Message From the Chairman

Dear Shareholders:

I am pleased to forward our Annual Report for fiscal 2025 highlighting our financial results. Last year I noted in the Chairman’s Message that we were looking forward to “a less restrictive monetary policy environment, where elevated interest rates and the inverted yield curve begin to reverse course and normalize.” A year later we do see significant progress in the Federal Open Market Committee’s (“FOMC”) efforts to reduce inflation, while not causing a meaningful downturn in the economy. Gross Domestic Product (“GDP”) has continued its expansion and the labor market has been resilient. However, the inverted yield curve persists. The current uncertainty with tariff policy has paused monetary policy easing as trade negotiations unfold and while the FOMC evaluates its economic impact. More uncertainty was added with the recently passed One Big Beautiful Bill Act of 2025 (“OBBBA”). While designed to stimulate the economy in the short term, the OBBBA is projected to increase the federal deficit over the next decade. One of the negative implications of a large federal deficit is higher long-term interest rates. As we enter fiscal 2026, the market is expecting the easing of monetary policy to resume later this calendar year but we are cognizant of the weaker employment data that was recently released and its potential downstream impact on the economy. We are also observing some weaknesses in the California real estate market. After years of being a seller’s market, real estate prices have experienced year-over-year declines in certain markets. Home affordability in California, and in many parts of the country, are at a record low. With high prices coupled with elevated interest rates and market uncertainties, it is inevitable that the housing market takes a breather. We are hopeful it is nothing more. In any case, we are well positioned for whatever comes. We have a strong capital position and pristine credit quality. Our credit culture has served us well in the past and continues to do so in the present, placing the Company in the top tiers of all credit metrics. Our goal is to be good stewards of our capital by executing a strategy of disciplined, sustainable growth, conservative credit underwriting, and consistent returns of capital to our shareholders.

Fiscal 2025

Last year, I described that our fiscal 2025 Business Plan reflected measured growth in loans and retail deposits, disciplined control of operating expenses, and sound capital management. Our fiscal 2025 financial results, described in the following Financial Highlights, were mixed, reflecting a decline in both net income and total assets compared to the prior year.

During fiscal 2025, the FOMC began implementing looser monetary policy. As the yield curve began to normalize, we transitioned to a less restrictive operating strategy as our business model performs better in a flat or upwardly sloping yield curve environment. Our loan production increased 61 percent to $122 million from the prior fiscal year, but our momentum was slowed by higher-than-normal levels of loan prepayments toward the end of the fiscal year. As a result, our loans held for investment decreased by approximately one percent for the fiscal year. Deposit growth remained a challenge as the competition for deposits remained intense. Some competitors, including large banks, were offering rates that were equal to, or above, wholesale levels. We made accommodations, as appropriate, to our pricing based on our evaluation of the customer relationships, while maintaining our pricing discipline, and augmented our funding needs with higher cost certificate of deposits. Total deposits remained flat but transaction accounts decreased six percent during the fiscal year. Our net interest margin reached an inflection point and increased 15 basis points to 2.93 percent for the fiscal year. The improvement came mostly through higher loan yields as loans exited their fixed rate term and generally adjusted to higher interest rates.

We continued our quarterly cash dividend of $0.14 per share in fiscal 2025 while repurchasing approximately 285,000 shares of our common stock under the stock repurchase plans.

Lastly, I would be remiss if I did not mention that we have not incurred any loan charge-offs during the year. In fact, it has been over seven years since the Company reported a net charge-off for a fiscal year.

Fiscal 2026

Similar to fiscal 2025, we plan to emphasize measured growth in loans held for investment and retail deposits; disciplined control of operating expenses where we continue to improve operating efficiencies; and sound capital management practices. We believe this is reasonable and prudent in a less restrictive monetary policy environment, where elevated interest rates and the inverted yield curve begin to reverse course and normalize. We plan to continue to return capital to shareholders in the form of cash dividends and stock repurchases. The Company has a strong capital position which has withstood our internal stress tests very well supporting this strategy. We remain committed to single-family, multi-family, and commercial real estate mortgage lending as our primary sources of asset growth and we will redeploy cash flows from investment securities to support the growth of our loan portfolio.

A Final Word

This coming year, the Bank will be celebrating the 70th anniversary of its founding, serving the great city of Riverside and its surrounding communities. As many of you are aware, Provident was founded by my father, Gordon A. Blunden, in 1956. After he retired in 1990, I had the honor of assuming his place in leading the Company. It is an honor I have held for 35 years. As I reflect on the history of Provident, I am proud of our legacy as a trusted provider of banking services to our communities and, just as importantly, this organization’s dedication to our communities through service and investments. As the great businessman and philanthropist Charlie Munger once said, “Remember that reputation and integrity are your most valuable assets – and can be lost in a heartbeat.” As we look to the next year and beyond, I want to assure you that the team at Provident is determined and dedicated to carrying on this Company’s reputation and legacy, just as we have since our founding. We will not move away from our community banking roots or from serving the families and small businesses of the Inland Empire; moreover, we will continue to celebrate and expand on that heritage.

Financial Highlights

The following tables set forth information concerning the consolidated financial position and results of operations of the Corporation and its subsidiary at the dates and for the periods indicated.


	At or For The Year Ended June 30,
(In Thousands, Except Per Share Information)	2025		2024		2023		2022		2021
FINANCIAL CONDITION DATA:
Total assets	$	1,245,613	$	1,272,200	$	1,332,948	$	1,187,038	$	1,183,596
Loans held for investment, net		1,045,745		1,052,979		1,077,629		939,992		850,960
Cash and cash equivalents		53,090		51,376		65,849		23,414		70,270
Investment securities		111,006		131,900		156,492		188,421		226,893
Deposits		888,772		888,348		950,571		955,504		937,973
Borrowings		213,073		238,500		235,009		85,000		100,983
Stockholders’ equity		128,545		129,941		129,687		128,650		127,280
Book value per share		19.54		18.98		18.41		17.66		16.88

OPERATING DATA:
Interest income	$	56,624	$	54,730	$	45,992	$	34,730	$	35,201
Interest expense		21,155		19,807		9,007		3,135		4,562
Net interest income		35,469		34,923		36,985		31,595		30,639
(Recovery of) provision for credit losses		(666)		(63)		374		(2,462)		(708)
Net interest income after (recovery of) provision for credit losses		36,135		34,986		36,611		34,057		31,347
Loan servicing and other fees		419		337		414		1,056		1,170
Deposit account fees		1,112		1,154		1,296		1,302		1,247
Card and processing fees		1,265		1,384		1,525		1,639		1,605
Other non-interest income		735		1,066		840		719		551
Operating expenses		30,793		28,540		28,270		25,915		25,733
Income before income taxes		8,873		10,387		12,416		12,858		10,187
Provision for income taxes		2,618		3,036		3,824		3,765		2,626
Net income	$	6,255	$	7,351	$	8,592	$	9,093	$	7,561
Basic earnings per share	$	0.93	$	1.06	$	1.20	$	1.23	$	1.01
Diluted earnings per share	$	0.93	$	1.06	$	1.19	$	1.22	$	1.00
Cash dividend per share	$	0.56	$	0.56	$	0.56	$	0.56	$	0.56

Financial Highlights


	At or For The Year Ended June 30,
	2025		2024		2023		2022		2021
KEY OPERATING RATIOS:

Performance Ratios
Return on average assets	0.59	%	0.57	%	0.68	%	0.76	%	0.64	%
Return on average stockholders’ equity	5.63		5.62		6.58		7.14		6.05
Interest rate spread	2.74		2.62		2.92		2.69		2.62
Net interest margin	2.93		2.78		2.99		2.72		2.66
Average interest-earning assets to average interest-bearing liabilities	110.38		110.28		110.27		110.67		110.78
Operating expenses as a percentage of average total assets	2.48		2.22		2.23		2.17		2.18
Efficiency ratio⁽¹⁾	78.96		73.44		68.85		71.37		73.08
Stockholders’ equity to total assets ratio	10.32		10.21		9.73		10.84		10.75
Dividend payout ratio	60.22		52.83		47.06		45.88		55.83

The Bank's Regulatory Capital Ratios
Tier 1 leverage capital (to adjusted average assets)	10.11	%	10.02	%	9.59	%	10.47	%	10.19	%
CET1 capital (to risk-weighted assets)	19.50		19.29		18.50		19.58		18.58
Tier 1 capital (to risk-weighted assets)	19.50		19.29		18.50		19.58		18.58
Total capital (to risk-weighted assets)	20.51		20.38		19.38		20.47		19.76

Asset Quality Ratios
Non-performing loans as a percentage of loans held for investment, net	0.14	%	0.25	%	0.12	%	0.15	%	1.02	%
Non-performing assets as a percentage of total assets	0.11		0.20		0.10		0.12		0.73
Allowance for credit losses as a percentage of gross loans held for investment	0.62		0.67		0.55		0.59		0.88
Net (recoveries) charge-offs to average loans receivable, net	—		—		—		(0.05)		—

(1)	Operating expenses as a percentage of net interest income and non-interest income.

Board of Directors and Senior Officers


Board of Directors		Senior Officers

Craig G. Blunden		Provident Financial Holdings, Inc.
Chairman of the Board of Directors
Provident Financial Holdings, Inc.		Donavon P. Ternes
Provident Bank		President and Chief Executive Officer

Judy A. Carpenter		Peter C. Fan
Retired Healthcare Executive		Senior Vice President
		Chief Financial Officer
Debbi H. Guthrie		Corporate Secretary
Retired Executive
Raincross Hospitality Corporation		Provident Bank

Brian N. Hawley		Donavon P. Ternes
Chief Executive Officer		President and Chief Executive Officer
Luminex Software, Inc.
		Avedis “Avi” Demirdjian
Kathy M. Michalak		Senior Vice President
Former Executive Director		Chief Information Officer
Habitat for Humanity Riverside
		Peter C. Fan
William E. Thomas, Esq.		Senior Vice President
Executive Vice President and General Counsel		Chief Financial Officer
The KPC Group		Corporate Secretary

Matthew E. Webb		Glee A. Harris
President and Chief Executive Officer		Senior Vice President
Albert A. Webb Associates		Human Resources

		Robert “Scott” Ritter
		Senior Vice President
		Single-Family Division

		David S. Weiant
		Senior Vice President
		Chief Lending Officer

		Gwendolyn L. Wertz
		Senior Vice President
		Retail Banking Division

Provident Locations




RETAIL BANKING CENTERS

Blythe		Moreno Valley
350 E. Hobson Way		12460 Heacock Street
Blythe, CA 92225		Moreno Valley, CA 92553
(760) 922-6105		(951) 242-3149
Canyon Crest		Orangecrest
5225 Canyon Crest Drive, Suite 30		19348 Van Buren Boulevard, Suite 119
Riverside, CA 92507		Riverside, CA 92508
(951) 781-8080		(951) 780-7170
Corona		Rancho Mirage
487 Magnolia Avenue, Suite 101		71991 Highway 111
Corona, CA 92879		Ranch Mirage, CA 92270
(951) 270-2926		(760) 340-5644
Downtown Business Center		Redlands
4001 Main Street		125 E. Citrus Avenue
Riverside, CA 92501		Redlands, CA 92373
(951) 682-3272		(909) 793-2992
Hemet		Sun City
1690 E. Florida Avenue		27010 Sun City Boulevard
Hemet, CA 92544		Sun City, CA 92586
(951) 658-7224		(951) 679-2301
Home Office		Temecula
6570 Magnolia Avenue		40705 Winchester Road, Suite 6
Riverside, CA 92506		Temecula, CA 92591
(951) 782-6177		(951) 296-2429
La Sierra
3312 La Sierra Avenue, Suite 105
Riverside, CA 92503
(951) 353-9897

Customer Information 1-800-442-5201 or www.myprovident.com


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/s/ Craig G. Blunden
Craig G. Blunden
Chairman of the Board of Directors