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): January 22, 2004


PROVIDENT FINANCIAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)


Delaware
(State or other jurisdiction
of incorporation)
000-28304
(File number)
33-0704889
(I.R.S. Employer
Identification No.)
 
 
 3756 Central Avenue, Riverside, California      
      (Address of principal executive office)
92506
(Zip Code)


Registrant's telephone number, including area code:  (909) 686-6060

 

                                                                                       
(Former name or former address, if changed since last report)


<PAGE>

 

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits

            (c)    Exhibit

                    99.1     Press Release of Provident Financial Holdings, Inc. on January 22, 2004.

 

Item 9. Regulation FD Disclosure

On January 22, 2004, Provident Financial Holdings, Inc. issued its earnings release for the second quarter ended December 31, 2003. A copy of the earnings release is attached hereto as Exhibit 99.1, which is incorporated herein by reference.

The information being furnished under this "Item 9. Regulation FD Disclosure" is intended to be furnished under "Item 12. Disclosure of Results of Operations and Financial Condition."

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: January 22, 2004                                  Provident Financial Holdings, Inc.

 

                                                                        /s/ Craig G. Blunden                            

                                                                        Craig G. Blunden
                                                                        Chairman, President and Chief Executive Officer
                                                                        (Principal Executive Officer)

 

                                                                        /s/ Donavon P. Ternes                          

                                                                        Donavon P. Ternes
                                                                        Chief Financial Officer
                                                                        (Principal Financial and Accounting Officer)

 

<PAGE>

 

Exhibit 99

Press Release dated January 22, 2004

 

<PAGE>

 

3756 Central Avenue                                                                            Contacts:
Riverside, CA 92506                                                                           
Craig G. Blunden, CEO
(909) 686 - 6060                                                                                    
Donavon P. Ternes, CFO

 

PROVIDENT FINANCIAL HOLDINGS, INC.
REPORTS SECOND-QUARTER EARNINGS

        Riverside, Calif. - Jan. 22, 2004 - Provident Financial Holdings, Inc. ("Company"), Nasdaq: PROV, the holding company for Provident Savings Bank, F.S.B. ("Bank"), today announced earnings for the second quarter of its fiscal year ending June 30, 2004.

        For the quarter ended December 31, 2003, the Company reported net income of $3.09 million, or 65 cents per diluted share (on 4.78 million average weighted shares outstanding), compared to net income of $3.89 million, or 76 cents per diluted share (on 5.15 million average weighted shares outstanding), in the comparable period a year ago. The decrease in average weighted shares outstanding reflects the Company's buyback programs.

        "During the second quarter, we continued to show improvement in our community banking business, as demonstrated by significantly higher net interest income and exceptionally strong growth in transaction accounts (core deposits)," said Craig G. Blunden, chairman, president and chief executive officer. "Moreover, we have made adjustments in our mortgage banking business to reflect lower funding volumes, and - depending on the trend in funding volumes - we are prepared to make further adjustments as necessary."

        Return on average assets for the second quarter of fiscal 2004 was 0.99 percent, compared to 1.36 percent for the same period of fiscal 2003. Return on average

Page 1 of 13

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stockholders' equity for the second quarter of fiscal 2004 was 11.90 percent, compared to 15.30 percent in the comparable period of fiscal 2003.

        On a sequential quarter basis, net income for the second quarter of fiscal 2004 decreased $490,000 to $3.09 million, or 14 percent, from $3.58 million in the first quarter of fiscal 2004; and diluted earnings per share decreased 9 cents to 65 cents, or 12 percent, from 74 cents in the first quarter of fiscal 2004. Return on average assets decreased 19 basis points to 0.99 percent from 1.18 percent in the first quarter of fiscal 2004, while return on average equity decreased 194 basis points to 11.90 percent from 13.84 percent in the first quarter of fiscal 2004.

        For the six months ended December 31, 2003, net income totaled $6.67 million, a decrease of 12 percent from net income of $7.58 million for the comparable period ended December 31, 2002; and diluted earnings per share for six months ended December 31, 2003 decreased $0.06, or 4 percent, to $1.39 from $1.45 for the comparable period last year. Return on average assets for the six months ended December 31, 2003 was 1.07 percent, compared to 1.40 percent for the six-month period a year earlier. Return on average stockholders' equity for the six months ended December 31, 2003 was 12.87 percent, compared to 14.81 percent for the six-month period a year earlier.

        Net interest income after provision for loan losses increased $1.25 million, or 17 percent, to $8.52 million in the second quarter of fiscal 2004 from $7.27 million for the same period in fiscal 2003. Non-interest income decreased $2.13 million to $4.11 million in the second quarter of fiscal 2004 from $6.24 million in the comparable period of fiscal

Page 2 of 13

<PAGE>

2003. Non-interest expense increased $140,000 to $7.22 million in the second quarter of fiscal 2004 from $7.08 million in the comparable period in fiscal 2003.

        The average balance of loans outstanding increased by $150.5 million to $901.8 million in the second quarter of fiscal 2004 from $751.3 million in the same quarter of fiscal 2003, while the average yield decreased by 89 basis points to 5.75 percent in the second quarter of fiscal 2004 from an average yield of 6.64 percent in the same quarter of fiscal 2003. The decrease in the average loan yield was due primarily to higher yielding loans prepaying and new loans funded at yields below the existing loan portfolio yield. Total portfolio loan originations (including purchased loans) in the second quarter of fiscal 2004 were $191.9 million, which consisted primarily of single-family, multi-family, commercial real estate and construction loans. This compares to total portfolio loan originations (including purchased loans) of $159.3 million in the second quarter of fiscal 2003. The balance outstanding of "preferred loans" (multi-family, construction, commercial real estate and commercial business loans) increased by $32.3 million, or 17 percent, to $220.6 million at December 31, 2003 from $188.3 million at December 31, 2002. The ratio of preferred loans to portfolio loans decreased to 25 percent at December 31, 2003 from 28 percent at December 31, 2002. Loan prepayments in the second quarter of fiscal 2004 were $103.1 million, compared to $111.1 million in the same quarter of fiscal 2003.

        The average balance of deposits increased by $100.5 million to $809.9 million and the average cost of deposits decreased by 69 basis points to 1.65 percent in the second quarter of fiscal 2004, compared to an average balance of $709.4 million and an average cost of 2.34 percent in the same quarter last year. Total transaction account

Page 3 of 13

<PAGE>

balances (core deposits) increased by $173.2 million, or 45 percent, to $556.6 million at December 31, 2003 from $383.4 million at December 31, 2002, while total time deposits decreased by $74.3 million, or 23 percent, to $253.4 million at December 31, 2003 from $327.7 million at December 31, 2002.

        The average balance of FHLB advances increased by $10.2 million to $300.0 million, and the average cost of advances decreased 21 basis points to 4.08 percent in the second quarter of fiscal 2004, compared to an average balance of $289.8 million and an average cost of 4.29 percent in the same quarter of fiscal 2003. The decrease in the average cost of FHLB advances was primarily the result of maturing advances with higher costs replaced by new advances with lower costs and the utilization of overnight advances at significantly lower costs.

        The net interest margin during the second quarter of fiscal 2004 increased 2 basis points to 2.95 percent, compared to 2.93 percent during the same quarter last year. On a sequential quarter basis, the net interest margin in the second quarter of fiscal 2004 increased 7 basis points from 2.88 percent in the first quarter of fiscal 2004. For the six months ended December 31, 2003, the net interest margin decreased to 2.92 percent, compared to 2.93 percent during the same period last year.

        During the second quarter of fiscal 2004, the provision for loan losses was $269,000, compared to $565,000 during the same period of fiscal 2003. The allowance for loan losses is considered sufficient to absorb potential losses inherent in loans held for investment.

        The decrease in non-interest income in the second quarter of fiscal 2004 compared to the same period of fiscal 2003 was primarily the result of a decrease in the

Page 4 of 13

<PAGE>

gain on sale of loans. The gain on sale of loans decreased by $2.2 million, or 45 percent, to $2.7 million, primarily attributable to a lower volume of loans originated for sale ($192.2 million compared to $322.0 million) the result of higher mortgage interest rates which led to lower refinance volumes. The loan sale margin was 154 basis points in the second quarter of fiscal 2004, down from 160 basis points in the prior year.

        In the second quarter of fiscal 2004, the fair-value adjustment of derivative financial instruments (Statement of Financial Accounting Standards (("SFAS")) No. 133) on the consolidated statement of operations was an unfavorable adjustment of $244,000, compared to an unfavorable adjustment of $248,000 in the same period last year. The fair value of the derivative financial instruments at December 31, 2003 was $259,000, compared to $810,000 at December 31, 2002. The fair-value adjustment for SFAS No. 133 is derived from changes in the market value of commitments to extend credit on loans to be held for sale, including servicing released premiums (net of commitments which may not fund), forward loan sale agreements and option contracts. The SFAS No. 133 adjustment is relatively volatile and may have an adverse impact on future earnings.

        Non-interest expense for the second quarter of fiscal 2004 increased by $134,000 to $7.2 million, compared to $7.1 million for the same quarter in fiscal 2003. The increase in non-interest expense was primarily the result of compensation and marketing costs associated with the new banking center in the Orangecrest area of Riverside, California, which opened in late August 2003, and an increase in incentive compensation as a result of transaction account growth. The Mortgage Banking Division incurred decreased commissions and loan production incentives in the second quarter of fiscal 2004, which were $119,000 lower than in the same period in fiscal 2003. The Southern

Page 5 of 13

<PAGE>

California wild fires in late October 2003 caused no material impact on the results of operations, financial position or cash flows for the quarter ended December 31, 2003. Also, the recently announced revisions of the Real Estate Investment Trust-related tax laws by the State of California Franchise Tax Board will have no impact on the Company.

        The Company's efficiency ratio for the second quarter of fiscal 2004 increased to 56 percent from 50 percent in the second quarter of 2003, a result of the decrease in non-interest income. For the six months ended December 31, 2003 the efficiency ratio increased to 55 percent from 51 percent during the same period in 2002.

        Non-performing assets increased to $2.5 million, or 0.19 percent of total assets, at December 31, 2003, compared to $2.0 million, or 0.17 percent of total assets, at December 31, 2002. The allowance for loan losses was $7.5 million at December 31, 2003, or 0.85 percent of gross loans held for investment, compared to $7.4 million, or 1.08 percent of gross loans held for investment, at December 31, 2002.

        During the quarter ended December 31, 2003, the Company did not repurchase any of its common stock. Currently, there are 94,446 shares remaining under the existing share repurchase authorization.

        The Bank currently operates 12 retail/business banking offices in Riverside County and San Bernardino County along with nine Provident Bank Mortgage loan production offices located throughout Southern California. The tenth loan production office is scheduled to open in February 2004 in Corona, California.

        The Company will host a conference call for institutional investors and bank analysts on Friday, January 23, 2004 at 10:00 a.m. (Pacific Time) to discuss its financial

Page 6 of 13

<PAGE>

results. The conference call can be accessed by dialing (888) 273-9887 and requesting the Provident Financial Holdings Earnings Release Conference Call. An audio replay of the conference call will be available through Friday, January 30, 2004 by dialing (800) 475-6701 and referencing access code number 716650.

        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

Certain matters in this News Release and the conference call noted above may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may relate to, among others, expectations of the business environment in which the Company operates, projections of future performance, perceived opportunities in the market, potential future credit experience, and statements regarding the Company's mission and vision. These forward-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties. The Company's actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements due to a wide range of factors including, but not limited to, the general business environment, interest rates, the California real estate market, competitive conditions between banks and non-bank financial services providers, regulatory changes, and other risks detailed in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2003.

Page 7 of 13

<PAGE>

PROVIDENT FINANCIAL HOLDINGS, INC.
Consolidated Statements of Financial Condition
(Unaudited - In Thousands)

       
 

December 31,
2003

 

June 30,
2003

   

Assets

         

   Cash

$ 24,427

$ 48,851

   Investment securities - held to maturity

         

     (fair value $76,340 and $77,210, respectively)

76,397

   

76,838

 

   Investment securities - available for sale at fair value

214,708

   

220,273

 

   Loans held for investment, net of allowance for loan losses of

         

     $7,480 and $7,218, respectively

870,088

   

744,219

 

   Loans held for sale, at lower of cost or market

4,909

   

4,247

 

   Receivable from sale of loans

52,526

   

114,902

 

   Accrued interest receivable

4,750

   

4,934

 

   Real estate held for investment, net

10,373

   

10,643

 

   Real estate owned, net

-

   

523

 

   Federal Home Loan Bank stock

24,484

   

20,974

 

   Premises and equipment, net

8,107

   

8,045

 

   Prepaid expenses and other assets

6,827

7,057

 

          Total assets

$ 1,297,596

   

$ 1,261,506

 
 

 

   

 

 

Liabilities and Stockholders' Equity

         

Liabilities:

         

   Non-interest bearing deposits

$ 45,756

$ 43,840

   Interest bearing deposits

764,283

   

710,266

 

          Total deposits

810,039

   

754,106

 
           

   Borrowings

356,892

   

367,938

 

   Accounts payable, accrued interest and other liabilities

24,790

   

32,584

 

          Total liabilities

1,191,721

   

1,154,628

 
           

Stockholders' equity:

         

   Preferred stock, $.01 par value; authorized 2,000,000 shares;
     none issued and outstanding

-

-

   Common stock, $.01 par value; authorized 15,000,000 shares;
     issued 7,928,115 and 7,846,665 shares, respectively;
     outstanding 4,817,997 and 4,986,519 shares, respectively)

79

78

   Additional paid-in capital

56,432

   

54,731

 

   Retained earnings

104,375

   

98,660

 

   Treasury stock at cost (3,110,118 and 2,860,146 shares,
     respectively)

(53,358

)

(45,801

)

   Unearned stock compensation

(2,180

)

(2,450

)

   Accumulated other comprehensive income, net of tax

527

   

1,660

 

 

 

 

 

          Total stockholders' equity

105,875

   

106,878

 
           

          Total liabilities and stockholders' equity

$ 1,297,596

   

$ 1,261,506

 

Page 8 of 13

<PAGE>

 

PROVIDENT FINANCIAL HOLDINGS, INC.
Consolidated Statement of Operations
(Unaudited - In Thousands, Except Earnings Per Share)

       
 

Quarter Ended
December 31,

 

Six Months Ended December 31,

   

2003

 

2002

 

2003

 

2002

Interest income:

             

   Loans receivable, net

$ 12,966

 

$ 12,471

 

$ 25,806

 

$ 24,205

   Investment securities

2,074

 

2,478

 

3,861

 

5,157

   FHLB stock

203

 

201

 

433

 

393

   Interest earning deposits

6

 

3

 

10

 

9

   Total interest income

15,249

 

15,153

 

30,110

 

29,764

               

Interest expense:

             

   NOW and money market checking

375

 

380

 

740

 

816

   Savings deposits

1,389

 

993

 

2,630

 

1,924

   Time deposits

1,609

 

2,810

 

3,439

 

5,966

   Borrowings

3,088

3,135

6,130

6,152

   Total interest expense

6,461

 

7,318

 

12,939

 

14,858

               

Net interest income

8,788

 

7,835

 

17,171

 

14,906

Provision for loan losses

269

 

565

 

269

 

765

Net interest income after provision for loan losses

8,519

7,270

16,902

14,141

               

Non-interest income

             

   Loan servicing and other fees

543

 

471

 

1,066

 

960

   Gain on sale of loans, net

2,739

 

4,909

 

5,893

 

9,019

   Real estate operations, net

13

 

144

 

203

 

352

   Deposit account fees

504

 

431

 

984

 

874

   Gain on sale of investment securities

-

 

-

 

-

 

266

   Other

315

 

281

 

694

 

826

   Total non-interest income

4,114

6,236

8,840

12,297

               

Non-interest expense

             

   Salaries and employee benefits

4,666

 

4,560

 

9,247

 

8,837

   Premises and occupancy

568

 

637

 

1,223

 

1,254

   Equipment

454

 

470

 

849

 

960

   Professional expenses

229

 

189

 

387

 

356

   Sales and marketing expenses

306

 

216

 

536

 

448

   Other

992

 

1,009

 

1,938

 

1,921

   Total non-interest expense

7,215

 

7,081

 

14,180

 

13,776

               

Income before taxes

5,418

 

6,425

 

11,562

 

12,662

Provision for income taxes

2,327

 

2,536

 

4,890

 

5,079

   Net income

$  3,091

 

$  3,889

 

$  6,672

 

$  7,583

               

Basic earnings per share

$   0.69

 

$   0.82

 

$   1.48

 

$   1.56

Diluted earnings per share

$   0.65

 

$   0.76

 

$   1.39

 

$   1.45

Cash dividends per share

$   0.10

 

$   0.05

 

$   0.20

 

$   0.10

Page 9 of 13

<PAGE>

 

PROVIDENT FINANCIAL HOLDINGS, INC.
Consolidated Statement of Operations - Sequential Quarter
(Dollars in Thousands, Except Earnings Per Share) (Unaudited)

   
 

Quarter Ended

 

December 31,

 

September 30,

2003

 

2003

Interest income:

     

   Loans receivable, net

$ 12,966

 

$ 12,840

   Investment securities

2,074

 

1,787

   FHLB stock

203

 

230

   Interest-earning deposits

6

 

4

   Total interest income

15,249

 

14,861

       

Interest expense:

     

   Checking and money market accounts

375

 

365

   Savings accounts

1,389

 

1,241

   Time deposits

1,609

 

1,830

   Borrowings

3,088

3,042

   Total interest expense

6,461

 

6,478

       

Net interest income

8,788

 

8,383

Provision for loan losses

269

 

-

Net interest income after provision for loan losses

8,519

8,383

       

Non-interest income:

     

   Loan servicing and other fees

543

 

523

   Gain on sale of loans, net

2,739

 

3,154

   Real estate operations, net

13

 

190

   Deposit account fees

504

 

480

   Other

315

 

379

   Total non-interest income

4,114

4,726

       

Non-interest expense:

     

   Salaries and employee benefits

4,666

 

4,581

   Premises and occupancy

568

 

655

   Equipment

454

 

395

   Professional expenses

229

 

158

   Sales and marketing expenses

306

 

230

   Other

992

 

946

   Total non-interest expense

7,215

 

6,965

       

Income before taxes

5,418

 

6,144

Provision for income taxes

2,327

 

2,563

   Net income

$  3,091

 

$  3,581

       

Basic earnings per share

$  0.69

 

$  0.79

Diluted earnings per share

$  0.65

 

$  0.74

Cash dividends per share

$  0.10

 

$  0.10

Page 10 of 13

<PAGE>

 

PROVIDENT FINANCIAL HOLDINGS, INC.
Financial Highlights
(Unaudited)

       
 

Quarter Ended
December 31,

 

Six Months Ended
December 31,

 

2003

 

2002

 

2003

 

2002

SELECTED FINANCIAL RATIOS:

             

Return on average assets

0.99%

 

1.36%

 

1.07%

 

1.40%

Return on average stockholders' equity

11.90%

 

15.30%

 

12.87%

 

14.81%

Stockholders' equity to total assets

8.16%

 

8.55%

 

8.16%

 

8.55%

Net interest spread

2.81%

 

2.75%

 

2.78%

 

2.73%

Net interest margin

2.95%

 

2.93%

 

2.92%

 

2.93%

Efficiency ratio

55.92%

 

50.32%

 

54.52%

 

50.64%

Average interest earning assets to average

             

   interest bearing liabilities

107.25%

 

107.18%

 

107.17%

 

107.91%

               

SELECTED FINANCIAL DATA:

             

Basic earnings per share

$   0.69

 

$   0.82

 

$   1.48

 

$   1.56

Diluted earnings per share

$   0.65

 

$   0.76

 

$   1.39

 

$   1.45

Book value per share

$ 21.97

 

$ 19.91

 

$ 21.97

 

$ 19.91

Shares used for basic EPS computation

4,463,539

 

4,771,725

 

4,494,174

 

4,870,104

Shares used for diluted EPS computation

4,775,439

 

5,145,500

 

4,809,485

 

5,245,769

Total shares issued and outstanding

4,817,997

 

5,036,044

 

4,817,997

 

5,036,044

               

ASSET QUALITY RATIOS:

             

Non-performing loans to loans held for investment, net

0.29%

 

0.23%

       

Non-performing assets to total assets

0.19%

 

0.17%

       

Allowance for loan losses to non-performing loans

299.56%

 

481.43%

       

Allowance for loan losses to gross loans held for

             

   investment

0.85%

 

1.08%

       
               

REGULATORY CAPITAL RATIOS:

             

Tangible equity ratio

6.62%

 

6.41%

       

Tier 1 (core) capital ratio

6.62%

 

6.41%

       

Total risk-based capital ratio

12.09%

 

13.12%

       

Tier 1 risk-based capital ratio

11.14%

 

12.02%

       
               

LOANS ORIGINATED FOR SALE (In Thousands):

             

Retail originations

$   77,591

 

$ 122,355

 

$ 244,717

 

$ 219,617

Wholesale originations

114,657

 

199,633

 

290,191

 

358,322

   Total loans originated for sale

$ 192,248

 

$ 321,988

 

$ 534,908

 

$ 577,939

               

LOANS SOLD AND SETTLED (In Thousands):

             

Servicing released

$ 155,965

 

$ 303,273

 

$ 489,058

 

$ 537,640

Servicing retained

43,846

 

3,202

 

122,874

 

8,796

   Total loans sold and settled

$ 199,811

 

$ 306,475

 

$611,932

 

$ 546,436

Page 11 of 13

<PAGE>

 

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

   
 

As of December 31,

 

2003

 

2002

Balance

Rate

Balance

Rate

INVESTMENT SECURITIES:

             

Held to maturity:

             

U.S. government agency securities

$  73,402

 

3.04%

 

$ 114,022

 

2.84%

U.S. government mortgage-backed securities

7

 

12.91%

 

8

 

14.12%

Corporate bonds

2,788

 

7.06%

 

2,770

 

7.10%

Time deposits at other banks

200

 

1.05%

 

-

 

-

   Total investment securities held to maturity

76,397

 

3.19%

 

116,800

 

2.94%

               

Available for sale (at fair value):

             

U.S. government agency securities

36,296

 

2.86%

 

31,822

 

2.65%

U.S. government agency mortgage-backed securities

162,316

 

3.81%

 

157,610

 

4.41%

Collateralized mortgage obligations

15,367

 

3.68%

 

-

 

-

Freddie Mac common stock

700

     

699

   

Fannie Mae common stock

29

     

25

   

   Total investment securities available for sale

214,708

 

3.63%

 

190,156

 

4.10%

     Total investment securities

$ 291,105

 

3.51%

 

$ 306,956

 

3.66%

               

LOANS HELD FOR INVESTMENT:

             

Single-family (1 to 4 units)

$ 641,452

 

5.43%

 

$ 476,459

 

6.20%

Multi-family (5 or more units)

58,904

 

5.95%

 

47,639

 

6.27%

Commercial real estate

91,746

 

6.61%

 

77,457

 

7.07%

Construction

126,005

 

5.50%

 

90,067

 

6.53%

Commercial business

18,027

 

6.85%

 

22,756

 

7.39%

Consumer

7,316

 

7.21%

 

13,158

 

7.74%

Other

6,811

 

7.03%

 

4,134

 

7.90%

   Total loans held for investment

950,261

 

5.65%

 

731,670

 

6.41%

               

Undisbursed loan funds

(74,081

)

   

(49,610

)

 

Deferred loan fees

1,388

     

51

   

Allowance for loan losses

(7,480

)

   

(7,361

)

 

   Total loans held for investment, net

$ 870,088

     

$ 674,750

   
               

Purchased loans serviced by others included above

$   35,635

 

6.40%

 

$   43,521

 

6.83%

               

DEPOSITS :

             

Checking accounts - non-interest bearing

$   45,756

     

$   35,331

   

Checking accounts - interest bearing

107,746

 

0.78%

 

96,021

 

0.78%

Savings accounts

356,786

 

1.58%

 

203,752

 

1.99%

Money market accounts

46,307

 

1.39%

 

48,250

 

1.50%

Time deposits

253,444

 

2.40%

 

327,652

 

3.19%

   Total deposits

$ 810,039

 

1.63%

 

$ 711,006

 

2.25%

Note: The interest rate described in the rate column is the weighted-average interest rate of all instruments, which are included in the balance of the respective line item.

Page 12 of 13

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

   
 

As of December 31,

 

2003

 

2002

 

Balance

 

Rate

 

Balance

 

Rate

BORROWINGS:

             

Overnight

$ 102,000

 

0.94%

 

$ 111,000

 

1.45%

Six month or less

4,000

 

5.56%

 

23,000

 

6.31%

Over six months to one year

25,000

 

5.92%

 

39,031

 

5.89%

Over one year to two years

10,000

 

4.56%

 

4,000

 

5.56%

Over two years to three years

32,000

 

3.38%

 

10,000

 

4.56%

Over three years to four years

40,000

 

3.66%

 

15,000

 

4.46%

Over four years to five years

47,000

 

3.78%

 

40,000

 

3.66%

Over five years

96,892

 

5.15%

 

94,921

 

5.34%

   Total borrowings

$ 356,892

 

3.49%

 

$ 336,952

 

3.93%

               
 

Quarter Ended

 

Six Months Ended

 
 

December 31,

 

December 31,

 
 

2003

 

2002

 

2003

 

2002

 

SELECTED AVERAGE BALANCE SHEETS:

Balance

 

Balance

 

Balance

 

Balance

 
                 

Loans receivable, net (1)

$   901,787

 

$   751,270

 

$   887,366

 

$   711,968

 

Investment securities

264,273

 

302,671

 

265,732

 

289,051

 

FHLB stock

22,029

 

16,044

 

21,554

 

14,234

 

Interest earning deposits

2,185

 

954

 

1,664

 

1,243

 

Total interest earning assets

$1,190,274

 

$1,070,939

 

$1,176,316

 

$1,016,496

 
                 

Deposits

$   809,868

 

$   709,442

 

$   790,710

 

$   697,267

 

Borrowings

299,993

 

289,753

 

306,896

 

244,700

 

Total interest bearing liabilities

$1,109,861

 

$   999,195

 

$1,097,606

 

$   941,967

 
                 
 

Quarter Ended

 

Six Months Ended

 
 

December 31,

 

December 31,

 
 

2003

 

2002

 

2003

 

2002

 
 

Yield/Cost

 

Yield/Cost

 

Yield/Cost

 

Yield/Cost

 
                 

Loans receivable, net (1)

5.75%

 

6.64%

 

5.82%

 

6.80%

 

Investment securities

3.14%

 

3.27%

 

2.91%

 

3.57%

 

FHLB stock

3.69%

 

5.01%

 

4.02%

 

5.52%

 

Interest earning deposits

1.10%

 

1.26%

 

1.20%

 

1.45%

 

Total interest earning assets

5.12%

 

5.66%

 

5.12%

 

5.86%

 
                 

Deposits

1.65%

 

2.34%

 

1.71%

 

2.48%

 

Borrowings

4.08%

 

4.29%

 

3.96%

 

4.99%

 

Total interest bearing liabilities

2.31%

 

2.91%

 

2.34%

 

3.13%

 

(1)    Includes loans held for sale.

Note: The interest rate or yield/cost described in the rate or yield/cost column is the weighted-average interest rate or yield/cost of all instruments, which are included in the balance of the respective line item.

Page 13 of 13

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