PROVIDENT FINANCIAL : REPORTS SECOND QUARTER OF FISCAL 2022 RESULTS - Form 8-K

PROVIDENT FINANCIAL HOLDINGS REPORTS

SECOND QUARTER OF FISCAL 2022 RESULTS

Net Income of $2.26 Million in the December 2021 Quarter

Loans Held for Investment Increase Slightly from June 30, 2021 to $852.0 Million

Total Deposits Increase 2% from June 30, 2021 to $956.3 Million

Improved Asset Quality with a $1.1 Million Recovery from the Allowance for Loan Losses

Non-Interest Expenses Remain Well-Controlled

Riverside, Calif. - January 26, 2022 - Provident Financial Holdings, Inc. ("Company"), NASDAQ GS: PROV, the holding company for Provident Savings Bank, F.S.B. ("Bank"), today announced second quarter earnings results for the fiscal year ending June 30, 2022.

For the quarter ended December 31, 2021, the Company reported net income of $2.26 million, or $0.30 per diluted share (on 7.48 million average diluted shares outstanding), up 93 percent from net income of $1.18 million, or $0.16 per diluted share (on 7.49 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 $1.11 million improvement in the provision for loan losses and a $394,000 increase in non-interest income (mainly, higher loan servicing and other fees).

"I am pleased that general economic conditions seem to be improving. I remain confident that Provident is well-positioned to benefit from the improving conditions and that our strong financial foundation will allow us to capitalize on future opportunities as they develop," said Craig G. Blunden, Chairman and Chief Executive Officer of the Company. "Our loan origination volume is improving, deposits are growing, operating expenses are well-controlled, and credit quality is excellent," said Mr. Blunden.

Return on average assets for the second quarter of fiscal 2022 was 0.76 percent, up from 0.40 percent for the same period of fiscal 2021; and return on average stockholders' equity for the second quarter of fiscal 2022 was 7.11 percent, up from 3.77 percent for the comparable period of fiscal 2021.

On a sequential quarter basis, the $2.26 million net income for the second quarter of fiscal 2022 reflects a 15 percent decrease from $2.67 million in the first quarter of fiscal 2022. The decrease in earnings for the second quarter of fiscal 2022 compared to the first quarter of fiscal

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2022 was primarily attributable to a $1.23 million increase in non-interest expenses and a $225,000 decrease in net interest income, partly offset by a $728,000 increase in the recovery from the allowance for loan losses and a $299,000 increase in non-interest income. The increase in the non-interest expenses was primarily due to higher salaries and employee benefits expenses (mainly attributable to the $1.20 million Employee Retention Tax Credit ("ERTC") recorded last quarter and not replicated this quarter). The increase in the non-interest income was primarily due to higher loan servicing and other fees attributable primarily to higher prepayment fees. Diluted earnings per share for the second quarter of fiscal 2022 were $0.30 per share, down 14 percent from the $0.35 per share during the first quarter of fiscal 2022. Return on average assets was 0.76 percent for the second quarter of fiscal 2022, down from 0.89 percent in the first quarter of fiscal 2022; and return on average stockholders' equity for the second quarter of fiscal 2022 was 7.11 percent, down from 8.39 percent for the first quarter of fiscal 2022.

For the six months ended December 31, 2021, net income increased $2.27 million, or 85 percent, to $4.93 million from $2.66 million in the comparable period ended December 31, 2020; and diluted earnings per share for the six months ended December 31, 2021 increased 81 percent to $0.65 per share (on 7.53 million average diluted shares outstanding) from $0.36 per share (on 7.47 million average diluted shares outstanding) for the comparable six-month period last year. Compared to the same period last year, the increase in earnings was primarily attributable to a $1.67 million improvement in the provision for loan losses and a $1.33 million decrease in non-interest expense (primarily attributable to the ERTC recorded in the first quarter of fiscal 2022) and a $304,000 increase in non-interest income, partly offset by a $253,000 decrease in net-interest income.

Net interest income remained virtually unchanged at $7.66 million in the second quarter of fiscal 2022 compared to $7.64 million for the same quarter last year. The average balance of interest-earning assets increased by $13.3 million, or one percent, to $1.16 billion in the second quarter of fiscal 2022 from $1.15 billion in the same quarter last year. The increase in the average balance of interest-earnings assets was due primarily to an increase in interest-earning deposits, partly offset by a decrease in loans held for investment. The net interest margin during the second quarter of fiscal 2022 decreased two basis points to 2.64 percent from 2.66 percent in the same quarter last year. The average yield on interest-earning assets decreased by 17 basis points to 2.93 percent in the second quarter of fiscal 2022 from 3.10 percent in the same quarter last year and the average cost of interest-bearing liabilities also decreased by 17 basis points to 0.32 percent in the second quarter of fiscal 2022 from 0.49 percent in the same quarter last year.

Interest income on loans receivable decreased by $424,000, or five percent, to $7.92 million in the second quarter of fiscal 2022 from $8.34 million in the same quarter of fiscal 2021. The decrease was due to a lower average yield, and to a lesser extent, a lower average balance. The average yield on loans receivable decreased by 13 basis points to 3.71 percent in the second quarter of fiscal 2022 from an average yield of 3.84 percent in the same quarter last year. Net deferred loan cost amortization in the second quarter of fiscal 2022 increased 19 percent to $622,000 from $521,000 in the same quarter last year. The average balance of loans receivable decreased by $14.2 million, or two percent, to $854.3 million in the second quarter of fiscal 2022

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from $868.5 million in the same quarter last year. Total loans originated and purchased for investment in the second quarter of fiscal 2022 were $65.3 million, up 121 percent from $29.6 million in the same quarter last year. Loan principal payments received in the second quarter of fiscal 2022 were $72.5 million, up 22 percent from $59.6 million in the same quarter last year.

Interest income from investment securities decreased $15,000, or three percent, to $433,000 in the second quarter of fiscal 2022 from $448,000 for the same quarter of fiscal 2021. This decrease was attributable to a lower average yield, partly offset by a higher average balance. The average yield on investment securities decreased three basis points to 0.83 percent in the second quarter of fiscal 2022 from 0.86 percent for the same quarter last year. The decrease in the average investment securities yield was primarily attributable to the downward repricing of adjustable rate mortgage-backed securities, partly offset by a lower premium amortization during the current quarter in comparison to the same quarter last year ($443,000 vs. $531,000). The average balance of investment securities increased by $1.2 million, or one percent, to $209.7 million in the second quarter of fiscal 2022 from $208.5 million in the same quarter last year.

In the second quarter of fiscal 2022, the Federal Home Loan Bank - San Francisco ("FHLB") distributed a $123,000 cash dividend to the Bank on its FHLB stock, up $23,000 or 23 percent from $100,000 in the same quarter last year.The average balance of FHLB - San Francisco stock in the second quarter of fiscal 2022 increased $185,000, or two percent, to $8.2 million from $8.0 million in the same quarter of fiscal 2021 and the average yield increased to 6.03 percent in the second quarter of fiscal 2022 from 5.02 percent in the same quarter last year.

Interest income from interest-earning deposits, primarily cash deposited at the Federal Reserve Bank of San Francisco, was $35,000 in the second quarter of fiscal 2022, up 106 percent from $17,000 in the same quarter of fiscal 2021. The increase was due to a higher average yield and a higher average balance. The average yield earned on interest-earning deposits in the second quarter of fiscal 2022 was 0.15 percent, up five basis points from 0.10 percent in the same quarter last year. The average balance of the Company's interest-earning deposits, primarily excess cash deposited with the Federal Reserve Bank of San Francisco, increased $26.1 million, or 40 percent, to $91.0 million in the second quarter of fiscal 2022 from $64.9 million in the same quarter last year primarily as a result of an increase in deposits, partly offset by a decrease in borrowings.

Interest expense on deposits for the second quarter of fiscal 2022 was $302,000 as compared to $468,000 for the same period last year, a decrease of $166,000, or 35 percent. The decrease in interest expense on deposits was attributable to a lower average cost of deposits, partly offset by a higher average balance. The average cost of deposits improved, decreasing by nine basis points to 0.12 percent in the second quarter of fiscal 2022 from 0.21 percent in the same quarter last year. Average deposits increased $59.4 million, or seven percent, to $962.1 million in the second quarter of fiscal 2022 from $902.7 million in the same quarter last year, primarily due to increases in transaction accounts, partly offset by a managed run-off of higher cost time deposits.

Transaction account balances or "core deposits" increased $27.2 million, or three percent, to $824.7 million at December 31, 2021 from $797.5 million at June 30, 2021, while time deposits

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decreased $8.7 million, or six percent, to $131.7 million at December 31, 2021 from $140.4 million at June 30, 2021.

Interest expense on borrowings, consisting primarily of FHLB - San Francisco advances, for the second quarter of fiscal 2022 decreased $257,000, or 32 percent, to $546,000 from $803,000 for the same period last year. The decrease in interest expense on borrowings was the result of a lower average balance, partly offset by a higher average cost. The average balance of borrowings, which consisted of FHLB advances, decreased $45.8 million, or 34 percent, to $89.0 million while the average cost of borrowings increased seven basis points to 2.43 percent in the second quarter of fiscal 2022, compared to an average balance of $134.8 million with an average cost of 2.36 percent in the same quarter last year. The decrease in the average balance of borrowings was primarily due to prepayments and maturities of borrowings, while the increase in the average cost was primarily due to higher prepayment fees between the periods ($39,000 vs. $12,000).

During the second quarter of fiscal 2022, the Company recorded a recovery from the allowance for loan losses of $1.07 million, in contrast to a $39,000 provision for loan losses recorded during the same period last year and a $339,000 recovery from the allowance for loan losses recorded in the first quarter of fiscal 2022 (sequential quarter). The recovery from the allowance for loan losses for the current quarter primarily reflects improved credit quality, payoffs of non-performing loans and a decrease in loans receivable during the current quarter as well as improving general economic conditions; while the provision for loan losses recorded in the same quarter last year primarily reflected the deterioration in forecasted economic metrics as a result of the COVID-19 pandemic, partly offset by a decrease in loans receivable.

Non-performing assets, comprised solely of non-performing loans with underlying collateral located in California, decreased $5.8 million or 67 percent to $2.8 million, or 0.24 percent of total assets, at December 31, 2021, compared to $8.6 million, or 0.73 percent of total assets, at June 30, 2021. The non-performing loans at December 31, 2021 are comprised of nine single-family loans and two multi-family loans. At both December 31, 2021 and June 30, 2021, there was no real estate owned.

Net loan recoveries for the quarter ended December 31, 2021 were $262,000 or 0.12 percent (annualized) of average loans receivable, as compared to net loan recoveries of $9,000 or 0.00 percent (annualized) of average loans receivable for the quarter ended December 31, 2020 and net loan recoveries of $165,000 or 0.08 percent (annualized) of average loans receivable for the quarter ended September 30, 2021 (sequential quarter).

Classified assets, comprised solely of loans, were $2.8 million at December 31, 2021, all classified in the substandard category and no loans were classified in the special mention category; while classified assets at June 30, 2021 were $10.4 million, including $1.8 million of loans in the special mention category and $8.6 million of loans in the substandard category.

As of December 31, 2021, the Corporation has no loans in a COVID-19 related forbearance. The Corporation ended its COVID-19 loan forbearance program on March 31, 2021.

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The allowance for loan losses was $6.6 million or 0.77 percent of gross loans held for investment at December 31, 2021, down from the $7.6 million or 0.88 percent of gross loans held for investment at June 30, 2021. Management believes that, based on currently available information, the allowance for loan losses is sufficient to absorb potential losses inherent in loans held for investment at December 31, 2021 under the incurred loss methodology.

Non-interest income increased by $394,000, or 40 percent, to $1.37 million in the second quarter of fiscal 2022 from $974,000 in the same period last year, primarily due to a $324,000 increase in loan servicing and other fees. The increase was due primarily to higher loan prepayment fees from loan payoffs. On a sequential quarter basis, non-interest income increased $299,000, or 28 percent, primarily as a result of an increase in loan servicing and other fees.

Non-interest expenses decreased slightly to $6.90 million in the second quarter of fiscal 2022 from $6.92 million in the same quarter last year. On a sequential quarter basis, non-interest expensesincreased $1.23 million, or 22 percent, from $5.67 million in the first quarter of fiscal 2022 due primarily to higher salaries and employee benefits expense resulting from the ERTC recorded in the first quarter of fiscal 2022 and not replicated in the second quarter of fiscal 2022.

The Company's efficiency ratio in the second quarter of fiscal 2022 was 76 percent, an improvement from 80 percent in the same quarter last year but higher than the 63 percent in the first quarter of fiscal 2022 (sequential quarter).which was lower primarily due to the reduction in salaries and employee benefits expense resulting from the ERTC.

The Company's provision for income taxes was $935,000 for the second quarter of fiscal 2022, up 94 percent from $481,000 in the same quarter last year primarily due to higher net income before the provision for income taxes. The effective tax rate in the second quarter of fiscal 2022 was 29.2 percent, slightly higher than the 29.0 percent in the same quarter last year. The Company believes that the tax provision recorded in the second quarter of fiscal 2022 reflects its current federal and state income tax obligations.

The Company repurchased 102,762 shares of its common stock with an average cost of $16.88 per share during the quarter ended December 31, 2021 pursuant to its stock repurchase plan. As of December 31, 2021, a total of 114,307 shares or 31 percent of the shares authorized for repurchase under the April 2020 stock repurchase plan remain available to purchase until the plan expires on April 27, 2022.

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, January 27, 2022 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 5331748. An audio replay of the conference call will be available through Thursday, February 3, 2022 by dialing 1-866-207-1041 and referencing access code number 9244107.

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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 2022 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

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PROVIDENT FINANCIAL HOLDINGS, INC.

Condensed Consolidated Statements of Financial Condition

(Unaudited -In Thousands, Except Share Information)

		December 31,			September 30,			June 30,			March 31,			December 31,
		2021			2021			2021			2021			2020
Assets
Cash and cash equivalents		$	85,680			$	88,249			$	70,270			$	71,629			$	74,001
Investment securities - held to maturity, at cost			205,065				205,821				223,306				239,480				203,098
Investment securities - available for sale, at fair value			3,118				3,316				3,587				3,802				4,158
Loans held for investment, net of allowance for loan losses of $6,608; $7,413; $7,587; $8,346 and $8,538, respectively; includes $1,555; $1,577; $1,874; $1,879 and $1,972 at fair value, respectively			852,006				859,035				850,960				840,274				855,086
Accrued interest receivable			2,862				2,909				2,999				3,060				3,126
FHLB - San Francisco stock			8,155				8,155				8,155				7,970				7,970
Premises and equipment, net			8,942				9,014				9,377				9,608				9,980
Prepaid expenses and other assets			16,577				15,782				14,942				13,473				13,308
Total assets		$	1,182,405			$	1,192,281			$	1,183,596			$	1,189,296			$	1,170,727
Liabilities and Stockholders' Equity
Liabilities:
Non interest-bearing deposits		$	112,022			$	120,883			$	123,179			$	124,043			$	109,609
Interest-bearing deposits			844,326				835,859				814,794				809,713				800,359
Total deposits			956,348				956,742				937,973				933,756				909,968
Borrowings			80,000				90,000				100,983				111,000				116,015
Accounts payable, accrued interest and other liabilities			18,123				17,304				17,360				18,790				19,760
Total liabilities			1,054,471				1,064,046				1,056,316				1,063,546				1,045,743
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; 18,229,615; 18,229,615; 18,229,615; 18,226,615 and 18,097,615 shares issued respectively; 7,389,943; 7,491,705; 7,541,469; 7,516,547 and 7,442,254 shares outstanding, respectively)			183				183				183				182				181
Additional paid-in capital			98,404				98,179				97,978				97,323				96,164
Retained earnings			200,569				199,344				197,733				195,443				194,923
Treasury stock at cost (10,839,672; 10,737,910; 10,688,146; 10,710,068 and 10,655,361 shares, respectively)			(171,280	)			(169,537	)			(168,686	)			(167,276	)			(166,364	)
Accumulated other comprehensive income, net of tax			58				66				72				78				80
Total stockholders' equity			127,934				128,235				127,280				125,750				124,984
Total liabilities and stockholders' equity		$	1,182,405			$	1,192,281			$	1,183,596			$	1,189,296			$	1,170,727

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PROVIDENT FINANCIAL HOLDINGS, INC.

Condensed Consolidated Statements of Operations

(Unaudited - In Thousands, Except Earnings Per Share)

		Quarter Ended December 31,			Six Months Ended December 31,
		2021			2020			2021			2020
Interest income:
Loans receivable, net		$	7,920			$	8,344			$	16,095			$	17,261
Investment securities			433				448				851				926
FHLB - San Francisco stock			123				100				245				200
Interest-earning deposits			35				17				66				41
Total interest income			8,511				8,909				17,257				18,428
Interest expense:
Checking and money market deposits			58				79				115				170
Savings deposits			45				54				86				132
Time deposits			199				335				414				717
Borrowings			546				803				1,091				1,605
Total interest expense			848				1,271				1,706				2,624
Net interest income			7,663				7,638				15,551				15,804
(Recovery) provision for loan losses			(1,067	)			39				(1,406	)			259
Net interest income, after (recovery) provision for loan losses			8,730				7,599				16,957				15,545
Non-interest income:
Loan servicing and other fees			444				120				630				525
Deposit account fees			325				329				637				639
Card and processing fees			399				368				804				732
Other			200				157				366				237
Total non-interest income			1,368				974				2,437				2,133
Non-interest expense:
Salaries and employee benefits			4,455				4,301				7,575				8,744
Premises and occupancy			758				865				1,663				1,768
Equipment			314				273				602				548
Professional expenses			348				402				809				816
Sales and marketing expenses			149				227				291				340
Deposit insurance premiums and regulatory assessments			136				141				273				275
Other			739				707				1,354				1,410
Total non-interest expense			6,899				6,916				12,567				13,901
Income before income taxes			3,199				1,657				6,827				3,777
Provision for income taxes			935				481				1,896				1,116
Net income		$	2,264			$	1,176			$	4,931			$	2,661
Basic earnings per share		$	0.30			$	0.16			$	0.66			$	0.36
Diluted earnings per share		$	0.30			$	0.16			$	0.65			$	0.36
Cash dividend per share		$	0.14			$	0.14			$	0.28			$	0.28

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PROVIDENT FINANCIAL HOLDINGS, INC.

Condensed Consolidated Statements of Operations - Sequential Quarters

(Unaudited - In Thousands, Except Share Information)

		Quarter Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
		2021			2021			2021			2021			2020
Interest income:
Loans receivable, net		$	7,920			$	8,175			$	7,735			$	7,860			$	8,344
Investment securities			433				418				471				452				448
FHLB - San Francisco stock			123				122				118				100				100
Interest-earning deposits			35				31				19				18				17
Total interest income			8,511				8,746				8,343				8,430				8,909
Interest expense:
Checking and money market deposits			58				57				48				50				79
Savings deposits			45				41				38				38				54
Time deposits			199				215				260				292				335
Borrowings			546				545				619				593				803
Total interest expense			848				858				965				973				1,271
Net interest income			7,663				7,888				7,378				7,457				7,638
(Recovery) provision for loan losses			(1,067	)			(339	)			(767	)			(200	)			39
Net interest income, after (recovery) provision for loan losses			8,730				8,227				8,145				7,657				7,599
Non-interest income:
Loan servicing and other fees			444				186				290				355				120
Deposit account fees			325				312				290				318				329
Card and processing fees			399				405				507				366				368
Other			200				166				154				160				157
Total non-interest income			1,368				1,069				1,241				1,199				974
Non-interest expense:
Salaries and employee benefits			4,455				3,120				2,172				4,241				4,301
Premises and occupancy			758				905				869				863				865
Equipment			314				288				293				312				273
Professional expenses			348				461				378				367				402
Sales and marketing expenses			149				142				210				130				227
Deposit insurance premiums and regulatory assessments			136				137				123				154				141
Other			739				615				878				842				707
Total non-interest expense			6,899				5,668				4,923				6,909				6,916
Income before income taxes			3,199				3,628				4,463				1,947				1,657
Provision for income taxes			935				961				1,124				386				481
Net income		$	2,264			$	2,667			$	3,339			$	1,561			$	1,176
Basic earnings per share		$	0.30			$	0.35			$	0.44			$	0.21			$	0.16
Diluted earnings per share		$	0.30			$	0.35			$	0.44			$	0.21			$	0.16
Cash dividends per share		$	0.14			$	0.14			$	0.14			$	0.14			$	0.14

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PROVIDENT FINANCIAL HOLDINGS, INC.

Financial Highlights

(Unaudited - Dollars in Thousands, Except Share Information)

		Quarter Ended		Six Months Ended
		December 31,		December 31,
		2021		2020		2021		2020
SELECTED FINANCIAL RATIOS:
Return on average assets			0.76	%		0.40	%		0.82	%		0.45	%
Return on average stockholders' equity			7.11	%		3.77	%		7.75	%		4.27	%
Stockholders' equity to total assets			10.82	%		10.68	%		10.82	%		10.68	%
Net interest spread			2.61	%		2.61	%		2.65	%		2.70	%
Net interest margin			2.64	%		2.66	%		2.67	%		2.75	%
Efficiency ratio			76.39	%		80.31	%		69.86	%		77.50	%
Average interest-earning assets to average interest-bearing liabilities			110.65	%		110.82	%		110.70	%		110.72	%
SELECTED FINANCIAL DATA:
Basic earnings per share		$	0.30		$	0.16		$	0.66		$	0.36
Diluted earnings per share		$	0.30		$	0.16		$	0.65		$	0.36
Book value per share		$	17.31		$	16.79		$	17.31		$	16.79
Shares used for basic EPS computation			7,435,218			7,441,984			7,482,544			7,439,230
Shares used for diluted EPS computation			7,482,812			7,492,040			7,529,067			7,474,661
Total shares issued and outstanding			7,389,943			7,442,254			7,389,943			7,442,254
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:
Mortgage Loans:
Single-family		$	45,720		$	12,444		$	80,140		$	35,643
Multi-family			14,920			16,432			40,238			38,279
Commercial real estate			3,005			-			4,205			1,860
Construction			1,684			688			1,684			1,828
Total loans originated and purchased for investment		$	65,329		$	29,564		$	126,267		$	77,610

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PROVIDENT FINANCIAL HOLDINGS, INC.

Financial Highlights

(Unaudited - Dollars in Thousands, Except Share Information)

		Quarter		Quarter		Quarter		Quarter		Quarter
		Ended		Ended		Ended		Ended		Ended
		12/31/21		09/30/21		06/30/21		03/31/21		12/31/20
SELECTED FINANCIAL RATIOS:
Return on average assets			0.76	%		0.89	%		1.12	%		0.53	%		0.40	%
Return on average stockholders' equity			7.11	%		8.39	%		10.65	%		4.99	%		3.77	%
Stockholders' equity to total assets			10.82	%		10.76	%		10.75	%		10.57	%		10.68	%
Net interest spread			2.61	%		2.69	%		2.50	%		2.56	%		2.61	%
Net interest margin			2.64	%		2.71	%		2.54	%		2.60	%		2.66	%
Efficiency ratio			76.39	%		63.28	%		57.12	%		79.82	%		80.31	%
Average interest-earning assets to average interest-bearing liabilities	110.65	%		110.76	%		110.77	%		110.94	%		110.82	%
SELECTED FINANCIAL DATA:
Basic earnings per share		$	0.30		$	0.35		$	0.44		$	0.21		$	0.16
Diluted earnings per share		$	0.30		$	0.35		$	0.44		$	0.21		$	0.16
Book value per share		$	17.31		$	17.12		$	16.88		$	16.73		$	16.79
Average shares used for basic EPS			7,435,218			7,529,870			7,518,542			7,462,795			7,441,984
Average shares used for diluted EPS			7,482,812			7,575,320			7,590,312			7,579,897			7,492,040
Total shares issued and outstanding			7,389,943			7,491,705			7,541,469			7,516,547			7,442,254
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:
Mortgage loans:
Single-family		$	45,720		$	34,420		$	51,574		$	38,928		$	12,444
Multi-family			14,920			25,318			36,987			21,208			16,432
Commercial real estate			3,005			1,200			1,128			830			-
Construction			1,684			-			3,598			-			688
Total loans originated and purchased for investment	$	65,329		$	60,938		$	93,287		$	60,966		$	29,564

Page 11 of 15

PROVIDENT FINANCIAL HOLDINGS, INC.

Financial Highlights

(Unaudited - Dollars in Thousands)

		As of		As of		As of		As of		As of
		12/31/21		09/30/21		06/30/21		03/31/21		12/31/20
ASSET QUALITY RATIOS ANDDELINQUENT LOANS:
Recourse reserve for loans sold		$	160		$	200		$	200		$	215		$	390
Allowance for loan losses		$	6,608		$	7,413		$	7,587		$	8,346		$	8,538
Non-performing loans to loans held for investment, net			0.33	%		0.77	%		1.02	%		1.16	%		1.20	%
Non-performing assets to total assets			0.24	%		0.55	%		0.73	%		0.82	%		0.88	%
Allowance for loan losses to gross loans held
for investment			0.77	%		0.86	%		0.88	%		0.98	%		0.99	%
Net loan charge-offs (recoveries) to average loans receivable (annualized)			(0.12)	%		(0.08)	%		-	%		-	%		-	%
Non-performing loans		$	2,802		$	6,616		$	8,646		$	9,759		$	10,270
Loans 30 to 89 days delinquent		$	3		$	20		$	-		$	-		$	350

		Quarter		Quarter		Quarter		Quarter		Quarter
		Ended		Ended		Ended		Ended		Ended
		12/31/21		09/30/21		06/30/21		03/31/21		12/31/20
Recourse provision (recovery) for loans sold		$	(40)		$	-		$	(15)		$	-		$	20
(Recovery) provision for loan losses		$	(1,067)		$	(339)		$	(767)		$	(200)		$	39
Net loan charge-offs (recoveries)		$	(262)		$	(165)		$	(8)		$	(8)		$	(9)

		As of		As of		As of		As of		As of
		12/31/2021		09/30/2021		06/30/2021		03/31/2021		12/31/2020
REGULATORY CAPITAL RATIOS (BANK):
Tier 1 leverage ratio		10.02	%	9.81	%	10.19	%	9.99	%	9.78	%
Common equity tier 1 capital ratio		19.69	%	18.90	%	18.58	%	18.77	%	18.30	%
Tier 1 risk-based capital ratio		19.69	%	18.90	%	18.58	%	18.77	%	18.30	%
Total risk-based capital ratio		20.79	%	20.12	%	19.76	%	20.02	%	19.56	%

		As of December 31,
		2021		2020
		Balance		Rate(1)		Balance		Rate(1)
INVESTMENT SECURITIES:
Held to maturity:
Certificates of deposit		$	600		0.28	%	$	1,000		0.34	%
U.S. SBA securities			1,237		0.60			1,903		0.60
U.S. government sponsored enterprise MBS			203,228		1.26			200,195		1.14
Total investment securities held to maturity		$	205,065		1.25	%	$	203,098		1.13	%
Available for sale (at fair value):
U.S. government agency MBS		$	1,965		1.88	%	$	2,551		2.77	%
U.S. government sponsored enterprise MBS			1,007		2.29			1,434		3.06
Private issue collateralized mortgage obligations			146		2.53			173		3.69
Total investment securities available for sale		$	3,118		2.04	%	$	4,158		2.91	%
Total investment securities		$	208,183		1.26	%	$	207,256		1.17	%

⁽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 12 of 15

PROVIDENT FINANCIAL HOLDINGS, INC.

Financial Highlights

(Unaudited - Dollars in Thousands)

		As of December 31,
		2021		2020
		Balance		Rate(1)		Balance		Rate(1)
LOANS HELD FOR INVESTMENT:
Held to maturity:
Single-family (1 to 4 units)		$	290,245		3.17	%	$	257,864		3.83	%
Multi-family (5 or more units)			466,467		4.04			488,412		4.16
Commercial real estate			91,236		4.84			102,551		4.67
Construction			3,501		5.35			7,135		5.99
Other mortgage			134		5.25			141		5.25
Commercial business			362		5.58			882		6.45
Consumer			78		15.00			95		15.00
Total loans held for investment			852,023		3.84	%		857,080		4.14	%
Advance payments of escrows			124					142
Deferred loan costs, net			6,467					6,402
Allowance for loan losses			(6,608)					(8,538)
Total loans held for investment, net		$	852,006				$	855,086
Purchased loans serviced by others included above		$	11,773		3.51	%	$	18,370		3.61	%

⁽¹⁾ The interest rate described in the rate column is the weighted-average interest rate or yield of all instruments, which are included in the balance of the respective line item.

		As of December 31,
		2021		2020
		Balance		Rate(1)		Balance		Rate(1)
DEPOSITS:
Checking accounts - non interest-bearing		$	112,022		-	%	$	109,609		-	%
Checking accounts - interest-bearing			349,747		0.04			314,163		0.05
Savings accounts			324,058		0.05			289,133		0.06
Money market accounts			38,838		0.16			43,310		0.14
Time deposits			131,683		0.60			153,753		0.82
Total deposits		$	956,348		0.12	%	$	909,968		0.18	%
BORROWINGS:
Overnight		$	-		-	%	$	-		-	%
Three months or less			-		-			-		-
Over three to six months			-		-			5,000		-
Over six months to one year			20,000		1.75			21,015		1.75
Over one year to two years			20,000		2.00			30,000		1.90
Over two years to three years			20,000		2.50			20,000		2.00
Over three years to four years			20,000		2.70			20,000		2.50
Over four years to five years			-		-			20,000		2.70
Over five years			-		-			-		-
Total borrowings		$	80,000		2.24	%	$	116,015		2.05	%

⁽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 13 of 15

PROVIDENT FINANCIAL HOLDINGS, INC.

Financial Highlights

(Unaudited - Dollars in Thousands)

		Quarter Ended		Quarter Ended
		December 31, 2021		December 31, 2020
		Balance		Rate(1)		Balance		Rate(1)
SELECTED AVERAGE BALANCE SHEETS:
Held to maturity:
Loans receivable, net		$	854,270			3.71	%	$	868,494		3.84	%
Investment securities			209,686			0.83			208,453		0.86
FHLB - San Francisco stock			8,155			6.03			7,970		5.02
Interest-earning deposits			90,990			0.15			64,922		0.10
Total interest-earning assets		$	1,163,101			2.93	%	$	1,149,839		3.10	%
Total assets		$	1,196,804					$	1,179,797
Deposits		$	962,116			0.12	%	$	902,701		0.21	%
Borrowings			89,022			2.43			134,826		2.36
Total interest-bearing liabilities		$	1,051,138			0.32	%	$	1,037,527		0.49	%
Total stockholders' equity		$	127,397					$	124,855

⁽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.

		Six Months Ended		Six Months Ended
		December 31, 2021		December 31, 2020
		Balance		Rate(1)		Balance		Rate(1)
SELECTED AVERAGE BALANCE SHEETS:
Held to maturity:
Loans receivable, net		$	853,505			3.77	%	$	880,733		3.92	%
Investment securities			214,797			0.79			182,344		1.02
FHLB - San Francisco stock			8,155			6.01			7,970		5.02
Interest-earning deposits			86,598			0.15			79,099		0.10
Total interest-earning assets		$	1,163,055			2.97	%	$	1,150,146		3.20	%
Total assets		$	1,195,781					$	1,180,936
Deposits		$	957,216			0.13	%	$	900,993		0.22	%
Borrowings			93,382			2.32			137,769		2.31
Total interest-bearing liabilities		$	1,050,598			0.32	%	$	1,038,762		0.50	%
Total stockholders' equity		$	127,278					$	124,599

⁽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 14 of 15

ASSET QUALITY:

		As of		As of		As of		As of		As of
		12/31/21		09/30/21		06/30/21		03/31/21		12/31/20
Loans on non-accrual status (excluding restructured loans):
Mortgage loans:
Single-family		$	745		$	739		$	882		$	896		$	2,062
Multi-family			1,077			775			781			786			-
Total			1,822			1,514			1,663			1,682			2,062
Accruing loans past due 90 days or more:			-			-			-			-			-
Total			-			-			-			-			-
Restructured loans on non-accrual status:
Mortgage loans:
Single-family			980			5,102			6,983			8,077			8,208
Total			980			5,102			6,983			8,077			8,208
Total non-performing loans (1)			2,802			6,616			8,646			9,759			10,270
Real estate owned, net			-			-			-			-			-
Total non-performing assets		$	2,802		$	6,616		$	8,646		$	9,759		$	10,270

⁽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.

Page 15 of 15