PROVIDENT FINANCIAL HOLDINGS INC

The Corporation’s primary sources of funds are deposits, principal and interest payments on loans and investment securities, proceeds from the maturity of loans and investment securities, FHLB – San Francisco advances, the discount window facility at the FRB of San Francisco, and federal funds facility with its correspondent bank. While maturities and scheduled amortization of loans and investment securities are a relatively predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.

The primary investing activity of the Corporation is the origination and purchase of loans held for investment. During the first three months of fiscal 2027 and 2026, the Corporation originated loans held for investment of $45.4 million and $29.6 million, respectively, with no loan purchases during either period. At September 30, 2026, the Corporation had loan

origination commitments totaling $20.1 million, undisbursed lines of credit totaling $618,000 and no undisbursed loan funds. The Corporation anticipates having sufficient funds available to meet its current loan funding commitments. During the first three months of fiscal 2027 and 2026, total loan repayments were $40.8 million and $34.5 million, respectively.

The Corporation’s primary financing activity is gathering deposits and, when needed, borrowings, principally FHLB – San Francisco advances. During the first three months of fiscal 2027, total deposits decreased $12.7 million, or one percent, to $897.7 million, primarily due to a decline in transaction accounts. Time deposits, including brokered certificates of deposit, declined slightly to $351.8 million at September 30, 2026 from $353.2 million at June 30, 2026. At September 30, 2026, time deposits with a principal amount of $250,000 or less and scheduled to mature in one year or less were $225.9 million and total time deposits with a principal amount of more than $250,000 and scheduled to mature in one year or less were $102.2 million. Historically, the Corporation has been able to retain most of its time deposits as they mature.

The Corporation maintains an adequate level of liquidity to ensure the availability of funds to support loan growth and deposit withdrawals, to satisfy financial commitments and to take advantage of investment opportunities. At September 30, 2026, total cash and cash equivalents were $53.2 million, or four percent of total assets, to meet short-term liquidity needs. Depending on market conditions and the pricing of deposit products, the Bank may utilize FHLB – San Francisco advances for part of its liquidity needs. As of September 30, 2026, borrowings with the FHLB – San Francisco totaled $172.0 million. Financing availability at the FHLB – San Francisco is limited to 35 percent of total assets, resulting in a remaining borrowing capacity of $239.1 million with available collateral of $340.0 million at September 30, 2026. In addition, the Bank had a $175.1 million discount window facility at the FRB of San Francisco, collateralized by investment securities and single-family loans with a total balance of $304.4 million. As of September 30, 2026, the Bank also had a $50.0 million federal funds borrowing arrangement with its correspondent bank. No advances were outstanding under either the FRB discount window or the correspondent bank facility as of September 30, 2026.

The Bank maintains borrowing relationships with both the FHLB-San Francisco and the FRB of San Francisco, and regularly reviews and updates its available borrowing capacity to ensure funds can be accessed on a timely basis to meet liquidity needs. Collateral pledged to both facilities is monitored and maintained at levels sufficient to support the Bank’s contingency liquidity requirements. Total aggregate borrowing capacity available under these facilities was approximately $464.2 million at September 30, 2026.

Regulations require the Bank to maintain adequate liquidity to assure safe and sound operations. The Bank’s average total liquidity ratio (defined as the ratio of average qualifying liquid assets to average deposits and borrowings) for the quarter ended September 30, 2026 was 8.0 percent, up from 7.1 percent for the quarter ended June 30, 2026.

On January 22, 2026, the Board of Directors authorized a stock repurchase plan for up to five percent of the Corporation’s common stock, or 318,875 shares. The Corporation could purchase shares periodically in the open market or through privately negotiated transactions, subject to market conditions, the Corporation’s capital requirements, available cash, and other relevant factors. The plan expires on January 22, 2027. As of September 30, 2026, a total of 88,174 shares remained available for future purchase under the Corporation’s January 2026 repurchase program. On October 22, 2026, the Board of Directors authorized a new stock repurchase plan for up to 305,477 shares, or approximately five percent of the Corporation’s outstanding common stock. The new plan will commence upon the earlier of the completion of the January 2026 plan or its expiration on January 22, 2027, and will remain in effect for one year following the commencement of the plan. Repurchases under the new plan will be subject to market conditions, the Corporation’s capital requirements, available cash, and other relevant factors.

Provident Financial Holdings is a separate legal entity from the Bank and, on a stand-alone level, must provide for its own liquidity and pay its own operating expenses and cash dividends. Provident Financial Holdings’ primary sources of funds consist of capital raised through dividends or capital distributions from the Bank, although there are general regulatory restrictions on the ability of the Bank to pay dividends. Future dividend payments are subject to the Board’s discretion and applicable regulatory restrictions. The Corporation currently pays quarterly cash dividends on its common stock which may be modified, suspended, or terminated at any time. Our current quarterly common stock dividend rate is $0.14 per share, which is intended to balance the Corporation’s objectives of supporting the Bank’s operations and returning cash to shareholders. Assuming continued cash dividend payments during fiscal 2027 at $0.14 per share, our average total dividend paid each quarter would be approximately $868,000 based on the number of outstanding shares at September 30, 2026. At September 30, 2026, the Corporation (on an unconsolidated basis) had liquid assets of $13.7 million.

The Bank, as a federally-chartered, federally insured savings bank, is subject to the capital requirements established by the OCC. Under the OCC’s capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators regarding capital components, risk weighting and other factors.

At September 30, 2026, the Bank exceeded all regulatory capital requirements. The Bank was categorized as "well-capitalized" at September 30, 2026 under the regulations of the OCC. As a bank holding company registered with the Federal Reserve, Provident Financial Holdings, Inc. is also subject to the capital adequacy requirements of the Federal Reserve. For a bank holding company with less than $3.0 billion in assets, the capital guidelines apply on a bank only basis, and the Federal Reserve expects the holding company’s subsidiary bank to be well capitalized under the prompt corrective action regulations.

The Bank’s actual and required minimum capital amounts and ratios at the dates indicated are as follows (dollars in thousands):

In addition to the minimum Tier 1, CET1 and Total capital ratios, the Bank is required to maintain a capital conservation buffer consisting of additional CET1 capital greater than 2.5% of risk-weighted assets above the required minimum capital levels. Failure to maintain the required buffer could result in limitations on the Bank’s ability to pay dividends, repurchase shares, and pay discretionary bonuses, based on specified percentages of eligible retained income. At September 30, 2026, the Bank’s capital exceeded the conservation buffer.

If the Bank does not have the ability to pay dividends to the Corporation, the Corporation may be limited in its ability to pay dividends to its stockholders. The Bank may not declare or pay a cash dividend if the effect thereafter would cause its net worth to be reduced below the regulatory capital requirements imposed by federal regulation. On September 30, 2026, the Bank paid a $13.0 million cash dividend to the Holding Company.