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Provident Financial Holdings Reports Fourth Quarter and Fiscal 2015 Earnings

FOURTH QUARTER HIGHLIGHTS INCLUDE:

Net Income Rises 19% to $2.5 Million Compared to Same Quarter Last Year

Diluted Earnings Per Share Increases 27% to $0.28 Per Share Compared to Same Quarter Last Year

Net Interest Margin Expands 24 Basis Points to 3.09% Compared to Same Quarter Last Year

Loans Held for Investment Increase 5% to $814.2 Million Since June 30, 2014

Non-Performing Assets Decline 11% to $16.3 Million Since June 30, 2014

Repurchased 187,566 Shares of Common Stock During the Current Quarter

RIVERSIDE, Calif., July 28, 2015 (GLOBE NEWSWIRE) -- Provident Financial Holdings, Inc. (“Company”) (NASDAQ:PROV), the holding company for Provident Savings Bank, F.S.B. (“Bank”), today announced fourth quarter earnings for the fiscal year ended June 30, 2015.

For the quarter ended June 30, 2015, the Company reported net income of $2.49 million, or $0.28 per diluted share (on 8.88 million average diluted shares outstanding), compared to net income of $2.09 million, or $0.22 per diluted share (on 9.70 million average diluted shares outstanding), in the comparable period a year ago. The increase in net income for the fourth quarter of fiscal 2015 was primarily attributable to a $1.19 million, or 16 percent, increase in net interest income, a $740,000, or nine percent, increase in the gain on sale of loans; partly offset by a $1.27 million, or 13 percent, increase in salaries and employee benefits expense and a $587,000, or 85 percent, reduction in the recovery from the allowance for loan losses, compared to the same period one year ago.

“We are very pleased with our improved financial results this year in comparison to last year. We have worked very hard to advance our fundamental performance and will continue to do so,” said Craig G. Blunden, Chairman and Chief Executive Officer of the Company. “Although we are disappointed with the small sequential quarter decline in loans held for investment, we will not sacrifice our prudent underwriting standards and disciplined pricing standards to enhance our short-term growth and performance at the expense of our long-term growth and performance,” he concluded.

Return on average assets for the fourth quarter of fiscal 2015 increased to 0.84 percent from 0.75 percent for the same period of fiscal 2014 and return on average stockholders’ equity for the fourth quarter of fiscal 2015 increased to 7.02 percent from 5.66 percent for the comparable period of fiscal 2014.

On a sequential quarter basis, the fourth quarter of fiscal 2015 net income reflects an $115,000, or four percent, decrease from net income of $2.60 million in the third quarter of fiscal 2015. The decrease in net income in the fourth quarter of fiscal 2015 compared to the third quarter of fiscal 2015 was primarily attributable to a decrease of $992,000 in the gain on sale of loans, partly offset by an increase of $472,000 in net interest income. Diluted earnings per share for the fourth quarter of fiscal 2015 were $0.28 per share, down three percent from $0.29 per share in the third quarter of fiscal 2015. Return on average assets decreased to 0.84 percent for the fourth quarter of fiscal 2015 from 0.92 percent in the third quarter of fiscal 2015; and return on average stockholders’ equity for the fourth quarter of fiscal 2015 was 7.02 percent, compared to 7.22 percent for the third quarter of fiscal 2015.

For the fiscal year ended June 30, 2015, net income increased $3.19 million, or 48 percent, to $9.80 million from $6.61 million in the comparable period ended June 30, 2014; and diluted earnings per share for the fiscal year ended June 30, 2015 increased $0.42, or 65 percent, to $1.07 from $0.65 for the comparable period last year. The increase was primarily attributable to the increase in the gain on sale of loans, which was partly offset by a decrease in the recovery from the allowance for loan losses, an increase in salaries and employee benefits expense and an increase in the provision for income taxes. Total loan originations and purchases in fiscal 2015 and 2014 were $2.66 billion and $2.14 billion, respectively, while $2.41 billion and $2.00 billion, respectively, were sold to investors.

Net interest income increased $1.19 million, or 16 percent, to $8.85 million in the fourth quarter of fiscal 2015 from $7.66 million for the same quarter of fiscal 2014, attributable to a higher average earning assets balance and, to a lesser extent, an increase in the net interest margin. Non-interest income increased $954,000, or 10 percent, to $10.51 million in the fourth quarter of fiscal 2015 from $9.56 million in the same quarter of fiscal 2014. Non-interest expense increased $936,000, or seven percent, to $15.15 million in the fourth quarter of fiscal 2015 from $14.21 million in the same quarter of fiscal 2014. The increases in non-interest income (primarily due to an increase in the gain on sale of loans) and non-interest expense (primarily due to an increase in salaries and employee benefits expense) relate primarily to increased mortgage banking activity.

The average balance of loans outstanding, including loans held for sale, increased by $165.5 million, or 19 percent, to $1.04 billion in the fourth quarter of fiscal 2015 from $869.6 million in the same quarter of fiscal 2014, primarily due to an increase in loans held for sale attributable to the improved mortgage banking activity and, to a lesser extent, an increase in loans held for investment, primarily in multi-family loans. The average yield on loans receivable decreased by 20 basis points to 3.89 percent in the fourth quarter of fiscal 2015 from an average yield of 4.09 percent in the same quarter of fiscal 2014. The decrease in the average loan yield was primarily attributable to payoffs of loans which had a higher yield than the average yield of loans held for investment, adjustable rate loans repricing to lower current market interest rates and a lower average yield on loans held for sale. The average balance of loans held for sale in the fourth quarter of fiscal 2015 was $219.8 million with an average yield of 3.63 percent as compared to $99.1 million with an average yield of 4.29 percent in the same quarter of fiscal 2014. Loans originated and purchased for investment in the fourth quarter of fiscal 2015 totaled $26.8 million, consisting primarily of multi-family, construction and single-family loans. The outstanding balance of “preferred loans” (multi-family, commercial real estate, construction and commercial business loans) increased by $52.4 million, or 13 percent, to $453.4 million at June 30, 2015 from $401.0 million at June 30, 2014. The percentage of preferred loans to total loans held for investment at June 30, 2015 increased to 55 percent from 51 percent at June 30, 2014. Loan principal payments received in the fourth quarter of fiscal 2015 were $32.0 million, compared to $46.1 million in the same quarter of fiscal 2014.

The average balance of investment securities decreased by $1.5 million, or nine percent, to $15.5 million in the fourth quarter of fiscal 2015 from $17.0 million in the same quarter of fiscal 2014. The decrease was attributable to principal payments received on mortgage-backed securities during the last 12 months, partly offset by an $800,000 investment in short-term time deposits at four minority-owned financial institutions in June 2014 and a $250,000 investment in the common stock of a community development financial institution in July 2014 to help fulfill the Bank’s Community Reinvestment Act obligation. The average yield on investment securities decreased eight basis points to 1.78 percent in the fourth quarter of fiscal 2015 from 1.86 percent for the same quarter of fiscal 2014. The decline in the average yield was primarily attributable to the downward repricing of adjustable rate mortgage-backed securities and the placement of the short-term time deposits referred to above at an average yield of 0.50 percent.

In the fourth quarter of fiscal 2015, the Federal Home Loan Bank (“FHLB”) – San Francisco distributed a $133,000 regular cash dividend and a $261,000 special cash dividend to the Bank. This compares to the same quarter last year when the Bank received a $178,000 regular cash dividend.

The average balance of the Company’s interest-earning deposits, primarily cash with the Federal Reserve Bank of San Francisco, decreased $93.4 million, or 52 percent, to $85.2 million in the fourth quarter of fiscal 2015 from $178.6 million in the same quarter of fiscal 2014. The decrease in interest-earning deposits was primarily the result of redeploying cash balances to fund the increase in loans held for sale and loans held for investment. The average yield earned on interest-earning deposits was 0.25 percent in both the fourth quarters of fiscal 2015 and 2014 and lower than the yield that could have been earned if the excess liquidity was deployed in loans or investment securities.

Average deposits increased $15.4 million, or two percent, to $918.1 million in the fourth quarter of fiscal 2015 from $902.7 million in the same quarter of fiscal 2014. The average cost of deposits decreased by six basis points to 0.50 percent in the fourth quarter of fiscal 2015 from 0.56 percent in the same quarter last year, primarily due to higher cost time deposits repricing to lower current market interest rates and a lower percentage of time deposits to the total deposit balance. Transaction account balances or “core deposits” increased $51.4 million, or 10 percent, to $578.4 million at June 30, 2015 from $527.0 million at June 30, 2014, while time deposits decreased $25.2 million, or seven percent, to $345.7 million at June 30, 2015 from $370.9 million at June 30, 2014, consistent with the Bank’s strategy to decrease the percentage of time deposits in its deposit base and to increase the percentage of lower cost checking and savings accounts.

The average balance of borrowings, which consisted of FHLB – San Francisco advances, increased $56.9 million, or 127 percent, to $101.5 million and the average cost of advances decreased 82 basis points to 2.38 percent in the fourth quarter of fiscal 2015, compared to an average balance of $44.6 million and an average cost of 3.20 percent in the same quarter of fiscal 2014. The increase in borrowings was primarily attributable to newly acquired long-term advances to hedge against rising interest rates.

The net interest margin during the fourth quarter of fiscal 2015 increased 24 basis points to 3.09 percent from 2.85 percent in the same quarter last year. The increase was primarily due to the deployment of excess liquidity into higher yielding interest-earning assets, primarily to fund increases in loans held for sale and loans held for investment and the special cash dividend received from FHLB – San Francisco. The average yield of interest-earning assets increased by 24 basis points to 3.70 percent in the fourth quarter of fiscal 2015 from 3.46 percent in the same quarter last year, while the average cost of liabilities increased by one basis point to 0.69 percent in the fourth quarter of fiscal 2015 from 0.68 percent in the same quarter last year.

During the fourth quarter of fiscal 2015, the Company recorded a recovery from the allowance for loan losses of $104,000 compared to the recovery of $691,000 recorded during the same period of fiscal 2014 and the $111,000 recovery recorded in the third quarter of fiscal 2015 (sequential quarter).

Non-performing assets, with underlying collateral primarily located in Southern California, decreased to $16.3 million, or 1.39 percent of total assets, at June 30, 2015, compared to $18.4 million, or 1.66 percent of total assets, at June 30, 2014. Non-performing loans at June 30, 2015 decreased $2.0 million or 12 percent since June 30, 2014 to $13.9 million and were primarily comprised of 34 single-family loans ($9.9 million); four multi-family loans ($2.2 million); five commercial real estate loans ($1.7 million); and one commercial business loan ($89,000). Real estate owned acquired in the settlement of loans at June 30, 2015 decreased $69,000, or three percent, to $2.4 million (three properties) from $2.5 million (four properties) at June 30, 2014. The real estate owned at June 30, 2015 was comprised of two single-family properties ($432,000) and one commercial real estate property ($2.0 million).

Net recoveries for the quarter ended June 30, 2015 were $116,000 or 0.04 percent (annualized) of average loans receivable, compared to net recoveries of $411,000 or 0.19 percent (annualized) of average loans receivable for the quarter ended June 30, 2014 and net recoveries of $130,000 or 0.05 percent (annualized) of average loans receivable for the quarter ended March 31, 2015 (sequential quarter).

Classified assets at June 30, 2015 were $31.1 million, comprised of $8.2 million of loans in the special mention category, $20.5 million of loans in the substandard category and $2.4 million in real estate owned. Classified assets at June 30, 2014 were $37.9 million, comprised of $9.4 million of loans in the special mention category, $26.0 million of loans in the substandard category and $2.5 million in real estate owned.

For the quarter ended June 30, 2015, no loans were restructured from their original terms or newly classified as a restructured loan. As of June 30, 2015, the outstanding balance of restructured loans that have not returned to their original promissory note terms was $6.6 million: two loans were classified as special mention ($989,000, on accrual status); and 16 loans were classified as substandard ($5.6 million, all are on non-accrual status). As of June 30, 2015, $4.9 million, or 74 percent, of restructured loans were current with respect to their modified payment terms.

The allowance for loan losses was $8.7 million at June 30, 2015, or 1.06 percent of gross loans held for investment, compared to $9.7 million at June 30, 2014, or 1.25 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 June 30, 2015.

Non-interest income increased by $954,000, or 10 percent, to $10.51 million in the fourth quarter of fiscal 2015 from $9.56 million in the same period of fiscal 2014, primarily as a result of a $740,000 increase in the gain on sale of loans. On a sequential quarter basis, non-interest income decreased $758,000, or seven percent, primarily as a result of a $992,000, or 10 percent, decrease in the gain on sale of loans.

The gain on sale of loans increased to $8.76 million for the quarter ended June 30, 2015 from $8.02 million in the comparable quarter last year, reflecting the impact of a higher loan sale volume, partly offset by a lower average loan sale margin. Total loan sale volume, which includes the net change in commitments to extend credit on loans to be held for sale, was $636.8 million in the quarter ended June 30, 2015, up $135.8 million, or 27 percent, from $501.0 million in the comparable quarter last year. The average loan sale margin for mortgage banking was 139 basis points for the quarter ended June 30, 2015, down 20 basis points from 159 basis points in the comparable quarter last year but up 14 basis points from 125 basis points in the third quarter of fiscal 2015 (sequential quarter). The gain on sale of loans includes an unfavorable fair-value adjustment on loans held for sale and derivative financial instruments (commitments to extend credit, commitments to sell loans, commitments to sell mortgage-backed securities, and option contracts) that amounted to a net loss of $5.34 million in the fourth quarter of fiscal 2015, compared to a favorable fair-value adjustment that amounted to a net gain of $3.03 million in the same period last year.

In the fourth quarter of fiscal 2015, a total of $720.7 million of loans were originated and purchased for sale, 51 percent higher than the $477.2 million for the same period last year, and six percent higher than the $680.6 million during the third quarter of fiscal 2015 (sequential quarter). The loan origination volume has increased from the previous year because mortgage interest rates have declined spurring an increase in refinance activity. Total loans sold during the quarter ended June 30, 2015 were $795.5 million, 87 percent higher than the $425.2 million sold during the same quarter last year, and 32 percent higher than the $604.1 million sold during the third quarter of fiscal 2015 (sequential quarter). Total loan originations (including loans originated and purchased for investment and loans originated and purchased for sale) were $747.5 million in the fourth quarter of fiscal 2015, an increase of 42 percent from $525.1 million in the same quarter of fiscal 2014, and two percent higher than the $735.8 million in the third quarter of fiscal 2015 (sequential quarter).

The sale and operations of real estate owned acquired in the settlement of loans resulted in a net gain of $294,000 in the fourth quarter of fiscal 2015, compared to a net gain of $3,000 in the comparable period last year. Four real estate owned properties were sold and two real estate owned properties were acquired in the settlement of loans in both the fourth quarters of fiscal 2015 and 2014. As of June 30, 2015, the real estate owned balance was $2.4 million (three properties), compared to $2.5 million (four properties) at June 30, 2014.

Non-interest expenses increased $936,000, or seven percent, to $15.15 million in the fourth quarter of fiscal 2015 from $14.21 million in the same quarter last year, primarily as a result of the increase in salaries and employee benefits expense. The increase in salaries and employee benefits expense was primarily related to the increase in mortgage banking loan production resulting in higher variable compensation expense.

The Company’s efficiency ratio improved to 78 percent in the fourth quarter of fiscal 2015 from 83 percent in the fourth quarter of fiscal 2014. The improvement was primarily the result of the increases in net interest income and non-interest income, partly offset by the increase in non-interest expense.

The Company’s provision for income taxes was $1.83 million for the fourth quarter of fiscal 2015, an increase of $230,000 or 14 percent, from $1.60 million in the same quarter last year, as a result of the increase in income before taxes. The effective income tax rate for the quarter ended June 30, 2015 was 42.4 percent as compared to 43.4 percent in the same quarter last year. The Company believes that the tax provision recorded in the fourth quarter of fiscal 2015 reflects its current income tax obligations.

The Company repurchased 187,566 shares of its common stock during the quarter ended June 30, 2015 at an average cost of $17.39 per share. As of June 30, 2015, a total of 81,667 shares or 19 percent of the shares authorized in the April 2015 stock repurchase plan have been purchased, leaving 348,984 shares available for future purchases.

The Bank currently operates 15 retail/business banking offices in Riverside County and San Bernardino County (Inland Empire). Provident Bank Mortgage operates two wholesale loan production offices and 13 retail loan production offices located throughout California.

The Company will host a conference call for institutional investors and bank analysts on Tuesday, July 28, 2015 at 10:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-800-230-1092 and requesting the Provident Financial Holdings Earnings Release Conference Call. An audio replay of the conference call will be available through Tuesday, August 4, 2015 by dialing 1-800-475-6701 and referencing access code number 365009.

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 increased competitive pressures; changes in the interest rate environment; secondary market conditions for loans and our ability to sell loans in the secondary market; changes in general economic conditions and conditions within the securities markets; 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-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 2015 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.


PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Financial Condition
(Unaudited –In Thousands, Except Share Information)
June 30,March 31, June 30,
2015 2015 2014
Assets
Cash and cash equivalents $81,403 $30,675 $118,937
Investment securities - held to maturity, at cost 800 800 800
Investment securities - available for sale, at fair value 14,161 14,986 16,347
Loans held for investment (net of allowance for loan losses of $8,724; $8,712 and $9,744, respectively; includes $4,518, $0 and $0 at fair value, respectively) 814,234 819,636 772,141
Loans held for sale, at fair value 224,715 307,054 158,883
Accrued interest receivable 2,839 2,855 2,483
Real estate owned, net 2,398 3,190 2,467
FHLB – San Francisco stock 8,094 7,732 7,056
Premises and equipment, net 5,417 5,617 6,369
Prepaid expenses and other assets 20,494 21,246 20,146
Total assets $1,174,555 $1,213,791 $1,105,629
Liabilities and Stockholders’ Equity
Liabilities:
Non interest-bearing deposits $67,538 $62,824 $58,654
Interest-bearing deposits 856,548 855,076 839,216
Total deposits 924,086 917,900 897,870
Borrowings 91,367 131,384 41,431
Accounts payable, accrued interest and other liabilities 17,965 22,649 20,466
Total liabilities 1,033,418 1,071,933 959,767
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; 17,766,865; 17,718,365 and 17,714,365 shares issued, respectively; 8,634,607; 8,718,929 and 9,312,269 shares outstanding, respectively) 177 177 177
Additional paid-in capital 88,893 87,552 88,259
Retained earnings 188,206 186,762 182,458
Treasury stock at cost (9,132,258; 8,999,436 and 8,402,096 shares, respectively) (136,470) (133,030) (125,418)
Accumulated other comprehensive income, net of tax 331 397 386
Total stockholders’ equity 141,137 141,858 145,862
Total liabilities and stockholders’ equity $1,174,555 $1,213,791 $1,105,629


PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(Unaudited - In Thousands, Except Earnings Per Share)
Quarter Ended Fiscal Year Ended
June 30, June 30,
2015 2014 2015 2014
Interest income:
Loans receivable, net $10,077 $8,902 $38,337 $36,424
Investment securities 69 79 287 339
FHLB – San Francisco stock 394 178 796 793
Interest-earning deposits 54 113 276 503
Total interest income 10,594 9,272 39,696 38,059
Interest expense:
Checking and money market deposits 104 93 419 385
Savings deposits 164 154 641 606
Time deposits 875 1,012 3,701 4,504
Borrowings 601 356 1,660 1,841
Total interest expense 1,744 1,615 6,421 7,336
Net interest income 8,850 7,657 33,275 30,723
Recovery from the allowance for loan losses (104) (691) (1,387) (3,380)
Net interest income, after recovery from the
allowance for loan losses 8,954 8,348 34,662 34,103
Non-interest income:
Loan servicing and other fees 262 299 1,085 1,077
Gain on sale of loans, net 8,762 8,022 34,210 25,799
Deposit account fees 575 601 2,412 2,469
Gain on sale and operations of real estate
owned acquired in the settlement of loans 294 3 282 18
Card and processing fees 376 373 1,406 1,370
Other 242 259 992 942
Total non-interest income 10,511 9,557 40,387 31,675
Non-interest expense:
Salaries and employee benefits 11,137 9,869 41,618 38,044
Premises and occupancy 1,062 1,106 4,666 4,468
Equipment 414 441 1,720 1,830
Professional expenses 551 518 2,179 1,832
Sales and marketing expenses 455 537 1,643 1,761
Deposit insurance and regulatory assessments 236 251 974 945
Other 1,295 1,492 5,169 5,288
Total non-interest expense 15,150 14,214 57,969 54,168
Income before taxes 4,315 3,691 17,080 11,610
Provision for income taxes 1,830 1,600 7,277 5,004
Net income $2,485 $2,091 $9,803 $6,606
Basic earnings per share $0.29 $0.22 $1.09 $0.67
Diluted earnings per share $0.28 $0.22 $1.07 $0.65
Cash dividends per share $0.12 $0.10 $0.45 $0.40

PROVIDENT FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statements of Operations – Sequential Quarter
(Unaudited – In Thousands, Except Share Information)
Quarter Ended
June 30,March 31,
2015 2015
Interest income:
Loans receivable, net $10,077 $9,689
Investment securities 69 70
FHLB – San Francisco stock 394 126
Interest-earning deposits 54 52
Total interest income 10,594 9,937
Interest expense:
Checking and money market deposits 104 101
Savings deposits 164 160
Time deposits 875 910
Borrowings 601 388
Total interest expense 1,744 1,559
Net interest income 8,850 8,378
Recovery from the allowance for loan losses (104) (111)
Net interest income, after recovery from the allowance for loan
losses 8,954 8,489
Non-interest income:
Loan servicing and other fees 262 264
Gain on sale of loans, net 8,762 9,754
Deposit account fees 575 607
Gain on sale and operations of real estate owned
acquired in the settlement of loans, net 294 58
Card and processing fees 376 338
Other 242 248
Total non-interest income 10,511 11,269
Non-interest expense:
Salaries and employee benefits 11,137 10,950
Premises and occupancy 1,062 1,106
Equipment 414 420
Professional expenses 551 671
Sales and marketing expenses 455 458
Deposit insurance premiums and regulatory assessments 236 227
Other 1,295 1,336
Total non-interest expense 15,150 15,168
Income before taxes 4,315 4,590
Provision for income taxes 1,830 1,990
Net income $2,485 $2,600
Basic earnings per share $0.29 $0.29
Diluted earnings per share $0.28 $0.29
Cash dividends per share $0.12 $0.11

PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands, Except Share Information )
Quarter Ended Fiscal Year Ended
June 30,June 30,
2015 2014 2015 2014
SELECTED FINANCIAL RATIOS:
Return on average assets 0.84% 0.75% 0.87% 0.58%
Return on average stockholders’ equity 7.02% 5.66% 6.81% 4.31%
Stockholders’ equity to total assets 12.02% 13.19% 12.02% 13.19%
Net interest spread 3.01% 2.78% 2.96% 2.69%
Net interest margin 3.09% 2.85% 3.03% 2.79%
Efficiency ratio 78.25% 82.57% 78.70% 86.81%
Average interest-earning assets to average
interest-bearing liabilities 112.20% 113.27% 113.02% 113.54%
SELECTED FINANCIAL DATA:
Basic earnings per share $0.29 $0.22 $1.09 $0.67
Diluted earnings per share $0.28 $0.22 $1.07 $0.65
Book value per share $16.35 $15.66 $16.35 $15.66
Shares used for basic EPS computation 8,669,375 9,521,624 8,996,952 9,926,323
Shares used for diluted EPS computation 8,875,220 9,697,117 9,173,112 10,110,993
Total shares issued and outstanding 8,634,607 9,312,269 8,634,607 9,312,269
LOANS ORIGINATED AND PURCHASED FOR SALE:
Retail originations $339,578 $247,536 $1,175,413 $984,378
Wholesale originations and purchases 381,098 229,684 1,305,302 983,244
Total loans originated and purchased for sale .$720,676 $477,220 $2,480,715 $1,967,622
LOANS SOLD:
Servicing released $790,621 $423,882 $2,392,251 $1,990,087
Servicing retained 4,917 1,323 17,663 9,189
Total loans sold $795,538 $425,205 $2,409,914 $1,999,276

As of As of As of As of As of
06/30/2015 03/31/2015 12/31/2014 09/30/2014 06/30/2014
ASSET QUALITY RATIOS AND
DELINQUENT LOANS:
Recourse reserve for loans sold $ 768 $ 731 $ 711 $712 $ 904
Allowance for loan losses $ 8,724 $ 8,712 $ 8,693 $8,888 $ 9,744
Non-performing loans to loans held for
investment, net 1.71 % 1.28 % 1.40 % 1.62% 2.06 %
Non-performing assets to total assets 1.39 % 1.13 % 1.32 % 1.40% 1.66 %
Allowance for loan losses to gross non-
performing loans 59.77 % 79.74 % 73.88 % 66.62% 55.73 %
Allowance for loan losses to gross loans held
for investment 1.06 % 1.05 % 1.08 % 1.11% 1.25 %
Net (recoveries) charge-offs to average loans
receivable (annualized) (0.04)% (0.05)% (0.07)% 0.02% (0.19)%
Non-performing loans $ 13,946 $ 10,521 $ 11,151 $12,791 $ 15,936
Loans 30 to 89 days delinquent $ 1,335 $ 4,445 $ 291 $581 $ 322

PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands)
Quarter Quarter Quarter Quarter Quarter
EndedEndedEndedEndedEnded
06/30/2015 03/31/2015 12/31/2014 09/30/2014 06/30/2014
Recourse provision (recovery) for loans sold $72 $42 $ (1) $(199) $ (86)
Recovery from the allowance for loan losses $(104) $(111) $(354) $(818) $(691)
Net (recoveries) charge-offs $(116) $(130) $(159) $38 $(411)
As of As of As of As of As of
06/30/2015 03/31/2015 12/31/14(1) 09/30/14(1) 06/30/14(1)
REGULATORY CAPITAL RATIOS (BANK):
Tier 1 leverage ratio 10.68% 10.79% 10.70% 10.50% 12.53%
Common equity tier 1 capital ratio 17.22% 15.81% N/A N/A N/A
Tier 1 risk-based capital ratio 17.22% 15.81% 15.15% 15.28% 18.72%
Total risk-based capital ratio 18.47% 17.04% 16.26% 16.47% 19.98%
REGULATORY CAPITAL RATIOS (HOLDING COMPANY):
Tier 1 leverage ratio 11.94% 12.47% N/A N/A N/A
Common equity tier 1 capital ratio 19.24% 18.27% N/A N/A N/A
Tier 1 risk-based capital ratio 19.24% 18.27% N/A N/A N/A
Total risk-based capital ratio 20.49% 19.50% N/A N/A N/A
(1) On January 1, 2015 the Bank and the Holding Company implemented the Basel III capital protocol consistent with regulatory requirements which were not applicable in prior periods.

As of June 30,
2015 2014
Balance Rate(1) Balance Rate(1)
INVESTMENT SECURITIES:
Held to maturity:
Certificates of deposit $800 0.50% $800 0.50%
Total investment securities held to maturity $800 0.50% $800 0.50%
Available for sale (at fair value):
U.S. government agency MBS $7,906 1.66% $9,109 1.65%
U.S. government sponsored enterprise MBS 5,387 2.40 6,385 2.35
Private issue collateralized mortgage obligations 717 2.49 853 2.40
Common stock – community development financial
institution 151 - - -
Total investment securities available for sale $14,161 1.97% $16,347 1.96%
Total investment securities $14,961 1.89% $17,147 1.89%
(1) The interest rate described in the rate column is the weighted-average interest rate or yield of all instruments, which are included in the balance of the respective line item.

PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands)
As of June 30,
2015 2014
Balance Rate(1) Balance Rate(1)
LOANS HELD FOR INVESTMENT:
Held to maturity:
Single-family (1 to 4 units) $365,961 3.28% $377,824 3.23%
Multi-family (5 or more units) 347,020 4.48 301,191 4.74
Commercial real estate 100,897 5.27 96,781 5.74
Construction 8,191 5.24 2,869 5.27
Commercial business 666 6.53 1,237 6.56
Consumer 244 9.94 306 9.06
Total loans held for investment 822,979 4.06% 780,208 4.14%
Undisbursed loan funds (3,360) (1,090)
Advance payments of escrows 199 215
Deferred loan costs, net 3,140 2,552
Allowance for loan losses (8,724) (9,744)
Total loans held for investment, net $814,234 $772,141
Purchased loans serviced by others included above $5,377 4.82% $11,991 4.36%
(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 June 30,
2015 2014
Balance Rate(1) Balance Rate(1)
DEPOSITS:
Checking accounts – non interest-bearing $67,538 -%$58,654 -%
Checking accounts – interest-bearing 224,090 0.15 202,769 0.14
Savings accounts 255,090 0.26 239,429 0.26
Money market accounts 31,672 0.31 26,125 0.36
Time deposits 345,696 1.02 370,893 1.08
Total deposits $924,086 0.50%$897,870 0.56%
BORROWINGS:
Overnight $ - - %$ - - %
Three months or less - - - -
Over three to twelve months - - - -
Over twelve months to one year - - - -
Over one year to two years - - - -
Over two years to three years 10,059 3.03 - -
Over three years to four years 10,000 1.53 10,080 3.04
Over four years to five years - - 10,000 1.53
Over five years 71,308 2.92 21,351 4.01
Total borrowings $91,367 2.78%$41,431 3.18%
(1) The interest rate described in the rate column is the weighted-average interest rate or cost of all instruments, which are included in the balance of the respective line item.

PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited - Dollars in Thousands)
Quarter Ended Quarter Ended
June 30, 2015 June 30, 2014
Balance Rate(1) Balance Rate(1)
SELECTED AVERAGE BALANCE SHEETS:
Loans receivable, net (2) $1,035,154 3.89% $869,620 4.09%
Investment securities 15,508 1.78% 16,963 1.86%
FHLB – San Francisco stock 8,003 19.69% 7,859 9.06%
Interest-earning deposits 85,203 0.25% 178,569 0.25%
Total interest-earning assets $1,143,868 3.70% $1,073,011 3.46%
Total assets $1,179,421 $1,110,915
Deposits $918,052 0.50% $902,688 0.56%
Borrowings 101,483 2.38% 44,624 3.20%
Total interest-bearing liabilities $1,019,535 0.69% $947,312 0.68%
Total stockholders’ equity $141,544 $147,754
(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 investment and loans held for sale at fair value, net of the allowance for loan losses.
Fiscal Year Ended Fiscal Year Ended
June 30, 2015 June 30, 2014
Balance Rate(1) Balance Rate(1)
SELECTED AVERAGE BALANCE SHEETS:
Loans receivable, net (2) $965,035 3.97% $874,941 4.16%
Investment securities 16,227 1.77% 17,923 1.89%
FHLB – San Francisco stock 7,294 10.91% 11,228 7.06%
Interest-earning deposits 108,971 0.25% 198,682 0.25%
Total interest-earning assets $1,097,527 3.62% $1,102,774 3.45%
Total assets $1,133,097 $1,140,648
Deposits $910,059 0.52% $914,175 0.60%
Borrowings 61,074 2.72% 57,131 3.22%
Total interest-bearing liabilities $971,133 0.66% $971,306 0.76%
Total stockholders’ equity $143,978 $153,153
(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 investment and loans held for sale at fair value, net of the allowance for loan losses.


PROVIDENT FINANCIAL HOLDINGS, INC.
Asset Quality (1)
(Unaudited – Dollars in Thousands)
As of As of As of As of As of
06/30/2015 03/31/2015 12/31/2014 09/30/2014 06/30/2014
Loans on non-accrual status (excluding
restructured loans):
Mortgage loans:
Single-family $7,010 $4,761 $4,561 $5,163 $7,442
Multi-family 653 582 589 745 1,333
Commercial real estate 680 444 728 1,521 1,552
Total 8,343 5,787 5,878 7,429 10,327
Accruing loans past due 90 days or more: - - - - -
Total - - - - -
Restructured loans on non-accrual status:
Mortgage loans:
Single-family 2,902 2,037 2,792 2,861 2,957
Multi-family 1,593 1,580 1,591 1,620 1,760
Commercial real estate 1,019 1,024 792 796 800
Commercial business loans 89 93 98 85 92
Total 5,603 4,734 5,273 5,362 5,609
Total non-performing loans 13,946 10,521 11,151 12,791 15,936
Real estate owned, net 2,398 3,190 3,496 2,707 2,467
Total non-performing assets $16,344 $13,711 $14,647 $15,498 $18,403
Restructured loans on accrual status:
Mortgage loans:
Single-family $989 $2,023 $687 $687 $343
Total $989 $2,023 $687 $687 $343
(1) The non-performing loan balances are net of individually evaluated or collectively evaluated allowances, specifically attached to the individual loans.


Contacts: Craig G. Blunden Chairman and Chief Executive Officer Donavon P. Ternes President, Chief Operating Officer, and Chief Financial Officer 3756 Central Avenue Riverside, CA 92506 (951) 686-6060

Source:Provident Financial Holdings, Inc.