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 28, 2020

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    Trading Symbol(s)    Name of each exchange on which registered
Common Stock, par value $.01 per share
  
PROV
  
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 28, 2020, 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, 2020. 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 28, 2020, the Corporation posted its Investor Presentation for the quarter ended March 31, 2020 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

The following exhibits are being furnished herewith and this list shall constitute the exhibit index:










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 28, 2020 
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 OF FISCAL 2020 RESULTS


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

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

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

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


    Riverside, Calif. – April 28, 2020 – Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the holding company for Provident Savings Bank, F.S.B. (“Bank”), today announced third quarter earnings results for the fiscal year ending June 30, 2020.
            For the quarter ended March 31, 2020, the Company reported net income of $1.14 million, or $0.15 per diluted share (on 7.60 million average diluted shares outstanding), in contrast to the net loss of $151,000, or $(0.02) per diluted share (on 7.51 million average diluted shares outstanding), in the comparable period a year ago. Compared to the same quarter last year, the increase in earnings was primarily attributable to lower non-interest expenses (mainly, lower salaries and employee benefits expenses related to fewer employees resulting from the scaling back of saleable single-family loan

Page 1 of 19
 

originations), partly offset by lower non-interest income (mainly, lower gain on sale of loans), a higher provision for loan losses and lower net interest income.
“Like all companies, we began to see the early implications of the COVID-19 pandemic in the March 2020 quarter. As a result, we increased our provision for loan losses, we tightened our underwriting criteria for new loan originations and purchases, and we began developing programs to help those customers who may be impacted by this event,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company.  “Nonetheless, we remain profitable, strongly capitalized and well-positioned to serve the communities of the Inland Empire,” said Mr. Blunden.
Mr. Blunden went on to say, “We have suspended foreclosure sales, offered late fee waivers and implemented a payment forbearance plan, among other actions.  Our branches are open and operating with normal branch hours.  We’ve implemented social distancing recommendations, sanitizing and cleaning procedures, and are generally operating under state, county, and city recommendations for essential service providers.”
“Provident plays an important role in the Inland Empire and I specifically wish to recognize and thank our employees who are working diligently to support our customers and communities under difficult circumstances,” Mr. Blunden concluded.
Return on average assets for the third quarter of fiscal 2020 was 0.41 percent in contrast to (0.05) percent for the same period of fiscal 2019; and return on average stockholders’ equity for the third quarter of fiscal 2020 was 3.70 percent in contrast to (0.49) percent for the comparable period of fiscal 2019.
On a sequential quarter basis, the $1.14 million net income for the third quarter of fiscal 2020 reflects a $1.26 million or 52 percent decrease from $2.40 million in the

Page 2 of 19
 

second quarter of fiscal 2020. The decrease in earnings for the third quarter of fiscal 2020 compared to the second quarter of fiscal 2020 was primarily attributable to an $896,000 higher provision for loan losses, a $749,000 reduction in net interest income and a $243,000 decrease in non-interest income (mainly reflecting $236,000 of lower loan servicing and other fees). Diluted earnings per share for the third quarter of fiscal 2020 were $0.15 per share, down 52 percent from the $0.31 per share during the second quarter of fiscal 2020. Return on average assets was 0.41 percent for the third quarter of fiscal 2020 compared to 0.87 percent in the second quarter of fiscal 2020; and return on average stockholders’ equity for the third quarter of fiscal 2020 was 3.70 percent, compared to 7.81 percent for the second quarter of fiscal 2020.
For the nine months ended March 31, 2020 net income increased $2.48 million, or 68 percent, to $6.11 million from $3.63 million in the comparable period ended March 31, 2019; and diluted earnings per share for the nine months ended March 31, 2020 increased 67 percent to $0.80 per share (on 7.61 million average diluted shares outstanding) from $0.48 per share (on 7.56 million average diluted shares outstanding) for the comparable nine month period last year. Compared to the same period last year, the increase in earnings was primarily attributable to a $13.28 million decrease in non-interest expense; partly offset by a $7.68 million decrease in non-interest income (mainly, a $7.23 million decrease in the gain on sale of loans) and a $1.12 million change in the provision for loan losses to a $671,000 provision from a $450,000 recovery. The decrease in non-interest expense was mainly attributable to a $9.80 million decrease in salaries and employee benefits expenses (primarily related to fewer employees resulting from the

Page 3 of 19
 

scaling back of saleable single-family loan originations) and a $1.30 million decrease in premises and occupancy expenses.
Net interest income decreased $722,000, or eight percent, to $8.89 million in the third quarter of fiscal 2020 from $9.61 million for the same quarter of fiscal 2019, attributable to a decrease in the net interest margin, and to a lesser extent, a lower average interest-earning assets balance. The net interest margin during the third quarter of fiscal 2020 decreased 23 basis points to 3.30 percent from 3.53 percent in the same quarter last year, primarily due to a decrease in the average yield of interest-earning assets and a slight increase in the average cost of interest-bearing liabilities. The average yield on interest-earning assets decreased by 22 basis points to 3.87 percent in the third quarter of fiscal 2020 from 4.09 percent in the same quarter last year reflecting in part recent significant decreases in the targeted Federal Funds Rate in response to the COVID-19 pandemic; while the average cost of interest-bearing liabilities increased by one basis point to 0.64 percent in the third quarter of fiscal 2020 from 0.63 percent in the same quarter last year. The average balance of interest-earning assets decreased by $11.3 million, or one percent, to $1.08 billion in the third quarter of fiscal 2020 from $1.09 billion in the same quarter last year. The average balance of interest-bearing liabilities decreased by $11.1 million, or one percent, to $967.9 million in the third quarter of fiscal 2020 from $979.0 million in the same quarter last year.
The average balance of loans receivable (including loans held for sale in the prior year) increased by $14.5 million, or two percent, to $929.5 million in the third quarter of fiscal 2020 from $915.0 million in the same quarter of fiscal 2019, primarily due to an increase in loans held for investment, partly offset by a decrease in loans held for sale.

Page 4 of 19
 

There were no loans held for sale during the third quarter of fiscal 2020. The average yield on loans receivable decreased by 24 basis points to 4.14 percent in the third quarter of fiscal 2020 from an average yield of 4.38 percent in the same quarter of fiscal 2019. Net deferred loan cost amortization in the third quarter of fiscal 2020 increased 152% to $451,000 from $179,000 in the same quarter of fiscal 2019 due primarily to higher loan payoffs. Total loans originated and purchased for investment in the third quarter of fiscal 2020 were $28.8 million, down 35 percent from $44.0 million in the same quarter of fiscal 2019. Loan principal payments received in the third quarter of fiscal 2020 were $55.7 million, up 53 percent from $36.5 million in the same quarter of fiscal 2019.
The average balance of investment securities decreased by $23.3 million, or 23 percent, to $78.6 million in the third quarter of fiscal 2020 from $101.9 million in the same quarter of fiscal 2019. The average yield on investment securities increased 11 basis points to 2.43 percent in the third quarter of fiscal 2020 from 2.32 percent for the same quarter of fiscal 2019. The increase in the average yield was primarily attributable to a lower premium amortization ($99,000 vs. $181,000).
In the third quarter of fiscal 2020, the Federal Home Loan Bank – San Francisco (“FHLB”) distributed a $144,000 cash dividend to the Bank on its FHLB stock, unchanged from the same quarter last year.
The average balance of the Company’s interest-earning deposits, primarily cash with the Federal Reserve Bank of San Francisco, decreased $2.5 million, or four percent, to $61.9 million in the third quarter of fiscal 2020 from $64.4 million in the same quarter of fiscal 2019. The average yield earned on interest-earning deposits in the third quarter of fiscal 2020 was 1.20 percent, down 120 basis points from 2.40 percent in the same

Page 5 of 19
 

quarter of fiscal 2019 largely as a result of decreases in the targeted Federal Funds Rate since July 2019.
Average deposits decreased $36.4 million, or four percent, to $836.9 million in the third quarter of fiscal 2020 from $873.3 million in the same quarter of fiscal 2019, primarily due to a managed run-off of higher cost time deposits over the last year consistent with the reduction in the Bank’s funding needs resulting from no loans originated for sale during the first nine months of fiscal 2020.  The average cost of deposits improved, decreasing by three basis points to 0.36 percent in the third quarter of fiscal 2020 from 0.39 percent in the same quarter last year.
Transaction account balances or “core deposits” increased slightly to $650.2 million at March 31, 2020 from $648.1 million at June 30, 2019, while time deposits decreased $7.5 million, or four percent, to $185.6 million at March 31, 2020 from $193.1 million at June 30, 2019.
The average balance of borrowings, which consisted of FHLB advances, increased $25.3 million, or 24 percent, to $131.1 million while the average cost of borrowings decreased 17 basis points to 2.44 percent in the third quarter of fiscal 2020, compared to an average balance of $105.8 million with an average cost of 2.61 percent in the same quarter of fiscal 2019. The increase in the average balance of borrowings was primarily due to new long-term borrowings with a lower average cost obtained during the first quarter of fiscal 2020.
During the third quarter of fiscal 2020, the Company recorded a provision for loan losses of $874,000, up from only $4,000 recorded during the same period of fiscal 2019 and up from the recovery of $22,000 recorded in the second quarter of fiscal 2020


Page 6 of 19
 

(sequential quarter).  The increase in the provision for loan losses was primarily due to a qualitative component established in our allowance for loan losses methodology in response to the COVID-19 pandemic which has negatively impacted the current economic environment.
Non-performing assets, with underlying collateral located in California, decreased $2.6 million, or 42 percent, to $3.6 million, or 0.33 percent of total assets, at March 31, 2020, compared to $6.2 million, or 0.57 percent of total assets, at June 30, 2019. The non-performing loans at March 31, 2020 are comprised of 16 single-family loans ($3.6 million) and one commercial business loan ($34,000). At both March 31, 2020 and June 30, 2019, there was no real estate owned.
Net loan recoveries for the quarter ended March 31, 2020 were $15,000 or 0.01 percent (annualized) of average loans receivable, similar to net loan recoveries of $15,000 or 0.01 percent (annualized) of average loans receivable for the quarter ended March 31, 2019 and net loan recoveries of $14,000 or 0.01 percent (annualized) of average loans receivable for the quarter ended December 31, 2019 (sequential quarter).
Classified assets at March 31, 2020 were $15.1 million, comprised of $11.4 million of loans in the special mention category, $3.7 million of loans in the substandard category and no real estate owned; while classified assets at June 30, 2019 were $16.2 million, comprised of $8.6 million of loans in the special mention category, $7.6 million of loans in the substandard category and no real estate owned.
For the quarter ended March 31, 2020, no new loans were restructured from their original terms and classified as restructured loans. The outstanding balance of restructured loans at March 31, 2020 was $1.8 million (six loans), down 53 percent from

Page 7 of 19
 
$3.8 million (eight loans) at June 30, 2019. As of March 31, 2020, all of the restructured loans were classified as substandard non-accrual. As of March 31, 2020, 39% or $683,000 of the restructured loans have a current payment status.
The allowance for loan losses was $7.8 million at March 31, 2020, or 0.85 percent of gross loans held for investment, compared to $7.1 million at June 30, 2019, or 0.80 percent of gross loans held for investment. Management believes that, based on currently available information, the allowance for loan losses is sufficient to absorb potential losses inherent in loans held for investment at March 31, 2020.
Non-interest income decreased by $1.95 million, or 64 percent, to $1.10 million in the third quarter of fiscal 2020 from $3.05 million in the same period of fiscal 2019, primarily as a result of no loan sales during the current quarter. The gain on sale of loans during the third quarter of fiscal 2019 was $1.72 million. On a sequential quarter basis, non-interest income decreased $243,000, or 18 percent, primarily as a result of a decrease in loan servicing and other loan fees. There were no loans originated for sale during the current or sequential quarters.
Non-interest expenses decreased $5.50 million, or 42 percent, to $7.50 million in the third quarter of fiscal 2020 from $13.00 million in the same quarter last year.  The decrease was due primarily to lower salaries and employee benefits expenses resulting from fewer employees and lesser reductions in premises and occupancy and other non-interest expense consistent with the scaling back of saleable single-family mortgage loan originations. On a sequential quarter basis, non-interest expenses remained virtually unchanged, decreasing $49,000 or one percent from $7.55 million.

Page 8 of 19
 
 

The Company’s efficiency ratio in the third quarter of fiscal 2020 was 75 percent, an improvement from 103 percent in the same quarter last year but an increase from 69 percent in the second quarter of fiscal 2020 (sequential quarter).
The Company’s provision for income tax was $467,000 for the third quarter of fiscal 2020 in contrast to an income tax benefit of $189,000 in the same quarter last year. The effective tax rate in the third quarter of fiscal 2020 was 28.97%. The Company believes that the tax provision recorded in the third quarter of fiscal 2020 reflects its current federal and state income tax obligations.
The Company repurchased 46,756 shares of its common stock during the quarter ended March 31, 2020 at an average cost of $18.95 per share. As of March 31, 2020, a total of 118,040 shares or 32 percent of the shares authorized for repurchase under the April 2018 stock repurchase plan were purchased at an average cost of $19.57 per share. The April 2018 stock repurchase plan expired on April 26, 2020.
The Bank currently operates 13 retail/business banking offices in Riverside County and San Bernardino County (Inland Empire).
The Company will host a conference call for institutional investors and bank analysts on Wednesday, April 29, 2020 at 9:00 a.m. (Pacific) to discuss its financial results.  The conference call can be accessed by dialing 1-877-226-8216 and referencing access code number 8875397.  An audio replay of the conference call will be available through Wednesday, May 6, 2020 by dialing 1-866-207-1041 and referencing access code number 7751893.
For more financial information about the Company please visit the website at www.myprovident.com and click on the “Investor Relations” section.

Page 9 of 19
 
 
Safe-Harbor Statement

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

Contacts: 
Craig G. Blunden
Donavon P. Ternes
 
Chairman and 
Chief Executive Officer 

President, Chief Operating Officer,
and Chief Financial Officer
 

Page 10 of 19
 
 


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

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

Page 11 of 19

 
 

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


Page 12 of 19
 
 

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

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


Page 13 of 19
 
 



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


Page 14 of 19

 
 


PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands, Except Share Information)
         
       
   
Quarter
Ended
    
Quarter
Ended
    
Quarter
Ended
    
Quarter
Ended
    
Quarter
Ended
  
   
03/31/20
    
12/31/19
    
09/30/19
    
06/30/19
    
03/31/19
  
SELECTED FINANCIAL RATIOS:
                              
Return (loss) on average assets
   
0.41
%
    
0.87
%
    
0.95
%
    
0.29
%
    
(0.05
)%
Return (loss) on average stockholders’ equity
   
3.70
%
    
7.81
%
    
8.46
%
    
2.60
%
    
(0.49
)%
Stockholders’ equity to total assets
   
11.12
%
    
11.18
%
    
11.05
%
    
11.12
%
    
10.83
%
Net interest spread
   
3.23
%
    
3.53
%
    
3.58
%
    
3.46
%
    
3.46
%
Net interest margin
   
3.30
%
    
3.59
%
    
3.64
%
    
3.52
%
    
3.53
%
Efficiency ratio
   
75.12
%
    
68.78
%
    
67.95
%
    
90.38
%
    
102.65
%
Average interest-earning assets to average
    interest-bearing liabilities
   
111.39
%
    
111.43
%
    
111.61
%
    
111.45
%
    
111.28
%
                                         
SELECTED FINANCIAL DATA:
                                        
Basic earnings (loss) per share
 

$   0.15
    

$   0.32
    

$   0.34
    

$   0.10
    

$  (0.02
)
Diluted earnings (loss) per share
 

$   0.15
    

$   0.31
    

$   0.33
    

$   0.10
    

$  (0.02
)
Book value per share
 

$ 16.56
    

$ 16.54
    

$ 16.33
    

$ 16.12
    

$ 16.17
  
Average shares used for basic EPS
   
7,468,932
      
7,482,300
      
7,482,435
      
7,496,457
      
7,506,770
  
Average shares used for diluted EPS
   
7,590,348
      
7,658,050
      
7,647,763
      
7,626,661
      
7,506,770
  
Total shares issued and outstanding
   
7,436,315
      
7,483,071
      
7,479,682
      
7,486,106
      
7,497,357
  
                                         
LOANS ORIGINATED AND PURCHASED FOR INVESTMENT:
                                        
Mortgage Loans:
                                        
Single-family
 
$
9,654
    
$
52,671
    
$
33,629
    
$
31,982
    
$
15,288
  
Multi-family
   
12,850
      
20,164
      
56,476
      
14,513
      
21,546
  
Commercial real estate
   
5,570
      
6,479
      
2,419
      
2,882
      
5,197
  
Construction
   
774
      
2,313
      
896
      
1,846
      
1,970
  
Consumer loans
   
-
      
1
      
-
      
-
      
-
  
   Total loans originated and purchased for
      investment
 
$
28,848
    
$
81,628
    
$
93,420
    
$
51,223
    
$
44,001
  
                                         
LOANS ORIGINATED FOR SALE:
                                        
Retail originations
 
$
-
    
$
-
    
$
-
    
$
9,593
    
$
72,353
  
Wholesale originations
   
-
      
-
      
-
      
4,057
      
38,353
  
   Total loans originated for sale
 
$
-
    
$
-
    
$
-
    
$
13,650
    
$
110,706
  
                                         
LOANS SOLD:
                                        
Servicing released
 
$
-
    
$
-
    
$
-
    
$
40,956
    
$
134,264
  
Servicing retained
   
-
      
-
      
-
      
2,003
      
2,409
  
   Total loans sold
 
$
-
    
$
-
    
$
-
    
$
42,959
    
$
136,673
  
                                         

Page 15 of 19
 
 


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


   
As of
    
As of
    
As of
    
As of
    
As of
  
   
03/31/20
    
12/31/19
    
09/30/19
    
06/30/19
    
03/31/19
  
ASSET QUALITY RATIOS AND
  DELINQUENT LOANS:
                              
Recourse reserve for loans sold
 
$
250
    
$
250
    
$
250
    
$
250
    
$
250
  
Allowance for loan losses
 
$
7,810
    
$
6,921
    
$
6,929
    
$
7,076
    
$
7,080
  
Non-performing loans to loans held for
  investment, net
   
0.40
%
    
0.36
%
    
0.57
%
    
0.71
%
    
0.69
%
Non-performing assets to total assets
   
0.33
%
    
0.31
%
    
0.47
%
    
0.57
%
    
0.55
%
Allowance for loan losses to gross loans held
                                        
  for investment
   
0.85
%
    
0.73
%
    
0.74
%
    
0.80
%
    
0.79
%
Net loan charge-offs (recoveries) to average    
  loans receivable (annualized)
    
(0.01
)%
    
(0.01
)%
    
(0.02
)%
    
(0.01
)%
    
(0.01
)%
Non-performing loans
 
$
3,635
    
$
3,427
    
$
5,230
    
$
6,218
    
$
6,115
  
Loans 30 to 89 days delinquent
 
$
2,827
    
$
986
    
$
990
    
$
665
    
$
699
  
   
Quarter
Ended
    
Quarter
Ended
    
Quarter
Ended
    
Quarter
Ended
    
Quarter
Ended
  
   
03/31/20
    
12/31/19
    
09/30/19
    
06/30/19
    
03/31/19
  
Provision (recovery) for loan losses
 
$
874
    
$
(22
)
  
$
(181
)
  
$
(25
)
  
$
4
  
Net loan charge-offs (recoveries)
 
$
(15
)
  
$
(14
)
  
$
(34
)
  
$
(21
)
  
$
(15
)
                                         
   
As of
    
As of
    
As of
    
As of
    
As of
  
   
03/31/20
    
12/31/19
    
09/30/19
    
06/30/19
    
03/31/19
  
REGULATORY CAPITAL RATIOS (BANK):
                                       
Tier 1 leverage ratio
   
10.36
%
    
10.24
%
    
10.21
%
    
10.50
%
    
10.17
%
Common equity tier 1 capital ratio
    
17.26
%
    
16.62
%
    
16.32
%
    
18.00
%
    
17.24
%
Tier 1 risk-based capital ratio
   
17.26
%
    
16.62
%
    
16.32
%
    
18.00
%
    
17.24
%
Total risk-based capital ratio
   
18.45
%
    
17.65
%
    
17.37
%
    
19.13
%
    
18.34
%
                                         

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


Page 16 of 19

 
 

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

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

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


Page 17 of 19


 
 



PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands)
  
 
Quarter Ended
    
Quarter Ended
  
 
March 31, 2020
    
March 31, 2019
  
 
Balance
    
Rate(1)
    
Balance
    
Rate(1)
  
                     
SELECTED AVERAGE BALANCE SHEETS:
                    
Loans receivable, net (2)
 
$
929,485
      
4.14
%
  
$
915,049
      
4.38
%
Investment securities
   
78,632
      
2.43
%
    
101,851
      
2.32
%
FHLB – San Francisco stock
   
8,199
      
7.03
%
    
8,199
      
7.03
%
Interest-earning deposits
    
61,900
      
1.20
%
    
64,390
      
2.40
%
Total interest-earning assets
 
$
1,078,216
      
3.87
%
  
$
1,089,489
      
4.09
%
Total assets
 
$
1,110,158
            
$
1,119,717
          
                               
Deposits
 
$
836,855
      
0.36
%
  
$
873,252
      
0.39
%
Borrowings
   
131,075
      
2.44
%
    
105,793
      
2.61
%
Total interest-bearing liabilities
 
$
967,930
      
0.64
%
  
$
979,045
      
0.63
%
Total stockholders’ equity
 
$
123,786
            
$
122,681
          

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


Page 18 of 19

 
 


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

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


Page 19 of 19


Exhibit 99.2