Form 8-K PROVIDENT FINANCIAL HOLD For: Apr 27

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April 27, 2021 3:44 PM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 27, 2021

PROVIDENT FINANCIAL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-28304	33-0704889
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

3756 Central Avenue, Riverside, California	92506
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (951) 686-6060

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Common Stock, par value $.01 per share

Trading Symbol(s)

PROV

Name of each exchange on which registered

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Item 2.02 Results of Operations and Financial Condition

On April 27, 2021, Provident Financial Holdings, Inc. (“Corporation”), the holding company for Provident Savings Bank, F.S.B., distributed its quarterly results for the quarter ended March 31, 2021. A copy of the news release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On April 27, 2021, the Corporation posted its Investor Presentation for the quarter ended March 31, 2021 on the Corporation’s website, www.myprovident.com, under Presentations in the Investor Relations section. A copy of the Investor Presentation is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d)

Exhibits

99.1	News release of the Corporation’s quarterly results for the quarter ended March 31, 2021.

99.2	Investor Presentation of Provident Financial Holdings, Inc. for the quarter ended March 31, 2021.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 27, 2021	PROVIDENT FINANCIAL HOLDINGS, INC.

	/s/ Donavon P. Ternes
	Donavon P. Ternes
	President, Chief Operating Officer and Chief Financial Officer (Principal Financial and Accounting Officer)

Exhibit 99.1



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

PROVIDENT FINANCIAL HOLDINGS REPORTS

THIRD QUARTER FISCAL 2021 RESULTS

The Company Reports Net Income of $1.56 Million in the March 2021 Quarter

Loans Held for Investment Decrease 7% from June 30, 2020 to $840.3 Million

Total Deposits Increase 5% from June 30, 2020 to $933.8 Million

Non-Interest Expense Declines 8% to $6.91 Million in the March 2021 Quarter in

Comparison to the March 2020 Quarter

Riverside, Calif. – April 27, 2021 – 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, 2021.

For the quarter ended March 31, 2021, the Company reported net income of $1.56 million, or $0.21 per diluted share (on 7.58 million average diluted shares outstanding), up from net income of $1.14 million, or $0.15 per diluted share (on 7.59 million average diluted shares outstanding), in the comparable period a year ago. Compared to the same quarter last year, the increase in earnings was primarily attributable to a recovery from the allowance for loan losses and lower non-interest expenses (mainly, lower salaries and employee benefits expenses related to fewer employees and reduced incentive compensation), partly offset by lower net interest income.

Page 1 of 20

“I am pleased with our improving operating results this quarter. We experienced stronger loan origination volumes than recent prior quarters, deposit growth is sound, operating expenses are well controlled, and credit quality remains very good,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company. “Additionally, I believe general economic conditions are beginning to improve from last year which is a welcome development. We are well-positioned to benefit from an increase in economic activity,” said Mr. Blunden.

Return on average assets for the third quarter of fiscal 2021 was 0.53 percent, up from 0.41 percent for the same period of fiscal 2020; and return on average stockholders’ equity for the third quarter of fiscal 2021 was 4.99 percent, up from 3.70 percent for the comparable period of fiscal 2020.

On a sequential quarter basis, the $1.56 million net income for the third quarter of fiscal 2021 reflects a 33 percent increase from $1.18 million in the second quarter of fiscal 2021. The increase in earnings for the third quarter of fiscal 2021 compared to the second quarter of fiscal 2021 was primarily attributable to a $225,000 increase in non-interest income and a $239,000 improvement in the provision for loan losses, partly offset by a decrease of $181,000 in net interest income. Diluted earnings per share for the third quarter of fiscal 2021 were $0.21 per share, up 31 percent from the $0.16 per share during the second quarter of fiscal 2021. Return on average assets was 0.53 percent for the third quarter of fiscal 2021, up from 0.40 percent in the second quarter of fiscal 2021; and return on average stockholders’ equity for the third quarter of fiscal 2021 was 4.99 percent, up from 3.77 percent for the second quarter of fiscal 2021.

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For the nine months ended March 31, 2021 net income decreased $1.89 million, or 31 percent, to $4.22 million from $6.11 million in the comparable period ended March 31, 2020; and diluted earnings per share for the nine months ended March 31, 2021 decreased 30 percent to $0.56 per share (on 7.52 million average diluted shares outstanding) from $0.80 per share (on 7.61 million average diluted shares outstanding) for the comparable nine-month period last year. Compared to the same period last year, the decrease in earnings was primarily attributable to a $4.85 million decrease in net-interest income; partly offset by lower non-interest expenses as a result of a $1.97 million decrease in salaries and employee benefits expenses and a $612,000 decrease in the provision for loan losses.

Net interest income decreased $1.43 million, or 16 percent, to $7.46 million in the third quarter of fiscal 2021 from $8.89 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 third quarter of fiscal 2021 decreased 70 basis points to 2.60 percent from 3.30 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 93 basis points to 2.94 percent in the third quarter of fiscal 2021 from 3.87 percent in the same quarter last year while the average cost of interest-bearing liabilities decreased by 26 basis points to 0.38 percent in the third quarter of fiscal 2021 from 0.64 percent in the same quarter last year. The average balance of interest-earning assets

Page 3 of 20

increased by $67.2 million, or six percent, to $1.15 billion in the third quarter of fiscal 2021 from $1.08 billion in the same quarter last year due primarily to purchases of investment securities, partly offset by a decrease in loans receivable.

The average balance of loans receivable decreased by $86.1 million, or nine percent, to $843.4 million in the third quarter of fiscal 2021 from $929.5 million in the same quarter of fiscal 2020. The average yield on loans receivable decreased by 41 basis points to 3.73 percent in the third quarter of fiscal 2021 from an average yield of 4.14 percent in the same quarter of fiscal 2020. Net deferred loan cost amortization in the third quarter of fiscal 2021 increased to $717,000 from $451,000 in the same quarter of fiscal 2020. Total loans originated and purchased for investment in the third quarter of fiscal 2021 were $61.0 million, up 112 percent from $28.8 million in the same quarter of fiscal 2020. Loan principal payments received in the third quarter of fiscal 2021 were $75.7 million, up 36 percent from $55.7 million in the same quarter of fiscal 2020 reflecting increased refinance activity in the currently low interest rate environment.

The average balance of investment securities increased by $143.7 million, or 183 percent, to $222.3 million in the third quarter of fiscal 2021 from $78.6 million in the same quarter of fiscal 2020. The average yield on investment securities decreased 162 basis points to 0.81 percent in the third quarter of fiscal 2021 from 2.43 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, reflecting the current low interest rate environment. During the third quarter of fiscal 2021, the Bank purchased investment securities totaling $50.4 million with an average yield of approximately 0.84%; and for the first nine months of fiscal 2021, the

Page 4 of 20

Bank purchased investment securities totaling $154.2 million with an average yield of approximately 0.82%.

In the third 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 31 percent from $144,000 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 $9.8 million, or 16 percent, to $71.7 million in the third quarter of fiscal 2021 from $61.9 million in the same quarter of fiscal 2020 primarily as a result of deposit growth and loan repayments outpacing new loan originations and purchases of loans and investment securities. The average yield earned on interest-earning deposits in the third quarter of fiscal 2021 was 0.10 percent, down 110 basis points from 1.20 percent in the same quarter of fiscal 2020 as a result of decreases in the targeted Federal Funds Rate.

Average deposits increased $79.8 million, or 10 percent, to $916.7 million in the third quarter of fiscal 2021 from $836.9 million in the same quarter of fiscal 2020, primarily due to increases in transaction accounts resulting primarily from government stimulus 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 19 basis points to 0.17 percent in the third quarter of fiscal 2021 from 0.36 percent in the same quarter last year.

Transaction account balances or “core deposits” increased $64.4 million, or nine percent, to $787.4 million at March 31, 2021 from $723.0 million at June 30, 2020, while

Page 5 of 20

time deposits decreased $23.6 million, or 14 percent, to $146.4 million at March 31, 2021 from $170.0 million at June 30, 2020.

The average balance of borrowings, which consisted of FHLB advances, decreased $15.4 million, or 12 percent, to $115.7 million while the average cost of borrowings decreased 36 basis points to 2.08 percent in the third quarter of fiscal 2021, compared to an average balance of $131.1 million with an average cost of 2.44 percent in the same quarter of fiscal 2020. The decrease in the average balance of borrowings was primarily due to prepayments and maturities of borrowings.

During the third quarter of fiscal 2021, the Company recorded a recovery from the allowance for loan losses of $200,000, in contrast to an $874,000 provision for loan losses recorded during the same period of fiscal 2020 and a $39,000 provision for loan losses recorded in the second quarter of fiscal 2021 (sequential quarter). The provision for loan losses in the previous quarters was primarily due to an increase in qualitative components in our allowance for loan losses methodology in response to the COVID-19 pandemic and its forecasted adverse economic impact. The recovery from the allowance for loan losses for the current quarter primarily reflects an improved economic outlook as of March 31, 2021, reducing the expected impact of the pandemic to the credit quality of the loan portfolio and declining loan balances during the current quarter; while the provision for loan losses recorded in the preceding quarters primarily reflected the deterioration in forecasted economic metrics reflecting the economic outlook that existed at each quarter end as a result of the COVID-19 pandemic, partly offset by the decrease in loan balances.

Non-performing assets, comprised solely of non-performing loans with underlying collateral located in California, increased $4.9 million to $9.8 million, or 0.82 percent of

Page 6 of 20

total assets, at March 31, 2021, compared to $4.9 million, or 0.42 percent of total assets, at June 30, 2020 and declined from $10.3 million, or 0.88 percent of total assets, at December 31, 2020 (sequential quarter). The non-performing loans at March 31, 2021 are comprised of 29 single-family loans and one multi-family loan. At both March 31, 2021 and June 30, 2020, there was no real estate owned.

Net loan recoveries for the quarter ended March 31, 2021 were $8,000 or 0.00 percent (annualized) of average loans receivable, as compared to net loan recoveries of $15,000 or 0.01 percent (annualized) of average loans receivable for the quarter ended March 31, 2020 and net loan recoveries of $9,000 or 0.00 percent (annualized) of average loans receivable for the quarter ended December 31, 2020 (sequential quarter).

Classified assets, comprised solely of loans, were $12.2 million at March 31, 2021, including $2.5 million of loans in the special mention category and $9.7 million of loans in the substandard category; while classified assets at June 30, 2020 were $14.1 million, including $8.6 million of loans in the special mention category and $5.5 million of loans in the substandard category.

The Bank has received requests from borrowers for some type of payment relief due to the COVID-19 pandemic. Loans that were current on their payments prior to the COVID-19 pandemic and modified by deferred payments, are not considered to be troubled debt restructurings pursuant to applicable accounting guidance consistent with the Coronavirus Aid, Relief, and Economic Security Act of 2020 or CARES Act and related bank regulatory guidance. The primary method of relief is to allow the borrower to defer loan payments for up to an initial six-month period, although we have also waived late fees and suspended foreclosure proceedings. Loans in which their payments are deferred

Page 7 of 20

beyond the initial six months are no longer in forbearance and are subsequently classified as troubled debt restructuring. As of March 31, 2021, loans in forbearance included five single-family with outstanding balances of approximately $1.8 million or 0.22 percent of gross loans held for investment, one commercial real estate loan with an outstanding balance of $945,000 or 0.11 percent of gross loans held for investment and one multi-family loan with an outstanding balance of $308,000 or 0.04 percent of gross loans held for investment. As of March 31, 2021, the Bank had no pending requests for payment relief. Interest income is recognized during the forbearance period unless the loans are classified as non-performing. After the payment deferral period, 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.

During the quarter ended March 31, 2021, one COVID-19 related forbearance loan was restructured while two restructured loans were upgraded to pass category. During the nine months ended March 31, 2021, 17 loans previously in a COVID-19 related payment forbearance and one pass loan were restructured and classified as restructured loans, while three restructured loans were upgraded to the pass category, of which one loan was subsequently paid off. The outstanding balance of restructured loans at March 31, 2021 was $8.3 million (23 loans) up from $2.6 million (eight loans) at June 30, 2020. As of March 31, 2021, a total of $8.1 million or 97 percent of the restructured loans were

Page 8 of 20

classified as substandard non-accrual and all of the restructured loans have a current payment status consistent with their restructuring terms.

The allowance for loan losses was $8.3 million or 0.98 percent of gross loans held for investment at March 31, 2021, similar to the $8.3 million or 0.91 percent of gross loans held for investment at June 30, 2020. 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, 2021 under the incurred loss methodology.

Non-interest income increased by $98,000, or nine percent, to $1.20 million in the third quarter of fiscal 2021 from $1.10 million in the same period of fiscal 2020, primarily due to an increase in loan servicing and other fees resulting from a recovery from servicing asset reserves attributable to lower loan prepayment estimates, partly offset by a decrease in deposit account fees reflecting certain fees that were waived related to accounts impacted by the COVID-19 pandemic and reduced transactions reflecting changes in spending habits due to the COVID-19 pandemic. On a sequential quarter basis, non-interest income increased $225,000, or 23 percent, primarily as a result of an increase in loan servicing and other fees resulting from higher loan prepayment fees.

Non-interest expenses decreased $596,000, or eight percent, to $6.91 million in the third quarter of fiscal 2021 from $7.51 million in the same quarter last year due primarily to lower salaries and employee benefits expense resulting from fewer employees and lower incentive compensation. On a sequential quarter basis, non-interest expenses remained virtually unchanged.

Page 9 of 20

The Company’s efficiency ratio in the third quarter of fiscal 2021 was 80 percent, up from 75 percent in the same quarter last year but unchanged from the second quarter of fiscal 2021 (sequential quarter).

The Company’s provision for income tax was $386,000 for the third quarter of fiscal 2021, down 17 percent from $467,000 in the same quarter last year primarily due to tax benefits attributable to the exercise of stock options, partly offset by higher net income before taxes. The effective tax rate in the third quarter of fiscal 2021 was 19.8%, down from 29.0% in the same quarter last year. The Company believes that the tax provision recorded in the third quarter of fiscal 2021 reflects its current federal and state income tax obligations.

The Company repurchased 54,707 shares of its common stock with an average cost of $16.66 per share during the quarter ended March 31, 2021 pursuant to its stock repurchase plan. As of March 31, 2021, a total of 317,108 shares or 85 percent of the shares authorized for repurchase under the April 2020 stock repurchase plan remain available to purchase until the plan expires on April 30, 2021.

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 28, 2021 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-877-226-8189 and referencing access code number 1087920. An audio replay of the conference call will be available through Wednesday, May 5, 2021 by dialing 1-866-207-1041 and referencing access code number 7861926.

Page 10 of 20

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

Page 11 of 20

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,
	2021			2020			2020			2020			2020
Assets
Cash and cash equivalents	$	71,629		$	74,001		$	66,467		$	116,034		$	84,250
Investment securities – held to maturity, at cost		239,480			203,098			193,868			118,627			69,482
Investment securities - available for sale, at fair value		3,802			4,158			4,416			4,717			4,828
Loans held for investment, net of allowance for loan losses of $8,346; $8,538; $8,490; $8,265 and $7,810, respectively; includes $1,879; $1,972; $2,240; $2,258 and $3,835 at fair value, respectively		840,274			855,086			884,953			902,796			914,307
Accrued interest receivable		3,060			3,126			3,373			3,271			3,154
FHLB – San Francisco stock		7,970			7,970			7,970			7,970			8,199
Premises and equipment, net		9,608			9,980			10,099			10,254			10,606
Prepaid expenses and other assets		13,473			13,308			12,887			13,168			12,741

Total assets	$	1,189,296		$	1,170,727		$	1,184,033		$	1,176,837		$	1,107,567

Liabilities and Stockholders’ Equity
Liabilities:
Non interest-bearing deposits	$	124,043		$	109,609		$	114,537		$	118,771		$	86,585
Interest-bearing deposits		809,713			800,359			790,149			774,198			749,246
Total deposits		933,756			909,968			904,686			892,969			835,831

Borrowings		111,000			116,015			136,031			141,047			131,070
Accounts payable, accrued interest and other liabilities		18,790			19,760			18,657			18,845			17,508
Total liabilities		1,063,546			1,045,743			1,059,374			1,052,861			984,409

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; 18,226,615; 18,097,615; 18,097,615; 18,097,615 and 18,097,615 shares issued, respectively; 7,516,547; 7,442,254; 7,441,259; 7,436,315 and 7,436,315 shares outstanding, respectively)

		182			181			181			181			181
Additional paid-in capital		97,323			96,164			95,948			95,593			95,355
Retained earnings		195,443			194,923			194,789			194,345			193,802
Treasury stock at cost (10,710,068; 10,655,361; 10,656,356; 10,661,300 and 10,661,300 shares, respectively)
		(167,276	)		(166,364	)		(166,358	)		(166,247	)		(166,247	)
Accumulated other comprehensive income, net of tax		78			80			99			104			67

Total stockholders’ equity		125,750			124,984			124,659			123,976			123,158

Total liabilities and stockholders’ equity	$	1,189,296		$	1,170,727		$	1,184,033		$	1,176,837		$	1,107,567

Page 12 of 20

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,
	Quarter Ended March 31,					Nine Months Ended March 31,
	2021			2020		2021		2020
Interest income:
Loans receivable, net	$	7,860		$	9,622	$	25,121	$	30,017
Investment securities		452			478		1,378		1,659
FHLB – San Francisco stock		100			144		300		432
Interest-earning deposits		18			186		59		621
Total interest income		8,430			10,430		26,858		32,729

Interest expense:
Checking and money market deposits		50			106		220		333
Savings deposits		38			131		170		396
Time deposits		292			509		1,009		1,571
Borrowings		593			794		2,198		2,318
Total interest expense		973			1,540		3,597		4,618

Net interest income		7,457			8,890		23,261		28,111
(Recovery) provision for loan losses		(200	)		874		59		671
Net interest income, after (recovery) provision for loan losses		7,657			8,016		23,202		27,440

Non-interest income:
Loan servicing and other fees		355			131		880		631
Deposit account fees		318			423		957		1,321
Card and processing fees		366			360		1,098		1,121
Other		160			187		397		442
Total non-interest income		1,199			1,101		3,332		3,515

Non-interest expense:
Salaries and employee benefits		4,241			4,966		12,985		14,950
Premises and occupancy		863			845		2,631		2,603
Equipment		312			314		860		855
Professional expenses		367			351		1,183		1,090
Sales and marketing expenses		130			177		470		506
Deposit insurance premiums and regulatory assessments		154			54		429		97
Other		842			798		2,252		2,196
Total non-interest expense		6,909			7,505		20,810		22,297

Income before taxes		1,947			1,612		5,724		8,658
Provision for income taxes		386			467		1,502		2,553
Net income	$	1,561		$	1,145	$	4,222	$	6,105

Basic earnings per share	$	0.21		$	0.15	$	0.57	$	0.82
Diluted earnings per share	$	0.21		$	0.15	$	0.56	$	0.80
Cash dividends per share	$	0.14		$	0.14	$	0.42	$	0.42

Page 13 of 20

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,
	2021			2020		2020		2020		2020
Interest income:
Loans receivable, net	$	7,860		$	8,344	$	8,917	$	9,128	$	9,622
Investment securities		452			448		478		461		478
FHLB – San Francisco stock		100			100		100		102		144
Interest-earning deposits		18			17		24		36		186
Total interest income		8,430			8,909		9,519		9,727		10,430

Interest expense:
Checking and money market deposits		50			79		91		91		106
Savings deposits		38			54		78		100		131
Time deposits		292			335		382		452		509
Borrowings		593			803		802		794		794
Total interest expense		973			1,271		1,353		1,437		1,540

Net interest income		7,457			7,638		8,166		8,290		8,890
(Recovery) provision for loan losses		(200	)		39		220		448		874
Net interest income, after provision (recovery) for loan losses		7,657			7,599		7,946		7,842		8,016

Non-interest income:
Loan servicing and other fees		355			120		405		188		131
Deposit account fees		318			329		310		289		423
Card and processing fees		366			368		364		333		360
Other		160			157		80		195		187
Total non-interest income		1,199			974		1,159		1,005		1,101

Non-interest expense:
Salaries and employee benefits		4,241			4,301		4,443		3,963		4,966
Premises and occupancy		863			865		903		862		845
Equipment		312			273		275		274		314
Professional expenses		367			402		414		349		351
Sales and marketing expenses		130			227		113		267		177
Deposit insurance premiums and regulatory assessments		154			141		134		130		54
Other		842			707		703		758		798
Total non-interest expense		6,909			6,916		6,985		6,603		7,505

Income before taxes		1,947			1,657		2,120		2,244		1,612
Provision for income taxes		386			481		635		660		467
Net income	$	1,561		$	1,176	$	1,485	$	1,584	$	1,145

Basic earnings per share	$	0.21		$	0.16	$	0.20	$	0.21	$	0.15
Diluted earnings per share	$	0.21		$	0.16	$	0.20	$	0.21	$	0.15
Cash dividends per share	$	0.14		$	0.14	$	0.14	$	0.14	$	0.14

Page 14 of 20

PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands, Except Share Information)
	Quarter Ended March 31,						Nine Months Ended March 31,
	2021			2020			2021			2020
SELECTED FINANCIAL RATIOS:
Return on average assets		0.53	%		0.41	%		0.48	%		0.74	%
Return on average stockholders’ equity		4.99	%		3.70	%		4.51	%		6.64	%
Stockholders’ equity to total assets		10.57	%		11.12	%		10.57	%		11.12	%
Net interest spread		2.56	%		3.23	%		2.66	%		3.44	%
Net interest margin		2.60	%		3.30	%		2.70	%		3.51	%
Efficiency ratio		79.82	%		75.12	%		78.25	%		70.50	%
Average interest-earning assets to average interest-bearing liabilities		110.94	%		111.39	%		110.79	%		111.48	%

SELECTED FINANCIAL DATA:
Basic earnings per share	$	0.21		$	0.15		$	0.57		$	0.82
Diluted earnings per share	$	0.21		$	0.15		$	0.56		$	0.80
Book value per share	$	16.73		$	16.56		$	16.73		$	16.56
Shares used for basic EPS computation		7,462,795			7,468,932			7,446,970			7,477,922
Shares used for diluted EPS computation		7,579,897			7,590,348			7,521,173			7,606,494
Total shares issued and outstanding		7,516,547			7,436,315			7,516,547			7,436,315

LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:
Mortgage Loans:
Single-family	$	38,928		$	9,654		$	74,571		$	95,954
Multi-family		21,208			12,850			59,487			89,490
Commercial real estate		830			5,570			2,690			14,468
Construction		-			774			1,828			3,983
Consumer loans		-			-			-			1
Total loans originated and purchased for investment	$	60,966		$	28,848		$	138,576		$	203,896

Page 15 of 20

PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands, Except Share Information)
	Quarter Ended			Quarter Ended			Quarter Ended			Quarter Ended			Quarter Ended
	03/31/21			12/31/20			09/30/20			06/30/20			03/31/20
SELECTED FINANCIAL RATIOS:
Return on average assets		0.53	%		0.40	%		0.50	%		0.55	%		0.41	%
Return on average stockholders’ equity		4.99	%		3.77	%		4.78	%		5.14	%		3.70	%
Stockholders’ equity to total assets		10.57	%		10.68	%		10.53	%		10.53	%		11.12	%
Net interest spread		2.56	%		2.61	%		2.79	%		2.89	%		3.23	%
Net interest margin		2.60	%		2.66	%		2.84	%		2.95	%		3.30	%
Efficiency ratio		79.82	%		80.31	%		74.91	%		71.04	%		75.12	%
Average interest-earning assets to average interest-bearing liabilities		110.94	%		110.82	%		110.62	%		110.80	%		111.39	%

SELECTED FINANCIAL DATA:
Basic earnings per share	$	0.21		$	0.16		$	0.20		$	0.21		$	0.15
Diluted earnings per share	$	0.21		$	0.16		$	0.20		$	0.21		$	0.15
Book value per share	$	16.73		$	16.79		$	16.75		$	16.67		$	16.56
Average shares used for basic EPS		7,462,795			7,441,984			7,436,476			7,436,315			7,468,932
Average shares used for diluted EPS		7,579,897			7,492,040			7,457,282			7,485,019			7,590,348
Total shares issued and outstanding		7,516,547			7,442,254			7,441,259			7,436,315			7,436,315

LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:
Mortgage loans:
Single-family	$	38,928		$	12,444		$	23,199		$	11,206		$	9,654
Multi-family		21,208			16,432			21,847			32,876			12,850
Commercial real estate		830			-			1,860			-			5,570
Construction		-			688			1,140			-			774
Other		-			-			-			143			-
Total loans originated and purchased for investment	$	60,966		$	29,564		$	48,046		$	44,225		$	28,848

Page 16 of 20

PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands)
	As of			As of			As of			As of			As of
	03/31/21			12/31/20			09/30/20			06/30/20			03/31/20
ASSET QUALITY RATIOS AND DELINQUENT LOANS:
Recourse reserve for loans sold	$	215		$	390		$	370		$	270		$	250
Allowance for loan losses	$	8,346		$	8,538		$	8,490		$	8,265		$	7,810
Non-performing loans to loans held for investment, net		1.16	%		1.20	%		0.51	%		0.55	%		0.40	%
Non-performing assets to total assets		0.82	%		0.88	%		0.38	%		0.42	%		0.33	%
Allowance for loan losses to gross loans held
for investment		0.98	%		0.99	%		0.95	%		0.91	%		0.85	%
Net loan charge-offs (recoveries) to average loans receivable (annualized)		0.00	%		0.00	%		0.00	%		0.00	%		(0.01	)%
Non-performing loans	$	9,759		$	10,270		$	4,532		$	4,924		$	3,635
Loans 30 to 89 days delinquent	$	-		$	350		$	2		$	219		$	2,827

	Quarter Ended			Quarter Ended			Quarter Ended			Quarter Ended			Quarter Ended
	03/31/21			12/31/20			09/30/20			06/30/20			03/31/20
Recourse provision for loans sold	$	-		$	20		$	100		$	20		$	-
Provision (recovery) for loan losses	$	(200	)	$	39		$	220		$	448		$	874
Net loan charge-offs (recoveries)	$	(8	)	$	(9	)	$	(5	)	$	(7	)	$	(15	)

	As of			As of			As of			As of			As of
	03/31/21			12/31/20			09/30/20			06/30/20			03/31/20
REGULATORY CAPITAL RATIOS (BANK):
Tier 1 leverage ratio		9.99	%		9.78	%		9.64	%		10.13	%		10.36	%
Common equity tier 1 capital ratio		18.77	%		18.30	%		16.94	%		17.51	%		17.26	%
Tier 1 risk-based capital ratio		18.77	%		18.30	%		16.94	%		17.51	%		17.26	%
Total risk-based capital ratio		20.02	%		19.56	%		18.19	%		18.76	%		18.45	%

	As of March 31,
	2021					2020
	Balance		Rate⁽¹⁾			Balance		Rate⁽¹⁾
INVESTMENT SECURITIES:
Held to maturity:
Certificates of deposit	$	1,000		0.34	%	$	800		2.63	%
U.S. SBA securities		1,877		0.60			2,083		2.10
U.S. government sponsored enterprise MBS		236,603		1.30			66,599		2.78
Total investment securities held to maturity	$	239,480		1.29	%	$	69,482		2.76	%

Available for sale (at fair value):
U.S. government agency MBS	$	2,360		2.52	%	$	3,001		3.54	%
U.S. government sponsored enterprise MBS		1,279		2.62			1,630		4.17
Private issue collateralized mortgage obligations		163		3.38			197		4.40
Total investment securities available for sale	$	3,802		2.59	%	$	4,828		3.79	%

Total investment securities	$	243,282		1.31	%	$	74,310		2.82	%

⁽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 17 of 20

PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands)
	As of March 31,
	2021						2020
	Balance			Rate⁽¹⁾			Balance			Rate⁽¹⁾
LOANS HELD FOR INVESTMENT:
Held to maturity:
Single-family (1 to 4 units)	$	254,393			3.61	%	$	326,686			4.16	%
Multi-family (5 or more units)		483,283			4.14			475,941			4.33
Commercial real estate		99,722			4.68			105,691			4.78
Construction		3,508			6.00			6,346			6.49
Other mortgage		140			5.25			-			-
Commercial business		851			6.39			502			6.05
Consumer		96			15.00			122			15.00
Total loans held for investment		841,993			4.05	%		915,288			4.34	%

Advance payments of escrows		339						193
Deferred loan costs, net		6,288						6,636
Allowance for loan losses		(8,346	)					(7,810	)
Total loans held for investment, net	$	840,274					$	914,307

Purchased loans serviced by others included above	$	14,339			3.54	%	$	26,941			3.71	%

⁽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,
	2021					2020
	Balance		Rate⁽¹⁾			Balance		Rate⁽¹⁾
DEPOSITS:
Checking accounts – non interest-bearing	$	124,043		-	%	$	86,585		-	%
Checking accounts – interest-bearing		320,704		0.04			270,389		0.12
Savings accounts		302,673		0.05			261,659		0.20
Money market accounts		39,945		0.08			31,575		0.21
Time deposits		146,391		0.77			185,623		1.08
Total deposits	$	933,756		0.16	%	$	835,831		0.35	%

BORROWINGS:
Overnight	$	-		-	%	$	-		-	%
Three months or less		-		-			-		-
Over three to six months		21,000		1.75			-		-
Over six months to one year		10,000		2.20			20,000		3.85
Over one year to two years		20,000		1.75			31,063		1.90
Over two years to three years		40,000		2.25			20,000		1.75
Over three years to four years		10,000		2.61			40,000		2.25
Over four years to five years		10,000		2.79			10,007		2.61
Over five years		-		-			10,000		2.79
Total borrowings	$	111,000		2.14	%	$	131,070		2.40	%

⁽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.

Page 18 of 20

PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands)
	Quarter Ended					Quarter Ended
	March 31, 2021					March 31, 2020
	Balance		Rate⁽¹⁾			Balance		Rate⁽¹⁾
SELECTED AVERAGE BALANCE SHEETS:
Held to maturity:
Loans receivable, net	$	843,374		3.73	%	$	929,485		4.14	%
Investment securities		222,284		0.81			78,632		2.43
FHLB – San Francisco stock		7,970		5.02			8,199		7.03
Interest-earning deposits		71,728		0.10			61,900		1.20
Total interest-earning assets	$	1,145,356		2.94	%	$	1,078,216		3.87	%
Total assets	$	1,176,614				$	1,110,158

Deposits	$	916,749		0.17	%	$	836,855		0.36	%
Borrowings		115,672		2.08			131,075		2.44
Total interest-bearing liabilities	$	1,032,421		0.38	%	$	967,930		0.64	%
Total stockholders’ equity	$	125,052				$	123,786

⁽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.

	Nine Months Ended					Nine Months Ended
	March 31, 2021					March 31, 2020
	Balance		Rate⁽¹⁾			Balance		Rate⁽¹⁾
SELECTED AVERAGE BALANCE SHEETS:
Held to maturity:
Loans receivable, net	$	868,462		3.86	%	$	922,246		4.34	%
Investment securities		195,463		0.94			87,260		2.53
FHLB – San Francisco stock		7,970		5.02			8,199		7.03
Interest-earning deposits		76,642		0.10			50,642		1.61
Total interest-earning assets	$	1,148,537		3.12	%	$	1,068,347		4.08	%
Total assets	$	1,179,517				$	1,100,162

Deposits	$	906,169		0.21	%	$	833,731		0.37	%
Borrowings		130,510		2.24			124,577		2.48
Total interest-bearing liabilities	$	1,036,679		0.46	%	$	958,308		0.64	%
Total stockholders’ equity	$	124,749				$	122,592

⁽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.

Page 19 of 20

PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited - Dollars in Thousands)
ASSET QUALITY:
	As of		As of		As of		As of		As of
	03/31/21		12/31/20		09/30/20		06/30/20		03/31/20
Loans on non-accrual status (excluding restructured loans):
Mortgage loans:
Single-family	$	896	$	2,062	$	2,084	$	2,281	$	1,875
Multi-family		786		-		-		-		-
Total		1,682		2,062		2,084		2,281		1,875

Accruing loans past due 90 days or more:		-		-		-		-		-
Total		-		-		-		-		-

Restructured loans on non-accrual status:
Mortgage loans:
Single-family		8,077		8,208		2,421		2,612		1,726
Commercial business loans		-		-		27		31		34
Total		8,077		8,208		2,448		2,643		1,760

Total non-performing loans ⁽¹⁾		9,759		10,270		4,532		4,924		3,635

Real estate owned, net		-		-		-		-		-
Total non-performing assets	$	9,759	$	10,270	$	4,532	$	4,924	$	3,635

⁽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.