Financial Performance - Net interest income for the quarter ended December 31, 2022, was $9,385 thousand, an increase of 9.43% compared to $7,663 thousand for the same quarter in 2021[11] - Net income for the six months ended December 31, 2022, was $4,461 thousand, a decrease of 9.53% from $4,931 thousand for the same period in 2021[12] - Basic earnings per share for the quarter ended December 31, 2022, was $0.33, compared to $0.30 for the same quarter in 2021, reflecting an increase of 10%[11] - Net income for the quarter ended December 31, 2022, was $2,371,000, a 4.72% increase from $2,264,000 in the same quarter of 2021[12] - Basic earnings per share for the six months ended December 31, 2022, was $0.62, a decrease from $0.66 for the same period in 2021[32] - Diluted earnings per share for the six months ended December 31, 2022, was $0.61, compared to $0.65 for the same period in 2021[32] Asset and Liability Management - Total assets increased to $1,271,042 thousand as of December 31, 2022, up from $1,187,038 thousand as of June 30, 2022, representing a growth of 7.06%[9] - Total liabilities increased to $1,141,801,000 as of December 31, 2022, compared to $1,058,388,000 on June 30, 2022, an increase of 7.85%[9] - Stockholders' equity as of December 31, 2022, was $129,241,000, a slight increase from $128,650,000 on June 30, 2022[9] - Total deposits decreased to $945,302 thousand as of December 31, 2022, from $955,504 thousand as of June 30, 2022, a decline of 1.06%[9] Loan Performance - Total loans held for investment increased from $937,970,000 to $1,037,213,000, representing an increase of approximately 10.6% from June 30, 2022 to December 31, 2022[43] - The total gross loans held for investment categorized as "Pass" amounted to $1,035,108,000 as of December 31, 2022, compared to $936,238,000 as of June 30, 2022, indicating a growth of approximately 10.6%[48] - The allowance for loan losses increased from $5,564,000 to $5,830,000, reflecting a rise of approximately 4.8%[43] - The total charge-offs for the quarter were zero, maintaining a consistent trend from the previous year[50] - The total loans held for investment, net of fair value adjustments, amounted to $1,040,337,000 as of December 31, 2022, up from $939,992,000 as of June 30, 2022[43] Non-Interest Income - Total non-interest income for the quarter ended December 31, 2022, was $956,000, a decrease of 30.1% compared to $1,368,000 in the same quarter of 2021[120] - Loan servicing and other fees for the quarter ended December 31, 2022, were $115,000, down 74.1% from $444,000 in the prior year[120] - Total non-interest income for the six months ended December 31, 2022, was $1,959,000, down 19.6% from $2,437,000 in the same period in 2021[120] Investment Securities - The Corporation held total investment securities of $150,796,000 as of December 31, 2022, with unrealized losses of $19,869,000[34] - The total investment securities held to maturity decreased from $185,745,000 as of June 30, 2022, to $168,232,000 as of December 31, 2022[34] - The fair value of investment securities available for sale decreased from $2,676,000 as of June 30, 2022, to $2,377,000 as of December 31, 2022[100] Loan Loss Provisions - Provision for loan losses was $191 thousand for the quarter ended December 31, 2022, compared to a recovery of $1,067 thousand for the same quarter in 2021, indicating a significant change in asset quality[11] - The allowance for loan losses as a percentage of gross loans held for investment decreased to 0.56% from 0.77% year-over-year[50] - The total allowance for loan losses at the end of the quarter on December 31, 2022, was $71,000, compared to $99,000 at the end of the same quarter in 2021[84] Cash Flow and Dividends - The net cash provided by operating activities for the six months ended December 31, 2022, was $5,212,000, slightly lower than $5,685,000 for the same period in 2021[23] - The company paid cash dividends of $0.14 per share in the quarter ended December 31, 2022[14] - Cash dividends of $0.28 per share were paid in the six months ended December 31, 2022, compared to $0.28 per share in the same period of 2021[19] Market and Economic Conditions - The corporation is in the process of evaluating the impact of new accounting standards related to credit losses, which may affect future financial statements[29] - The corporation's revenue from contracts with customers is recognized in non-interest income, with the largest portion derived from interest income, which is outside the scope of ASC 606[117]

Financial Data and Key Metrics Changes - In the most recent quarter, the company originated $74.3 million of loans held for investment, a decline from $84.6 million in the prior sequential quarter [9] - The allowance for loan losses to gross loans held for investment decreased to 56 basis points on December 31, 2022, from 57 basis points on September 30, 2022 [10] - The net interest margin remained unchanged at 3.05% for the quarter ended December 31, 2022, despite a 27 basis point increase in the average yield on total interest-earning assets [11] - Operating expenses decreased to $6.8 million in the December 2022 quarter, lower than the stable run rate of approximately $6.9 million per quarter [12] Business Line Data and Key Metrics Changes - Loans held for investment increased by approximately 5% compared to September 30, 2022, with the increase in single-family loans offsetting small declines in multifamily commercial real estate and construction loan categories [18] - The company experienced $28 million of loan principal payoffs and payments, down from $31.7 million in the September 2022 quarter [9] Market Data and Key Metrics Changes - Competition remains elevated for loan originations, with many borrowers reducing their new activity due to rising mortgage interest rates [17] - There is increased demand for single-family adjustable-rate mortgage products as a result of higher fixed-rate mortgage interest rates [17] Company Strategy and Development Direction - The short-term strategy for balance sheet management remains unchanged, focusing on leveraging the balance sheet with prudent loan portfolio growth [13] - The company aims to maintain its cash dividend and recognizes stock buyback programs as valid capital management tools, having repurchased approximately 103,000 shares of common stock in the December 2022 quarter [14][24] Management's Comments on Operating Environment and Future Outlook - Current credit quality is holding up well, with only $4,000 of early-stage delinquency balances as of December 31, 2022, and nonperforming assets decreased to $956,000 [19] - The company anticipates that loan originations in the March 2023 quarter will decline from this quarter and may drop below the range of recent prior quarters, which has been between $65 million and $95 million [17] Other Important Information - The company distributed approximately $2 million of cash dividends to shareholders and repurchased approximately $2.2 million worth of common stock for the fiscal year-to-date [24] - The total interest-earning assets composition improved during the quarter with an increase in the average balance of loans receivable [13] Q&A Session Summary - There were no questions from the phone lines during the Q&A session [21]

Table of Contents For the quarterly period ended September 30, 2022 [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to _________________ Commission File Number 000-28304 PROVIDENT FINANCIAL HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 33-0704889 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (State or other jurisdiction of incorporation o ...

Financial Data and Key Metrics Changes - In Q1 2023, the company originated $84.6 million in loans held for investment, a slight decline from $85.9 million in the previous quarter [6] - Loan principal payments and pay-offs were $31.7 million, down from $41.3 million in the June 2022 quarter [7] - Non-performing assets decreased to $964,000 from $1.4 million on June 30, 2022 [12] - The net interest margin expanded by 12 basis points to 3.05% for the quarter ended September 30, 2022 [13][15] - Operating expenses increased to $6.9 million, consistent with a stable run rate [17] Business Line Data and Key Metrics Changes - Loans held for investment increased by approximately 6% compared to June 30, 2022, with increases in single-family and multi-family loans offsetting declines in commercial real estate and construction loans [10] - The company is seeing more demand for single-family adjustable-rate mortgage products due to higher fixed mortgage interest rates [8] Market Data and Key Metrics Changes - Competition for loan originations remains elevated, with many borrowers reducing new activity due to rising mortgage interest rates [7] - The average cost of deposits increased by just 2 basis points to 13 basis points for the quarter ended September 30, 2022 [14] Company Strategy and Development Direction - The company aims to leverage its balance sheet with prudent loan portfolio growth, maintaining a stable cash dividend and engaging in stock buyback programs [20][21] - The company is cautious about expanding its commercial real estate portfolio, particularly in retail and office sectors, due to changing market dynamics [28][30] Management's Comments on Operating Environment and Future Outlook - Management noted that current credit quality is holding up well, with minimal early-stage loan balances [11] - The company expects net interest margin to continue its near-term expansion due to higher mortgage interest rates affecting new loan production [16] - There is an expectation of some pressure on operating expenses due to increased wages and inflation [17][41] Other Important Information - The company has not adopted CECL yet, with plans to do so on July 1, 2023 [32] - The company repurchased approximately 50,000 shares of common stock in the September 2022 quarter [21] Q&A Session Summary Question: Loan pricing for single-family and multi-family production - New loan originations are coming in at rates in the high fives to low sixes across all products [27] Question: Appetite for adding CRE credits - The company is cautious about growing the CRE category significantly, particularly in retail and office due to market conditions [28][30] Question: Plans to control deposit costs - The company plans to manage deposit costs by maintaining a stable retail deposit base and responding to competitive rates on CDs [35][36] Question: Active secondary market for mortgage loans - There is an active secondary market, but rising interest rates have led to price discovery challenges [38][39] Question: Non-interest expense growth expectations - The company expects a stable run rate of about $6.9 million for operating expenses, with potential low-single-digit pressure from inflation [41]

Deposits and Loans - As of June 30, 2022, total deposits amounted to $955.5 million, reflecting a net increase of $17.5 million from the previous year[118] - Interest-bearing checking accounts increased by $8.4 million to $335.8 million, representing a growth of 2.57%[116] - Savings accounts saw an increase of $26.3 million, reaching $333.6 million, which is a growth of 8.57%[116] - Time deposits decreased from $140.4 million in 2021 to $121.1 million in 2022, a decline of 13.7%[117] - The Bank's total mortgage loans pledged to the FHLB – San Francisco were $570.4 million as of June 30, 2022, down from $607.0 million in 2021[119] - As of June 30, 2022, multi-family mortgage loans were $464.7 million, representing 49.5% of loans held for investment, down from $484.4 million (56.8%) in 2021[46] - The Bank originated $105.9 million in multi-family and commercial real estate loans during fiscal 2022, compared to $88.8 million in 2021, with no purchases made in 2022[46] - The Bank's commercial business loans increased by 42% to $1.2 million as of June 30, 2022, from $849,000 in 2021[63] - Total loans originated for investment increased to $299.8 million in 2022, up from $215.0 million in 2021, representing a 39.4% increase[70] - The total gross loans held for investment increased to $937.97 million at June 30, 2022, from $852.08 million at June 30, 2021[103] Borrowings and Financing - The weighted-average interest rate on borrowings from the FHLB – San Francisco was 2.20% as of June 30, 2022, compared to 2.19% in 2021[119] - The Bank's remaining financing availability was $310.3 million as of June 30, 2022, an increase from $296.8 million in 2021[121] - As of June 30, 2022, the Bank had $85.0 million of outstanding advances from the FHLB – San Francisco, down from $101.0 million in 2021, representing a decrease of 15.8%[137] - The Bank's total insured time deposits at June 30, 2022, were $111.970 million, compared to $132.067 million in 2021, a decrease of 15.3%[118] Capital and Compliance - The Bank's capital requirements include a Tier 1 leverage ratio of 4%, a CET1 capital ratio of 4.5%, a Tier 1 capital ratio of 6%, and a total capital ratio of 8%[148] - As of June 30, 2022, the Bank was categorized as "well capitalized" under the regulatory framework for prompt corrective action[154] - The Bank's ability to pay dividends is limited if it does not maintain the required capital conservation buffer[150] - The Corporation received a satisfactory rating for its compliance with the Community Reinvestment Act during its last examination[161] - The Corporation is subject to capital regulations that apply to its savings institution subsidiaries, but not to the Corporation itself unless determined otherwise by the FRB[176] Employee and Workforce - The Bank had 162 full-time equivalent employees as of June 30, 2022, with an average tenure of approximately 8.6 years, a decrease of 15% from 10.1 years in the previous year[200][201] - Employee turnover was 39.8% in fiscal 2022, up from 34.1% in fiscal 2021[203] - Approximately 73% of the workforce was female, and 27% was male as of June 30, 2022[201] Non-Performing Assets and Loan Losses - Non-performing assets decreased to $1.4 million, or 0.12% of total assets, as of June 30, 2022, compared to $8.6 million, or 0.73% of total assets, in 2021[76] - The allowance for loan losses was $5.6 million, or 0.59% of gross loans held for investment, compared to $7.6 million, or 0.88%, at June 30, 2021[100] - A recovery of $2.5 million from the allowance for loan losses was recorded in fiscal 2022, compared to a recovery of $708,000 in fiscal 2021[100] - Non-performing loans decreased to $1.4 million, or 0.15% of net loans held for investment, from $8.6 million, or 1.02%, in the previous year[103] Investment Securities - The investment securities portfolio was $188.4 million at June 30, 2022, down from $226.9 million at June 30, 2021[107] - The Bank purchased $19.0 million of held to maturity mortgage-backed securities during fiscal 2022, compared to $158.0 million in fiscal 2021[107] - The total investment securities held to maturity were $185,745,000, representing 98.47% of total investment securities[108] - The weighted average yield for held to maturity securities was 1.36% as of June 30, 2022[110] Regulatory and Legal Compliance - The USA Patriot Act mandates financial institutions to develop programs to prevent money laundering and terrorist activities[162] - Non-compliance with federal or state privacy and cybersecurity laws could lead to substantial fines and reputational harm[170] - The Corporation is subject to a broad array of federal and state consumer protection laws and regulations[172] - The OCC has primary enforcement responsibility over federally chartered savings institutions and can impose civil penalties for violations[163]

Provident Financial Holdings, Inc. (NASDAQ:PROV) Q4 2022 Earnings Conference Call July 27, 2022 ET Company Participants Craig Blunden - Chairman & Chief Executive Officer Donavon Ternes - President, Chief Operating & Chief Financial Officer Conference Call Participants Nick Cucharale - Piper Sandler Tim Coffey - Janney Operator Ladies and gentlemen, thank you for standing by. Welcome to the Provident Financial Holdings Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-o ...

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%201%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited interim condensed consolidated financial information, including statements, management's discussion, market risk, and controls [Financial Statements](index=4&type=section&id=ITEM%201%20-%20Financial%20Statements) This section presents the unaudited interim condensed consolidated financial statements, including financial condition, operations, equity, and cash flows, with detailed notes [Condensed Consolidated Statements of Financial Condition](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time Consolidated Financial Condition (in thousands) | Metric | March 31, 2022 | June 30, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$1,187,834** | **$1,183,596** | | Loans held for investment, net | $893,563 | $850,960 | | Investment securities | $198,523 | $226,893 | | Cash and cash equivalents | $60,121 | $70,270 | | **Total Liabilities** | **$1,060,217** | **$1,056,316** | | Total deposits | $963,500 | $937,973 | | Borrowings | $80,000 | $100,983 | | **Total Stockholders' Equity** | **$127,617** | **$127,280** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net income over specific periods Consolidated Operations Highlights (in thousands, except per share data) | Metric | Quarter Ended Mar 31, 2022 | Quarter Ended Mar 31, 2021 | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $7,538 | $7,457 | $23,089 | $23,261 | | (Recovery) provision for loan losses | ($645) | ($200) | ($2,051) | $59 | | Non-interest Income | $1,114 | $1,199 | $3,551 | $3,332 | | Non-interest Expense | $6,899 | $6,909 | $19,466 | $20,810 | | **Net Income** | **$1,699** | **$1,561** | **$6,630** | **$4,222** | | **Diluted EPS** | **$0.23** | **$0.21** | **$0.89** | **$0.56** | - Net income for the nine months ended March 31, 2022, was significantly boosted by a **$1.2 million** credit from the Employee Retention Tax Credit (ERTC), which reduced salaries and employee benefits expense[12](index=12&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement tracks changes in the company's equity over time, including net income, dividends, and stock repurchases - The company paid cash dividends of **$0.14 per share** in the quarter ended March 31, 2022, consistent with the prior year's quarter[16](index=16&type=chunk)[17](index=17&type=chunk) - For the nine months ended March 31, 2022, the company repurchased **221,797 shares** of treasury stock for **$3.74 million**[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary for Nine Months Ended March 31 (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,355 | $9,025 | | Net cash used for investing activities | ($15,181) | ($60,862) | | Net cash (used for) provided by financing activities | ($2,323) | $7,432 | | **Net decrease in cash and cash equivalents** | **($10,149)** | **($44,405)** | - The primary use of cash in investing activities for the nine months ended March 31, 2022, was a net increase in loans held for investment of **$42.1 million**. In the prior year period, the company had a net decrease in loans and significant purchases of investment securities[24](index=24&type=chunk) [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and breakdowns of the financial data presented in the consolidated financial statements - Gross loans held for investment increased to **$892.5 million** at March 31, 2022, from **$852.1 million** at June 30, 2021, with single-family and multi-family loans comprising the largest segments[45](index=45&type=chunk) Allowance for Loan Losses Activity (in thousands) | Period | Beginning Balance | (Recovery) Provision | Net Recoveries (Charge-offs) | Ending Balance | | :--- | :--- | :--- | :--- | :--- | | **Q3 2022** | $6,608 | ($645) | $6 | $5,969 | | **9M 2022** | $7,587 | ($2,051) | $433 | $5,969 | - Non-performing loans on non-accrual status decreased significantly to **$2.2 million** at March 31, 2022, from **$9.4 million** at June 30, 2021, indicating improved asset quality[54](index=54&type=chunk)[55](index=55&type=chunk) - On April 28, 2022, the Board of Directors declared a quarterly cash dividend of **$0.14 per share** and authorized a new stock repurchase plan for up to **5%** of the company's common stock[145](index=145&type=chunk)[146](index=146&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=58&type=section&id=ITEM%202%20-%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operating results, including analyses of asset quality, liquidity, and capital resources [Executive Summary and Operating Strategy](index=62&type=section&id=Executive%20Summary%20and%20Operating%20Strategy) This section outlines the Corporation's strategic goals, focusing on asset growth and optimizing the deposit mix - The Corporation's operating strategy focuses on moderately increasing total assets by growing its loan portfolio, particularly in single-family, multi-family, and commercial real estate loans[160](index=160&type=chunk) - A key strategic goal is to improve the net interest margin by shifting the deposit mix from higher-cost time deposits to lower-cost checking and savings accounts[160](index=160&type=chunk) [Comparison of Financial Condition](index=64&type=section&id=Comparison%20of%20Financial%20Condition%20at%20March%2031,%202022%20and%20June%2030,%202021) This section compares the company's financial position at different reporting dates, highlighting changes in assets, liabilities, and equity - Total assets increased slightly to **$1.19 billion** at March 31, 2022, from **$1.18 billion** at June 30, 2021, driven by a **5%** increase in loans held for investment to **$893.6 million**[166](index=166&type=chunk)[170](index=170&type=chunk) - Total deposits grew by **3%** to **$963.5 million**, reflecting a **5%** increase in transaction accounts, while higher-cost time deposits decreased by **9%**, consistent with the company's strategy[174](index=174&type=chunk) - Total borrowings decreased by **21%** to **$80.0 million** due to prepayment and maturities of long-term FHLB advances[175](index=175&type=chunk) [Comparison of Operating Results](index=68&type=section&id=Comparison%20of%20Operating%20Results%20for%20the%20Quarters%20and%20Nine%20Months%20Ended%20March%2031,%202022%20and%202021) This section analyzes the company's financial performance over different periods, focusing on revenue, expenses, and profitability metrics Key Performance Metrics | Metric | Q3 FY22 | Q3 FY21 | 9M FY22 | 9M FY21 | | :--- | :--- | :--- | :--- | :--- | | Net Income (in millions) | $1.7 | $1.6 | $6.6 | $4.2 | | Diluted EPS | $0.23 | $0.21 | $0.89 | $0.56 | | ROA | 0.57% | 0.53% | 0.74% | 0.48% | | ROE | 5.33% | 4.99% | 6.94% | 4.51% | - The **57%** increase in net income for the first nine months of fiscal 2022 was primarily driven by a **$2.1 million** recovery from the allowance for loan losses and a **$1.3 million** decrease in non-interest expenses[179](index=179&type=chunk) - Net interest margin for the nine-month period decreased by **5 basis points** to **2.65%** compared to the prior year, as the decrease in the average yield on interest-earning assets outpaced the decrease in the cost of funds[185](index=185&type=chunk) - Non-interest expense for the nine months decreased by **6%**, mainly due to a **$1.2 million** credit for the Employee Retention Tax Credit (ERTC) recorded in the first quarter[227](index=227&type=chunk)[228](index=228&type=chunk) [Asset Quality](index=81&type=section&id=Asset%20Quality) This section assesses the credit risk within the loan portfolio and the adequacy of the allowance for loan losses - Asset quality showed significant improvement, with non-performing loans (net) decreasing by **77%** to **$2.0 million** at March 31, 2022, from **$8.6 million** at June 30, 2021[218](index=218&type=chunk)[232](index=232&type=chunk) Asset Quality Ratios | Ratio | March 31, 2022 | June 30, 2021 | | :--- | :--- | :--- | | Non-performing loans / Loans held for investment | 0.22% | 1.02% | | Allowance for loan losses / Gross loans | 0.66% | 0.88% | - Total classified assets, a broader measure of credit risk, decreased to **$2.8 million** from **$10.4 million** at June 30, 2021[239](index=239&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) This section evaluates the company's ability to meet its financial obligations and maintain sufficient capital levels - The Corporation maintains a strong liquidity position with primary funding from deposits and access to significant borrowing capacity, including **$321.4 million** from the FHLB and a **$168.4 million** discount window facility at the Federal Reserve[241](index=241&type=chunk)[244](index=244&type=chunk) - The Bank exceeded all regulatory capital requirements at March 31, 2022, and was categorized as **'well-capitalized'** under OCC regulations[249](index=249&type=chunk) Bank Capital Ratios as of March 31, 2022 | Ratio | Actual | Well-Capitalized Minimum | | :--- | :--- | :--- | | Tier 1 leverage capital | 10.27% | 5.00% | | CET1 capital | 19.32% | 6.50% | | Total capital | 20.29% | 10.00% | [Quantitative and Qualitative Disclosures about Market Risk](index=53&type=section&id=ITEM%203%20-%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details the Corporation's management of market risk, primarily interest rate risk, using NPV sensitivity and gap analysis to measure exposure to interest rate fluctuations - The Corporation uses an internal interest rate risk model to measure the change in Net Portfolio Value (NPV) under various interest rate scenarios[256](index=256&type=chunk) Net Portfolio Value (NPV) Sensitivity as of March 31, 2022 | Change in Rates | Change in NPV (in thousands) | | :--- | :--- | | +300 bp | $100,718 | | +200 bp | $72,672 | | +100 bp | $39,533 | | -100 bp | ($9,935) | - The company's net interest income simulation model indicates an asset-sensitive position, projecting a **0.73%** increase in net interest income over 12 months with a **+100 basis point** rate shock as of March 31, 2022[270](index=270&type=chunk)[271](index=271&type=chunk) [Controls and Procedures](index=57&type=section&id=ITEM%204%20-%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the Corporation's disclosure controls and procedures were effective as of March 31, 2022. No material changes to internal control over financial reporting occurred during the quarter - The CEO and CFO concluded that the Corporation's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2022[276](index=276&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the Corporation's internal controls[277](index=277&type=chunk) [PART II - OTHER INFORMATION](index=57&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional information, including legal proceedings, risk factors, and details on equity security sales and use of proceeds [Legal Proceedings](index=57&type=section&id=ITEM%201%20-%20Legal%20Proceedings) The Corporation is involved in various claims and lawsuits in the ordinary course of business but is not a party to any pending legal proceedings that it believes would have a material adverse effect on its financial condition - The Corporation is not a party to any pending legal proceedings that it believes would have a material adverse effect on its financial condition, operations, or cash flows[278](index=278&type=chunk) [Risk Factors](index=57&type=section&id=ITEM%201A%20-%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended June 30, 2021 - There have been no material changes in the risk factors previously disclosed in the Corporation's Annual Report on Form 10-K for the year ended June 30, 2021[279](index=279&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=ITEM%202%20-%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase activity during the quarter. The company purchased 69,271 shares under its publicly announced plan at an average price of $16.69 per share Share Repurchases in Q3 FY2022 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2022 | 20,376 | $16.86 | | February 2022 | 17,213 | $16.82 | | March 2022 | 31,682 | $16.50 | | **Total** | **69,271** | **$16.69** | - As of March 31, 2022, **45,036 shares** remained available for purchase under the April 2020 stock repurchase plan, which was set to expire on April 27, 2022[282](index=282&type=chunk)

Provident Financial Holdings, Inc. (NASDAQ:PROV) Q3 2022 Earnings Conference Call April 27, 2022 12:00 PM ET Company Participants Craig Blunden – Chairman & Chief Executive Officer Donavon Ternes – President, Chief Operating & Chief Financial Officer Conference Call Participants Nicholas Cucharale – Piper Sandler Timothy Coffey – Janney Montgomery Scott LLC Operator Ladies and gentlemen, thank you for standing by. And welcome to the Third Quarter Earnings Call. At this time, all lines are in a listen-only m ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ ✓ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2021 [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to _________________ Commission File Number 000-28304 PROVIDENT FINANCIAL HOLDINGS, INC. (Exact name of registrant as ...

Financial Data and Key Metrics Changes - In Q2 2022, the company originated and purchased $65.3 million of loans held for investment, an increase from $60.9 million in the prior quarter [7] - Loan principal payments and payoffs increased to $72.5 million from $53.9 million in the previous quarter [7] - Loans held for investment decreased by approximately 1% compared to the previous quarter, with a notable decline in multifamily and commercial real estate loans [10] - Non-performing assets decreased significantly to $2.8 million from $6.6 million in the previous quarter [10][11] - The allowance for loan losses to gross loans held for investment decreased to 77 basis points from 86 basis points [12] Business Line Data and Key Metrics Changes - The company experienced a shift in loan payoffs, with more multifamily payoffs in the December quarter compared to single-family payoffs [24] - Underwriting standards have gradually returned to pre-pandemic levels, with a cautious approach towards commercial real estate, particularly in retail and office sectors [25] - The pipelines for single-family and multifamily loans are similar in size to the previous quarter, suggesting stable origination and purchase volumes [9] Market Data and Key Metrics Changes - Competition for loan originations remains elevated, particularly in the multifamily and commercial real estate sectors [8] - The refinance market is expected to slow down, impacting overall loan activity [27] - The company has seen increased activity in purchased loans, although no purchases were executed in the December quarter [27] Company Strategy and Development Direction - The company aims to leverage its balance sheet with prudent loan portfolio growth while redeploying excess liquidity into government-sponsored mortgage-backed securities [17] - Maintaining cash dividends is prioritized over stock buyback activities, although stock repurchases were made under the April 2020 program [18] - The company is focused on operational efficiencies to lower operating expenses [15] Management's Comments on Operating Environment and Future Outlook - Management noted that current credit quality is strong, with minimal early-stage delinquencies and a significant reduction in non-performing assets [10][11] - There is potential for further reduction in the allowance for loan losses as the economic environment improves [39] - The company is prepared for potential interest rate hikes, which could positively impact net interest margins [36] Other Important Information - The company has not adopted the Current Expected Credit Loss (CECL) model, making comparisons with CECL adopters challenging [12] - The FTE count increased slightly to 170 from 166 year-over-year [16] Q&A Session Summary Question: Were the payoffs related to rate hikes? - Management indicated it is difficult to determine, but noted a shift in the mix of payoffs with more multifamily payoffs in the December quarter [24] Question: Have underwriting standards returned to pre-pandemic levels? - Management confirmed that underwriting standards have gradually improved over the past year, with current caution in commercial real estate [25] Question: What is the current market activity for loans? - Management observed good pipeline activity, particularly in multifamily and commercial real estate, but noted the refinance market is expected to slow [27] Question: How is the company addressing wage pressures? - Management acknowledged wage pressures and indicated ongoing wage increases based on market surveys [29] Question: What was the amount of securities purchases in the March quarter? - Management reported $15 million in purchases during the December quarter, keeping cash balances flat [34] Question: What is the outlook for multifamily loan activity? - Management noted competitive conditions in the multifamily sector, with origination volumes expected to increase if purchase packages can be secured [37] Question: Is there room to drive down the coverage ratio? - Management indicated there is potential for reduction in the allowance for loan losses as the pandemic-related components are adjusted [39]