PROVIDENT FINANCIAL HOLDINGS INC

Previous wording

Provident Financial Holdings, Inc., a Delaware corporation, was organized in January 1996 for the purpose of becoming the holding company of Provident Savings Bank, F.S.B. (the “Bank") upon the Bank’s conversion from a federal mutual to a federal stock savings bank (“Conversion”). The Conversion was completed on June 27, 1996. The Corporation is regulated by the Board of Governors of the Federal Reserve System (“Federal Reserve”). At December 31, 2024, the Corporation had total assets of $1.25 billion, total deposits of $867.5 million and total stockholders’ equity of $128.6 million. The Corporation has not engaged in any significant activity other than holding the stock of the Bank. Accordingly, the information set forth in this report, including financial statements and related data, relates primarily to the Bank and its subsidiaries. As used in this report, the terms “we,” “our,” “us,” and “Corporation” refer to Provident Financial Holdings, Inc. and its consolidated subsidiaries, unless the context indicates otherwise.

Current wording

Provident Financial Holdings, Inc., a Delaware corporation, was organized in January 1996 for the purpose of becoming the holding company of Provident Savings Bank, F.S.B. (the “Bank") upon the Bank’s conversion from a federal mutual to a federal stock savings bank (“Conversion”). The Conversion was completed on June 27, 1996. The Corporation is regulated by the Board of Governors of the Federal Reserve System (“Federal Reserve”). At March 31, 2025, the Corporation had total assets of $1.26 billion, total deposits of $901.3 million and total stockholders’ equity of $128.9 million. The Corporation has not engaged in any significant activity other than holding the stock of the Bank. Accordingly, the information set forth in this report, including financial statements and related data, relates primarily to the Bank and

Previous wording

The Corporation began paying quarterly cash dividends during the quarter ended September 30, 2002. On October 24, 2024, the Corporation’s Board of Directors declared a quarterly cash dividend of $0.14 per share for shareholders of record as of the close of business on November 14, 2024. This dividend was paid on December 5, 2024. Future dividend declarations and payments will be subject to the Board of Directors’ discretion, considering factors such as the Corporation’s financial condition, operational results, tax implications, capital requirements, industry standards, legal restrictions, economic conditions, and other relevant factors, including regulatory limitations that affect the Bank’s ability to pay dividends to the Corporation. Under Delaware law, dividends may be paid from surplus or, in the abset of surplus, from net profits of the current fiscal year and/or the preceding fiscal year in which the dividend is declared.

Current wording

The Corporation began paying quarterly cash dividends during the quarter ended September 30, 2002. On January 23, 2025, the Corporation’s Board of Directors declared a quarterly cash dividend of $0.14 per share for shareholders of record as of the close of business on February 13, 2025. This dividend was paid on March 6, 2025. Future dividend declarations and payments will be subject to the Board of Directors’ discretion, considering factors such as the Corporation’s financial condition, operational results, tax implications, capital requirements, industry standards, legal restrictions, economic conditions, and other relevant factors, including regulatory limitations that affect the Bank’s ability to pay dividends to the Corporation. Under Delaware law, dividends may be paid from surplus or, in the absence of surplus, from net profits of the current fiscal year and/or the preceding fiscal year in which the dividend is declared.

Previous wording

The Corporation’s critical accounting estimates are described in the Critical Accounting Estimates section of Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 1 - Organization and Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (“2024 Form 10-K”). There have not been any material changes in the Corporation’s critical accounting policies and estimates as compared to the disclosures contained in the Corporation’s 2024 Form 10-K.

Current wording

The Corporation’s critical accounting estimates are described in the Critical Accounting Estimates section of Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 1 - Organization and Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (“2024 Annual Form 10-K”). There have not been any material

Previous wording

Provident Savings Bank, F.S.B., established in 1956, is a financial services company committed to serving consumers and small to mid-sized businesses in the Inland Empire region of Southern California. The Bank conducts its business operations as Provident Bank and through its subsidiary, Provident Financial Corp. The business activities of the Corporation, primarily through the Bank, consist of community banking and, to a lesser degree, investment services for customers and trustee services on behalf of the Bank.

Current wording

Provident Savings Bank, F.S.B., established in 1956, is a financial services company committed to serving consumers and small to mid-sized businesses in the Inland Empire region of Southern California. The Bank conducts its business operations as Provident Bank and through its subsidiary, Provident Financial Corp (“PFC”). The business activities of the Corporation, primarily through the Bank, consist of community banking and, to a lesser degree, investment services for customers and trustee services on behalf of the Bank.

Previous wording

Community banking operations primarily consist of accepting deposits from customers within the communities surrounding the Corporation’s full service offices and investing those funds in single-family, multi-family and commercial real estate loans. Also, to a lesser extent, the Corporation makes construction, commercial business, consumer and other mortgage loans. The primary source of income in community banking is net interest income, which is the difference between the interest income earned on loans and investment securities, and the interest expense paid on interest-bearing deposits and borrowed funds. Additionally, certain fees are collected from depositors, such as returned check fees, deposit account service charges, ATM fees, IRA/KEOGH fees, safe deposit box fees, wire transfer fees and overdraft protection fees, among others.

Current wording

Community banking operations primarily consist of accepting deposits from customers within the communities surrounding the Corporation’s full service offices and investing those funds in single-family, multi-family and commercial real estate loans. Also, to a lesser extent, the Corporation makes construction, commercial business, consumer and other mortgage loans. The primary source of income in community banking is net interest income, which is the difference between the interest income earned on loans and investment securities, and the interest expense paid on interest-bearing deposits and borrowed funds. Additionally, certain fees are collected from depositors, such as overdraft fees, deposit account service charges, ATM fees, IRA/KEOGH fees, safe deposit box fees, wire transfer fees and overdraft protection fees, among others.

Previous wording

The Corporation plans to enhance its community banking business by moderately increasing its total assets, focusing on expanding single-family, multi-family, commercial real estate, construction, and commercial business loans. Additionally, the Corporation aims to reduce the percentage of retail time deposits in its deposit base while increasing the proportion of lower-cost checking and savings accounts. To diversify its deposit instruments, the Corporation will consider utilizing brokered certificates of deposit and the State of California’s time deposits, subject to market conditions and its funding needs. This strategy is designed to improve core revenue by achieving a higher net interest margin and, combined with the Corporation’s growth, ultimately increase net interest income. While the Corporation’s long-term strategy targets moderate growth, management acknowledges that this growth may be influenced by general economic conditions and other factors.

Current wording

The Corporation plans to enhance its community banking operations through moderate asset growth, with a strategic focus on expanding its single-family, multi-family, commercial real estate, construction, and commercial business lending portfolios. In parallel, the Corporation plans to improve the composition of its deposit base by reducing reliance on retail time deposits and increasing the proportion of lower-cost checking and savings accounts. To further diversify its funding sources, the Corporation may utilize brokered certificates of deposit and government deposits, as appropriate based on market conditions and funding requirements. This strategy is designed to strengthen core revenue by improving the net interest margin and, in conjunction with asset growth, increase overall net interest income. While the Corporation’s long-term strategy targets moderate and sustainable growth, management recognizes that the pace and success of this growth will be influenced by general economic conditions and other external factors.

Previous wording

Investment services operations primarily consist of selling alternative investment products such as annuities and mutual funds to the Bank’s depositors. Provident Financial Corp (“PFC”) performs trustee services for the Bank’s real estate secured loan transactions and has in the past held, and may in the future hold, real estate for investment. Investment services and trustee services contribute a very small percentage of gross revenue.

Current wording

Investment services operations primarily consist of selling alternative investment products such as annuities and mutual funds to the Bank’s depositors. PFC performs trustee services for the Bank’s real estate secured loan transactions and has in the past held, and may in the future hold, real estate for investment. Investment services and trustee services contribute a very small percentage of gross revenue.

Previous wording

There are a number of risks associated with the business activities of the Corporation, many of which are beyond the Corporation’s control as described in the 2024 Form 10-K. The Corporation attempts to mitigate many of these risks through prudent banking practices, such as interest rate risk management, credit risk management, operational risk management, and liquidity risk management.

Current wording

There are a number of risks associated with the business activities of the Corporation, many of which are beyond the Corporation’s control as described in the 2024 Annual Form 10-K. The Corporation attempts to mitigate many of these risks through prudent banking practices, such as interest rate risk management, credit risk management, operational risk management, and liquidity risk management.

Previous wording

The California economic environment presents heightened risk for the Corporation primarily with respect to real estate values and loan delinquencies. Since the majority of the Corporation’s loans are secured by real estate located within California, significant declines in the value of California real estate may inhibit the Corporation’s ability to recover on defaulted loans by selling the underlying real estate. Additionally, the commercial real estate environment, particularly office space of various types, currently presents elevated risk within the banking industry. In response, the Bank has reviewed its existing loans collateralized by office space for any outsized exposure and implemented tighter underwriting standards for this collateral type. At December 31, 2024, our commercial real estate portfolio totaled $78.0 million, including office space of various types, totaling approximately $40.4 million or 51.8 percent of the total commercial real estate portfolio and 3.8 percent of the total loan portfolio.

Current wording

The California economic environment presents heightened risk for the Corporation primarily with respect to real estate values and loan delinquencies. Since the majority of the Corporation’s loans are secured by real estate located within California, significant declines in the value of California real estate may inhibit the Corporation’s ability to recover on defaulted loans by selling the underlying real estate. Additionally, the commercial real estate environment, particularly office space of various types, currently presents elevated risk within the banking industry. In response, the Bank has reviewed its existing loans collateralized by office space for any outsized exposure and implemented tighter underwriting standards for this collateral type. At March 31, 2025, our commercial real estate portfolio totaled $75.3 million, including office space of various types, totaling approximately $39.9 million or 52.9 percent of the total commercial real estate portfolio and 3.8 percent of the total loan portfolio.

Previous wording

The recent wildfires in California, which began in January 2025, have not materially impacted the Bank’s customers or collateral in our market area. However, the statewide economic repercussions of these events may indirectly affect the Corporation. These repercussions include increased insurance premiums, stricter underwriting standards, and potential shifts in property values, which could elevate credit risk. Additionally, the long-term risk of recurring wildfires due to climate change presents ongoing challenges to real estate markets across the state. The Corporation remains committed to prudent risk management practices and continues to monitor these developments to mitigate potential risks and support customers in navigating any financial challenges that may arise. For additional information, see “Asset Quality” below.

Current wording

The January 2025 wildfires in Los Angeles, California did not have material impact to the Bank’s customers or collateral in our market area. However, the statewide economic repercussions of these events may indirectly affect the Corporation. These repercussions might include increased insurance premiums, stricter underwriting standards, and potential shifts in property values, which could elevate credit risk. Additionally, the long-term risk of recurring wildfires due to climate

Previous wording

Total assets decreased one percent to $1.25 billion at December 31, 2024 from $1.27 billion at June 30, 2024. The decrease was primarily attributable to decreases in cash and cash equivalents and investment securities.

Current wording

Total assets decreased one percent to $1.26 billion at March 31, 2025 from $1.27 billion at June 30, 2024. The decrease was primarily attributable to a decrease in investment securities, partially offset by an increase in loans held for investment.

Previous wording

Total cash and cash equivalents, primarily excess cash deposited with the FRB of San Francisco, decreased $5.9 million, or 11 percent, to $45.5 million at December 31, 2024 from $51.4 million at June 30, 2024. The decrease in total cash and cash equivalents was primarily attributable to deposit outflows and management’s proactive strategy to manage liquidity based upon recent economic conditions.

Current wording

Total cash and cash equivalents, primarily excess cash deposited with the FRB of San Francisco, decreased $461,000, or one percent, to $50.9 million at March 31, 2025 from $51.4 million at June 30, 2024. The decrease was primarily attributable to utilization of cash to support loan growth in the held for investment portfolio, which was also funded by deposit inflows. This decline was partly offset by a decrease in borrowings and reflects management’s proactive strategy to manage liquidity in response to prevailing economic conditions.

Previous wording

Investment securities (held to maturity and available for sale) decreased $11.3 million, or nine percent, to $120.6 million at December 31, 2024 from $131.9 million at June 30, 2024. The decrease was primarily the result of scheduled and accelerated principal payments on mortgage-backed and other securities during the first six months of fiscal 2025, with no purchases or sales of investment securities during the period. For further analysis on investment securities, see Note 4 of the Notes to Unaudited Interim Condensed Consolidated Financial Statements of this Form 10-Q.

Current wording

Investment securities (held to maturity and available for sale) decreased $16.6 million, or 13 percent, to $115.3 million at March 31, 2025 from $131.9 million at June 30, 2024. The decrease was primarily the result of scheduled and accelerated principal payments on mortgage-backed and other securities during the first nine months of fiscal 2025, with no purchases or sales of investment securities during the period. For further analysis on investment securities, see Note 4 of the Notes to Unaudited Interim Condensed Consolidated Financial Statements of this Form 10-Q.

Previous wording

Loans held for investment increased $624,000 to $1.05 billion at December 31, 2024 from June 30, 2024, predominantly due to an increase in single-family loans, partly offset by declines in multi-family and commercial real estate loans. During the first six months of fiscal 2025, the Corporation originated $65.4 million of loans held for investment, consisting primarily of single-family, multi-family and commercial real estate loans located throughout California. The Corporation did not purchase any loans during the first six months of fiscal 2025. Total loan principal payments during the first six months of fiscal 2025 were $68.4 million, up 68 percent from $40.8 million during the comparable period in fiscal 2024. Single-family loans held for investment at December 31, 2024 and June 30, 2024 totaled $533.1 million and $518.1

Current wording

Loans held for investment increased $6.0 million to $1.06 billion at March 31, 2025 from $1.05 billion at June 30, 2024, predominantly due to increases in single-family and commercial business loans, partly offset by declines in multi-family and commercial real estate loans. During the first nine months of fiscal 2025, the Corporation originated $93.3 million of loans held for investment, consisting primarily of single-family, multi-family and commercial real estate loans located throughout California, compared to $56.9 million originated during the nine months ended June 30, 2024. The Corporation did not purchase any loans during the first nine months of fiscal 2025 or 2024. Total loan principal payments during the first nine months of fiscal 2025 were $91.4 million, up 32 percent from $69.3 million during the comparable period in fiscal 2024, reflecting elevated payoff and amortization activity. Single-family loans held for investment at March 31, 2025 and June 30, 2024 totaled $545.4 million and $518.1 million, representing approximately 52 percent and 49 percent of loans held for investment, respectively. Multi-family loans held for investment at March 31, 2025 and June 30, 2024 totaled $429.5 million and $445.2 million, respectively, representing approximately 41 percent and 42 percent of loans held for investment, respectively. Commercial real estate loans held for investment at March 31, 2025 and June 30, 2024 totaled $75.3 million and $83.3 million, respectively, representing approximately seven percent and eight percent of loans held for investment, respectively. Commercial business loans at March 31, 2025 and June 30, 2024 totaled $4.2 million and $1.4 million, respectively.

Previous wording

Total deposits decreased $20.8 million, or two percent, to $867.5 million at December 31, 2024 from $888.3 million at June 30, 2024, due to decreases in all account categories, except time deposits. The decrease in total deposits was primarily due to customers seeking higher interest rates as competition for deposits in our market area remains strong. Total uninsured deposits were approximately $134.7 million and $122.7 million at December 31, 2024 and June 30, 2024, respectively. The amounts of uninsured deposits are based on estimated amounts of uninsured deposits as of the reported period. Such estimates are based on the same methodologies and assumptions used for regulatory reporting requirements.

Current wording

Total uninsured deposits were approximately $162.2 million (of which, $57.1 million were collateralized) and $122.7 million (of which, $9.0 million were collateralized) at March 31, 2025 and June 30, 2024, respectively. Uninsured deposits are based on estimated amounts of uninsured deposits as of the reported period. Such estimates are based on the same methodologies and assumptions used for regulatory reporting requirements.

Previous wording

Total borrowings increased $7.0 million, or three percent, to $245.5 million at December 31, 2024 from $238.5 million at June 30, 2024. The increase in borrowings was primarily to fund deposit outflows. At December 31, 2024 and June 30, 2024, borrowings were comprised of short-term and long-term FHLB - San Francisco advances used for liquidity and interest rate risk management purposes.

Current wording

Total borrowings decreased $22.9 million, or 10 percent, to $215.6 million at March 31, 2025 from $238.5 million at June 30, 2024. The decrease in borrowings was due primarily to payoffs from the scheduled maturities. At March 31, 2025 and June 30, 2024, borrowings were comprised of short-term and long-term FHLB - San Francisco advances used for liquidity and interest rate risk management purposes.

Previous wording

Total stockholders’ equity declined $1.3 million, or one percent, to $128.6 million at December 31, 2024 from $129.9 million at June 30, 2024. The decrease was primarily due to $1.9 million of cash dividends paid to shareholders and $2.5 million of stock repurchases, partly offset by net income of $2.8 million in the first six months of fiscal 2025 and the amortization of stock-based compensation of $300,000. The Corporation repurchased 157,197 shares of its common stock in the open market at a weighted average cost of $14.98 per share during the first six months of fiscal 2025 pursuant to its publicly announced stock repurchase program. In addition, the Corporation acquired 8,758 shares of the Corporation common stock at a cost of $13.24 per share in settlement of employees' withholding tax obligations related to the vesting of restricted stock in the first six months of fiscal 2025.

Current wording

Total stockholders’ equity declined $1.0 million, or one percent, to $128.9 million at March 31, 2025 from $129.9 million at June 30, 2024. The decrease was primarily due to $2.8 million of cash dividends paid to shareholders and $3.3 million of stock repurchases, partly offset by net income of $4.6 million and the amortization of stock-based compensation of $423,000 in the first nine months of fiscal 2025. The Corporation repurchased 209,066 shares of its common stock in the open market at a weighted average cost of $15.06 per share during the first nine months of fiscal 2025 pursuant to its publicly announced stock repurchase programs. In addition, the Corporation acquired 8,758 shares of the Corporation common stock at a cost of $13.24 per share in settlement of employees' withholding tax obligations related to the vesting of restricted stock in the first nine months of fiscal 2025.

Previous wording

Comparison of Operating Results for the Quarters and Six Months Ended December 31, 2024 and 2023

Current wording

Comparison of Operating Results for the Quarters and Nine Months Ended March 31, 2025 and 2024

Previous wording

Net income for the second quarter of fiscal 2025 was $872,000, down $1.3 million or 59 percent from $2.1 million in the same period of fiscal 2024. The decrease was primarily attributable to a $586,000 provision for credit losses in the second quarter of fiscal 2025 (in contrast to a $720,000 recovery of credit losses in the same quarter last year) and a $450,000 increase in non-interest expense.

Current wording

Net income for the third quarter of fiscal 2025 was $1.9 million, up $362,000 or 24 percent from $1.5 million in the same period of fiscal 2024. The increase was primarily attributable to a $391,000 recovery of credit losses in the third quarter of fiscal 2025 (in contrast to a $124,000 provision for credit losses in the same quarter last year) and a $653,000 increase in net interest income, partly offset by a $688,000 increase in non-interest expense.

Previous wording

For the first six months of fiscal 2025, net income was $2.8 million, down $1.1 million or 29 percent from $3.9 million in the same period of fiscal 2024. The decrease was attributable to a $1.1 million increase in non-interest expense and a $538,000 decrease in net interest income, partly offset by a $118,000 increase in non-interest income in the first six months of fiscal 2025 as compared to the same period in fiscal 2024.

Current wording

For the first nine months of fiscal 2025, net income was $4.6 million, down $769,000 or 14 percent from $5.4 million in the same period of fiscal 2024. The decrease was attributable to a $1.8 million increase in non-interest expense, partly offset by a $451,000 higher recovery of credit losses, a $115,000 increase in net interest income and $177,000 increase in non-interest income in the first nine months of fiscal 2025 as compared to the same period in fiscal 2024.

Previous wording

The efficiency ratio, defined as non-interest expense divided by the sum of net interest income and non-interest income, was 81.15 percent for the second quarter of fiscal 2025, compared to 76.11 percent in the same period last year. The deterioration of the efficiency ratio during the current quarter compared to the same period last year was primarily due to higher non-interest expenses. For the first six months of fiscal 2025, the efficiency ratio was 80.11 percent, compared to 72.68 percent for the same period of fiscal 2024. The deterioration of the efficiency ratio during the first six months of fiscal 2025 compared to the same period last year was due to both higher non-interest expenses and a lower net interest income, partly offset by a higher non-interest income.

Current wording

The efficiency ratio, defined as non-interest expense divided by the sum of net interest income and non-interest income, was 77.64 percent for the third quarter of fiscal 2025, compared to 76.20 percent in the same period last year. The increase of the efficiency ratio during the current quarter compared to the same period last year was primarily due to the increase in non-interest expense outpacing the increase in total net interest income and non-interest income. For the first nine months of fiscal 2025, the efficiency ratio was 79.26 percent, compared to 73.82 percent for the same period of fiscal 2024. The deterioration of the efficiency ratio during the first nine months of fiscal 2025 compared to the same period last year was due to the increase in non-interest expense outpacing the increase in total net interest income and non-interest income.

Previous wording

Return on average assets was 0.28 percent in the second quarter of fiscal 2025, down 38 basis points from 0.66 percent in the same period last year. For the first six months of fiscal 2025, return on average assets was 0.45 percent, down 15 basis points from 0.60 percent in the same period last year.

Current wording

Return on average assets was 0.59 percent in the third quarter of fiscal 2025, up 12 basis points from 0.47 percent in the same period last year. For the first nine months of fiscal 2025, return on average assets was 0.50 percent, down six basis points from 0.56 percent in the same period last year.

Previous wording

Return on average stockholders’ equity was 2.66 percent in the second quarter of fiscal 2025, down from 6.56 percent in the same period last year. For the first six months of fiscal 2025, return on average stockholders’ equity was 4.22 percent, down from 5.98 percent in the same period last year.

Current wording

Return on average stockholders’ equity was 5.71 percent in the third quarter of fiscal 2025, up from 4.57 percent in the same period last year. For the first nine months of fiscal 2025, return on average stockholders’ equity was 4.72 percent, down from 5.51 percent in the same period last year.

Previous wording

Diluted earnings per share for the second quarter of fiscal 2025 were $0.13, down 58 percent from $0.31 in the same period last year. For the first six months of fiscal 2025, diluted earnings per share were $0.41, down 27 percent from $0.56 in the same period last year.

Current wording

Diluted earnings per share for the third quarter of fiscal 2025 were $0.28, up 27 percent from $0.22 in the same period last year. For the first nine months of fiscal 2025, diluted earnings per share were $0.68, down 12 percent from $0.77 in the same period last year.

Previous wording

For the Six Months Ended December 31, 2024 and 2023. Net interest income decreased $538,000 or three percent to $17.4 million for the first six months of fiscal 2025 from $17.9 million in the same period in fiscal 2024, as a result of a lower average balance of interest-earning assets, partly offset by a higher net interest margin. The average balance of interest-earning assets decreased $56.5 million, or four percent, to $1.21 billion in the first six months of fiscal 2025 from $1.27 billion in the comparable period of fiscal 2024, primarily reflecting decreases in the average balance of loans receivable, investment securities and interest-earning deposits. The average balance of interest-bearing liabilities decreased by $53.3 million, or five percent, to $1.10 billion in the first six months of fiscal 2025 from $1.15 billion in the same period last year primarily reflecting decreases in the average balance of transaction accounts, partly offset by an increase in the average balance of time deposits, particularly in brokered certificates of deposit. Net interest margin was 2.87 percent in the first six months of fiscal 2025, an increase of four basis points from 2.83 percent in the same period of fiscal 2024. The weighted-average yield on interest-earning assets increased by 37 basis points to 4.64 percent in the first six months of fiscal 2025 from 4.27 percent in the same period last year, while the weighted-average cost of interest-bearing liabilities increased by 37 basis points to 1.94 percent for the first six months of fiscal 2025 as compared to 1.57 percent in the same period last year.

Current wording

For the Nine Months Ended March 31, 2025 and 2024. Net interest income increased $115,000 to $26.6 million for the first nine months of fiscal 2025 from $26.5 million in the same period in fiscal 2024, as a result of a higher net interest margin, partly offset by a lower average balance of interest-earning assets. The net interest margin was 2.92 percent in the first nine months of fiscal 2025, an increase of 12 basis points from 2.80 percent in the same period of fiscal 2024, as the average yield on interest-earning assets increased by 36 basis points to 4.67 percent, while the average cost of interest-bearing liabilities increased 26 basis points to 1.93 percent. The average balance of interest-earning assets decreased $47.9 million, or four percent, to $1.21 billion in the first nine months of fiscal 2025 from $1.26 billion in the comparable period of fiscal 2024, primarily reflecting decreases in the average balance of loans receivable and investment securities. Similarly, the average balance of interest-bearing liabilities decreased by $44.8 million, or four percent, to $1.10 billion in the first nine months of fiscal 2025 from $1.14 billion in the same period last year primarily reflecting decreases in the average balance of transaction accounts, partly offset by an increase in the average balance of time deposits, particularly government deposits and brokered certificates of deposit.

Previous wording

**For the Quarters Ended December 31, 2024 and 2023.**Total interest income increased $356,000, or three percent, to $14.0 million for the second quarter of fiscal 2025 from $13.7 million for the same quarter of fiscal 2024. The increase was due primarily to an increase in interest income from loans receivable, partly offset by decreases in interest income from investment securities and interest-earnings deposits.

Current wording

**For the Quarters Ended March 31, 2025 and 2024.**Total interest income increased $622,000, or five percent, to $14.4 million for the third quarter of fiscal 2025 from $13.8 million for the same quarter of fiscal 2024. The increase was due primarily to an increase in interest income from loans receivable.

Previous wording

Interest income on loans receivable increased $541,000, or four percent, to $13.1 million in the second quarter of fiscal 2025 from $12.5 million in the same quarter of fiscal 2024. The increase was due to a higher average yield, partly offset by a lower average balance. The average yield on loans receivable increased 33 basis points to 4.99 percent in the second quarter of fiscal 2025 from an average yield of 4.66 percent in the same quarter last year. The higher weighted average loan yield was due primarily to the upward repricing of adjustable rate loans and new loan originations with higher weighted average interest rates. Adjustable-rate loans of approximately $100.7 million were repriced upward in the second quarter of fiscal 2025 by approximately 15 basis points from an average yield of 7.83 percent to 7.98 percent. The average balance of loans receivable decreased $27.8 million, or three percent, to $1.05 billion in the second quarter of fiscal 2025 from $1.07 billion in the same quarter last year. Net deferred loan cost amortization in the second quarter of fiscal 2025 increased 76 percent to $381,000 from $217,000 in the same quarter last year. Total loans originated for investment in the second quarter of fiscal 2025 were $36.4 million, up 80 percent from $20.2 million in the same quarter last year; while loan principal payments received in the second quarter of fiscal 2025 were $34.3 million, up 93 percent from $17.8 million in the same quarter last year.

Current wording

Interest income on loans receivable increased $685,000, or five percent, to $13.4 million in the third quarter of fiscal 2025 from $12.7 million in the same quarter of fiscal 2024. The increase was due to a higher average yield, partly offset by a lower average balance. The average yield on loans receivable increased 32 basis points to 5.06 percent in the third quarter of fiscal 2025 from an average yield of 4.74 percent in the same quarter last year. The higher average loan yield was due primarily to the upward repricing of adjustable rate loans and new loan originations with higher average interest rates. The average balance of loans receivable decreased $14.6 million, or one percent, to $1.06 billion in the third quarter of fiscal 2025 from $1.07 billion in the same quarter last year. Net deferred loan cost amortization in the third quarter of fiscal 2025 decreased six percent to $239,000 from $255,000 in the same quarter last year. Total loans originated for investment in the third quarter of fiscal 2025 were $27.9 million, up 53 percent from $18.2 million in the same quarter last year; while loan principal payments received in the third quarter of fiscal 2025 were $23.0 million, down 19 percent from $28.5 million in the same quarter last year.

Previous wording

Interest income from investment securities decreased $53,000, or 10 percent, to $471,000 in the second quarter of fiscal 2025 from $524,000 for the same quarter of fiscal 2024. This decrease was attributable to a lower average balance, partly offset by a higher average yield. The average balance of investment securities decreased $23.4 million, or 16 percent, to $123.8 million in the second quarter of fiscal 2025 from $147.2 million in the same quarter last year. The decrease in the average balance of investment securities was primarily the result of scheduled and accelerated principal payments on mortgage-backed securities. The average yield on investment securities increased 10 basis points to 1.52 percent in the second quarter of fiscal 2025 from 1.42 percent for the same quarter last year. The increase in the average yield was primarily attributable to a lower premium amortization during the current quarter in comparison to the same quarter last year ($97,000 vs. $137,000) due to lower total principal repayments ($5.3 million vs. $5.9 million) and the upward repricing of adjustable-rate mortgage-backed securities.

Current wording

Interest income from investment securities decreased $58,000, or 11 percent, to $459,000 in the third quarter of fiscal 2025 from $517,000 for the same quarter of fiscal 2024. This decrease was attributable to a lower average balance, partly offset by a higher average yield. The average balance of investment securities decreased $23.0 million, or 16 percent, to $118.4 million in the third quarter of fiscal 2025 from $141.4 million in the same quarter last year. The decrease in the average balance of investment securities was primarily the result of scheduled and accelerated principal payments on mortgage-backed and other securities. The average yield on investment securities increased nine basis points to 1.55 percent in the third quarter of fiscal 2025 from 1.46 percent for the same quarter last year. The increase in the average yield was primarily attributable to a lower premium amortization during the current quarter in comparison to the same quarter last year ($86,000 vs. $124,000) due to lower total principal repayments ($5.3 million vs. $5.7 million) and the upward repricing of adjustable-rate mortgage-backed securities.

Previous wording

The Bank received $213,000 of cash dividends from FHLB – San Francisco stock and other equity investments in the second quarter of fiscal 2025, up eight percent from $197,000 in the same quarter last year. The average balance of FHLB – San Francisco stock and other equity investments in the second quarter of fiscal 2025 was $10.2 million, up seven percent from $9.5 million in the same quarter of fiscal 2024 while the average yield was 8.38 percent, up nine basis points from 8.29 percent.

Current wording

The Bank received $213,000 of cash dividends from FHLB – San Francisco stock and other equity investments in the third quarter of fiscal 2025, up one percent from $210,000 in the same quarter last year. The average balance of FHLB – San Francisco stock and other equity investments in the third quarter of fiscal 2025 was $10.3 million, up eight percent from

Previous wording

Interest income from interest-earning deposits, primarily cash deposited at the FRB of San Francisco, was $287,000 in the second quarter of fiscal 2025, down 34 percent from $435,000 in the same quarter of fiscal 2024. The decrease was due to a lower average balance and, to a lesser extent, a lower average yield. The average balance of interest-earning deposits decreased $7.8 million, or 25 percent, to $23.7 million in the second quarter of fiscal 2025 from $31.5 million in the same quarter last year primarily due to the Bank decreasing its liquidity position, which was mitigated by robust borrowing capacities. The average yield earned on interest-earning deposits in the second quarter of fiscal 2025 was 4.74 percent, down 67 basis points from 5.41 percent in the same quarter last year, due primarily to a decrease in the interest rate paid on excess reserves.

Current wording

Interest income from interest-earning deposits, primarily cash deposited at the FRB of San Francisco, was $389,000 in the third quarter of fiscal 2025, down two percent from $397,000 in the same quarter of fiscal 2024. The decrease was due to a lower average yield, partly offset by a higher average balance. The average yield earned on interest-earning deposits in the third quarter of fiscal 2025 was 4.42 percent, down 98 basis points from 5.40 percent in the same quarter last year, due primarily to decreases in the interest rates paid on excess reserves. The average balance of interest-earning deposits increased $6.1 million, or 21 percent, to $35.2 million in the third quarter of fiscal 2025 from $29.1 million in the same quarter last year primarily due to an increased liquidity position that has not been fully utilized for loan fundings.

Previous wording

For the Six Months Ended December 31, 2024 and 2023. Total interest income increased $1.1 million, or four percent, to $28.1 million for the first six months of fiscal 2025 from $27.0 million in the same period of fiscal 2024. The increase was due primarily to an increase in interest income from loans receivable, partly offset by decreases in interest income on interest-earning deposits and investment securities.

Current wording

For the Nine Months Ended March 31, 2025 and 2024. Total interest income increased $1.7 million, or four percent, to $42.5 million for the first nine months of fiscal 2025 from $40.8 million in the same period of fiscal 2024. The increase was due primarily to an increase in interest income from loans receivable, partly offset by decreases in interest income on interest-earning deposits and investment securities.

Previous wording

Interest income from loans receivable increased $1.4 million, or six percent, to $26.1 million in the first six months of fiscal 2025 from $24.7 million for the same period of fiscal 2024. The increase was due to a higher average yield, partly offset by a lower average balance. The average yield on loans receivable increased 38 basis points to 4.98 percent during the first six months of fiscal 2025 from 4.60 percent in the same period last year. The increase in the average yield on loans receivable was primarily attributable to loans repricing upward and new loan originations with a higher average yield, partly offset by an increase in net deferred loan cost amortization to $736,000 in the first six months of fiscal 2025 from $409,000 in the same period of fiscal 2024. Adjustable-rate loans of approximately $222.9 million repriced upward in the first six months of fiscal 2025 by approximately 66 basis points from an average yield of 7.59 percent to 8.25 percent. The average balance of loans receivable decreased by $25.6 million, or two percent, to $1.05 billion for the first six months of fiscal 2025 from $1.07 billion in the same period of fiscal 2024. Total loans originated for investment in the first six months of fiscal 2025 were $65.4 million, up 69 percent from $38.7 million in the same period last year. Loan principal payments received in the first six months of fiscal 2025 were $68.4 million, up 68 percent from $40.8 million in the same period last year.

Current wording

Interest income from loans receivable increased $2.0 million, or five percent, to $39.4 million in the first nine months of fiscal 2025 from $37.4 million for the same period of fiscal 2024. The increase was due to a higher average yield, partly offset by a lower average balance. The average yield on loans receivable increased 36 basis points to 5.00 percent during the first nine months of fiscal 2025 from 4.64 percent in the same period last year. The increase in the average yield on loans receivable was primarily attributable to loans repricing upward and new loan originations with a higher average yield, partly offset by an increase in net deferred loan cost amortization to $975,000 in the first nine months of fiscal 2025 from $664,000 in the same period of fiscal 2024. Adjustable-rate loans of approximately $353.9 million repriced upward in the first nine months of fiscal 2025 by approximately 40 basis points from an average yield of 7.58 percent to 7.98 percent. The average balance of loans receivable decreased by $22.0 million, or two percent, to $1.05 billion for the first nine months of fiscal 2025 from $1.07 billion in the same period of fiscal 2024. Total loans originated for investment in the first nine months of fiscal 2025 were $93.3 million, up 64 percent from $56.9 million in the same period last year. Loan principal payments received in the first nine months of fiscal 2025 were $91.4 million, up 32 percent from $69.3 million in the same period last year.

Previous wording

Interest income from investment securities decreased $95,000, or nine percent, to $953,000 in the first six months of fiscal 2025 from $1.0 million for the same period of fiscal 2024. This decrease was attributable to a lower average balance, partly offset by a higher average yield. The average balance of investment securities decreased by $23.7 million, or 16 percent, to $126.7 million in the first six months of fiscal 2025 from $150.4 million in the same period of fiscal 2024. The decrease in the average balance of investment securities was primarily the result of scheduled and accelerated principal payments on mortgage-backed securities. The average yield on investment securities increased by 11 basis points to 1.50 percent in the first six months of fiscal 2025 from 1.39 percent in the same period of fiscal 2024. The increase in the average yield was primarily attributable to lower premium amortization ($208,000 compared to $292,000) attributable to lower principal repayments ($11.1 million vs. $12.6 million) and, to a lesser extent, the upward repricing of adjustable rate mortgage-backed securities.

Current wording

Interest income from investment securities decreased $153,000, or 10 percent, to $1.4 million in the first nine months of fiscal 2025 from $1.6 million for the same period of fiscal 2024. This decrease was attributable to a lower average balance, partly offset by a higher average yield. The average balance of investment securities decreased by $23.4 million, or 16 percent, to $124.0 million in the first nine months of fiscal 2025 from $147.4 million in the same period of fiscal 2024. The decrease in the average balance of investment securities was primarily the result of scheduled and accelerated principal payments on mortgage-backed and other securities. The average yield on investment securities increased by 10 basis points to 1.52 percent in the first nine months of fiscal 2025 from 1.42 percent in the same period of fiscal 2024. The increase in the average yield was primarily attributable to lower premium amortization ($294,000 compared to $416,000) attributable to lower principal repayments ($16.3 million vs. $18.2 million) and, to a lesser extent, the upward repricing of adjustable rate mortgage-backed securities.

Previous wording

FHLB – San Francisco cash dividends received in the first six months of fiscal 2025 were $423,000, up 13 percent from $376,000 in the same period of fiscal 2024. The average balance of FHLB – San Francisco stock in the first six months of fiscal 2025 was $10.1 million, up seven percent from $9.5 million in the same period of fiscal 2024, and the average yield was 8.34 percent, up 43 basis points from 7.91 percent.

Current wording

FHLB – San Francisco and other equity investments cash dividends received in the first nine months of fiscal 2025 were $636,000, up nine percent from $586,000 in the same period of fiscal 2024. The average balance of FHLB – San Francisco stock and other equity investments in the first nine months of fiscal 2025 was $10.2 million, up seven percent from $9.5 million in the same period of fiscal 2024, and the average yield was 8.33 percent, up 11 basis points from 8.22 percent.

Previous wording

Interest income from interest-earning deposits, primarily cash deposited at the FRB of San Francisco, was $647,000 in the first six months of fiscal 2025, down 28 percent from $898,000 in the same period of fiscal 2024. The decrease was due to a lower average balance and, to a lesser extent, a lower average yield. The average balance of the interest-earning deposits in the first six months of fiscal 2025 was $25.0 million, a decrease of $7.8 million or 24 percent, from $32.8 million in the same period of fiscal 2024. The average yield earned on interest-earning deposits decreased by 30 basis

Current wording

Interest income from interest-earning deposits, primarily cash deposited at the FRB of San Francisco, was $1.0 million in the first nine months of fiscal 2025, down 20 percent from $1.3 million in the same period of fiscal 2024. The decrease was due to a lower average yield and, to a lesser extent, a lower average balance. The average yield earned on interest-earning deposits decreased by 59 basis points to 4.79 percent in the first nine months of fiscal 2025 from 5.38 percent in the comparable period last year, due primarily to decreases in the interest rates paid on excess reserves. The average balance of the interest-earning deposits in the first nine months of fiscal 2025 was $28.4 million, a decrease of $3.1 million or 10 percent, from $31.5 million in the same period of fiscal 2024.

Previous wording

Interest expense on deposits for the second quarter of fiscal 2025 was $2.7 million, an 18 percent increase from $2.3 million for the same quarter last year. The increase in interest expense on deposits was attributable to a higher average cost, partly offset by a lower average balance of deposits. The average cost of deposits was 1.23 percent for the second quarter of fiscal 2025, up 24 basis points from 0.99 percent in the same quarter last year, primarily attributable to the average cost of time deposits (including brokered certificates of deposit) which increased 23 basis points to 3.78 percent for the second quarter of fiscal 2025 from 3.55 percent in the same quarter of fiscal 2024. The average balance of deposits decreased six percent to $863.1 million in the second quarter of fiscal 2025 from $914.6 million in the same quarter last year due to decreases in transaction accounts which was partly offset by an increase in time deposits. The average balance of transaction accounts was $600.2 million in the second quarter of fiscal 2025, down 11 percent from $677.1 million in the same quarter last year; while the average balance of time deposits (including brokered certificates of deposit) increased 11 percent to $262.9 million in the second quarter of fiscal 2025 from $237.6 million in the same quarter last year.

Current wording

Interest expense on deposits for the third quarter of fiscal 2025 was $2.7 million, a $71,000, or three percent, increase as compared to the same quarter last year. The increase was attributable to a higher average cost of deposits, partly offset by a lower average balance. The average cost of deposits was 1.26 percent for the third quarter of fiscal 2025, up eight basis points from 1.18 percent in the same quarter last year, primarily due to a higher proportion of time deposits, which are typically higher cost. Time deposits accounted for 33 percent of total deposits in the third quarter of fiscal 2025, compared to 28 percent in the same quarter last year. The average balance of deposits decreased $25.8 million, or three percent, to $885.0 million in the third quarter of fiscal 2025 from $910.8 million in the same quarter last year due to decreases in transaction accounts which was partly offset by an increase in time deposits. The average balance of transaction accounts was $596.7 million in the third quarter of fiscal 2025, down $54.8 million, or eight percent, from $651.5 million in the same quarter last year; while the average balance of time deposits (including brokered certificates of deposit) increased $29.1 million, or 11 percent, to $288.4 million in the third quarter of fiscal 2025 from $259.3 million in the same quarter last year.

Previous wording

Interest expense on borrowings, consisting of FHLB – San Francisco advances, for the second quarter of fiscal 2025 decreased $30,000, or one percent, to $2.6 million as compared to the same quarter last year. The decrease was primarily the result of a lower average balance, partly offset by a higher average cost of borrowings. The average balance of borrowings decreased $3.8 million or two percent to $226.7 million in the second quarter of fiscal 2025 from $230.5 million in the same quarter last year, while the average cost of borrowings increased two basis points to 4.53 percent in the second quarter of fiscal 2025 from 4.51 percent in the same quarter last year.

Current wording

Interest expense on borrowings, consisting of FHLB – San Francisco advances, for the third quarter of fiscal 2025 decreased $102,000, or four percent, to $2.5 million from $2.6 million in the same quarter last year. The decrease was primarily the result of a lower average cost of borrowings and to a lesser extent, a lower average balance. The average cost of borrowings decreased 11 basis points to 4.52 percent in the third quarter of fiscal 2025 from 4.63 percent in the same quarter last year and the average balance of borrowings decreased $1.8 million or one percent to $221.8 million in the third quarter of fiscal 2025 from $223.6 million in the same quarter last year.

Previous wording

For the Six Months Ended December 31, 2024 and 2023. Total interest expense increased $1.6 million, or 18 percent to $10.7 million in the first six months of fiscal 2025 from $9.1 million in the same period last year. The increase was attributable primarily to higher interest expense on borrowings and time deposits, particularly brokered certificates of deposit.

Current wording

For the Nine Months Ended March 31, 2025 and 2024. Total interest expense increased $1.6 million, or 11 percent to $15.9 million in the first nine months of fiscal 2025 from $14.3 million in the same period last year. The increase was attributable primarily to higher interest expense on deposits and, to a lesser extent, higher interest expense on borrowings.

Previous wording

Interest expense on deposits for the first six months of fiscal 2025 was $5.5 million, a 32 percent increase from $4.2 million for the same period last year. The increase was attributable to a higher average cost of total deposits and a higher average balance of time deposits. The average cost of deposits was 1.25 percent, up 36 basis points from 0.89 percent in the same period last year, attributable primarily to time deposits (including brokered certificates of deposit) which increased 51 basis points to 3.87 percent for the first six months of fiscal 2025 from 3.36 percent for same period in fiscal 2024. The average balance of deposits decreased $55.6 million or six percent to $871.8 million in the first six months of fiscal 2025 from $927.4 million in the same period last year due primarily to a decrease of $89.4 million in the average balance of transaction accounts, partly offset by an increase of $33.8 million in the average balance of time deposits.

Current wording

Interest expense on deposits for the first nine months of fiscal 2025 was $8.2 million, a $1.4 million or 21 percent increase from $6.8 million for the same period last year. The increase was attributable to a higher average cost of total deposits, partly offset by a lower average balance. The average cost of deposits was 1.25 percent, up 26 basis points from 0.99 percent in the same period last year, attributable primarily to time deposits (including brokered certificates of deposit) which increased 24 basis points to 3.78 percent for the first nine months of fiscal 2025 from 3.54 percent for same period in fiscal 2024. The average balance of deposits decreased $45.7 million or five percent to $876.2 million in the first nine months of fiscal 2025 from $921.9 million in the same period last year due primarily to a decrease of $77.9 million in the average balance of transaction accounts, partly offset by an increase of $32.2 million in the average balance of time deposits.

Previous wording

Interest expense on borrowings, consisting primarily of FHLB – San Francisco advances, for the first six months of fiscal 2025 increased $287,000, or six percent, to $5.2 million from $4.9 million in the same period last year. The increase was primarily the result of a higher average cost and, to a lesser extent, a higher average balance. The average cost of borrowings increased 21 basis points to 4.63 percent in the first six months of fiscal 2025 from 4.42 percent in the same period last year and the average balance of borrowings increased by $2.2 million or one percent to $223.7 million in the first six months of fiscal 2025 from $221.5 million in the same period last year.

Current wording

Interest expense on borrowings, consisting primarily of FHLB – San Francisco advances, for the first nine months of fiscal 2025 increased $185,000, or two percent, to $7.7 million from $7.5 million in the same period last year. The increase was primarily the result of a higher average cost and, to a lesser extent, a higher average balance. The average cost of borrowings increased nine basis points to 4.59 percent in the first nine months of fiscal 2025 from 4.50 percent in the same period last year and the average balance of borrowings increased by $881,000 to $223.1 million in the first nine months of fiscal 2025 from $222.2 million in the same period last year.