 units) |  | $ | 324,952 |  |  |  | 4.50 | % |  | $ | 314,808 |  |  |  | 4.34 | %
Multi-family (5 or more units) |  |  | 439,041 |  |  |  | 4.52 |  |  |  | 476,008 |  |  |  | 4.20 |
Commercial real estate |  |  | 111,928 |  |  |  | 4.92 |  |  |  | 109,726 |  |  |  | 4.71 |
Construction |  |  | 4,638 |  |  |  | 7.34 |  |  |  | 3,174 |  |  |  | 6.65 |
Other |  |  | 167 |  |  |  | 6.50 |  |  |  | 167 |  |  |  | 6.50 |
Commercial business |  |  | 478 |  |  |  | 6.72 |  |  |  | 500 |  |  |  | 6.17 |
Consumer |  |  | 134 |  |  |  | 15.50 |  |  |  | 109 |  |  |  | 14.71 |
Total loans held for investment |  |  | 881,338 |  |  |  | 4.58 | % |  |  | 904,492 |  |  |  | 4.33 | %
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 |  |  |  |  |
Purchased loans serviced by others included above |  | $ | 33,934 |  |  |  | 3.78 | % |  | $ | 20,477 |  |  |  | 3.32 | %
(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 June 30, |
|  | 2019 |  |  | 2018 |
|  | Balance |  |  | Rate(1) |  |  | Balance |  |  | Rate(1) |
DEPOSITS: |  |  |  |  |  |  |  |  |  |  |  |
Checking accounts – non interest-bearing |  | $ | 90,184 |  |  |  | - | % |  | $ | 86,174 |  |  |  | - | %
Checking accounts – interest-bearing |  |  | 257,909 |  |  |  | 0.12 |  |  |  | 259,372 |  |  |  | 0.11 |
Savings accounts |  |  | 264,387 |  |  |  | 0.20 |  |  |  | 289,791 |  |  |  | 0.21 |
Money market accounts |  |  | 35,646 |  |  |  | 0.28 |  |  |  | 34,633 |  |  |  | 0.29 |
Time deposits |  |  | 193,145 |  |  |  | 1.12 |  |  |  | 237,628 |  |  |  | 1.05 |
Total deposits |  | $ | 841,271 |  |  |  | 0.37 | % |  | $ | 907,598 |  |  |  | 0.39 | %
BORROWINGS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Overnight |  | $ | - |  |  |  | - | % |  | $ | 15,000 |  |  |  | 2.08 | %
Three months or less |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Over three to six months |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Over six months to one year |  |  | - |  |  |  | - |  |  |  | 10,000 |  |  |  | 1.53 |
Over one year to two years |  |  | 20,000 |  |  |  | 3.85 |  |  |  | - |  |  |  | - |
Over two years to three years |  |  | 21,107 |  |  |  | 2.06 |  |  |  | 20,000 |  |  |  | 3.85 |
Over three years to four years |  |  | 10,000 |  |  |  | 2.25 |  |  |  | 21,163 |  |  |  | 2.07 |
Over four years to five years |  |  | 30,000 |  |  |  | 2.25 |  |  |  | 10,000 |  |  |  | 2.25 |
Over five years |  |  | 20,000 |  |  |  | 2.70 |  |  |  | 50,000 |  |  |  | 2.43 |
Total borrowings |  | $ | 101,107 |  |  |  | 2.62 | % |  | $ | 126,163 |  |  |  | 2.47 | %

(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.

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PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands)

|  | Quarter Ended |  |  | Quarter Ended |
|  | June 30, 2019 |  |  | June 30, 2018 |
|  | Balance |  |  | Rate(1) |  |  | Balance |  |  | Rate(1) |
SELECTED AVERAGE BALANCE SHEETS: |  |  |  |  |  |  |  |  |  |  |  |
Loans receivable, net (2) |  | $ | 879,835 |  |  |  | 4.35 | % |  | $ | 986,403 |  |  |  | 4.13 | %
Investment securities |  |  | 105,024 |  |  |  | 2.52 | % |  |  | 99,779 |  |  |  | 1.55 | %
FHLB – San Francisco stock |  |  | 8,199 |  |  |  | 6.93 | % |  |  | 8,180 |  |  |  | 6.85 | %
Interest-earning deposits |  |  | 71,768 |  |  |  | 2.35 | % |  |  | 41,488 |  |  |  | 1.84 | %
Total interest-earning assets |  | $ | 1,064,826 |  |  |  | 4.06 | % |  | $ | 1,135,850 |  |  |  | 3.84 | %
Total assets |  | $ | 1,095,818 |  |  |  |  |  |  | $ | 1,168,205 |  |  |  |  |
Deposits |  | $ | 854,359 |  |  |  | 0.36 | % |  | $ | 909,961 |  |  |  | 0.38 | %
Borrowings |  |  | 101,112 |  |  |  | 2.65 | % |  |  | 117,651 |  |  |  | 2.53 | %
Total interest-bearing liabilities |  | $ | 955,471 |  |  |  | 0.60 | % |  | $ | 1,027,612 |  |  |  | 0.63 | %
Total stockholders’ equity |  | $ | 121,129 |  |  |  |  |  |  | $ | 120,545 |  |  |  |  |

(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 investment and loans held for sale at fair value, net of the allowance for loan losses.

|  | Fiscal Year Ended |  |  | Fiscal Year Ended |
|  | June 30, 2019 |  |  | June 30, 2018 |
|  | Balance |  |  | Rate(1) |  |  | Balance |  |  | Rate(1) |
SELECTED AVERAGE BALANCE SHEETS: |  |  |  |  |  |  |  |  |  |  |  |
Loans receivable, net (2) |  | $ | 926,003 |  |  |  | 4.33 | % |  | $ | 986,815 |  |  |  | 4.06 | %
Investment securities |  |  | 97,870 |  |  |  | 2.09 | % |  |  | 90,719 |  |  |  | 1.48 | %
FHLB – San Francisco stock |  |  | 8,199 |  |  |  | 8.62 | % |  |  | 8,126 |  |  |  | 6.99 | %
Interest-earning deposits |  |  | 67,816 |  |  |  | 2.24 | % |  |  | 53,438 |  |  |  | 1.45 | %
Total interest-earning assets |  | $ | 1,099,888 |  |  |  | 4.03 | % |  | $ | 1,139,098 |  |  |  | 3.75 | %
Total assets |  | $ | 1,130,666 |  |  |  |  |  |  | $ | 1,172,003 |  |  |  |  |
Deposits |  | $ | 880,118 |  |  |  | 0.38 | % |  | $ | 915,344 |  |  |  | 0.38 | %
Borrowings |  |  | 109,558 |  |  |  | 2.58 | % |  |  | 113,984 |  |  |  | 2.56 | %
Total interest-bearing liabilities |  | $ | 989,676 |  |  |  | 0.63 | % |  | $ | 1,029,328 |  |  |  | 0.62 | %
Total stockholders’ equity |  | $ | 121,702 |  |  |  |  |  |  | $ | 123,283 |  |  |  |  |

(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 investment and loans held for sale at fair value, net of the allowance for loan losses.

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PROVIDENT FINANCIAL HOLDINGS, INC. Asset Quality (1) (Unaudited – Dollars in Thousands) |
|  | As of |  |  | As of |  |  | As of |  |  | As of |  |  | As of |
|  | 06/30/19 |  |  | 03/31/19 |  |  | 12/31/18 |  |  | 09/30/18 |  |  | 06/30/18 |
Loans on non-accrual status (excluding restructured loans): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  | $ | 3,315 |  |  | $ | 2,657 |  |  | $ | 2,572 |  |  | $ | 2,773 |  |  | $ | 2,665 |
Construction |  |  | 971 |  |  |  | 745 |  |  |  | 745 |  |  |  | 745 |  |  |  | - |
Total |  |  | 4,286 |  |  |  | 3,402 |  |  |  | 3,317 |  |  |  | 3,518 |  |  |  | 2,665 |
Accruing loans past due 90 days or more: |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Restructured loans on non-accrual status: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  |  | 1,891 |  |  |  | 2,669 |  |  |  | 2,698 |  |  |  | 3,280 |  |  |  | 3,328 |
Commercial business loans |  |  | 41 |  |  |  | 44 |  |  |  | 47 |  |  |  | 64 |  |  |  | 64 |
Total |  |  | 1,932 |  |  |  | 2,713 |  |  |  | 2,745 |  |  |  | 3,344 |  |  |  | 3,392 |
Total non-performing loans |  |  | 6,218 |  |  |  | 6,115 |  |  |  | 6,062 |  |  |  | 6,862 |  |  |  | 6,057 |
Real estate owned, net |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 524 |  |  |  | 906 |
Total non-performing assets |  | $ | 6,218 |  |  | $ | 6,115 |  |  | $ | 6,062 |  |  | $ | 7,386 |  |  | $ | 6,963 |

(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 credit adjustments.
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