PROVIDENT FINANCIAL HOLDINGS INC

The Bank is headquartered in Riverside, California and, as of June 30, 2025, operates 12 full-service banking offices in Riverside County and one full-service banking office in San Bernardino County. Management considers Southern California, including Riverside County, western San Bernardino County (collectively, the “Inland Empire”), and surrounding counties, to be the Bank’s primary market, with the Inland Empire its primary market area for deposits. Based on the most recent FDIC data, the Bank was the largest independent community bank (based on total assets) headquartered in Riverside County and held the 11th largest deposit market share of all banks in the county, with the second largest share among community banks.

According to the 2020 Census Bureau, Riverside and San Bernardino counties have the fourth and fifth largest populations in California, respectively, and are part of the greater Los Angeles metropolitan area, consisting primarily of suburban and urban communities. The Inland Empire, with a population of approximately 4.7 million, is relatively densely populated. The U.S. Department of Labor’s Bureau of Labor Statistics reported an unemployment rate of 5.9% in the Inland Empire in June 2025, slightly higher than California’s rate of 5.4% and the national rate of 4.1%. In June 2024, these rates were 5.3% in the Inland Empire, 5.2% in California, and 4.1% nationwide.

Economic growth for the Inland Empire, also known as the Riverside-San Bernardino-Ontario Metropolitan Statistical Area, is expected to rise modestly in 2025. Last year, the outlook was highlighted with concerns about potential headwinds related the uncertainty surrounding the 2024 presidential election. This negatively impacted both consumer and business spending decisions and future investment plans. These uncertainties have been replaced by policy decisions by the new administration regarding (i) tariffs, (ii) deportation, (iii) fiscal policy (especially taxes), and (iv) regulation, making forecasting difficult. Regardless, the beginning of an expansive consumer credit policy has begun with the previous interest cuts in 2024, and it is expected to continue. This is expected to generate positive impulses for the Inland Empire economy, which is expected to outperform the state economy but not the national economy. The outlook for 2025 is based on the assumption that the administration’s proposed policies on tariffs and deportation will not have an immediate effect on trade and construction. Part of this is the larger role that the logistics industry plays in the Inland Empire. Transportation, warehousing, and wholesale have moved into third place in terms of overall employment share and represent the largest share in San Bernardino County (third largest in Riverside County). The opening of new facilities in 2025 will require new workers, and the continuation of consumption of imported goods by U.S. consumers will continue to drive growth in this segment, subject to the outcome of tariff negotiations with Mexico and Canada. (Source: Lowe Institute of Political Economy, The State of the Region 2025 Economic and Election Report, February 2025).

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 264,260 in June 2025. The statewide annualized sales figure represents what would be the total number of homes sold during 2025 if sales maintained the June 2025 pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. June home sales activity rose 4.0 percent from the 254,190 homes sold in May 2025 and was down 0.3 percent from a year ago, when 264,960 homes were sold on an annualized basis. The June result reversed three consecutive months of sales declines and was only one of two months of sales increases for the first half of 2025. The year-over-year decline marked the third straight monthly decrease and was the first time since late 2023 that annual sales fell for three consecutive months. Year-to-date sales were slightly above a year ago. Statewide pending sales in June slipped from last year’s level for the seventh consecutive month, posting the largest year-over-year drop since January 2025. California’s median home price fell for the second straight month in June, slipping below the $900,000 mark for the first time in three months. The June median price of $899,560 was down 0.1 percent from May and also down 0.1 percent from $900,720 in June 2024. The decline in June was not in line with the June’s historical average gain of 0.8 percent, suggesting non-seasonal factors such as market uncertainty and elevated mortgage rates had a negative lingering effect on housing demand and home prices. (Source: California Association of Realtors® – July 17, 2025 News Release).