EX-99.1 2 prov8k12720exh991.htm
Exhibit 99.1

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

PROVIDENT FINANCIAL HOLDINGS REPORTS
SECOND QUARTER OF FISCAL 2020 RESULTS
Net Income Increases by 22% in the December 2019 Quarter in Comparison to the
December 2018 Quarter
Net Interest Margin Expands Five Basis Points to 3.59% in the December 2019
Quarter in Comparison to the December 2018 Quarter
Loans Held for Investment Increase 7% to $941.7 Million
from June 30, 2019
Non-Performing Assets Decrease 45% to $3.4 Million at December 31, 2019 in
Comparison to $6.2 Million at June 30, 2019
Riverside, Calif. – January 27, 2020 – Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the holding company for Provident Savings Bank, F.S.B. (“Bank”), today announced second quarter earnings results for the fiscal year ending June 30, 2020.
For the quarter ended December 31, 2019, the Company reported net income of $2.40 million, or $0.31 per diluted share (on 7.66 million average diluted shares outstanding), up 22 percent from the net income of $1.96 million, or $0.26 per diluted share (on 7.60 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, partly offset by lower non-interest income.
“I am pleased with our financial results for the December 2019 quarter. We continue to demonstrate reasonable growth in our loan portfolio, our credit quality
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metrics are very good, operating expenses are under control, and our capital levels are strong,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company. “We look forward to 2020 and believe we are well-positioned for growth by serving the communities of the Inland Empire,” Mr. Blunden concluded.
Return on average assets for the second quarter of fiscal 2020 was 0.87 percent compared to 0.69 percent for the same period of fiscal 2019; and return on average stockholders’ equity for the second quarter of fiscal 2020 was 7.81 percent compared to 6.42 percent for the comparable period of fiscal 2019.
On a sequential quarter basis, the $2.40 million net income for the second quarter of fiscal 2020 reflects a $164,000 or six percent decrease from $2.56 million in the first quarter of fiscal 2020. The decrease in earnings for the second quarter of fiscal 2020 compared to the first quarter of fiscal 2020 was primarily attributable to higher non-interest expenses (primarily due to the $296,000 partial reversion of a previously expensed legal settlement, which was recognized during the prior sequential quarter and not replicated this quarter) and a lower recovery from the allowance for loan losses, partly offset by higher non-interest income (primarily due to higher loan servicing and other fees). Diluted earnings per share for the second quarter of fiscal 2020 were $0.31 per share, down six percent from the $0.33 per share during the first quarter of fiscal 2020. Return on average assets was 0.87 percent for the second quarter of fiscal 2020 compared to 0.95 percent in the first quarter of fiscal 2020; and return on average stockholders’ equity for the second quarter of fiscal 2020 was 7.81 percent, compared to 8.46 percent for the first quarter of fiscal 2020.
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For the six months ended December 31, 2019 net income increased $1.18 million, or 31 percent, to $4.96 million from $3.78 million in the comparable period ended December 31, 2018; and diluted earnings per share for the six months ended December 31, 2019 increased 30 percent to $0.65 per share (on 7.65 million average diluted shares outstanding) from $0.50 per share (on 7.58 million average diluted shares outstanding) for the comparable six month period last year. Compared to the same period last year, the increase in earnings was primarily attributable to a $7.79 million decrease in non-interest expense; partly offset by a $5.52 million decrease in the gain on sale of loans.
Net interest income decreased $192,000, or two percent, to $9.64 million in the second quarter of fiscal 2020 from $9.83 million for the same quarter of fiscal 2019, attributable to a lower average interest-earning assets balance, partly offset by an increase in the net interest margin. The average balance of interest-earning assets decreased by $35.7 million, or three percent, to $1.07 billion in the second quarter of fiscal 2020 from $1.11 billion in the same quarter last year. The average balance of interest-bearing liabilities decreased by $36.1 million, or four percent, to $964.6 million in the second quarter of fiscal 2020 from $1.00 billion in the same quarter last year. The net interest margin during the second quarter of fiscal 2020 increased five basis points to 3.59 percent from 3.54 percent in the same quarter last year, primarily due to an increase in the average yield of interest-earning assets, partly offset by a slight increase in the average cost of interest-bearing liabilities. The average yield on interest-earning assets increased by six basis points to 4.18 percent in the second quarter of fiscal 2020 from 4.12 percent in the same quarter last year; while the average cost of interest-bearing liabilities
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increased by one basis point to 0.65 percent in the second quarter of fiscal 2020 from 0.64 percent in the same quarter last year.
The average balance of loans receivable (including loans held for sale in the prior year) decreased by $7.1 million, or one percent, to $934.1 million in the second quarter of fiscal 2020 from $941.2 million in the same quarter of fiscal 2019, primarily due to a decrease in the average balance of loans held for sale, partly offset by an increase in loans held for investment. There were no loans held for sale during the second quarter of fiscal 2020. The average yield on loans receivable increased by three basis points to 4.42 percent in the second quarter of fiscal 2020 from an average yield of 4.39 percent in the same quarter of fiscal 2019. The increase in the average yield on loans receivable was primarily attributable to a $378,000 deferred loan fee that was recognized in interest income as a result of a loan payoff in the second quarter of fiscal 2020 from a previously classified non-performing loan that had been upgraded to pass as compared to $159,000 of deferred interest payments that was recognized from two non-performing loans that were paid off in the same quarter last year. Total loans originated and purchased for investment in the second quarter of fiscal 2020 were $81.6 million, up 108 percent from $39.3 million in the same quarter of fiscal 2019. Loan principal payments received in the second quarter of fiscal 2020 were $65.2 million, up 58 percent from $41.2 million in the same quarter of fiscal 2019.
The average balance of investment securities decreased by $6.4 million, or seven percent, to $87.1 million in the second quarter of fiscal 2020 from $93.5 million in the same quarter of fiscal 2019. The average yield on investment securities increased 70 basis points to 2.60 percent in the second quarter of fiscal 2020 from 1.90 percent for the same
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quarter of fiscal 2019. The increase in the average yield was primarily attributable to a lower premium amortization ($97,000 vs. $224,000) and purchases of mortgage-backed securities during the last 12 months which had higher average yields than the existing portfolio.
In the second quarter of fiscal 2020, the Federal Home Loan Bank – San Francisco (“FHLB”) distributed a $145,000 cash dividend to the Bank on its FHLB stock, down from $278,000 in the same quarter last year, which included a $133,000 special cash dividend received on FHLB San Francisco stock last year, not replicated this quarter.
The average balance of the Company’s interest-earning deposits, primarily cash with the Federal Reserve Bank of San Francisco, decreased $22.3 million, or 33 percent, to $45.5 million in the second quarter of fiscal 2020 from $67.8 million in the same quarter of fiscal 2019. The average yield earned on interest-earning deposits in the second quarter of fiscal 2020 was 1.62 percent, down 61 basis points from 2.23 percent in the same quarter of fiscal 2019 largely as a result of three 25 basis point decreases in the targeted Federal Funds Rate in the first and second quarters of fiscal 2020.
Average deposits decreased $56.0 million, or six percent, to $833.6 million in the second quarter of fiscal 2020 from $889.6 million in the same quarter of fiscal 2019, primarily due to a managed run-off of higher cost time deposits consistent with the reduction in the Bank’s funding needs resulting from no loans originated for sale during the first and second quarters of fiscal 2020. The average cost of deposits improved, decreasing by three basis points to 0.37 percent in the second quarter of fiscal 2020 from 0.40 percent in the same quarter last year.
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Transaction account balances or “core deposits” decreased slightly to $647.8 million at December 31, 2019 from $648.1 million at June 30, 2019, while time deposits decreased $7.2 million, or four percent, to $185.9 million at December 31, 2019 from $193.1 million at June 30, 2019.
The average balance of borrowings, which consisted of FHLB advances, increased $20.0 million, or 18 percent, to $131.1 million while the average cost of borrowings decreased 12 basis points to 2.43 percent in the second quarter of fiscal 2020, compared to an average balance of $111.1 million with an average cost of 2.55 percent in the same quarter of fiscal 2019. The increase in the average balance of borrowings was primarily due to the new long-term borrowings with a lower average cost obtained during the first quarter of fiscal 2020 (sequential quarter).
During the second quarter of fiscal 2020, the Company recorded a recovery from the allowance for loan losses of $22,000, as compared to a recovery of $217,000 recorded during the same period of fiscal 2019 and a recovery of $181,000 recorded in the first quarter of fiscal 2020 (sequential quarter).
Non-performing assets, with underlying collateral located in California, decreased $2.8 million, or 45 percent, to $3.4 million, or 0.31 percent of total assets, at December 31, 2019, compared to $6.2 million, or 0.57 percent of total assets, at June 30, 2019. The non-performing loans at December 31, 2019 are comprised of 16 single-family loans ($3.4 million) and one commercial business loan ($37,000). At both December 31, 2019 and June 30, 2019, there was no real estate owned.
Net loan recoveries for the quarter ended December 31, 2019 were $14,000 or 0.01 percent (annualized) of average loans receivable, compared to net loan recoveries of
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$123,000 or 0.05 percent (annualized) of average loans receivable for the quarter ended December 31, 2018 and net loan recoveries of $34,000 or 0.02 percent (annualized) of average loans receivable for the quarter ended September 30, 2019 (sequential quarter).
Classified assets at December 31, 2019 were $13.7 million, comprised of $9.4 million of loans in the special mention category, $4.3 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 December 31, 2019, no new loans were restructured from their original terms and classified as restructured loans. The outstanding balance of restructured loans at December 31, 2019 was $1.8 million (six loans), down 53 percent from $3.8 million (eight loans) at June 30, 2019. As of December 31, 2019, all of the restructured loans were classified as substandard non-accrual. As of December 31, 2019, 49% or $888,000 of the restructured loans have a current payment status.
The allowance for loan losses was $6.9 million at December 31, 2019, or 0.73 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 December 31, 2019.
Non-interest income decreased by $2.26 million, or 63 percent, to $1.34 million in the second quarter of fiscal 2020 from $3.60 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 last year, during the second quarter of fiscal 2019, was $2.26 million. On a sequential
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quarter basis, non-interest income increased $274,000, or 26 percent, primarily as a result of an increase in loan servicing and other loan fees. There were no loans originated for sale during the current or sequential quarters.
Non-interest expenses decreased $3.33 million, or 31 percent, to $7.55 million in the second quarter of fiscal 2020 from $10.88 million in the same quarter last year. The decrease was due primarily to lower salaries and employee benefits expenses resulting from fewer employees and consistent with the scaling back of saleable single-family mortgage loan originations. On a sequential quarter basis, non-interest expenses increased $316,000 or four percent from $7.24 million. The increase in non-interest expenses for the sequential quarter was primarily due to the $296,000 partial reversion of a previously expensed legal settlement, which was recognized in other non-interest expense during the quarter ended September 30, 2019 and not replicated this quarter.
The Company’s efficiency ratio in the second quarter of fiscal 2020 was 69 percent, an improvement from 81 percent in the same quarter last year but a slight increase from 68 percent in the first quarter of fiscal 2020 (sequential quarter).
The Company’s provision for income tax was $1.05 million for the second quarter of fiscal 2020, up 30 percent from $810,000 in the same quarter last year. The effective tax rate in the second quarter of fiscal 2020 was 30.51% as compared to 29.26% in the same quarter of fiscal 2019. The Company believes that the tax provision recorded in the second quarter of fiscal 2020 reflects its current federal and state income tax obligations.
The Company repurchased 2,361 shares of its common stock during the quarter ended December 31, 2019 at an average cost of $21.84 per share. As of December 31, 2019, a total of 71,284 shares or 19 percent of the April 2018 stock repurchase plan have
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been purchased at an average cost of $19.97 per share, leaving 301,716 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 Tuesday, January 28, 2020 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-844-721-7239 and referencing access code number 1069003. An audio replay of the conference call will be available through Tuesday, February 4, 2020 by dialing 1-866-207-1041 and referencing access code number 2689092.
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 | Donovan 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)

|  | December 31 |  |  | September 30, |  |  | June 30, |  |  | March 31, |  |  | December 31, |
|  | 2019 |  |  | 2019 |  |  | 2019 |  |  | 2019 |  |  | 2018 |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 48,233 |  |  | $ | 54,515 |  |  | $ | 70,632 |  |  | $ | 61,458 |  |  | $ | 67,359 |
Investment securities – held to maturity, at cost |  |  | 77,161 |  |  |  | 85,088 |  |  |  | 94,090 |  |  |  | 102,510 |  |  |  | 84,990 |
Investment securities - available for sale, at fair value |  |  | 5,237 |  |  |  | 5,517 |  |  |  | 5,969 |  |  |  | 6,294 |  |  |  | 6,563 |
Loans held for investment, net of allowance for loan losses of $6,921; $6,929; $7,076; $7,080 and $7,061, respectively; includes $4,173; $4,386; $5,094; $5,239 and $4,995 at fair value, respectively |  |  | 941,729 |  |  |  | 924,314 |  |  |  | 879,925 |  |  |  | 883,554 |  |  |  | 875,413 |
Loans held for sale, at fair value |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 30,500 |  |  |  | 57,562 |
Accrued interest receivable |  |  | 3,292 |  |  |  | 3,380 |  |  |  | 3,424 |  |  |  | 3,386 |  |  |  | 3,156 |
Real estate owned, net |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
FHLB – San Francisco stock |  |  | 8,199 |  |  |  | 8,199 |  |  |  | 8,199 |  |  |  | 8,199 |  |  |  | 8,199 |
Premises and equipment, net |  |  | 10,967 |  |  |  | 11,215 |  |  |  | 8,226 |  |  |  | 8,395 |  |  |  | 8,601 |
Prepaid expenses and other assets |  |  | 12,569 |  |  |  | 13,068 |  |  |  | 14,385 |  |  |  | 15,099 |  |  |  | 15,327 |
Total assets |  | $ | 1,107,387 |  |  | $ | 1,105,296 |  |  | $ | 1,084,850 |  |  | $ | 1,119,395 |  |  | $ | 1,127,170 |
Liabilities and Stockholders’ Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non interest-bearing deposits |  | $ | 85,846 |  |  | $ | 85,338 |  |  | $ | 90,184 |  |  | $ | 90,875 |  |  | $ | 78,866 |
Interest-bearing deposits |  |  | 747,804 |  |  |  | 746,398 |  |  |  | 751,087 |  |  |  | 786,009 |  |  |  | 794,018 |
Total deposits |  |  | 833,650 |  |  |  | 831,736 |  |  |  | 841,271 |  |  |  | 876,884 |  |  |  | 872,884 |
Borrowings |  |  | 131,085 |  |  |  | 131,092 |  |  |  | 101,107 |  |  |  | 101,121 |  |  |  | 111,135 |
Accounts payable, accrued interest and other liabilities |  |  | 18,876 |  |  |  | 20,299 |  |  |  | 21,831 |  |  |  | 20,181 |  |  |  | 20,474 |
Total liabilities |  |  | 983,611 |  |  |  | 983,127 |  |  |  | 964,209 |  |  |  | 998,186 |  |  |  | 1,004,493 |
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; 18,091,865; 18,081,365; 18,064,365and 18,053,115 shares issued, respectively; 7,483,071; 7,479,682; 7,486,106; 7,497,357 and 7,506,855 shares outstanding, respectively) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 181 |  |  |  | 181 |  |  |  | 181 |  |  |  | 181 |  |  |  | 181 |
Additional paid-in capital |  |  | 95,118 |  |  |  | 94,795 |  |  |  | 94,351 |  |  |  | 96,114 |  |  |  | 95,913 |
Retained earnings |  |  | 193,704 |  |  |  | 192,354 |  |  |  | 190,839 |  |  |  | 191,103 |  |  |  | 192,306 |
Treasury stock at cost (10,614,544; 10,612,183; 10,559,259; 10,567,008 and 10,546,260 shares, respectively) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | (165,360 | ) |  |  | (165,309 | ) |  |  | (164,891 | ) |  |  | (166,352 | ) |  |  | (165,892 | )
Accumulated other comprehensive income, net of tax |  |  | 133 |  |  |  | 148 |  |  |  | 161 |  |  |  | 163 |  |  |  | 169 |
Total stockholders’ equity |  |  | 123,776 |  |  |  | 122,169 |  |  |  | 120,641 |  |  |  | 121,209 |  |  |  | 122,677 |
Total liabilities and stockholders’ equity |  | $ | 1,107,387 |  |  | $ | 1,105,296 |  |  | $ | 1,084,850 |  |  | $ | 1,119,395 |  |  | $ | 1,127,170 |

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PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Operations (Unaudited - In Thousands, Except Earnings Per Share)

|  | Quarter Ended December 31, |  |  | Six Months Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |
Loans receivable, net |  | $ | 10,320 |  |  | $ | 10,331 |  |  | $ | 20,395 |  |  | $ | 20,505 |
Investment securities |  |  | 567 |  |  |  | 444 |  |  |  | 1,181 |  |  |  | 789 |
FHLB – San Francisco stock |  |  | 145 |  |  |  | 278 |  |  |  | 288 |  |  |  | 421 |
Interest-earning deposits |  |  | 189 |  |  |  | 387 |  |  |  | 435 |  |  |  | 725 |
Total interest income |  |  | 11,221 |  |  |  | 11,440 |  |  |  | 22,299 |  |  |  | 22,440 |
Interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Checking and money market deposits |  |  | 117 |  |  |  | 117 |  |  |  | 227 |  |  |  | 225 |
Savings deposits |  |  | 131 |  |  |  | 147 |  |  |  | 265 |  |  |  | 298 |
Time deposits |  |  | 530 |  |  |  | 630 |  |  |  | 1,062 |  |  |  | 1,251 |
Borrowings |  |  | 804 |  |  |  | 715 |  |  |  | 1,524 |  |  |  | 1,478 |
Total interest expense |  |  | 1,582 |  |  |  | 1,609 |  |  |  | 3,078 |  |  |  | 3,252 |
Net interest income |  |  | 9,639 |  |  |  | 9,831 |  |  |  | 19,221 |  |  |  | 19,188 |
Recovery from allowance for loan losses |  |  | (22 | ) |  |  | (217 | ) |  |  | (203 | ) |  |  | (454 | )
Net interest income, after recovery from allowance for loan losses |  |  | 9,661 |  |  |  | 10,048 |  |  |  | 19,424 |  |  |  | 19,642 |
Non-interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loan servicing and other fees |  |  | 367 |  |  |  | 277 |  |  |  | 500 |  |  |  | 601 |
Gain (loss) on sale of loans, net |  |  | (43 | ) |  |  | 2,263 |  |  |  | (129 | ) |  |  | 5,395 |
Deposit account fees |  |  | 451 |  |  |  | 509 |  |  |  | 898 |  |  |  | 1,014 |
Loss on sale and operations of real estate owned acquired in the settlement of loans |  |  | - |  |  |  | (7 | ) |  |  | - |  |  |  | (6 | )
Card and processing fees |  |  | 371 |  |  |  | 392 |  |  |  | 761 |  |  |  | 790 |
Other |  |  | 198 |  |  |  | 161 |  |  |  | 384 |  |  |  | 350 |
Total non-interest income |  |  | 1,344 |  |  |  | 3,595 |  |  |  | 2,414 |  |  |  | 8,144 |
Non-interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  |  | 4,999 |  |  |  | 7,211 |  |  |  | 9,984 |  |  |  | 15,461 |
Premises and occupancy |  |  | 880 |  |  |  | 1,274 |  |  |  | 1,758 |  |  |  | 2,619 |
Equipment |  |  | 262 |  |  |  | 495 |  |  |  | 541 |  |  |  | 916 |
Professional expenses |  |  | 331 |  |  |  | 411 |  |  |  | 739 |  |  |  | 858 |
Sales and marketing expenses |  |  | 212 |  |  |  | 253 |  |  |  | 329 |  |  |  | 422 |
Deposit insurance premiums and regulatory assessments |  |  | 59 |  |  |  | 172 |  |  |  | 43 |  |  |  | 337 |
Other |  |  | 811 |  |  |  | 1,059 |  |  |  | 1,398 |  |  |  | 1,966 |
Total non-interest expense |  |  | 7,554 |  |  |  | 10,875 |  |  |  | 14,792 |  |  |  | 22,579 |
Income before taxes |  |  | 3,451 |  |  |  | 2,768 |  |  |  | 7,046 |  |  |  | 5,207 |
Provision for income taxes |  |  | 1,053 |  |  |  | 810 |  |  |  | 2,086 |  |  |  | 1,426 |
Net income |  | $ | 2,398 |  |  | $ | 1,958 |  |  | $ | 4,960 |  |  | $ | 3,781 |
Basic earnings per share |  | $ | 0.32 |  |  | $ | 0.26 |  |  | $ | 0.66 |  |  | $ | 0.51 |
Diluted earnings per share |  | $ | 0.31 |  |  | $ | 0.26 |  |  | $ | 0.65 |  |  | $ | 0.50 |
Cash dividends per share |  | $ | 0.14 |  |  | $ | 0.14 |  |  | $ | 0.28 |  |  | $ | 0.28 |

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

|  | Quarter Ended |
|  | December 31, |  |  | September 30, |  |  | June 30, |  |  | March 31, |  |  | December 31, |
|  | 2019 |  |  | 2019 |  |  | 2019 |  |  | 2019 |  |  | 2018 |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans receivable, net |  | $ | 10,320 |  |  | $ | 10,075 |  |  | $ | 9,576 |  |  | $ | 10,011 |  |  | $ | 10,331 |
Investment securities |  |  | 567 |  |  |  | 614 |  |  |  | 661 |  |  |  | 592 |  |  |  | 444 |
FHLB – San Francisco stock |  |  | 145 |  |  |  | 143 |  |  |  | 142 |  |  |  | 144 |  |  |  | 278 |
Interest-earning deposits |  |  | 189 |  |  |  | 246 |  |  |  | 426 |  |  |  | 386 |  |  |  | 387 |
Total interest income |  |  | 11,221 |  |  |  | 11,078 |  |  |  | 10,805 |  |  |  | 11,133 |  |  |  | 11,440 |
Interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Checking and money market deposits |  |  | 117 |  |  |  | 110 |  |  |  | 101 |  |  |  | 102 |  |  |  | 117 |
Savings deposits |  |  | 131 |  |  |  | 134 |  |  |  | 135 |  |  |  | 139 |  |  |  | 147 |
Time deposits |  |  | 530 |  |  |  | 532 |  |  |  | 530 |  |  |  | 600 |  |  |  | 630 |
Borrowings |  |  | 804 |  |  |  | 720 |  |  |  | 669 |  |  |  | 680 |  |  |  | 715 |
Total interest expense |  |  | 1,582 |  |  |  | 1,496 |  |  |  | 1,435 |  |  |  | 1,521 |  |  |  | 1,609 |
Net interest income |  |  | 9,639 |  |  |  | 9,582 |  |  |  | 9,370 |  |  |  | 9,612 |  |  |  | 9,831 |
Provision (recovery) for loan losses |  |  | (22 | ) |  |  | (181 | ) |  |  | (25 | ) |  |  | 4 |  |  |  | (217 | )
Net interest income, after provision (recovery) for loan losses |  |  | 9,661 |  |  |  | 9,763 |  |  |  | 9,395 |  |  |  | 9,608 |  |  |  | 10,048 |
Non-interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loan servicing and other fees |  |  | 367 |  |  |  | 133 |  |  |  | 188 |  |  |  | 262 |  |  |  | 277 |
Gain (loss) on sale of loans, net |  |  | (43 | ) |  |  | (86 | ) |  |  | 21 |  |  |  | 1,719 |  |  |  | 2,263 |
Deposit account fees |  |  | 451 |  |  |  | 447 |  |  |  | 443 |  |  |  | 471 |  |  |  | 509 |
Gain (loss) on sale and operations of real estate owned acquired in the settlement of loans, net |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2 |  |  |  | (7 | )
Card and processing fees |  |  | 371 |  |  |  | 390 |  |  |  | 405 |  |  |  | 373 |  |  |  | 392 |
Other |  |  | 198 |  |  |  | 186 |  |  |  | 258 |  |  |  | 225 |  |  |  | 161 |
Total non-interest income |  |  | 1,344 |  |  |  | 1,070 |  |  |  | 1,315 |  |  |  | 3,052 |  |  |  | 3,595 |
Non-interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  |  | 4,999 |  |  |  | 4,985 |  |  |  | 5,396 |  |  |  | 9,292 |  |  |  | 7,211 |
Premises and occupancy |  |  | 880 |  |  |  | 878 |  |  |  | 1,133 |  |  |  | 1,286 |  |  |  | 1,274 |
Equipment |  |  | 262 |  |  |  | 279 |  |  |  | 1,141 |  |  |  | 417 |  |  |  | 495 |
Professional expenses |  |  | 331 |  |  |  | 408 |  |  |  | 493 |  |  |  | 513 |  |  |  | 411 |
Sales and marketing expenses |  |  | 212 |  |  |  | 117 |  |  |  | 312 |  |  |  | 246 |  |  |  | 253 |
Deposit insurance premiums and regulatory assessments |  |  | 59 |  |  |  | (16 | ) |  |  | 129 |  |  |  | 124 |  |  |  | 172 |
Other |  |  | 811 |  |  |  | 587 |  |  |  | 1,053 |  |  |  | 1,122 |  |  |  | 1,059 |
Total non-interest expense |  |  | 7,554 |  |  |  | 7,238 |  |  |  | 9,657 |  |  |  | 13,000 |  |  |  | 10,875 |
Income (loss) before taxes |  |  | 3,451 |  |  |  | 3,595 |  |  |  | 1,053 |  |  |  | (340 | ) |  |  | 2,768 |
Provision (benefit) for income taxes |  |  | 1,053 |  |  |  | 1,033 |  |  |  | 266 |  |  |  | (189 | ) |  |  | 810 |
Net income (loss) |  | $ | 2,398 |  |  | $ | 2,562 |  |  | $ | 787 |  |  | $ | (151 | ) |  | $ | 1,958 |
Basic earnings (loss) per share |  | $ | 0.32 |  |  | $ | 0.34 |  |  | $ | 0.10 |  |  | $ | (0.02 | ) |  | $ | 0.26 |
Diluted earnings (loss) per share |  | $ | 0.31 |  |  | $ | 0.33 |  |  | $ | 0.10 |  |  | $ | (0.02 | ) |  | $ | 0.26 |
Cash dividends per share |  | $ | 0.14 |  |  | $ | 0.14 |  |  | $ | 0.14 |  |  | $ | 0.14 |  |  | $ | 0.14 |

Page 12 of 18

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

|  | Quarter Ended December 31, |  |  | Six Months Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
SELECTED FINANCIAL RATIOS: |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets |  |  | 0.87 | % |  |  | 0.69 | % |  |  | 0.91 | % |  |  | 0.66 | %
Return on average stockholders’ equity |  |  | 7.81 | % |  |  | 6.42 | % |  |  | 8.13 | % |  |  | 6.22 | %
Stockholders’ equity to total assets |  |  | 11.18 | % |  |  | 10.88 | % |  |  | 11.18 | % |  |  | 10.88 | %
Net interest spread |  |  | 3.53 | % |  |  | 3.48 | % |  |  | 3.55 | % |  |  | 3.36 | %
Net interest margin |  |  | 3.59 | % |  |  | 3.54 | % |  |  | 3.61 | % |  |  | 3.42 | %
Efficiency ratio |  |  | 68.78 | % |  |  | 81.00 | % |  |  | 68.37 | % |  |  | 82.61 | %
Average interest-earning assets to average |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
interest-bearing liabilities |  |  | 111.43 | % |  |  | 110.98 | % |  |  | 111.52 | % |  |  | 110.92 | %
SELECTED FINANCIAL DATA: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings per share |  | $ | 0.32 |  |  | $ | 0.26 |  |  | $ | 0.66 |  |  | $ | 0.51 |
Diluted earnings per share |  | $ | 0.31 |  |  | $ | 0.26 |  |  | $ | 0.65 |  |  | $ | 0.50 |
Book value per share |  | $ | 16.54 |  |  | $ | 16.34 |  |  | $ | 16.54 |  |  | $ | 16.34 |
Shares used for basic EPS computation |  |  | 7,482,300 |  |  |  | 7,506,106 |  |  |  | 7,482,367 |  |  |  | 7,468,537 |
Shares used for diluted EPS computation |  |  | 7,658,050 |  |  |  | 7,601,759 |  |  |  | 7,651,441 |  |  |  | 7,579,414 |
Total shares issued and outstanding |  |  | 7,483,071 |  |  |  | 7,506,855 |  |  |  | 7,483,071 |  |  |  | 7,506,855 |
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  | $ | 52,671 |  |  | $ | 24,180 |  |  | $ | 86,300 |  |  | $ | 41,396 |
Multi-family |  |  | 20,164 |  |  |  | 10,068 |  |  |  | 76,640 |  |  |  | 22,777 |
Commercial real estate |  |  | 6,479 |  |  |  | 3,175 |  |  |  | 8,898 |  |  |  | 8,480 |
Construction |  |  | 2,313 |  |  |  | 1,863 |  |  |  | 3,209 |  |  |  | 3,343 |
Consumer loans |  |  | 1 |  |  |  | - |  |  |  | 1 |  |  |  | - |
Total loans originated and purchased for investment |  | $ | 81,628 |  |  | $ | 39,286 |  |  | $ | 175,048 |  |  | $ | 75,996 |
LOANS ORIGINATED FOR SALE: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail originations |  | $ | - |  |  | $ | 87,913 |  |  | $ | - |  |  | $ | 215,046 |
Wholesale originations |  |  | - |  |  |  | 58,504 |  |  |  | - |  |  |  | 127,692 |
Total loans originated for sale |  | $ | - |  |  | $ | 146,417 |  |  | $ | - |  |  | $ | 342,738 |
LOANS SOLD: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicing released |  | $ | - |  |  | $ | 165,484 |  |  | $ | - |  |  | $ | 376,534 |
Servicing retained |  |  | - |  |  |  | 2,026 |  |  |  | - |  |  |  | 2,784 |
Total loans sold |  | $ | - |  |  | $ | 167,510 |  |  | $ | - |  |  | $ | 379,318 |

Page 13 of 18

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

|  | Quarter Ended |  |  | Quarter Ended |  |  | Quarter Ended |  |  | Quarter Ended |  |  | Quarter Ended |
|  | 12/31/19 |  |  | 09/30/19 |  |  | 06/30/19 |  |  | 03/31/19 |  |  | 12/31/18 |
SELECTED FINANCIAL RATIOS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return (loss) on average assets |  |  | 0.87 | % |  |  | 0.95 | % |  |  | 0.29 | % |  |  | (0.05 | )% |  |  | 0.69 | %
Return (loss) on average stockholders’ equity |  |  | 7.81 | % |  |  | 8.46 | % |  |  | 2.60 | % |  |  | (0.49 | )% |  |  | 6.42 | %
Stockholders’ equity to total assets |  |  | 11.18 | % |  |  | 11.05 | % |  |  | 11.12 | % |  |  | 10.83 | % |  |  | 10.88 | %
Net interest spread |  |  | 3.53 | % |  |  | 3.58 | % |  |  | 3.46 | % |  |  | 3.46 | % |  |  | 3.48 | %
Net interest margin |  |  | 3.59 | % |  |  | 3.64 | % |  |  | 3.52 | % |  |  | 3.53 | % |  |  | 3.54 | %
Efficiency ratio |  |  | 68.78 | % |  |  | 67.95 | % |  |  | 90.38 | % |  |  | 102.65 | % |  |  | 81.00 | %
Average interest-earning assets to average interest-bearing liabilities |  |  | 111.43 | % |  |  | 111.61 | % |  |  | 111.45 | % |  |  | 111.28 | % |  |  | 110.98 | %
SELECTED FINANCIAL DATA: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings (loss) per share |  | $ | 0.32 |  |  | $ | 0.34 |  |  | $ | 0.10 |  |  | $ | (0.02 | ) |  | $ | 0.26 |
Diluted earnings (loss) per share |  | $ | 0.31 |  |  | $ | 0.33 |  |  | $ | 0.10 |  |  | $ | (0.02 | ) |  | $ | 0.26 |
Book value per share |  | $ | 16.54 |  |  | $ | 16.33 |  |  | $ | 16.12 |  |  | $ | 16.17 |  |  | $ | 16.34 |
Average shares used for basic EPS |  |  | 7,482,300 |  |  |  | 7,482,435 |  |  |  | 7,496,457 |  |  |  | 7,506,770 |  |  |  | 7,506,106 |
Average shares used for diluted EPS |  |  | 7,658,050 |  |  |  | 7,647,763 |  |  |  | 7,626,661 |  |  |  | 7,506,770 |  |  |  | 7,601,759 |
Total shares issued and outstanding |  |  | 7,483,071 |  |  |  | 7,479,682 |  |  |  | 7,486,106 |  |  |  | 7,497,357 |  |  |  | 7,506,855 |
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  | $ | 52,671 |  |  | $ | 33,629 |  |  | $ | 31,982 |  |  | $ | 15,288 |  |  | $ | 24,180 |
Multi-family |  |  | 20,164 |  |  |  | 56,476 |  |  |  | 14,513 |  |  |  | 21,546 |  |  |  | 10,068 |
Commercial real estate |  |  | 6,479 |  |  |  | 2,419 |  |  |  | 2,882 |  |  |  | 5,197 |  |  |  | 3,175 |
Construction |  |  | 2,313 |  |  |  | 896 |  |  |  | 1,846 |  |  |  | 1,970 |  |  |  | 1,863 |
Consumer loans |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total loans originated and purchased for investment |  | $ | 81,628 |  |  | $ | 93,420 |  |  | $ | 51,223 |  |  | $ | 44,001 |  |  | $ | 39,286 |
LOANS ORIGINATED FOR SALE: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail originations |  | $ | - |  |  | $ | - |  |  | $ | 9,593 |  |  | $ | 72,353 |  |  | $ | 87,913 |
Wholesale originations |  |  | - |  |  |  | - |  |  |  | 4,057 |  |  |  | 38,353 |  |  |  | 58,504 |
Total loans originated for sale |  | $ | - |  |  | $ | - |  |  | $ | 13,650 |  |  | $ | 110,706 |  |  | $ | 146,417 |
LOANS SOLD: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicing released |  | $ | - |  |  | $ | - |  |  | $ | 40,956 |  |  | $ | 134,264 |  |  | $ | 165,484 |
Servicing retained |  |  | - |  |  |  | - |  |  |  | 2,003 |  |  |  | 2,409 |  |  |  | 2,026 |
Total loans sold |  | $ | - |  |  | $ | - |  |  | $ | 42,959 |  |  | $ | 136,673 |  |  | $ | 167,510 |

Page 14 of 18

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

|  | As of |  |  | As of |  |  | As of |  |  | As of |  |  | As of |
|  | 12/31/19 |  |  | 09/30/19 |  |  | 06/30/19 |  |  | 03/31/19 |  |  | 12/31/18 |
ASSET QUALITY RATIOS AND DELINQUENT LOANS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Recourse reserve for loans sold |  | $ | 250 |  |  | $ | 250 |  |  | $ | 250 |  |  | $ | 250 |  |  | $ | 250 |
Allowance for loan losses |  | $ | 6,921 |  |  | $ | 6,929 |  |  | $ | 7,076 |  |  | $ | 7,080 |  |  | $ | 7,061 |
Non-performing loans to loans held for investment, net |  |  | 0.36 | % |  |  | 0.57 | % |  |  | 0.71 | % |  |  | 0.69 | % |  |  | 0.69 | %
Non-performing assets to total assets |  |  | 0.31 | % |  |  | 0.47 | % |  |  | 0.57 | % |  |  | 0.55 | % |  |  | 0.54 | %
Allowance for loan losses to gross loans held |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
for investment |  |  | 0.73 | % |  |  | 0.74 | % |  |  | 0.80 | % |  |  | 0.79 | % |  |  | 0.80 | %
Net loan charge-offs (recoveries) to average loans receivable (annualized) |  |  | (0.01 | )% |  |  | (0.02 | )% |  |  | (0.01 | )% |  |  | (0.01 | )% |  |  | (0.05 | )%
Non-performing loans |  | $ | 3,427 |  |  | $ | 5,230 |  |  | $ | 6,218 |  |  | $ | 6,115 |  |  | $ | 6,062 |
Loans 30 to 89 days delinquent |  | $ | 986 |  |  | $ | 990 |  |  | $ | 665 |  |  | $ | 699 |  |  | $ | 2 |

|  | Quarter Ended |  |  | Quarter Ended |  |  | Quarter Ended |  |  | Quarter Ended |  |  | Quarter Ended |
|  | 12/31/19 |  |  | 09/30/19 |  |  | 06/30/19 |  |  | 03/31/19 |  |  | 12/31/18 |
Provision (recovery) for loan losses |  | $ | (22 | ) |  | $ | (181 | ) |  | $ | (25 | ) |  | $ | 4 |  |  | $ | (217 | )
Net loan charge-offs (recoveries) |  | $ | (14 | ) |  | $ | (34 | ) |  | $ | (21 | ) |  | $ | (15 | ) |  | $ | (123 | )
|  | As of |  |  | As of |  |  | As of |  |  | As of |  |  | As of |
|  | 12/31/19 |  |  | 09/30/19 |  |  | 06/30/19 |  |  | 03/31/19 |  |  | 12/31/18 |
REGULATORY CAPITAL RATIONS (BANK): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tier 1 leverage ratio |  |  | 10.24 | % |  |  | 10.21 | % |  |  | 10.50 | % |  |  | 10.17 | % |  |  | 9.96 | %
Common equity tier 1 capital ratio |  |  | 16.62 | % |  |  | 16.32 | % |  |  | 18.00 | % |  |  | 17.24 | % |  |  | 17.17 | %
Tier 1 risk-based capital ratio |  |  | 16.62 | % |  |  | 16.32 | % |  |  | 18.00 | % |  |  | 17.24 | % |  |  | 17.17 | %
Total risk-based capital ratio |  |  | 17.65 | % |  |  | 17.37 | % |  |  | 19.13 | % |  |  | 18.34 | % |  |  | 18.26 | %

|  | As of December 31, |
|  | 2019 |  |  | 2018 |
|  | Balance |  |  | Rate(1) |  |  | Balance |  |  | Rate(1) |
INVESTMENT SECURITIES: |  |  |  |  |  |  |  |  |  |  |  |
Held to maturity: |  |  |  |  |  |  |  |  |  |  |  |
Certificates of deposit |  | $ | 800 |  |  |  | 2.63 | % |  | $ | 600 |  |  |  | 2.32 | %
U.S. SBA securities |  |  | 2,816 |  |  |  | 2.35 |  |  |  | 2,939 |  |  |  | 2.60 |
U.S. government sponsored enterprise MBS |  |  | 73,545 |  |  |  | 2.85 |  |  |  | 81,451 |  |  |  | 2.51 |
Total investment securities held to maturity |  | $ | 77,161 |  |  |  | 2.83 | % |  | $ | 84,990 |  |  |  | 2.51 | %
Available for sale (at fair value): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency MBS |  | $ | 3,246 |  |  |  | 3.77 | % |  | $ | 3,942 |  |  |  | 3.49 | %
U.S. government sponsored enterprise MBS |  |  | 1,760 |  |  |  | 4.51 |  |  |  | 2,311 |  |  |  | 4.28 |
Private issue collateralized mortgage obligations |  |  | 231 |  |  |  | 4.63 |  |  |  | 310 |  |  |  | 3.95 |
Total investment securities available for sale |  | $ | 5,237 |  |  |  | 4.06 | % |  | $ | 6,563 |  |  |  | 3.79 | %
Total investment securities |  | $ | 82,398 |  |  |  | 2.91 | % |  | $ | 91,553 |  |  |  | 2.60 | %

(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 15 of 18

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

|  | As of December 31, |
|  | 2019 |  |  | 2018 |
|  | Balance |  |  | Rate(1) |  |  | Balance |  |  | Rate(1) |
LOANS HELD FOR INVESTMENT: |  |  |  |  |  |  |  |  |  |  |  |
Held to maturity: |  |  |  |  |  |  |  |  |  |  |  |
Single-family (1 to 4 units) |  | $ | 347,344 |  |  |  | 4.20 | % |  | $ | 312,499 |  |  |  | 4.48 | %
Multi-family (5 or more units) |  |  | 479,151 |  |  |  | 4.34 |  |  |  | 447,033 |  |  |  | 4.29 |
Commercial real estate |  |  | 107,613 |  |  |  | 4.98 |  |  |  | 112,830 |  |  |  | 4.83 |
Construction |  |  | 6,914 |  |  |  | 7.04 |  |  |  | 3,986 |  |  |  | 7.37 |
Other |  |  | - |  |  |  | - |  |  |  | 167 |  |  |  | 6.50 |
Commercial business |  |  | 578 |  |  |  | 6.09 |  |  |  | 455 |  |  |  | 6.45 |
Consumer |  |  | 140 |  |  |  | 15.00 |  |  |  | 103 |  |  |  | 15.05 |
Total loans held for investment |  |  | 941,740 |  |  |  | 4.38 | % |  |  | 877,073 |  |  |  | 4.44 | %
Advance payments of escrows |  |  | 56 |  |  |  |  |  |  |  | 95 |  |  |  |  |
Deferred loan costs, net |  |  | 6,854 |  |  |  |  |  |  |  | 5,306 |  |  |  |  |
Allowance for loan losses |  |  | (6,921 | ) |  |  |  |  |  |  | (7,061 | ) |  |  |  |
Total loans held for investment, net |  | $ | 941,729 |  |  |  |  |  |  | $ | 875,413 |  |  |  |  |
Purchased loans serviced by others included above |  | $ | 29,798 |  |  |  | 3.74 | % |  | $ | 17,247 |  |  |  | 3.36 | %

(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 December 31, |
|  | 2019 |  |  | 2018 |
|  | Balance |  |  | Rate(1) |  |  | Balance |  |  | Rate(1) |
DEPOSITS: |  |  |  |  |  |  |  |  |  |  |  |
Checking accounts – non interest-bearing |  | $ | 85,846 |  |  |  | - | % |  | $ | 78,866 |  |  |  | - | %
Checking accounts – interest-bearing |  |  | 269,454 |  |  |  | 0.12 |  |  |  | 256,549 |  |  |  | 0.12 |
Savings accounts |  |  | 259,035 |  |  |  | 0.20 |  |  |  | 277,145 |  |  |  | 0.21 |
Money market accounts |  |  | 33,418 |  |  |  | 0.28 |  |  |  | 36,627 |  |  |  | 0.28 |
Time deposits |  |  | 185,897 |  |  |  | 1.13 |  |  |  | 223,697 |  |  |  | 1.12 |
Total deposits |  | $ | 833,650 |  |  |  | 0.37 | % |  | $ | 872,884 |  |  |  | 0.40 | %
BORROWINGS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Overnight |  | $ | - |  |  |  | - | % |  | $ | - |  |  |  | - | %
Three months or less |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Over three to six months |  |  | - |  |  |  | - |  |  |  | 10,000 |  |  |  | 1.53 |
Over six months to one year |  |  | 10,000 |  |  |  | 3.92 |  |  |  | - |  |  |  | - |
Over one year to two years |  |  | 31,078 |  |  |  | 2.41 |  |  |  | 10,000 |  |  |  | 3.92 |
Over two years to three years |  |  | 30,000 |  |  |  | 1.90 |  |  |  | 21,135 |  |  |  | 2.81 |
Over three years to four years |  |  | 20,000 |  |  |  | 2.00 |  |  |  | 10,000 |  |  |  | 2.20 |
Over four years to five years |  |  | 20,007 |  |  |  | 2.50 |  |  |  | 20,000 |  |  |  | 2.00 |
Over five years |  |  | 20,000 |  |  |  | 2.70 |  |  |  | 40,000 |  |  |  | 2.60 |
Total borrowings |  | $ | 131,085 |  |  |  | 2.41 | % |  | $ | 111,135 |  |  |  | 2.52 | %
(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 |
|  | December 31, 2019 |  |  | December 31, 2018 |
|  | Balance |  |  | Rate(1) |  |  | Balance |  |  | Rate(1) |
SELECTED AVERAGE BALANCE SHEETS: |  |  |  |  |  |  |  |  |  |  |  |
Loans receivable, net (2) |  | $ | 934,060 |  |  |  | 4.42 | % |  | $ | 941,192 |  |  |  | 4.39 | %
Investment securities |  |  | 87,108 |  |  |  | 2.60 | % |  |  | 93,468 |  |  |  | 1.90 | %
FHLB – San Francisco stock |  |  | 8,199 |  |  |  | 7.07 | % |  |  | 8,199 |  |  |  | 13.56 | %
Interest-earning deposits |  |  | 45,519 |  |  |  | 1.62 | % |  |  | 67,760 |  |  |  | 2.23 | %
Total interest-earning assets |  | $ | 1,074,886 |  |  |  | 4.18 | % |  | $ | 1,110,619 |  |  |  | 4.12 | %
Total assets |  | $ | 1,107,102 |  |  |  |  |  |  | $ | 1,142,302 |  |  |  |  |
Deposits |  | $ | 833,554 |  |  |  | 0.37 | % |  | $ | 889,557 |  |  |  | 0.40 | %
Borrowings |  |  | 131,084 |  |  |  | 2.43 | % |  |  | 111,141 |  |  |  | 2.55 | %
Total interest-bearing liabilities |  | $ | 964,638 |  |  |  | 0.65 | % |  | $ | 1,000,698 |  |  |  | 0.64 | %
Total stockholders’ equity |  | $ | 122,820 |  |  |  |  |  |  | $ | 122,017 |  |  |  |  |

(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 December 31, 2018.

|  | Six Months Ended |  |  | Six Months Ended |
|  | December 31, 2019 |  |  | December 31, 2018 |
|  | Balance |  |  | Rate(1) |  |  | Balance |  |  | Rate(1) |
SELECTED AVERAGE BALANCE SHEETS: |  |  |  |  |  |  |  |  |  |  |  |
Loans receivable, net (2) |  | $ | 918,666 |  |  |  | 4.44 | % |  | $ | 954,148 |  |  |  | 4.30 | %
Investment securities |  |  | 91,527 |  |  |  | 2.58 | % |  |  | 92,384 |  |  |  | 1.71 | %
FHLB – San Francisco stock |  |  | 8,199 |  |  |  | 7.03 | % |  |  | 8,199 |  |  |  | 10.27 | %
Interest-earning deposits |  |  | 45,015 |  |  |  | 1.89 | % |  |  | 67,552 |  |  |  | 2.10 | %
Total interest-earning assets |  | $ | 1,063,407 |  |  |  | 4.19 | % |  | $ | 1,122,283 |  |  |  | 4.00 | %
Total assets |  | $ | 1,095,219 |  |  |  |  |  |  | $ | 1,153,265 |  |  |  |  |
Deposits |  | $ | 832,187 |  |  |  | 0.37 | % |  | $ | 896,217 |  |  |  | 0.39 | %
Borrowings |  |  | 121,363 |  |  |  | 2.49 | % |  |  | 115,577 |  |  |  | 2.54 | %
Total interest-bearing liabilities |  | $ | 953,550 |  |  |  | 0.64 | % |  | $ | 1,011,794 |  |  |  | 0.64 | %
Total stockholders’ equity |  | $ | 122,001 |  |  |  |  |  |  | $ | 121,511 |  |  |  |  |

(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 six months ended December 31, 2018.

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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 |
|  | 12/31/19 |  |  | 09/30/19 |  |  | 06/30/19 |  |  | 03/31/19 |  |  | 12/31/18 |
Loans on non-accrual status (excluding restructured loans): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  | $ | 1,607 |  |  | $ | 2,737 |  |  | $ | 3,315 |  |  | $ | 2,657 |  |  | $ | 2,572 |
Construction |  |  | - |  |  |  | 1,139 |  |  |  | 971 |  |  |  | 745 |  |  |  | 745 |
Total |  |  | 1,607 |  |  |  | 3,876 |  |  |  | 4,286 |  |  |  | 3,402 |  |  |  | 3,317 |
Accruing loans past due 90 days or more: |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Restructured loans on non-accrual status: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family |  |  | 1,783 |  |  |  | 1,316 |  |  |  | 1,891 |  |  |  | 2,669 |  |  |  | 2,698 |
Commercial business loans |  |  | 37 |  |  |  | 38 |  |  |  | 41 |  |  |  | 44 |  |  |  | 47 |
Total |  |  | 1,820 |  |  |  | 1,354 |  |  |  | 1,932 |  |  |  | 2,713 |  |  |  | 2,745 |
Total non-performing loans |  |  | 3,427 |  |  |  | 5,230 |  |  |  | 6,218 |  |  |  | 6,115 |  |  |  | 6,062 |
Real estate owned, net |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total non-performing assets |  | $ | 3,427 |  |  | $ | 5,230 |  |  | $ | 6,218 |  |  | $ | 6,115 |  |  | $ | 6,062 |

(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.
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