Provident Financial Holdings Reports First Quarter Fiscal 2021 Results

The Company Reports Net Income of $1.49 Million in the September 2020 Quarter

Loans Held for Investment Decrease 2% from June 30, 2020 to $885.0 Million

Total Deposits Increase 1% from June 30, 2020 to $904.7 Million

Non-Performing Assets Decrease 8% to $4.5 Million at September 30, 2020 in Comparison to $4.9 Million at June 30, 2020

Non-Interest Expense Declines 3% to $6.99 Million in the September 2020 Quarter in Comparison to the September 2019 Quarter

RIVERSIDE, Calif., Oct. 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 first quarter earnings results for the fiscal year ending June 30, 2021.

For the quarter ended September 30, 2020, the Company reported net income of $1.49 million, or $0.20 per diluted share (on 7.46 million average diluted shares outstanding), down from net income of $2.56 million, or $0.33 per diluted share (on 7.65 million average diluted shares outstanding), in the comparable period a year ago. Compared to the same quarter last year, the decrease in earnings was primarily attributable to lower net interest income and a higher provision for loan losses, partly offset by lower non-interest expenses (mainly, lower salaries and employee benefits expenses related to fewer employees and reduced incentive compensation).

“To date, Provident has successfully navigated the weak economic conditions resulting from the COVID-19 pandemic. The Company was well-positioned for an economic downturn before the pandemic struck and our employees have been exceptional in overcoming the operational challenges subsequent to its onset,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company. “We will continue to operate the Company in a prudent manner and respond as required to the elevated risks in the current operating environment,” said Mr. Blunden.

Return on average assets for the first quarter of fiscal 2021 was 0.50 percent, down from 0.95 percent for the same period of fiscal 2020; and return on average stockholders’ equity for the first quarter of fiscal 2021 was 4.78 percent, down from 8.46 percent for the comparable period of fiscal 2020.

On a sequential quarter basis, the $1.49 million net income for the first quarter of fiscal 2021 reflects a six percent decrease from $1.58 million in the fourth quarter of fiscal 2020. The decrease in earnings for the first quarter of fiscal 2021 compared to the fourth quarter of fiscal 2020 was primarily attributable to an increase of $382,000 in non-interest expenses and a decrease of $124,000 in net interest income, partly offset by a $228,000 decrease in the provision for loan losses and a $154,000 increase in non-interest income. Diluted earnings per share for the first quarter of fiscal 2021 were $0.20 per share, down five percent from the $0.21 per share during the fourth quarter of fiscal 2020. Return on average assets was 0.50 percent for the first quarter of fiscal 2021, down from 0.55 percent in the fourth quarter of fiscal 2020; and return on average stockholders’ equity for the first quarter of fiscal 2021 was 4.78 percent, down from 5.14 percent for the fourth quarter of fiscal 2020.

Net interest income decreased $1.41 million, or 15 percent, to $8.17 million in the first quarter of fiscal 2021 from $9.58 million for the same quarter of fiscal 2020, attributable to a decrease in the net interest margin, partly offset by a higher average interest-earning assets balance. The net interest margin during the first quarter of fiscal 2021 decreased 80 basis points to 2.84 percent from 3.64 percent in the same quarter last year, primarily due to a decrease in the average yield of interest-earning assets reflecting primarily downward pressure on adjustable rate instruments as a result of decreases in market interest rates over the last year, partly offset by a much smaller decrease in the average cost of interest-bearing liabilities. The average yield on interest-earning assets decreased by 90 basis points to 3.31 percent in the first quarter of fiscal 2021 from 4.21 percent in the same quarter last year while the average cost of interest-bearing liabilities decreased by 11 basis points to 0.52 percent in the first quarter of fiscal 2021 from 0.63 percent in the same quarter last year. The average balance of interest-earning assets increased by $98.5 million, or nine percent, to $1.15 billion in the first quarter of fiscal 2021 from $1.05 billion in the same quarter last year. The average balance of interest-bearing liabilities increased by $97.5 million, or 10 percent, to $1.04 billion in the first quarter of fiscal 2021 from $942.5 million in the same quarter last year.

The average balance of loans receivable decreased by $10.3 million, or one percent, to $893.0 million in the first quarter of fiscal 2021 from $903.3 million in the same quarter of fiscal 2020. The average yield on loans receivable decreased by 47 basis points to 3.99 percent in the first quarter of fiscal 2021 from an average yield of 4.46 percent in the same quarter of fiscal 2020. Net deferred loan cost amortization in the first quarter of fiscal 2021 increased 191 percent to $466,000 from $160,000 in the same quarter of fiscal 2020 due primarily to higher loan payoffs. Total loans originated and purchased for investment in the first quarter of fiscal 2021 were $48.0 million, down 49 percent from $93.4 million in the same quarter of fiscal 2020. Loan principal payments received in the first quarter of fiscal 2021 were $66.3 million, up 31 percent from $50.8 million in the same quarter of fiscal 2020.

The average balance of investment securities increased by $60.3 million, or 63 percent, to $156.2 million in the first quarter of fiscal 2021 from $95.9 million in the same quarter of fiscal 2020. The average yield on investment securities decreased 134 basis points to 1.22 percent in the first quarter of fiscal 2021 from 2.56 percent for the same quarter of fiscal 2020. The decrease in the average yield was primarily attributable to investment security purchases with a lower average yield than the legacy portfolio of investment securities. During the first quarter of fiscal 2021, the Bank purchased investment securities totaling $82.8 million with an average yield of approximately 0.82%.

In the first quarter of fiscal 2021, the Federal Home Loan Bank – San Francisco (“FHLB”) distributed a $100,000 cash dividend to the Bank on its FHLB stock, down 30 percent from $143,000 in the same quarter last year.

The average balance of the Company’s interest-earning deposits, primarily cash with the Federal Reserve Bank of San Francisco, increased $48.8 million, or 110 percent, to $93.3 million in the first quarter of fiscal 2021 from $44.5 million in the same quarter of fiscal 2020 as a result of deposit growth outpacing loan originations. The average yield earned on interest-earning deposits in the first quarter of fiscal 2021 was 0.10 percent, down 206 basis points from 2.16 percent in the same quarter of fiscal 2020 largely as a result of decreases in the targeted Federal Funds Rate since August 2019.

Average deposits increased $68.5 million, or eight percent, to $899.3 million in the first quarter of fiscal 2021 from $830.8 million in the same quarter of fiscal 2020, primarily due to increases in transaction accounts resulting primarily from government assistance programs related to the COVID-19 pandemic, partly offset by a managed run-off of higher cost time deposits. The average cost of deposits improved, decreasing by 13 basis points to 0.24 percent in the first quarter of fiscal 2021 from 0.37 percent in the same quarter last year.

Transaction account balances or “core deposits” increased $20.7 million, or three percent, to $743.7 million at September 30, 2020 from $723.0 million at June 30, 2020, while time deposits decreased $9.0 million, or five percent, to $161.0 million at September 30, 2020 from $170.0 million at June 30, 2020.

The average balance of borrowings, which consisted of FHLB advances, increased $29.1 million, or 26 percent, to $140.7 million while the average cost of borrowings decreased 30 basis points to 2.26 percent in the first quarter of fiscal 2021, compared to an average balance of $111.6 million with an average cost of 2.56 percent in the same quarter of fiscal 2020. The increase in the average balance of borrowings was primarily due to new borrowings with a lower average cost.

During the first quarter of fiscal 2021, the Company recorded a provision for loan losses of $220,000, in contrast to a $181,000 recovery from the allowance for loan losses recorded during the same period of fiscal 2020 and lower than the provision for loan losses of $448,000 recorded in the fourth quarter of fiscal 2020 (sequential quarter).   The provision for loan losses in the last three quarters was primarily due to a qualitative component established in our allowance for loan losses methodology in response to the COVID-19 pandemic and its continued and forecasted adverse economic impact.

Non-performing assets, with underlying collateral located in California, decreased $392,000, or 13 percent, to $4.5 million, or 0.38 percent of total assets, at September 30, 2020, compared to $4.9 million, or 0.42 percent of total assets, at June 30, 2020. The non-performing loans at September 30, 2020 are comprised of 17 single-family loans ($4.5 million) and one commercial business loan ($27,000). At both September 30, 2020 and June 30, 2020, there was no real estate owned.

Net loan recoveries for the quarter ended September 30, 2020 were $5,000 or 0.00 percent (annualized) of average loans receivable, as compared to net loan recoveries of $34,000 or 0.02 percent (annualized) of average loans receivable for the quarter ended September 30, 2019 and net loan recoveries of $7,000 or 0.00 percent (annualized) of average loans receivable for the quarter ended June 30, 2020 (sequential quarter).

Classified assets at September 30, 2020 were $10.6 million, comprised of $6.0 million of loans in the special mention category, $4.6 million of loans in the substandard category and no real estate owned; while classified assets at June 30, 2020 were $14.1 million, comprised of $8.6 million of loans in the special mention category, $5.5 million of loans in the substandard category and no real estate owned.

For the quarter ended September 30, 2020, one new loan was restructured from its original terms and classified as a restructured loan, while one restructured loan was upgraded to the pass category. The outstanding balance of restructured loans at September 30, 2020 was $2.4 million (eight loans), down seven percent from $2.6 million (eight loans) at June 30, 2020. As of September 30, 2020, all of the restructured loans were classified as substandard non-accrual and all of the restructured loans have a current payment status consistent with their restructuring terms.

The Bank has received requests from borrowers for some type of payment relief due to the COVID-19 pandemic. Since these loans were current on their payments prior to the COVID-19 pandemic, these restructurings are not considered to be troubled debt restructurings at September 30, 2020 pursuant to applicable accounting guidance. The primary method of relief is to allow the borrower to defer loan payments for up to six months, although we have also waived late fees and suspended foreclosure proceedings. As of September 30, 2020, there were 44 single-family loans in forbearance with outstanding balances of approximately $17.2 million or 1.94 percent of gross loans held for investment and one multi-family loan in forbearance with an outstanding balance of approximately $455,000 or 0.05 percent of gross loans held for investment. In addition, as of September 30, 2020, the Bank had one pending request for payment relief for a single-family loan totaling approximately $264,000. Interest income is recognized during the forbearance period unless the loans are classified as non-performing. After the payment deferral period (up to six months), scheduled loan payments will once again become due and payable. The forbearance amount will be due and payable in full as a balloon payment at the end of the loan term or sooner if the loan becomes due and payable in full at an earlier date. The Company believes the steps it is taking are necessary to effectively manage the loan portfolio and assist its customers through the ongoing uncertainty surrounding the duration, impact and government response to the COVID-19 pandemic.

The allowance for loan losses was $8.5 million at September 30, 2020, or 0.95 percent of gross loans held for investment, compared to $8.3 million at June 30, 2020, or 0.91 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 September 30, 2020 under the incurred loss methodology.

Non-interest income increased by $89,000, or eight percent, to $1.16 million in the first quarter of fiscal 2021 from $1.07 million in the same period of fiscal 2020, primarily due to an increase in loan servicing and other fees resulting from higher loan prepayment fees, partly offset by decreases in deposit account fees reflecting reduced transactions as a result of the COVID-19 pandemic. On a sequential quarter basis, non-interest income increased $154,000, or 15 percent, primarily as a result of an increase in loan servicing and other fees also resulting from higher loan prepayment fees.

Non-interest expenses decreased $253,000, or three percent, to $6.99 million in the first quarter of fiscal 2021 from $7.24 million in the same quarter last year due primarily to lower salaries and employee benefits expenses resulting from fewer employees and lower incentive compensation, partly offset by increases in deposit insurance premiums and regulatory assessments (resulting from FDIC insurance premium credits used in the same quarter last year which were not replicated in the first quarter of fiscal 2021) and higher other expenses. On a sequential quarter basis, non-interest expenses increased $382,000 or six percent to $6.99 million from $6.60 million, primarily due to higher salaries and employee benefits expenses resulting from the reversal of incentive compensation accruals in the fourth quarter of fiscal 2020, not replicated in the first quarter of fiscal 2021.

The Company’s efficiency ratio in the first quarter of fiscal 2021 was 75 percent, up from 68 percent in the same quarter last year and 71 percent in the fourth quarter of fiscal 2020 (sequential quarter) primarily due to the decrease in net interest income.

The Company’s provision for income tax was $635,000 for the first quarter of fiscal 2021, down 39 percent from $1.03 million in the same quarter last year primarily due to lower pre-tax income. The effective tax rate in the first quarter of fiscal 2021 was 29.95%. The Company believes that the tax provision recorded in the first quarter of fiscal 2021 reflects its current federal and state income tax obligations.

The Company did not repurchase any shares of its common stock during the quarter ended September 30, 2020 pursuant to its stock repurchase plan. As of September 30, 2020, a total of 371,815 shares or 100 percent of the shares authorized for repurchase under the April 2020 stock repurchase plan are available to purchase.

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 Thursday, October 29, 2020 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-844-291-5489 and referencing access code number 7785263. An audio replay of the conference call will be available through Thursday, November 5, 2020 by dialing 1-866-207-1041 and referencing access code number 4191012.

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; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes,; including as a result of the COVID-19 pandemic; 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 2021 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

PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Financial Condition (Unaudited –In Thousands, Except Share Information)
	September 30,			June 30,			March 31,			December 31,			September 30,
		2020			2020			2020			2019			2019
Assets
Cash and cash equivalents	$	66,467		$	116,034		$	84,250		$	48,233		$	54,515
Investment securities – held to maturity, at cost		193,868			118,627			69,482			77,161			85,088
Investment securities - available for sale, at fair value		4,416			4,717			4,828			5,237			5,517
Loans held for investment, net of allowance for loan losses of $8,490; $8,265; $7,810; $6,921 and$6,929, respectively; includes $2,240; $2,258; $3,835; $4,173 and $4,386 at fair value, respectively		884,953			902,796			914,307			941,729			924,314
Accrued interest receivable		3,373			3,271			3,154			3,292			3,380
FHLB – San Francisco stock		7,970			7,970			8,199			8,199			8,199
Premises and equipment, net		10,099			10,254			10,606			10,967			11,215
Prepaid expenses and other assets		12,887			13,168			12,741			12,569			13,068
Total assets	$	1,184,033		$	1,176,837		$	1,107,567		$	1,107,387		$	1,105,296
Liabilities and Stockholders’ Equity
Liabilities:
Non interest-bearing deposits	$	114,537		$	118,771		$	86,585		$	85,846		$	85,338
Interest-bearing deposits		790,149			774,198			749,246			747,804			746,398
Total deposits		904,686			892,969			835,831			833,650			831,736
Borrowings		136,031			141,047			131,070			131,085			131,092
Accounts payable, accrued interest and other liabilities		18,657			18,845			17,508			18,876			20,299
Total liabilities		1,059,374			1,052,861			984,409			983,611			983,127
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; 18,097,615; 18,097,615 and 18,091,865 shares issued, respectively; 7,441,259; 7,436,315; 7,436,315; 7,483,071 and 7,479,682 shares outstanding, respectively)		181			181			181			181			181
Additional paid-in capital		95,948			95,593			95,355			95,118			94,795
Retained earnings		194,789			194,345			193,802			193,704			192,354
Treasury stock at cost (10,656,356; 10,661,300; 10,661,300; 10,614,544 and 10,612,183 shares, respectively)		(166,358	)		(166,247	)		(166,247	)		(165,360	)		(165,309	)
Accumulated other comprehensive income, net of tax		99			104			67			133			148
Total stockholders’ equity		124,659			123,976			123,158			123,776			122,169
Total liabilities and stockholders’ equity	$	1,184,033		$	1,176,837		$	1,107,567		$	1,107,387		$	1,105,296

PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Operations – Sequential Quarters (Unaudited – In Thousands, Except Share Information)
	Quarter Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
		2020			2020			2020			2019			2019
Interest income:
Loans receivable, net	$	8,917		$	9,128		$	9,622		$	10,320		$	10,075
Investment securities		478			461			478			567			614
FHLB – San Francisco stock		100			102			144			145			143
Interest-earning deposits		24			36			186			189			246
Total interest income		9,519			9,727			10,430			11,221			11,078
Interest expense:
Checking and money market deposits		91			91			106			117			110
Savings deposits		78			100			131			131			134
Time deposits		382			452			509			530			532
Borrowings		802			794			794			804			720
Total interest expense		1,353			1,437			1,540			1,582			1,496
Net interest income		8,166			8,290			8,890			9,639			9,582
Provision (recovery) for loan losses		220			448			874			(22	)		(181	)
Net interest income, after provision (recovery) for loan losses		7,946			7,842			8,016			9,661			9,763
Non-interest income:
Loan servicing and other fees		405			188			131			367			133
Deposit account fees		310			289			423			451			447
Card and processing fees		364			333			360			371			390
Other		80			195			187			155			100
Total non-interest income		1,159			1,005			1,101			1,344			1,070
Non-interest expense:
Salaries and employee benefits		4,443			3,963			4,966			4,999			4,985
Premises and occupancy		903			862			845			880			878
Equipment		275			274			314			262			279
Professional expenses		414			349			351			331			408
Sales and marketing expenses		113			267			177			212			117
Deposit insurance premiums and regulatory assessments		134			130			54			59			(16	)
Other		703			758			798			811			587
Total non-interest expense		6,985			6,603			7,505			7,554			7,238
Income before taxes		2,120			2,244			1,612			3,451			3,595
Provision for income taxes		635			660			467			1,053			1,033
Net income	$	1,485		$	1,584		$	1,145		$	2,398		$	2,562
Basic earnings per share	$	0.20		$	0.21		$	0.15		$	0.32		$	0.34
Diluted earnings per share	$	0.20		$	0.21		$	0.15		$	0.31		$	0.33
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				Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended
		09/30/20				06/30/20				03/31/20				12/31/19				09/30/19
SELECTED FINANCIAL RATIOS:
Return on average assets			0.50%				0.55%				0.41%				0.87%				0.95%
Return on average stockholders’ equity			4.78%				5.14%				3.70%				7.81%				8.46%
Stockholders’ equity to total assets			10.53%				10.53%				11.12%				11.18%				11.05%
Net interest spread			2.79%				2.89%				3.23%				3.53%				3.58%
Net interest margin			2.84%				2.95%				3.30%				3.59%				3.64%
Efficiency ratio			74.91%				71.04%				75.12%				68.78%				67.95%
Average interest-earning assets to average interest-bearing liabilities			110.62%				110.80%				111.39%				111.43%				111.61%
SELECTED FINANCIAL DATA:
Basic earnings per share		$	0.20			$	0.21			$	0.15			$	0.32			$	0.34
Diluted earnings per share		$	0.20			$	0.21			$	0.15			$	0.31			$	0.33
Book value per share		$	16.75			$	16.67			$	16.56			$	16.54			$	16.33
Average shares used for basic EPS			7,436,476				7,436,315				7,468,932				7,482,300				7,482,435
Average shares used for diluted EPS			7,457,282				7,485,019				7,590,348				7,658,050				7,647,763
Total shares issued and outstanding			7,441,259				7,436,315				7,436,315				7,483,071				7,479,682
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:
Mortgage loans:
Single-family		$	23,199			$	11,206			$	9,654			$	52,671			$	33,629
Multi-family			21,847				32,876				12,850				20,164				56,476
Commercial real estate			1,860				-				5,570				6,479				2,419
Construction			1,140				-				774				2,313				896
Other			-				143				-				-				-
Consumer loans			-				-				-				1				-
Total loans originated and purchased for investment		$	48,046			$	44,225			$	28,848			$	81,628			$	93,420

PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands)
		As of				As of				As of				As of				As of
		09/30/20				06/30/20				03/31/20				12/31/19				09/30/19
ASSET QUALITY RATIOS AND DELINQUENT LOANS:
Recourse reserve for loans sold		$	370			$	270			$	250			$	250			$	250
Allowance for loan losses		$	8,490			$	8,265			$	7,810			$	6,921			$	6,929
Non-performing loans to loans held for investment, net			0.51%				0.55%				0.40%				0.36%				0.57%
Non-performing assets to total assets			0.38%				0.42%				0.33%				0.31%				0.47%
Allowance for loan losses to gross loans held for investment			0.95%				0.91%				0.85%				0.73%				0.74%
Net loan charge-offs (recoveries) to average loans receivable (annualized)			0.00%				0.00%				(0.01)%				(0.01)%				(0.02)%
Non-performing loans		$	4,532			$	4,924			$	3,635			$	3,427			$	5,230
Loans 30 to 89 days delinquent		$	2			$	219			$	2,827			$	986			$	990
		Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended
		09/30/20				06/30/20				03/31/20				12/31/19				09/30/19
Recourse provision for loans sold		$	100			$	20			$	-			$	-			$	-
Provision (recovery) for loan losses		$	220			$	448			$	874			$	(22	)		$	(181	)
Net loan charge-offs (recoveries)		$	(5	)		$	(7	)		$	(15	)		$	(14	)		$	(34	)
		As of				As of				As of				As of				As of
		09/30/20				06/30/20				03/31/20				12/31/19				09/30/19
REGULATORY CAPITAL RATIOS (BANK):
Tier 1 leverage ratio			9.64%				10.13%				10.36%				10.24%				10.21%
Common equity tier 1 capital ratio.			16.94%				17.51%				17.26%				16.62%				16.32%
Tier 1 risk-based capital ratio			16.94%				17.51%				17.26%				16.62%				16.32%
Total risk-based capital ratio			18.19%				18.76%				18.45%				17.65%				17.37%

	As of September 30,
	2020							2019
	Balance				Rate(1)			Balance				Rate(1)
INVESTMENT SECURITIES:
Held to maturity:
Certificates of deposit	$	600			0.32	%		$	800			2.63	%
U.S. SBA securities		2,044			0.60				2,876			2.85
U.S. government sponsored enterprise MBS		191,224			1.27				81,412			2.91
Total investment securities held to maturity	$	193,868			1.26	%		$	85,088			2.91	%
Available for sale (at fair value):
U.S. government agency MBS	$	2,726			3.08	%		$	3,413			3.92	%
U.S. government sponsored enterprise MBS		1,506			3.45				1,851			4.72
Private issue collateralized mortgage obligations		184			3.70				253			4.65
Total investment securities available for sale	$	4,416			3.23	%		$	5,517			4.22	%
Total investment securities	$	198,284			1.30	%		$	90,605			2.99	%
(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 September 30,
	2020							2019
	Balance				Rate(1)			Balance				Rate(1)
LOANS HELD FOR INVESTMENT:
Held to maturity:
Single-family (1 to 4 units).	$	288,790			3.93	%		$	328,332			4.39	%
Multi-family (5 or more units)		482,900			4.19				479,597			4.39
Commercial real estate		105,207			4.67				110,652			5.00
Construction		8,787			6.20				5,912			7.17
Other mortgage		142			5.25				-			-
Commercial business		923			6.47				368			6.57
Consumer		100			15.00				144			15.25
Total loans held for investment		886,849			4.19	%			925,005			4.48	%
Advance payments of escrows		39							34
Deferred loan costs, net		6,555							6,204
Allowance for loan losses		(8,490	)						(6,929	)
Total loans held for investment, net	$	884,953						$	924,314
Purchased loans serviced by others included above	$	20,777			3.72	%		$	32,441			3.77	%
(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 September 30,
	2020							2019
	Balance				Rate(1)			Balance				Rate(1)
DEPOSITS:
Checking accounts – non interest-bearing	$	114,537			-	%		$	85,338			-	%
Checking accounts – interest-bearing		302,072			0.09				263,400			0.12
Savings accounts		281,863			0.11				256,880			0.20
Money market accounts		45,262			0.23				34,959			0.36
Time deposits		160,952			0.89				191,159			1.14
Total deposits	$	904,686			0.23	%		$	831,736			0.38	%
BORROWINGS:
Overnight	$	-			-	%		$	-			-	%
Three months or less		10,000			3.92				-			-
Over three to six months		10,000			3.79				-			-
Over six months to one year		26,031			1.42				-			-
Over one year to two years		30,000			1.90				41,092			2.78
Over two years to three years		20,000			2.00				30,000			1.90
Over three years to four years		20,000			2.50				20,000			2.00
Over four years to five years		20,000			2.70				20,000			2.50
Over five years		-			-				20,000			2.70
Total borrowings	$	136,031			2.32	%		$	131,092			2.41	%
(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
	September 30, 2020							September 30, 2019
	Balance				Rate(1)			Balance				Rate(1)
SELECTED AVERAGE BALANCE SHEETS:
Held to maturity:
Loans receivable, net	$	892,971			3.99	%		$	903,272			4.46	%
Investment securities		156,235			1.22				95,945			2.56
FHLB – San Francisco stock		7,970			5.02				8,199			6.98
Interest-earning deposits		93,276			0.10				44,511			2.16
Total interest-earning assets	$	1,150,452			3.31	%		$	1,051,927			4.21	%
Total assets	$	1,182,076						$	1,083,335
Deposits	$	899,286			0.24	%		$	830,820			0.37	%
Borrowings		140,711			2.26				111,641			2.56
Total interest-bearing liabilities	$	1,039,997			0.52	%		$	942,461			0.63	%
Total stockholders’ equity	$	124,344						$	121,182
(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.

ASSET QUALITY:
				As of				As of				As of				As of				As of
				09/30/20				06/30/20				03/31/20				12/31/19				09/30/19
Loans on non-accrual status (excluding restructured loans):
	Mortgage loans:
		Single-family		$	2,084			$	2,281			$	1,875			$	1,607			$	2,737
		Construction			-				-				-				-				1,139
		Total			2,084				2,281				1,875				1,607				3,876
Accruing loans past due 90 days or more:					-				-				-				-				-
		Total			-				-				-				-				-
Restructured loans on non-accrual status:
	Mortgage loans:
		Single-family			2,421				2,612				1,726				1,783				1,316
	Commercial business loans				27				31				34				37				38
		Total			2,448				2,643				1,760				1,820				1,354
			Total non-performing loans (1)		4,532				4,924				3,635				3,427				5,230
Real estate owned, net					-				-				-				-				-
Total non-performing assets				$	4,532			$	4,924			$	3,635			$	3,427			$	5,230

⁽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.