Provident Financial Holdings Reports Third Quarter of Fiscal 2020 Results

Company Reports $1.14 Million of Net Income in the March 2020 Quarter in Comparison to the $151,000 Net Loss in the March 2019 Quarter

Non-Interest Expense Declines by 42% in the March 2020 Quarter in Comparison to the March 2019 Quarter

Loans Held for Investment Increase 4% to $914.3 Million from June 30, 2019

Non-Performing Assets Decrease 42% to $3.6 Million at March 31, 2020 in Comparison to $6.2 Million at June 30, 2019

RIVERSIDE, Calif., April 28, 2020 (GLOBE NEWSWIRE) -- Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the holding company for Provident Savings Bank, F.S.B. (“Bank”), today announced third quarter earnings results for the fiscal year ending June 30, 2020.

For the quarter ended March 31, 2020, the Company reported net income of $1.14 million, or $0.15 per diluted share (on 7.60 million average diluted shares outstanding), in contrast to the net loss of $151,000, or $(0.02) per diluted share (on 7.51 million average diluted shares outstanding), in the comparable period a year ago. Compared to the same quarter last year, the increase in earnings was primarily attributable to lower non-interest expenses (mainly, lower salaries and employee benefits expenses related to fewer employees resulting from the scaling back of saleable single-family loan originations), partly offset by lower non-interest income (mainly, lower gain on sale of loans), a higher provision for loan losses and lower net interest income.

“Like all companies, we began to see the early implications of the COVID-19 pandemic in the March 2020 quarter. As a result, we increased our provision for loan losses, we tightened our underwriting criteria for new loan originations and purchases, and we began developing programs to help those customers who may be impacted by this event,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company. “Nonetheless, we remain profitable, strongly capitalized and well-positioned to serve the communities of the Inland Empire,” said Mr. Blunden.

Mr. Blunden went on to say, “We have suspended foreclosure sales, offered late fee waivers and implemented a payment forbearance plan, among other actions. Our branches are open and operating with normal branch hours. We’ve implemented social distancing recommendations, sanitizing and cleaning procedures, and are generally operating under state, county, and city recommendations for essential service providers.”

“Provident plays an important role in the Inland Empire and I specifically wish to recognize and thank our employees who are working diligently to support our customers and communities under difficult circumstances,” Mr. Blunden concluded.

Return on average assets for the third quarter of fiscal 2020 was 0.41 percent in contrast to (0.05) percent for the same period of fiscal 2019; and return on average stockholders’ equity for the third quarter of fiscal 2020 was 3.70 percent in contrast to (0.49) percent for the comparable period of fiscal 2019.

On a sequential quarter basis, the $1.14 million net income for the third quarter of fiscal 2020 reflects a $1.26 million or 52 percent decrease from $2.40 million in the second quarter of fiscal 2020. The decrease in earnings for the third quarter of fiscal 2020 compared to the second quarter of fiscal 2020 was primarily attributable to an $896,000 higher provision for loan losses, a $749,000 reduction in net interest income and a $243,000 decrease in non-interest income (mainly reflecting $236,000 of lower loan servicing and other fees). Diluted earnings per share for the third quarter of fiscal 2020 were $0.15 per share, down 52 percent from the $0.31 per share during the second quarter of fiscal 2020. Return on average assets was 0.41 percent for the third quarter of fiscal 2020 compared to 0.87 percent in the second quarter of fiscal 2020; and return on average stockholders’ equity for the third quarter of fiscal 2020 was 3.70 percent, compared to 7.81 percent for the second quarter of fiscal 2020.

For the nine months ended March 31, 2020 net income increased $2.48 million, or 68 percent, to $6.11 million from $3.63 million in the comparable period ended March 31, 2019; and diluted earnings per share for the nine months ended March 31, 2020 increased 67 percent to $0.80 per share (on 7.61 million average diluted shares outstanding) from $0.48 per share (on 7.56 million average diluted shares outstanding) for the comparable nine month period last year. Compared to the same period last year, the increase in earnings was primarily attributable to a $13.28 million decrease in non-interest expense; partly offset by a $7.68 million decrease in non-interest income (mainly, a $7.23 million decrease in the gain on sale of loans) and a $1.12 million change in the provision for loan losses to a $671,000 provision from a $450,000 recovery. The decrease in non-interest expense was mainly attributable to a $9.80 million decrease in salaries and employee benefits expenses (primarily related to fewer employees resulting from the scaling back of saleable single-family loan originations) and a $1.30 million decrease in premises and occupancy expenses.

Net interest income decreased $722,000, or eight percent, to $8.89 million in the third quarter of fiscal 2020 from $9.61 million for the same quarter of fiscal 2019, attributable to a decrease in the net interest margin, and to a lesser extent, a lower average interest-earning assets balance. The net interest margin during the third quarter of fiscal 2020 decreased 23 basis points to 3.30 percent from 3.53 percent in the same quarter last year, primarily due to a decrease in the average yield of interest-earning assets and a slight increase in the average cost of interest-bearing liabilities. The average yield on interest-earning assets decreased by 22 basis points to 3.87 percent in the third quarter of fiscal 2020 from 4.09 percent in the same quarter last year reflecting in part recent significant decreases in the targeted Federal Funds Rate in response to the COVID-19 pandemic; while the average cost of interest-bearing liabilities increased by one basis point to 0.64 percent in the third quarter of fiscal 2020 from 0.63 percent in the same quarter last year. The average balance of interest-earning assets decreased by $11.3 million, or one percent, to $1.08 billion in the third quarter of fiscal 2020 from $1.09 billion in the same quarter last year. The average balance of interest-bearing liabilities decreased by $11.1 million, or one percent, to $967.9 million in the third quarter of fiscal 2020 from $979.0 million in the same quarter last year.

The average balance of loans receivable (including loans held for sale in the prior year) increased by $14.5 million, or two percent, to $929.5 million in the third quarter of fiscal 2020 from $915.0 million in the same quarter of fiscal 2019, primarily due to an increase in loans held for investment, partly offset by a decrease in loans held for sale. There were no loans held for sale during the third quarter of fiscal 2020. The average yield on loans receivable decreased by 24 basis points to 4.14 percent in the third quarter of fiscal 2020 from an average yield of 4.38 percent in the same quarter of fiscal 2019. Net deferred loan cost amortization in the third quarter of fiscal 2020 increased 152% to $451,000 from $179,000 in the same quarter of fiscal 2019 due primarily to higher loan payoffs. Total loans originated and purchased for investment in the third quarter of fiscal 2020 were $28.8 million, down 35 percent from $44.0 million in the same quarter of fiscal 2019. Loan principal payments received in the third quarter of fiscal 2020 were $55.7 million, up 53 percent from $36.5 million in the same quarter of fiscal 2019.

The average balance of investment securities decreased by $23.3 million, or 23 percent, to $78.6 million in the third quarter of fiscal 2020 from $101.9 million in the same quarter of fiscal 2019. The average yield on investment securities increased 11 basis points to 2.43 percent in the third quarter of fiscal 2020 from 2.32 percent for the same quarter of fiscal 2019. The increase in the average yield was primarily attributable to a lower premium amortization ($99,000 vs. $181,000).

In the third quarter of fiscal 2020, the Federal Home Loan Bank – San Francisco (“FHLB”) distributed a $144,000 cash dividend to the Bank on its FHLB stock, unchanged from the same quarter last year.

The average balance of the Company’s interest-earning deposits, primarily cash with the Federal Reserve Bank of San Francisco, decreased $2.5 million, or four percent, to $61.9 million in the third quarter of fiscal 2020 from $64.4 million in the same quarter of fiscal 2019. The average yield earned on interest-earning deposits in the third quarter of fiscal 2020 was 1.20 percent, down 120 basis points from 2.40 percent in the same quarter of fiscal 2019 largely as a result of decreases in the targeted Federal Funds Rate since July 2019.

Average deposits decreased $36.4 million, or four percent, to $836.9 million in the third quarter of fiscal 2020 from $873.3 million in the same quarter of fiscal 2019, primarily due to a managed run-off of higher cost time deposits over the last year consistent with the reduction in the Bank’s funding needs resulting from no loans originated for sale during the first nine months of fiscal 2020. The average cost of deposits improved, decreasing by three basis points to 0.36 percent in the third quarter of fiscal 2020 from 0.39 percent in the same quarter last year.

Transaction account balances or “core deposits” increased slightly to $650.2 million at March 31, 2020 from $648.1 million at June 30, 2019, while time deposits decreased $7.5 million, or four percent, to $185.6 million at March 31, 2020 from $193.1 million at June 30, 2019.

The average balance of borrowings, which consisted of FHLB advances, increased $25.3 million, or 24 percent, to $131.1 million while the average cost of borrowings decreased 17 basis points to 2.44 percent in the third quarter of fiscal 2020, compared to an average balance of $105.8 million with an average cost of 2.61 percent in the same quarter of fiscal 2019. The increase in the average balance of borrowings was primarily due to new long-term borrowings with a lower average cost obtained during the first quarter of fiscal 2020.

During the third quarter of fiscal 2020, the Company recorded a provision for loan losses of $874,000, up from only $4,000 recorded during the same period of fiscal 2019 and up from the recovery of $22,000 recorded in the second quarter of fiscal 2020 (sequential quarter).The increase in the provision for loan losses was primarily due to a qualitative component established in our allowance for loan losses methodology in response to the COVID-19 pandemic which has negatively impacted the current economic environment.

Non-performing assets, with underlying collateral located in California, decreased $2.6 million, or 42 percent, to $3.6 million, or 0.33 percent of total assets, at March 31, 2020, compared to $6.2 million, or 0.57 percent of total assets, at June 30, 2019. The non-performing loans at March 31, 2020 are comprised of 16 single-family loans ($3.6 million) and one commercial business loan ($34,000). At both March 31, 2020 and June 30, 2019, there was no real estate owned.

Net loan recoveries for the quarter ended March 31, 2020 were $15,000 or 0.01 percent (annualized) of average loans receivable, similar to net loan recoveries of $15,000 or 0.01 percent (annualized) of average loans receivable for the quarter ended March 31, 2019 and net loan recoveries of $14,000 or 0.01 percent (annualized) of average loans receivable for the quarter ended December 31, 2019 (sequential quarter).

Classified assets at March 31, 2020 were $15.1 million, comprised of $11.4 million of loans in the special mention category, $3.7 million of loans in the substandard category and no real estate owned; while classified assets at June 30, 2019 were $16.2 million, comprised of $8.6 million of loans in the special mention category, $7.6 million of loans in the substandard category and no real estate owned.

For the quarter ended March 31, 2020, no new loans were restructured from their original terms and classified as restructured loans. The outstanding balance of restructured loans at March 31, 2020 was $1.8 million (six loans), down 53 percent from $3.8 million (eight loans) at June 30, 2019. As of March 31, 2020, all of the restructured loans were classified as substandard non-accrual. As of March 31, 2020, 39% or $683,000 of the restructured loans have a current payment status.

The allowance for loan losses was $7.8 million at March 31, 2020, or 0.85 percent of gross loans held for investment, compared to $7.1 million at June 30, 2019, or 0.80 percent of gross loans held for investment. Management believes that, based on currently available information, the allowance for loan losses is sufficient to absorb potential losses inherent in loans held for investment at March 31, 2020.

Non-interest income decreased by $1.95 million, or 64 percent, to $1.10 million in the third quarter of fiscal 2020 from $3.05 million in the same period of fiscal 2019, primarily as a result of no loan sales during the current quarter. The gain on sale of loans during the third quarter of fiscal 2019 was $1.72 million. On a sequential quarter basis, non-interest income decreased $243,000, or 18 percent, primarily as a result of a decrease in loan servicing and other loan fees. There were no loans originated for sale during the current or sequential quarters.

Non-interest expenses decreased $5.50 million, or 42 percent, to $7.50 million in the third quarter of fiscal 2020 from $13.00 million in the same quarter last year. The decrease was due primarily to lower salaries and employee benefits expenses resulting from fewer employees and lesser reductions in premises and occupancy and other non-interest expense consistent with the scaling back of saleable single-family mortgage loan originations. On a sequential quarter basis, non-interest expenses remained virtually unchanged, decreasing $49,000 or one percent from $7.55 million.

The Company’s efficiency ratio in the third quarter of fiscal 2020 was 75 percent, an improvement from 103 percent in the same quarter last year but an increase from 69 percent in the second quarter of fiscal 2020 (sequential quarter).

The Company’s provision for income tax was $467,000 for the third quarter of fiscal 2020 in contrast to an income tax benefit of $189,000 in the same quarter last year. The effective tax rate in the third quarter of fiscal 2020 was 28.97%. The Company believes that the tax provision recorded in the third quarter of fiscal 2020 reflects its current federal and state income tax obligations.

The Company repurchased 46,756 shares of its common stock during the quarter ended March 31, 2020 at an average cost of $18.95 per share. As of March 31, 2020, a total of 118,040 shares or 32 percent of the shares authorized for repurchase under the April 2018 stock repurchase plan were purchased at an average cost of $19.57 per share. The April 2018 stock repurchase plan expired on April 26, 2020.

The Bank currently operates 13 retail/business banking offices in Riverside County and San Bernardino County (Inland Empire).

The Company will host a conference call for institutional investors and bank analysts on Wednesday, April 29, 2020 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-877-226-8216 and referencing access code number 8875397. An audio replay of the conference call will be available through Wednesday, May 6, 2020 by dialing 1-866-207-1041 and referencing access code number 7751893.

For more financial information about the Company please visit the website at www.myprovident.com and click on the “Investor Relations” section.

Safe-Harbor Statement

This press release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to the Company’s financial condition, liquidity, results of operations, plans, objectives, future performance or business. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors which could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements include, but are not limited to the effect of the COVID-19 pandemic, including on Company’s credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; increased competitive pressures; changes in the interest rate environment; secondary market conditions for loans and our ability to originate for sale and sell loans in the secondary market; changes in general economic conditions and conditions within the securities markets including as a result of the COVID-19 pandemic; legislative and regulatory changes; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (“SEC”) - which are available on our website at www.myprovident.com and on the SEC’s website at www.sec.gov. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements whether as a result of new information, future events or otherwise. These risks could cause our actual results for fiscal 2020 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of us and could negatively affect our operating and stock price performance.

Contacts:

Craig G. Blunden 
Chairman and 
Chief Executive Officer 

Donavon P. Ternes
President, Chief Operating Officer 
and Chief Financial Officer

(951) 686-606

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

					March 31,			December 31,			September 30,			June 30,			March 31,
					2020			2019			2019			2019			2019
Assets
Cash and cash equivalents				$	84,250		$	48,233		$	54,515		$	70,632		$	61,458
Investment securities – held to maturity, at cost					69,482			77,161			85,088			94,090			102,510
Investment securities - available for sale, at fair value					4,828			5,237			5,517			5,969			6,294
Loans held for investment, net of allowance for loan losses of $7,810; $6,921; $6,929; $7,076 and $7,080, respectively; includes $3,835; $4,173; $4,386; $5,094 and $5,239 at fair value, respectively					914,307			941,729			924,314			879,925			883,554
Loans held for sale, at fair value					-			-			-			-			30,500
Accrued interest receivable					3,154			3,292			3,380			3,424			3,386
FHLB – San Francisco stock					8,199			8,199			8,199			8,199			8,199
Premises and equipment, net					10,606			10,967			11,215			8,226			8,395
Prepaid expenses and other assets					12,741			12,569			13,068			14,385			15,099
Total assets				$	1,107,567		$	1,107,387		$	1,105,296		$	1,084,850		$	1,119,395
Liabilities and Stockholders’ Equity
Liabilities:
Non interest-bearing deposits				$	86,585		$	85,846		$	85,338		$	90,184		$	90,875
Interest-bearing deposits					749,246			747,804			746,398			751,087			786,009
Total deposits					835,831			833,650			831,736			841,271			876,884
Borrowings					131,070			131,085			131,092			101,107			101,121
Accounts payable, accrued interest and other liabilities					17,508			18,876			20,299			21,831			20,181
Total liabilities					984,409			983,611			983,127			964,209			998,186
Stockholders’ equity:
Preferred stock, $.01 par value (2,000,000 shares authorized; none issued and outstanding)				-			-			-			-			-
Common stock, $.01 par value (40,000,000 shares authorized; 18,097,615; 18,097,615; 18,091,865; 18,081,365 and 18,064,365 shares issued, respectively; 7,436,315; 7,483,071; 7,479,682; 7,486,106 and 7,497,357 shares outstanding, respectively)				181			181			181			181			181
Additional paid-in capital					95,355			95,118			94,795			94,351			96,114
Retained earnings					193,802			193,704			192,354			190,839			191,103
Treasury stock at cost (10,661,300; 10,614,544; 10,612,183; 10,559,259 and 10,567,008 shares, respectively)					(166,247	)		(165,360	)		(165,309	)		(164,891	)		(166,352	)
Accumulated other comprehensive income, net of tax					67			133			148			161			163
Total stockholders’ equity					123,158			123,776			122,169			120,641			121,209
Total liabilities and stockholders’ equity				$	1,107,567		$	1,107,387		$	1,105,296		$	1,084,850		$	1,119,395

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

	Quarter Ended March 31,								Nine Months Ended March 31,
		2020				2019				2020				2019
Interest income:
Loans receivable, net	$	9,622			$	10,011			$	30,017			$	30,516
Investment securities		478				592				1,659				1,381
FHLB – San Francisco stock		144				144				432				565
Interest-earning deposits		186				386				621				1,111
Total interest income		10,430				11,133				32,729				33,573
Interest expense:
Checking and money market deposits		106				102				333				327
Savings deposits		131				139				396				437
Time deposits		509				600				1,571				1,851
Borrowings		794				680				2,318				2,158
Total interest expense		1,540				1,521				4,618				4,773
Net interest income		8,890				9,612				28,111				28,800
Provision (recovery) for loan losses		874				4				671				(450	)
Net interest income, after provision (recovery) for loan losses		8,016				9,608				27,440				29,250
Non-interest income:
Loan servicing and other fees		131				262				631				863
Gain (loss) on sale of loans, net		14				1,719				(115	)			7,114
Deposit account fees		423				471				1,321				1,485
Gain (loss) on sale and operations of real estate owned acquired in the settlement of loans		-				2				-				(4	)
Card and processing fees		360				373				1,121				1,163
Other		173				225				557				575
Total non-interest income		1,101				3,052				3,515				11,196
Non-interest expense:
Salaries and employee benefits		4,966				9,292				14,950				24,753
Premises and occupancy		845				1,286				2,603				3,905
Equipment		314				417				855				1,333
Professional expenses		351				513				1,090				1,371
Sales and marketing expenses		177				246				506				668
Deposit insurance premiums and regulatory assessments		54				124				97				461
Other		798				1,122				2,196				3,088
Total non-interest expense		7,505				13,000				22,297				35,579
Income (loss) before taxes		1,612				(340	)			8,658				4,867
Provision (benefit) for income taxes		467				(189	)			2,553				1,237
Net income (loss)	$	1,145			$	(151	)		$	6,105			$	3,630
Basic earnings (loss) per share	$	0.15			$	(0.02	)		$	0.82			$	0.49
Diluted earnings (loss) per share	$	0.15			$	(0.02	)		$	0.80			$	0.48
Cash dividends per share	$	0.14			$	0.14			$	0.42			$	0.42

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

	Quarter Ended
	March 31,						December 31,					September 30,				June 30,				March 31,
	2020						2019					2019				2019				2019
Interest income:
Loans receivable, net	$	9,622						$	10,320			$	10,075			$	9,576			$	10,011
Investment securities		478							567				614				661				592
FHLB – San Francisco stock		144							145				143				142				144
Interest-earning deposits		186							189				246				426				386
Total interest income		10,430							11,221				11,078				10,805				11,133
Interest expense:
Checking and money market deposits		106							117				110				101				102
Savings deposits		131							131				134				135				139
Time deposits		509							530				532				530				600
Borrowings		794							804				720				669				680
Total interest expense		1,540							1,582				1,496				1,435				1,521
Net interest income		8,890							9,639				9,582				9,370				9,612
Provision (recovery) for loan losses		874							(22		)		(181		)		(25	)			4
Net interest income, after provision (recovery) for loan losses		8,016							9,661				9,763				9,395				9,608
Non-interest income:
Loan servicing and other fees		131							367				133				188				262
Gain (loss) on sale of loans, net		14							(43		)		(86		)		21				1,719
Deposit account fees		423							451				447				443				471
Gain on sale and operations of real estate owned acquired in the settlement of loans, net		-							-				-				-				2
Card and processing fees		360							371				390				405				373
Other		173							198				186				258				225
Total non-interest income		1,101							1,344				1,070				1,315				3,052
Non-interest expense:
Salaries and employee benefits		4,966							4,999				4,985				5,396				9,292
Premises and occupancy		845							880				878				1,133				1,286
Equipment		314							262				279				1,141				417
Professional expenses		351							331				408				493				513
Sales and marketing expenses		177							212				117				312				246
Deposit insurance premiums and regulatory assessments		54							59				(16		)		129				124
Other		798							811				587				1,053				1,122
Total non-interest expense		7,505							7,554				7,238				9,657				13,000
Income (loss) before taxes		1,612							3,451				3,595				1,053				(340				)
Provision (benefit) for income taxes		467							1,053				1,033				266				(189				)
Net income (loss)	$	1,145						$	2,398			$	2,562			$	787			$	(151				)
Basic earnings (loss) per share	$	0.15						$	0.32			$	0.34			$	0.10			$	(0.02				)
Diluted earnings (loss) per share	$	0.15						$	0.31			$	0.34			$	0.10			$	(0.02				)
Cash dividends per share	$	0.14						$	0.14			$	0.14			$	0.14			$	0.14

 

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

	Quarter Ended March 31,								Nine Months Ended March 31,
		2020				2019				2020				2019
SELECTED FINANCIAL RATIOS:
Return (loss) on average assets		0.41	%			(0.05	)%			0.74	%			0.42	%
Return (loss) on average stockholders’ equity		3.70	%			(0.49	)%			6.64	%			3.97	%
Stockholders’ equity to total assets		11.12	%			10.83	%			11.12	%			10.83	%
Net interest spread		3.23	%			3.46	%			3.44	%			3.39	%
Net interest margin		3.30	%			3.53	%			3.51	%			3.45	%
Efficiency ratio		75.12	%			102.65	%			70.50	%			88.96	%
Average interest-earning assets to average
interest-bearing liabilities		111.39	%			111.28	%			111.48	%			111.04	%
SELECTED FINANCIAL DATA:
Basic earnings (loss) per share	$	0.15			$	(0.02	)		$	0.82			$	0.49
Diluted earnings (loss) per share	$	0.15			$	(0.02	)		$	0.80			$	0.48
Book value per share	$	16.56			$	16.17			$	16.56			$	16.17
Shares used for basic EPS computation		7,468,932				7,506,770				7,477,922				7,481,095
Shares used for diluted EPS computation		7,590,348				7,506,770				7,606,494				7,555,013
Total shares issued and outstanding		7,436,315				7,497,357				7,436,315				7,497,357
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:
Mortgage Loans:
Single-family	$	9,654			$	15,288			$	95,954			$	56,684
Multi-family		12,850				21,546				89,490				44,323
Commercial real estate		5,570				5,197				14,468				13,677
Construction		774				1,970				3,983				5,313
Consumer loans		-				-				1				-
Total loans originated and purchased for investment	$	28,848			$	44,001			$	203,896			$	119,997
LOANS ORIGINATED FOR SALE:
Retail originations	$	-			$	72,353			$	-			$	287,399
Wholesale originations		-				38,353				-				166,045
Total loans originated for sale	$	-			$	110,706			$	-			$	453,444
LOANS SOLD:
Servicing released	$	-			$	134,264			$	-			$	510,798
Servicing retained		-				2,409				-				5,193
Total loans sold	$	-			$	136,673			$	-			$	515,991

 

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

	Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended
	03/31/20				12/31/19				09/30/19				06/30/19				03/31/19
SELECTED FINANCIAL RATIOS:
Return (loss) on average assets	0.41%				0.87%				0.95%				0.29%				(0.05)%
Return (loss) on average stockholders’ equity	3.70%				7.81%				8.46%				2.60%				(0.49)%
Stockholders’ equity to total assets	11.12%				11.18%				11.05%				11.12%				10.83%
Net interest spread	3.23%				3.53%				3.58%				3.46%				3.46%
Net interest margin	3.30%				3.59%				3.64%				3.52%				3.53%
Efficiency ratio	75.12%				68.78%				67.95%				90.38%				102.65%
Average interest-earning assets to average interest-bearing liabilities	111.39%				111.43%				111.61%				111.45%				111.28%
SELECTED FINANCIAL DATA:
Basic earnings (loss) per share	$	0.15			$	0.32			$	0.34			$	0.10			$	(0.02	)
Diluted earnings (loss) per share	$	0.15			$	0.31			$	0.33			$	0.10			$	(0.02	)
Book value per share	$	16.56			$	16.54			$	16.33			$	16.12			$	16.17
Average shares used for basic EPS	7,468,932				7,482,300				7,482,435				7,496,457				7,506,770
Average shares used for diluted EPS	7,590,348				7,658,050				7,647,763				7,626,661				7,506,770
Total shares issued and outstanding	7,436,315				7,483,071				7,479,682				7,486,106				7,497,357
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:
Mortgage Loans:
Single-family	$	9,654			$	52,671			$	33,629			$	31,982			$	15,288
Multi-family	12,850				20,164				56,476				14,513				21,546
Commercial real estate	5,570				6,479				2,419				2,882				5,197
Construction	774				2,313				896				1,846				1,970
Consumer loans	-				1				-				-				-
Total loans originated and purchased for investment	$	28,848			$	81,628			$	93,420			$	51,223			$	44,001
LOANS ORIGINATED FOR SALE:
Retail originations	$	-			$	-			$	-			$	9,593			$	72,353
Wholesale originations	-				-				-				4,057				38,353
Total loans originated for sale	$	-			$	-			$	-			$	13,650			$	110,706
LOANS SOLD:
Servicing released	$	-			$	-			$	-			$	40,956			$	134,264
Servicing retained	-				-				-				2,003				2,409
Total loans sol	$	-			$	-			$	-			$	42,959			$	136,673

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

	As of				As of				As of				As of				As of
	03/31/20				12/31/19				09/30/19				06/30/19				03/31/19
ASSET QUALITY RATIOS AND DELINQUENT LOANS:
Recourse reserve for loans sold	$	250			$	250			$	250			$	250			$	250
Allowance for loan losses	$	7,810			$	6,921			$	6,929			$	7,076			$	7,080
Non-performing loans to loans held for investment, net		0.40%				0.36%				0.57%				0.71%				0.69%
Non-performing assets to total assets		0.33%				0.31%				0.47%				0.57%				0.55%
Allowance for loan losses to gross loans held for investment		0.85%				0.73%				0.74%				0.80%				0.79%
Net loan charge-offs (recoveries) to average loans receivable (annualized)		(0.01)%				(0.01)%				(0.02)%				(0.01)%				(0.01)%
Non-performing loans	$	3,635			$	3,427			$	5,230			$	6,218			$	6,115
Loans 30 to 89 days delinquent	$	2,827			$	986			$	990			$	665			$	699

	Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended
	03/31/20				12/31/19				09/30/19				06/30/19				03/31/19
Provision (recovery) for loan losses	$	874			$	(22	)		$	(181	)		$	(25	)		$	4
Net loan charge-offs (recoveries)	$	(15	)		$	(14	)		$	(34	)		$	(21	)		$	(15	)
	As of				As of				As of				As of				As of
	03/31/20				12/31/19				09/30/19				06/30/19				03/31/19
REGULATORY CAPITAL RATIOS (BANK):
Tier 1 leverage ratio	10.36%				10.24%				10.21%				10.50%				10.17%
Common equity tier 1 capital ratio	17.26%				16.62%				16.32%				18.00%				17.24%
Tier 1 risk-based capital ratio	17.26%				16.62%				16.32%				18.00%				17.24%
Total risk-based capital ratio	18.45%				17.65%				17.37%				19.13%				18.34%

		As of March 31,
		2020								2019
		Balance					Rate(1)			Balance			Rate(1)
INVESTMENT SECURITIES:
Held to maturity:
Certificates of deposit		$	800				2.63	%		$	400		2.74	%
U.S. SBA securities		2,083					2.10			2,917			2.85
U.S. government sponsored enterprise MBS		66,599					2.78			99,193			2.75
Total investment securities held to maturity		$	69,482				2.76	%		$	102,510		2.75	%
Available for sale (at fair value):
U.S. government agency MBS		$	3,001				3.54	%		$	3,796		3.72	%
U.S. government sponsored enterprise MBS		1,630					4.17			2,198			4.60
Private issue collateralized mortgage obligations		197					4.40			300			4.20
Total investment securities available for sale		$	4,828				3.79	%		$	6,294		4.05	%
Total investment securities		$	74,310				2.82	%		$	108,804		2.83	%
(1) The interest rate described in the rate column is the weighted-average interest rate or yield of all instruments, which are included in the balance of the respective line item.

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

			As of March 31,
			2020						2019
				Balance		Rate(1)				Balance		Rate(1)
LOANS HELD FOR INVESTMENT:
Held to maturity:
Single-family (1 to 4 units)			$	326,686		4.16	%		$	314,824		4.52	%
Multi-family (5 or more units)				475,941		4.33				449,812		4.35
Commercial real estate				105,691		4.78				115,355		4.92
Construction				6,346		6.49				4,139		7.44
Other				-		-				167		6.50
Commercial business				502		6.05				483		6.32
Consumer				122		15.00				133		15.47
Total loans held for investment				915,288		4.34	%			884,913		4.50	%
Advance payments of escrows				193						225
Deferred loan costs, net				6,636						5,496
Allowance for loan losses				(7,810	)					(7,080	)
Total loans held for investment, net			$	914,307					$	883,554
Purchased loans serviced by others included above			$	26,941		3.71	%		$	17,122		3.35	%
(1) The interest rate described in the rate column is the weighted-average interest rate or yield of all instruments, which are included in the balance of the respective line item.

	As of March 31,
	2020						2019
	Balance			Rate(1)			Balance			Rate(1)
DEPOSITS:
Checking accounts – non interest-bearing	$	86,585		-	%		$	90,875		-	%
Checking accounts – interest-bearing		270,389		0.12				269,648		0.12
Savings accounts		261,659		0.20				271,971		0.20
Money market accounts		31,575		0.21				34,229		0.21
Time deposits		185,623		1.08				210,161		1.14
Total deposits	$	835,831		0.35	%		$	876,884		0.38	%
BORROWINGS:
Overnight	$	-		-	%		$	-		-	%
Three months or less		-		-				-		-
Over three to six months		-		-				-		-
Over six months to one year		20,000		3.85				-		-
Over one year to two years		31,063		1.90				20,000		3.85
Over two years to three years		20,000		1.75				21,121		2.06
Over three years to four years		40,000		2.25				-		-
Over four years to five years		10,007		2.61				40,000		2.25
Over five years		10,000		2.79				20,000		2.70
Total borrowings	$	131,070		2.40	%			101,121		2.62	%
(1) The interest rate described in the rate column is the weighted-average interest rate or cost of all instruments, which are included in the balance of the respective line item.

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

	Quarter Ended						Quarter Ended
	March 31, 2020						March 31, 2019
		Balance		Rate(1)				Balance		Rate(1)
SELECTED AVERAGE BALANCE SHEETS:
Loans receivable, net (2)	$	929,485		4.14	%		$	915,049		4.38	%
Investment securities		78,632		2.43	%			101,851		2.32	%
FHLB – San Francisco stock		8,199		7.03	%			8,199		7.03	%
Interest-earning deposits		61,900		1.20	%			64,390		2.40	%
Total interest-earning assets	$	1,078,216		3.87	%		$	1,089,489		4.09	%
Total assets	$	1,110,158					$	1,119,717
Deposits	$	836,855		0.36	%		$	873,252		0.39	%
Borrowings		131,075		2.44	%			105,793		2.61	%
Total interest-bearing liabilities	$	967,930		0.64	%		$	979,045		0.63	%
Total stockholders’ equity	$	123,786					$	122,681
(1) The interest rate described in the rate column is the weighted-average interest rate or yield/cost of all instruments, which are included in the balance of the respective line item. (2) Includes loans held for sale at fair value for the quarter ended March 31, 2019.

	Nine Months Ended						Nine Months Ended
	March 31, 2020						March 31, 2019
	Balance			Rate(1)			Balance			Rate(1)
SELECTED AVERAGE BALANCE SHEETS:
Loans receivable, net (2)	$	922,246		4.34	%		$	941,336		4.32	%
Investment securities	87,260			2.53	%		95,494			1.93	%
FHLB – San Francisco stock	8,199			7.03	%		8,199			9.19	%
Interest-earning deposits	50,642			1.61	%		66,498			2.20	%
Total interest-earning assets	$	1,068,347		4.08	%		$	1,111,527		4.03	%
Total assets	$	1,100,162					$	1,142,238
Deposits	$	833,731		0.37	%		$	888,674		0.39	%
Borrowings	124,577			2.48	%		112,363			2.56	%
Total interest-bearing liabilities	$	958,308		0.64	%		$	1,001,037		0.64	%
Total stockholders’ equity	$	122,592					$	121,895
(1) The interest rate described in the rate column is the weighted-average interest rate or yield/cost of all instruments, which are included in the balance of the respective line item.  (2) Includes loans held for sale at fair value for the nine months ended March 31, 2019.

PROVIDENT FINANCIAL HOLDINGS, INC. 
Asset Quality ⁽¹⁾
(Unaudited – Dollars in Thousands)

	As of					As of					As of					As of					As of
	03/31/20					12/31/19					09/30/19					06/30/19					03/31/19
Loans on non-accrual status (excluding restructured loans):
Mortgage loans:
Single-family	$	1,875				$	1,607				$	2,737				$	3,315				$	2,657
Construction		-					-					1,139					971					745
Total		1,875					1,607					3,876					4,286					3,402
Accruing loans past due 90 days or more:		-					-					-					-					-
Total		-					-					-					-					-
Restructured loans on non-accrual status:
Mortgage loans:
Single-family		1,726					1,783					1,316					1,891					2,669
Commercial business loans		34					37					38					41					44
Total		1,760					1,820					1,354					1,932					2,713
Total non-performing loans		3,635					3,427					5,230					6,218					6,115
Real estate owned, net		-					-					-					-					-
Total non-performing assets	$	3,635				$	3,427				$	5,230				$	6,218				$	6,115
(1) The non-performing loans balances are net of individually evaluated or collectively evaluated allowances, specifically attached to the individual loans and include fair value adjustments.