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What changed in PROVIDENT FINANCIAL HOLDINGS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PROVIDENT FINANCIAL HOLDINGS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+412 added−437 removedSource: 10-K (2025-08-29) vs 10-K (2024-08-30)

Top changes in PROVIDENT FINANCIAL HOLDINGS INC's 2025 10-K

412 paragraphs added · 437 removed · 346 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

179 edited+23 added−49 removed210 unchanged
Biggest changeFor non-performing commercial real estate loans, an individually evaluated allowance is derived based on the loan's discounted cash flow fair value (for modified loans) or collateral fair value less estimated selling costs and if the fair value is higher than the loan balance, no allowance is required. ​ 17 Table of Contents The following table shows certain credit ratios at and for the periods indicated and each component of the ratio’s calculations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For The Year Ended June 30, ​ (Dollars In Thousands) 2024 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ACL on loans as a percentage of total gross loans held for investment at period end ​ ​ 0.67 % ​ 0.55 % ACL on loans ​ $ 7,065 ​ $ 5,946 ​ Total gross loans held for investment ​ $ 1,050,846 ​ $ 1,074,164 ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-performing loans as a percentage of net loans held for investment at period end ​ ​ 0.25 % ​ 0.12 % Total non-performing loans, net ​ $ 2,596 ​ $ 1,300 ​ Total loans held for investment, net ​ $ 1,052,979 ​ $ 1,077,629 ​ ​ ​ ​ ​ ​ ​ ​ ​ ACL on loans as a percentage of gross non-performing loans at period end ​ ​ 264.71 % ​ 418.14 % ACL on loans ​ $ 7,065 ​ $ 5,946 ​ Total gross non-performing loans ​ $ 2,669 ​ $ 1,422 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net recoveries (charge-offs) to average loans receivable during the period: ​ ​ ​ ​ ​ ​ ​ Mortgage loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Single-family: ​ ​ - % ​ - % Net recoveries ​ $ - ​ $ 8 ​ Average loans receivable ​ $ 520,071 ​ $ 471,347 ​ ​ ​ ​ ​ ​ ​ ​ ​ Multi-family: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 459,025 ​ $ 464,511 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 86,425 ​ $ 89,060 ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 2,340 ​ $ 2,606 ​ ​ ​ ​ ​ ​ ​ ​ ​ Other: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 99 ​ $ 111 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial business loans: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 1,592 ​ $ 1,290 ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer loans: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 64 ​ $ 75 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans: ​ ​ - % ​ - % Total net recoveries ​ $ - ​ $ 8 ​ Total average loans receivable ​ $ 1,069,616 ​ $ 1,029,000 ​ 18 Table of Contents The distribution of the ACL on loans at the dates indicated is summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, ​ ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ ​ ​ ​ ​ Loans in ​ ​ ​ ​ Loans in ​ ​ ​ ​ ​ ​ Each ​ ​ ​ ​ Each ​ ​ ​ ​ ​ ​ Category ​ ​ ​ ​ Category ​ ​ ​ ​ ​ ​ to Total ​ ​ ​ ​ to Total ​ (Dollars In Thousands) ​ Amount ​ Loans ​ Amount ​ Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage loans: ​ ​ Single-family ​ $ 6,295 49.30 % $ 1,720 48.30 % Multi-family ​ 595 42.36 ​ 3,270 42.93 ​ Commercial real estate ​ 66 7.93 ​ 868 8.43 ​ Construction ​ 97 0.26 ​ 15 0.18 ​ Other ​ 1 0.01 ​ 2 0.01 ​ Commercial business loans ​ 11 0.13 ​ 67 0.14 ​ Consumer loans ​ — 0.01 ​ 4 0.01 ​ Total ACL ​ $ 7,065 100.00 % $ 5,946 100.00 % ​ ​ Investment Securities Activities ​ Federally chartered savings institutions are permitted under federal and state laws to invest in various types of liquid assets, including U.S.
Biggest changeFor additional information regarding the Bank’s allowance for credit losses, the methodology used to estimate expected credit losses, and the composition of non-performing loans, see Note 3 – Loans and Allowance for Credit Losses in the Consolidated Financial Statements. 15 Table of Contents The following table shows certain credit ratios at and for the periods indicated and each component of the ratio’s calculations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For The Year Ended June 30, ​ (Dollars In Thousands) 2025 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ACL on loans as a percentage of total gross loans held for investment at period end ​ ​ 0.62 % ​ 0.67 % ACL on loans ​ $ 6,424 ​ $ 7,065 ​ Total gross loans held for investment ​ $ 1,042,423 ​ $ 1,050,846 ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-performing loans as a percentage of net loans held for investment at period end ​ ​ 0.14 % ​ 0.25 % Total non-performing loans, net ​ $ 1,414 ​ $ 2,596 ​ Total loans held for investment, net ​ $ 1,045,745 ​ $ 1,052,979 ​ ​ ​ ​ ​ ​ ​ ​ ​ ACL on loans as a percentage of gross non-performing loans at period end ​ ​ 452.08 % ​ 264.71 % ACL on loans ​ $ 6,424 ​ $ 7,065 ​ Total gross non-performing loans ​ $ 1,421 ​ $ 2,669 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net charge-offs to average loans receivable during the period: ​ ​ ​ ​ ​ ​ ​ Mortgage loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Single-family: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 533,551 ​ $ 520,071 ​ ​ ​ ​ ​ ​ ​ ​ ​ Multi-family: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 434,955 ​ $ 459,025 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 78,257 ​ $ 86,425 ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 1,722 ​ $ 2,340 ​ ​ ​ ​ ​ ​ ​ ​ ​ Other: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 89 ​ $ 99 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial business loans: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 2,816 ​ $ 1,592 ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer loans: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Average loans receivable ​ $ 58 ​ $ 64 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans: ​ ​ - % ​ - % Net charge-offs ​ $ - ​ $ - ​ Total average loans receivable ​ $ 1,051,448 ​ $ 1,069,616 ​ 16 Table of Contents The distribution of the ACL on loans at the dates indicated is summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, ​ ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ ​ ​ ​ ​ Loans in ​ ​ ​ ​ Loans in ​ ​ ​ ​ ​ ​ Each ​ ​ ​ ​ Each ​ ​ ​ ​ ​ ​ Category ​ ​ ​ ​ Category ​ ​ ​ ​ ​ ​ to Total ​ ​ ​ ​ to Total ​ (Dollars In Thousands) ​ Amount ​ Loans ​ Amount ​ Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage loans: ​ ​ Single-family ​ $ 5,734 52.23 % $ 6,295 49.30 % Multi-family ​ 615 40.62 ​ 595 42.36 ​ Commercial real estate ​ 55 6.98 ​ 66 7.93 ​ Construction ​ 12 0.04 ​ 97 0.26 ​ Other ​ 2 0.01 ​ 1 0.01 ​ Commercial business loans ​ 6 0.12 ​ 11 0.13 ​ Consumer loans ​ — — ​ — 0.01 ​ Total ACL ​ $ 6,424 100.00 % $ 7,065 100.00 % ​ ​ Investment Securities Activities ​ Federally chartered savings institutions are permitted under federal and state laws to invest in various types of liquid assets, including U.S.
Loans based on the SOFR index constitute a majority of the Bank’s loans held for investment. The majority of the ARM loans held for investment have five, seven, or 10-year fixed periods prior to the first adjustment and provide for fully amortizing loan payments throughout the term of the loan.
Loans based on the SOFR index constitute a majority of the Bank’s loans held for investment. The majority of the ARM loans held for investment have five, seven, or 10-year fixed periods prior to the first adjustment and provide for fully amortizing payments throughout the term of the loan.
To mitigate the risks involved with non-QM loans, the Bank has implemented systems, processes, 7 Table of Contents procedural and product changes, and maintains its underwriting standards, to ensure that the “ability-to-repay” requirements are adequately addressed. ​ A decline in real estate values subsequent to the time of origination of real estate secured loans could result in higher loan delinquency levels, foreclosures, provisions for credit losses and net charge-offs.
To mitigate the risks involved with non-QM loans, the Bank has implemented systems, processes, procedural and product changes, and maintains its underwriting standards, to ensure that the “ability-to-repay” requirements are adequately addressed. 7 Table of Contents ​ A decline in real estate values subsequent to the time of origination of real estate secured loans could result in higher loan delinquency levels, foreclosures, provisions for credit losses and net charge-offs.
There is no guarantee in the future that the FHLB – San Francisco will pay cash dividends or redeem excess capital stock held by its members. ​ Under federal law, the FHLB - San Francisco is required to contribute to low and moderately priced housing programs through direct loans or interest subsidies on advances targeted for community investment and low and moderate income housing projects.
There is no guarantee in the future that the FHLB – San Francisco will pay cash dividends or redeem excess stock held by its members. ​ Under federal law, the FHLB - San Francisco is required to contribute to low and moderately priced housing programs through direct loans or interest subsidies on advances targeted for community investment and low and moderate income housing projects.
The Bank is subject to consumer protection regulations issued by the CFPB, but as a financial institution with assets of less than $10.0 billion in assets, the Bank is generally subject to supervision and enforcement by the OCC with respect to compliance with consumer financial protection laws and CFPB regulations. ​ The Bank is subject to a broad array of federal and state consumer protection laws and regulations that govern almost every aspect of its business relationships with consumers.
The Bank is subject to consumer protection regulations issued by the CFPB, but as a financial institution with assets of less than $10.0 billion, the Bank is generally subject to supervision and enforcement by the OCC with respect to compliance with consumer financial protection laws and CFPB regulations. ​ The Bank is subject to a broad array of federal and state consumer protection laws and regulations that govern almost every aspect of its business relationships with consumers.
Generally, mortgage loans sold to Fannie Mae and Freddie Mac were sold on a non-recourse basis and foreclosure losses are generally the responsibility of the purchaser and not the Bank, except in the case of Federal Housing Administration (“FHA”) and Veterans’ Administration (“VA”) loans used to form Government National Mortgage Association pools, which are subject to limitations on the FHA’s and VA’s loan guarantees. ​ 11 Table of Contents The following table shows the Bank’s loan originations, purchases, sales and principal repayments during the periods indicated.
Generally, mortgage loans sold to Fannie Mae and Freddie Mac were sold on a non-recourse basis and foreclosure losses are generally the responsibility of the purchaser and not the Bank, except in the case of Federal Housing Administration (“FHA”) and Veterans’ Administration (“VA”) loans used to form Government National Mortgage Association pools, which are subject to limitations on the FHA’s and VA’s loan guarantees. ​ The following table shows the Bank’s loan originations, purchases, sales and principal repayments during the periods indicated.
As previously discussed, it also determined that it was more likely than not that the Bank would not be required to sell the securities prior to recovery of the amortized cost basis; therefore, no impairment losses were recorded on investment securities available for sale and investment securities held to maturity for the fiscal years ended June 30, 2024 and 2023. ​ ​ Deposit Activities and Other Sources of Funds ​ General.
As previously discussed, it also determined that it was more likely than not that the Bank would not be required to sell the securities prior to recovery of the amortized cost basis; therefore, no impairment losses were recorded on investment securities available for sale and investment securities held to maturity for the fiscal years ended June 30, 2025 and 2024. ​ ​ Deposit Activities and Other Sources of Funds ​ General.
As of June 30, 2024 and 2023, all loans serviced by others were performing according to their original contractual payment terms, except for one loan totaling $362,000 that was classified as non-performing as of June 30, 2024. ​ The Bank also sells participating interests in loans when it has been determined that it is beneficial to diversify the Bank’s risk.
As of June 30, 2025 and 2024, all loans serviced by others were performing according to their original contractual payment terms, except for one loan totaling $362,000 that was classified as non-performing as of June 30, 2024. ​ The Bank also sells participating interests in loans when it has been determined that it is beneficial to diversify the Bank’s risk.
In evaluating an application for the Corporation to acquire control of a savings institution, the FRB would consider the financial and managerial resources and future prospects of the Corporation and the target institution, the effect of the acquisition on the risk to the DIF, the convenience and the needs of the community, including performance under the CRA and competitive factors. ​ The FRB may not approve any acquisition that would result in a multiple savings and loan holding company controlling savings institutions in more than one state, subject to two exceptions; (i) supervisory acquisitions and (ii) the acquisition of a savings institution in another state if the laws of the state of the target savings institution specifically permit such acquisitions.
In evaluating an application for the Corporation to acquire control of a savings institution, the FRB would consider the financial and managerial resources and future prospects of the 30 Table of Contents Corporation and the target institution, the effect of the acquisition on the risk to the DIF, the convenience and the needs of the community, including performance under the CRA and competitive factors. ​ The FRB may not approve any acquisition that would result in a multiple savings and loan holding company controlling savings institutions in more than one state, subject to two exceptions; (i) supervisory acquisitions and (ii) the acquisition of a savings institution in another state if the laws of the state of the target savings institution specifically permit such acquisitions.
The FRB policy statement also indicates that it would be inappropriate for a company experiencing serious financial problems to borrow funds to pay dividends. 33 Table of Contents ​ In addition, a savings and loan holding company is required to give the FRB prior written notice of any purchase or redemption of its outstanding equity securities if the gross consideration for the purchase or redemption, when combined with the net consideration paid for all such purchases or redemptions during the preceding 12 months, is equal to 10% or more of its consolidated net worth.
The FRB policy statement also indicates that it would be inappropriate for a company experiencing serious financial problems to borrow funds to pay dividends. ​ In addition, a savings and loan holding company is required to give the FRB prior written notice of any purchase or redemption of its outstanding equity securities if the gross consideration for the purchase or redemption, when combined with the net consideration paid for all such purchases or redemptions during the preceding 12 months, is equal to 10% or more of its consolidated net worth.
PFC’s current activities include: (i) acting as trustee for the Bank’s real estate transactions and (ii) holding real estate for investment, if any. Profed Mortgage, Inc and First Service Corporation are currently inactive. In fiscal 2024 and 2023, the Bank contributed capital of $0 and $10,000 to PFC, respectively.
PFC’s current activities include: (i) acting as trustee for the Bank’s real estate transactions and (ii) holding real estate for investment, if any. Profed Mortgage, Inc and First Service Corporation are currently inactive. In fiscal 2025 and 2024, the Bank contributed capital of $10,000 and $0 to PFC, respectively.
The OCC also may take any one of a number of discretionary supervisory actions, including the issuance of a capital directive and the replacement of senior executive officers and directors. ​ As of June 30, 2024, the most recent notification from the OCC categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action.
The OCC also may take any one of a number of discretionary supervisory actions, including the issuance of a capital directive and the replacement of senior executive officers and directors. ​ As of June 30, 2025, the most recent notification from the OCC categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action.
The description of these laws and regulations, as well as descriptions of laws and regulations contained elsewhere herein, does not purport to be complete and is qualified in its entirety by reference to the applicable laws and regulations. Legislation is introduced from time to time in the United States Congress (“Congress”) that may affect the Corporation’s and the Bank’s operations.
The description of these laws and regulations, as well as descriptions of laws and regulations contained elsewhere herein, do not purport to be complete and is qualified in its entirety by reference to the applicable laws and regulations. Legislation is introduced from time to time in the United States Congress (“Congress”) that may affect the Corporation’s and the Bank’s operations.
The following table sets forth information at June 30, 2024 regarding the dollar amount of principal payments becoming contractually due during the periods indicated for loans held for investment. Demand loans, loans having no stated schedule of principal payments, loans having no stated maturity, and overdrafts are reported as becoming due within one year.
The following table sets forth information at June 30, 2025 regarding the dollar amount of principal payments becoming contractually due during the periods indicated for loans held for investment. Demand loans, loans having no stated schedule of principal payments, loans having no stated maturity, and overdrafts are reported as becoming due within one year.
The Bank uses the same underwriting criteria for these purchases as it does for loans it originates. The Bank did not purchase any loans to be held for investment in fiscal 2024 and 2023, due primarily to concerns over asset quality in light of the current economic climate and fewer loans available for purchase.
The Bank uses the same underwriting criteria for these purchases as it does for loans it originates. The Bank did not purchase any loans to be held for investment in fiscal 2025 and 2024, due primarily to concerns over asset quality in light of the current economic climate and fewer loans available for purchase.
The specific purpose of the Foundation is to promote and provide for the betterment of youth, education, housing and the arts in the Bank’s primary market areas of Riverside and San Bernardino counties. The Foundation was funded with a $500,000 charitable contribution made by the Bank in the fourth quarter of fiscal 2006.
The specific purpose of the Foundation is to promote and provide for the betterment of youth, education, housing and the arts in the Bank’s primary market areas of Riverside and San Bernardino counties. The Foundation was funded with a $500,000 charitable contribution made by the Bank in fiscal 2006.
Such loans may be returned to accrual status when all contractual amounts past due have been brought current, and the borrower’s performance under the modified terms of the loan agreement and the ultimate collectability of all contractual amounts due under the modified terms is no longer in doubt. ​ In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, “Financial Instruments-Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures.” This ASU provides new guidance on the treatment of troubled debt restructurings (“TDR”) in relation to the adoption of the current expected credit loss methodology, or CECL model, for the accounting for credit losses (discussed below).
Loans may be returned to accrual status when all contractual amounts past due have been brought current, and the borrower’s performance under the modified loan terms, as well as the ultimate collectability of all contractual amounts due, is no longer in doubt. ​ In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, “Financial Instruments-Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures.” This ASU provides new guidance on the treatment of troubled debt restructurings (“TDR”) in relation to the adoption of the current expected credit loss methodology, or CECL model, for the accounting for credit losses (discussed below).
Our non-traditional single-family residential loans include loans to borrowers who provided limited or no documentation of their income or stated income loans, negative amortization loans (a loan in which accrued interest exceeding the required monthly loan payment is added to loan principal up to 115% of the original loan amount), more than 30-year amortization loans, and loans to borrowers with a FICO score below 660 (these loans are considered subprime by the OCC).
Our non-traditional single-family residential loans include loans to borrowers who provided limited or no documentation of their 6 Table of Contents income or stated income loans, negative amortization loans (a loan in which accrued interest exceeding the required monthly loan payment is added to loan principal up to 115% of the original loan amount), more than 30-year amortization loans, and loans to borrowers with a FICO score below 660 (these loans are considered subprime by the OCC).
The Bank did not sell any participation loans in fiscal 2024 or fiscal 2023. ​ Commercial Business Loans . The Bank has a Business Banking Department that primarily serves businesses located within the Inland Empire. Commercial business loans allow the Bank to diversify its lending and increase the average loan yield.
The Bank did not sell any participation loans in fiscal 2025 or fiscal 2024. ​ Commercial Business Loans . The Bank has a Business Banking Department that primarily serves businesses located within the Inland Empire. Commercial business loans allow the Bank to diversify its lending and increase the average loan yield.
Accordingly, the repayment of a commercial business loan depends primarily on the creditworthiness of the borrower (and any guarantors), while liquidation of collateral is secondary and oftentimes an insufficient source of repayment. At June 30, 2024 and 2023, there were no non-performing commercial business loans.
Accordingly, the repayment of a commercial business loan depends primarily on the creditworthiness of the borrower (and any guarantors), while liquidation of collateral is secondary and oftentimes an insufficient source of repayment. At June 30, 2025 and 2024, there were no non-performing commercial business loans.
When a property is acquired, it is recorded at its fair market value less the estimated cost of sale. Subsequent declines in value are charged to operations. As of both June 30, 2024 and 2023, there was no REO property.
When a property is acquired, it is recorded at its fair market value less the estimated cost of sale. Subsequent declines in value are charged to operations. As of both June 30, 2025 and 2024, there was no REO property.
A federal savings bank that makes the so-called “covered savings association” election must divest any activities or investments that are not permitted for a national bank. The Bank had not made such an election as of June 30, 2024. ​ Federal Home Loan Bank System.
A federal savings bank that makes the so-called “covered savings association” election must divest any activities or investments that are not permitted for a national bank. The Bank had not made such an election as of June 30, 2025. ​ Federal Home Loan Bank System.
As of the effective date of the legislation, the Bank had no post 1987 additions to its bad debt tax reserves. As of June 30, 2024, the Bank’s total pre-1988 bad debt reserve for tax purposes was approximately $9.0 million.
As of the effective date of the legislation, the Bank had no post 1987 additions to its bad debt tax reserves. As of June 30, 2025, the Bank’s total pre-1988 bad debt reserve for tax purposes was approximately $9.0 million.
These reserves may be in the form of cash or noninterest-bearing deposits with the regional FRB. Interest-bearing checking accounts and other types of accounts that permit payments or transfers to third parties fall within the definition of transaction accounts and are subject to Regulation D reserve requirements, as are any non-personal time deposits at a bank.
These reserves may be in the form of cash or noninterest-bearing deposits with the regional 28 Table of Contents FRB. Interest-bearing checking accounts and other types of accounts that permit payments or transfers to third parties fall within the definition of transaction accounts and are subject to Regulation D reserve requirements, as are any non-personal time deposits at a bank.
Multiple savings and loan holding companies may engage in activities permitted for financial holding companies, and certain other activities including acting as a trustee under a deed of trust and real estate investments. ​ 32 Table of Contents If the Bank were to fail the QTL test, the Corporation must, within one year of that failure, register as, and become subject to the restrictions applicable to bank holding companies.
Multiple savings and loan holding companies may engage in activities permitted for financial holding companies, and certain other activities including acting as a trustee under a deed of trust and real estate investments. ​ If the Bank were to fail the QTL test, the Corporation must, within one year of that failure, register as, and become subject to the restrictions applicable to bank holding companies.
The Bank had no non-performing consumer loans at both June 30, 2024 and 2023. During fiscal 2024 and 2023, the Bank had no charge-offs or recoveries on consumer loans. ​ Loans Originations, Purchases, Sales and Repayments ​ Mortgage loans are primarily originated for investment.
The Bank had no non-performing consumer loans at both June 30, 2025 and 2024. During fiscal 2025 and 2024, the Bank had no charge-offs or recoveries on consumer loans. ​ Loans Originations, Purchases, Sales and Repayments ​ Mortgage loans are primarily originated for investment.
This competition may limit the Bank’s growth and profitability in the future. ​ 2 Table of Contents Reportable Segments ​ Management monitors the revenue and expense components of the various products and services the Bank offers, but operations are managed and financial performance is evaluated on a Corporation-wide basis in comparison to a business plan which is developed each year.
This competition may limit the Bank’s growth and profitability in the future. ​ Reportable Segments ​ Management monitors the revenue and expense components of the various products and services the Bank offers, but operations are managed and financial performance is evaluated on a corporation-wide basis in comparison to a business plan which is developed each year.
The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate allowance for credit loss for regulatory purposes.
The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate allowance for credit losses for regulatory purposes.
During fiscal 2024 and 2023, the Bank had no charge-offs or recoveries on construction loans, and no construction loans were non-performing or 30-89 days delinquent at both June 30, 2024 and June 30, 2023. ​ Participation Loan Purchases and Sales.
During fiscal 2025 and 2024, the Bank had no charge-offs or recoveries on construction loans, and no construction loans were non-performing or 30-89 days delinquent at both June 30, 2025 and June 30, 2024. ​ Participation Loan Purchases and Sales.
In addition, the SEC maintains a website that contains reports, proxy and information statements, and other information regarding companies that file electronically with the SEC. This information is available at www.sec.gov. ​ Lending Activities ​ General.
In addition, the SEC maintains a website that contains reports, proxy and information statements, and other information regarding companies filed electronically with the SEC. This information is available at www.sec.gov. ​ Lending Activities ​ General.
Although commercial business loans are often collateralized by equipment, inventory, accounts receivable or other business assets including real estate, the liquidation of collateral in the event of a borrower default is often an insufficient source of repayment because accounts receivable may not be collectible and inventories and equipment may be obsolete or of limited 10 Table of Contents use.
Although commercial business loans are often collateralized by equipment, inventory, accounts receivable or other business assets including real estate, the liquidation of collateral in the event of a borrower default is often an insufficient source of repayment because accounts receivable may not be collectible and inventories and equipment may be obsolete or of limited use.
Savings institutions also must conduct the activities of subsidiaries in accordance with existing regulations and orders. With respect to subsidiaries generally, the OCC may determine that investment by a savings institution in, or the activities of, a subsidiary must be restricted or eliminated based on safety and soundness or legal reasons. 29 Table of Contents ​ Transactions with Affiliates.
Savings institutions also must conduct the activities of subsidiaries in accordance with existing regulations and orders. With respect to subsidiaries generally, the OCC may determine that investment by a savings institution in, or the activities of, a subsidiary must be restricted or eliminated based on safety and soundness or legal reasons. ​ Transactions with Affiliates.
If such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury’s Office of Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts, and, effective in 2018, the beneficial owners of accounts.
If such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury’s Office of Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts, and the beneficial owners of accounts.
At June 30, 2024, the Bank’s largest lending relationship to a single borrower or group of borrowers consisted of four multi-family loans totaling $5.0 million, which were performing according to their original payment terms. ​ Effective July 1, 2019, the OCC issued a final rule implementing a section of the Economic Growth, Regulatory Relief and Consumer Protection Act (“EGRRCPA”) which permits an eligible federal savings bank with assets of $20.0 billion or less as of December 31, 2017 to elect to operate with the business powers of a national bank, generally subject to the same limitations and restrictions, without converting to a national bank charter.
At June 30, 2025, the Bank’s largest lending relationship to a single borrower or group of related borrowers consisted of four multi-family loans totaling $4.9 million, which were performing according to their original payment terms. ​ Effective July 1, 2019, the OCC issued a final rule implementing a section of the Economic Growth, Regulatory Relief and Consumer Protection Act (“EGRRCPA”) which permits an eligible federal savings bank with assets of $20.0 billion or less as of December 31, 2017 to elect to operate with the business powers of a national bank, generally subject to the same limitations and restrictions, without converting to a national bank charter.
In fiscal 2024 and 2023, the FHLB – San Francisco distributed cash dividends to the Bank totaling $793,000 and $556,000, respectively. ​ ​ Subsidiary Activities ​ Federal savings institutions generally may invest up to 3% of their assets in service corporations, provided that at least one-half of any amount in excess of 1% is used primarily for community, inner-city and community development projects.
In fiscal 2025 and 2024, the FHLB – San Francisco distributed cash dividends to the Bank totaling $835,000 and $793,000, respectively. ​ ​ Subsidiary Activities ​ Federal savings institutions generally may invest up to 3% of their assets in service corporations, provided that at least one-half of any amount in excess of 1% is used primarily for community, inner-city and community development projects.
The Corporation provided disclosures on its cybersecurity risk management and governance on this Form 10-K for fiscal years ended June 20, 2024 (See Part I, Item 1C - Cybersecurity). Non-compliance with federal or similar state privacy and cybersecurity laws and regulations could lead to substantial regulatory imposed fines and penalties, damages from private causes of action and/or reputational harm.
The Corporation provided disclosures on its cybersecurity risk management and governance on this Form 10-K for fiscal year ended June 20, 2025 (See Part I, Item 1C - Cybersecurity). Non-compliance with federal or similar state privacy and cybersecurity laws and regulations could lead to substantial regulatory imposed fines and penalties, damages from private causes of action and/or reputational harm.
The properties securing these loans are mainly located in the counties of Alameda, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Francisco, and Santa Clara. The Bank typically originates multi-family and commercial real estate loans in amounts ranging from $350,000 to $6.0 million.
The properties securing these loans are mainly located in the counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego and San Francisco. The Bank typically originates multi-family and commercial real estate loans in amounts ranging from $350,000 to $6.0 million.
An institution that temporarily ceases to meet any qualifying criteria is provided with a two quarter grace 28 Table of Contents period to regain compliance. Failure to meet the qualifying criteria within the grace period or maintain a leverage ratio of 8% or greater requires the institution to comply with the generally applicable regulatory capital requirements.
An institution that temporarily ceases to meet any qualifying criteria is provided with a two quarter grace period to regain compliance. Failure to meet the qualifying criteria within the grace period or maintain a leverage ratio of 8% or greater requires the institution to comply with the generally applicable regulatory capital requirements.
The Bank’s OCC annual assessments for the fiscal years ended June 30, 2024 and 2023 were $179,000 and $198,000, respectively. ​ The Bank's general permissible lending limit for loans to one borrower is equal to the greater of $500,000 or 15% of unimpaired capital and surplus (except for loans fully secured by certain readily marketable collateral, in which case this limit is increased to 25% of unimpaired capital and surplus).
The Bank’s OCC annual assessments for the fiscal years ended June 30, 2025 and 2024 were $167,000 and $179,000, respectively. ​ The Bank’s general permissible lending limit for loans to one borrower is equal to the greater of $500,000 or 15% of unimpaired capital and surplus (except for loans fully secured by certain readily marketable collateral, in which case this limit is increased to 25% of unimpaired capital and surplus).
The Bank believes that the internal monitoring system helps reduce many of the risks inherent in its construction loans. ​ 9 Table of Contents Construction loans afford the Bank the opportunity to achieve higher interest rates and fees with shorter terms to maturity than its single-family mortgage loans.
The Bank believes that the internal monitoring system helps reduce many of the risks inherent in its construction loans. ​ Construction loans afford the Bank the opportunity to achieve higher interest rates and fees with shorter terms to maturity than its single-family mortgage loans.
Subsequent to the adoption of ASC 326, the Bank no longer reports TDRs or classifies loans as TDRs given those loans previously recognized as TDRs have been incorporated into the CECL methodology in regard to credit loss reserves as of July 1, 2023.
Subsequent to the adoption of ASC 326, the Bank no longer reports TDRs or classifies loans as TDRs given those loans 13 Table of Contents previously recognized as TDRs have been incorporated into the CECL methodology in regard to credit loss reserves as of July 1, 2023.
The Corporation and its non-savings institution subsidiaries are affiliates of the Bank. In general, transactions with affiliates must be on terms that are as favorable to the institution as comparable transactions with non-affiliates. In addition, certain types of transactions are restricted to an aggregate percentage of the institution’s capital.
The Corporation and its non-savings institution subsidiaries are affiliates of the Bank. In general, transactions 27 Table of Contents with affiliates must be on terms that are as favorable to the institution as comparable transactions with non-affiliates. In addition, certain types of transactions are restricted to an aggregate percentage of the institution’s capital.
The new rules require registrants to disclose on Form 8-K any cybersecurity incident they determine to be material and to describe the material aspects of the incident's nature, scope, and timing, as well as its material impact or 31 Table of Contents reasonably likely material impact on the registrant.
The new rules require registrants to disclose on Form 8-K any cybersecurity incident they determine to be material and to describe the material aspects of the incident's nature, scope, and timing, as well as its material impact or reasonably likely material impact on the registrant.
If the estimate of construction costs proves to be inaccurate, the Bank may be required to advance funds beyond the amount originally committed to permit completion of the project. If the estimate of value upon completion proves to be inaccurate, the Bank may be confronted with a project whose value is insufficient to assure full repayment.
If the estimate of construction costs proves to be inaccurate, the Bank may be required to advance funds beyond the amount originally committed to permit completion of the project. If the estimate of value upon completion 9 Table of Contents proves to be inaccurate, the Bank may be confronted with a project whose value is insufficient to assure full repayment.
The general assessments, paid on a semi-annual basis, are determined based on the savings institution’s total assets, including 26 Table of Contents consolidated subsidiaries.
The general assessments, paid on a semi-annual basis, are determined based on the savings institution’s total assets, including 24 Table of Contents consolidated subsidiaries.
The Bank reviews its deposit composition and pricing on a weekly basis. ​ The Bank generally offers time deposits for terms not exceeding seven years. As illustrated in the following table, time deposits represented approximately 31% of the Bank’s deposit portfolio at June 30, 2024, compared to approximately 23% at June 30, 2023.
The Bank reviews its deposit composition and pricing on a weekly basis. ​ The Bank generally offers time deposits for terms not exceeding seven years. As illustrated in the following table, time deposits represented approximately 35% of the Bank’s deposit portfolio at June 30, 2025, compared to approximately 31% at June 30, 2024.
The FDIC has the authority to recommend to the OCC that enforcement action be taken with respect to a particular savings institution. If the OCC does not take action, the FDIC has authority to take such action under certain circumstances. Federal law also establishes criminal penalties for certain violations. ​ 30 Table of Contents Standards for Safety and Soundness.
The FDIC has the authority to recommend to the OCC that enforcement action be taken with respect to a particular savings institution. If the OCC does not take action, the FDIC has authority to take such action under certain circumstances. Federal law also establishes criminal penalties for certain violations. ​ Standards for Safety and Soundness.
At June 30, 2024, the outstanding borrowings mature between 2024 and 2028 with a weighted average maturity of 13 months. ​ In addition to the total borrowings mentioned above, the Bank utilized its borrowing facility for letters of credit and credit enhancement for loans previously sold to the FHLB – San Francisco under the Mortgage Partnership Finance (“MPF”) program which have a recourse liability.
At June 30, 2025, the outstanding borrowings mature between 2025 and 2028 with a weighted average maturity of 10 months. ​ In addition to the borrowings mentioned above, the Bank utilized its borrowing facility for letters of credit and credit enhancement for loans previously sold to the FHLB – San Francisco under the Mortgage Partnership Finance (“MPF”) program which have a recourse liability.
During fiscal 2024, the Bank declared and paid $7.0 million of cash dividends to Provident, while Provident declared and paid $3.9 million of cash dividends to shareholders. ​ Excise Tax on Stock Repurchases. The Inflation Reduction Act of 2022 imposed a one percent excise tax on the value of corporate share repurchases (net of issuance).
During fiscal 2025, the Bank declared and paid $9.0 million of cash dividends to Provident, while Provident declared and paid $3.8 million of cash dividends to shareholders. ​ Excise Tax on Stock Repurchases. The Inflation Reduction Act of 2022 imposed a one percent excise tax on the value of corporate share repurchases (net of issuance).
At June 30, 2024, the Corporation’s net state tax rate was 8.5%. Bad debt deductions are available in computing California franchise taxes using the specific charge-off method. The Bank and its California subsidiaries file California franchise tax returns on a combined basis. The Corporation will be treated as a general corporation subject to the general corporate tax rate.
At June 30, 2025, the Corporation’s net state tax rate was 8.6%. Bad debt deductions are available in computing California franchise taxes using the specific charge-off method. The Bank and its California subsidiaries file California franchise tax returns on a combined basis. The Corporation will be treated as a general corporation subject to the general corporate tax rate. ​ Delaware.
The Bank currently has a privacy protection policy in place and believes that such policy is in compliance with the regulations. ​ Other Consumer Protection Laws and Regulations. The Consumer Financial Protection Bureau (“CFPB”) exercises broad regulatory, supervisory and enforcement authority with respect to both new and existing consumer financial protection laws.
The Bank currently has a privacy protection policy in place and believes that such policy is in compliance with the regulations. ​ 29 Table of Contents Other Consumer Protection Laws and Regulations. The Consumer Financial Protection Bureau (“CFPB”) exercises broad regulatory, supervisory and enforcement authority with respect to both new and existing consumer financial protection laws.
Non-performing loans and/or delinquent loans may increase if there is a general decline in California real estate markets and in the event poor general economic conditions prevail. ​ Construction Loans. The Bank originates from time to time two types of construction loans: short-term construction loans and construction/permanent loans.
Non-performing and delinquent loans may increase in the event of a general decline in California real estate markets or if adverse economic conditions prevail. ​ Construction Loans. The Bank originates from time to time two types of construction loans: short-term construction loans and construction/permanent loans.
The programs are limited to a maximum semi-annual increase or decrease of one percentage point with a maximum lifetime increase of five percentage points and the rate may not fall below the margin.
The programs are subject to a maximum semi-annual increase or decrease of one percentage point and a maximum lifetime increase of five percentage points, and the rate may not fall below the margin.
In exchange for the additional risk to us associated with these loans, these borrowers generally are required to pay a higher interest rate, and 6 Table of Contents depending on the credit history, a lower loan-to-value ratio was generally required than for a conforming loan.
In exchange for the additional risk to us associated with these loans, these borrowers generally are required to pay a higher interest rate, and depending on the credit history, a lower loan-to-value ratio was generally required than for a conforming loan.
At June 30, 2024 and 2023, the Bank’s investment in all its combined subsidiaries totaled $8,000 and $13,000, respectively. ​ ​ REGULATION ​ The following is a brief description of certain laws and regulations which are applicable to the Corporation and the Bank.
At June 30, 2025 and 2024, the Bank’s investment in all its combined subsidiaries totaled $14,000 and $8,000, respectively. ​ ​ REGULATION ​ The following is a brief description of certain laws and regulations which are applicable to the Corporation and the Bank.
At June 30, 2024 and 2023, total non-performing single-family loans were $2.6 million and $1.3 million, respectively, net of allowances and charge-offs, and there were no loans past due 30 to 89 days at both dates. ​ The Bank has underwriting standards that generally conform with the standards of the government sponsored entities (“GSE”) which include Fannie Mae and Freddie Mac.
At June 30, 2025 and 2024, total non-performing single-family loans were $948,000 and $2.6 million, respectively, net of allowances and charge-offs, and there were no loans past due 30 to 89 days at both dates. ​ The Bank has underwriting standards that generally conform with the standards of the government sponsored entities (“GSE”) which include Fannie Mae and Freddie Mac.
Accordingly, all operations are considered by management to be one operating segment and one reportable segment as contained in the Consolidated Statements of Operations to the Corporation’s audited consolidated financial statements included in Item 8 of this Form 10-K. ​ Internet Website ​ The Corporation maintains a website at www.myprovident.com.
Accordingly, all operations are considered by management to be one operating segment and one reportable segment as contained in the Consolidated Statements of Operations to the Corporation’s audited consolidated financial statements and Note 17, “Segment Reporting” of the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K. ​ Internet Website ​ The Corporation maintains a website at www.myprovident.com.
The Bank’s investment in its service corporations did not exceed these limits at June 30, 2024 and 2023. ​ 25 Table of Contents The Bank has three wholly owned subsidiaries: PFC, Profed Mortgage, Inc., and First Service Corporation.
The Bank’s investment in its service corporations did not exceed these limits at June 30, 2025 and 2024. ​ 23 Table of Contents The Bank has three wholly owned subsidiaries: PFC, Profed Mortgage, Inc., and First Service Corporation.
The ethnicity of our workforce was 40.5% White, 42.2% Hispanic or Latino, 6.5% African American or Black, 6.0% Asian, 2.7% two or more races, 0.5% American Indian or Alaskan Native and 1.6% Not Specified. As part of our compensation philosophy, we offer and maintain market competitive compensation programs for our employees in order to attract and retain superior talent.
The ethnicity of our workforce was 36.5% White, 44.8% Hispanic or Latino, 7.8% African American or Black, 5.2% Asian, 3.6% two or more races, 0.5% American Indian or Alaskan Native and 1.6% Not Specified. As part of our compensation philosophy, we offer and maintain market competitive compensation programs for our employees in order to attract and retain superior talent.
During fiscal 2024, the Bank originated $40.9 million of single-family loans to be held for investment, all of which were underwritten in accordance with the Bank’s origination guidelines, and did not purchase any single-family loans. This compares to single-family loan originations of $165.9 million and no loan purchases during fiscal 2023.
During fiscal 2025, the Bank originated $92.5 million of single-family loans to be held for investment, all of which were underwritten in accordance with the Bank’s origination guidelines, and did not purchase any single-family loans. This compares to single-family loan originations of $40.9 million and no loan purchases during fiscal 2024.
The Bank contributed $40,000 to the Foundation in both fiscal 2024 and 2023. ​ Subsequent Event ​ On July 25, 2024, the Corporation announced that the Provident Board of Directors declared a cash dividend of $0.14 per share.
The Bank contributed $40,000 to the Foundation in both fiscal 2025 and 2024. ​ Subsequent Event ​ On July 24, 2025, the Corporation announced that the Provident Board of Directors declared a cash dividend of $0.14 per share.
The Bank had no real estate owned (“REO”) both at June 30, 2024 and 2023. ​ The following table sets forth information with respect to the Bank’s non-performing assets, net of the ACL and fair value adjustments, at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, (Dollars In Thousands) 2024 2023 ​ ​ ​ ​ ​ ​ ​ ​ Loans on non-performing status: ​ ​ Mortgage loans: ​ ​ Single-family ​ $ 2,596 ​ $ 1,300 ​ Total ​ 2,596 ​ 1,300 ​ ​ ​ ​ ​ ​ ​ ​ ​ Accruing loans past due 90 days or more ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ Total non-performing loans ​ 2,596 ​ 1,300 ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate owned, net ​ — ​ — ​ Total non-performing assets ​ $ 2,596 ​ $ 1,300 ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-performing loans as a percentage of loans held for investment, net ​ 0.25 % 0.12 % ​ ​ ​ ​ ​ ​ ​ ​ Non-performing loans as a percentage of total assets ​ 0.20 % 0.10 % ​ ​ ​ ​ ​ ​ ​ ​ Non-performing assets as a percentage of total assets ​ 0.20 % 0.10 % ​ The Bank assesses loans individually and classifies the loans as non-performing and substandard in accordance with regulatory requirements when the accrual of interest has been discontinued, loans have been modified or management has serious doubts about the future collectability of principal and interest, even though the loans may be currently performing.
The Bank had no real estate owned (“REO”) at June 30, 2025 and 2024. ​ 12 Table of Contents The following table sets forth information with respect to the Bank’s non-performing assets, net of the ACL and fair value adjustments, at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, (Dollars In Thousands) 2025 2024 ​ ​ ​ ​ ​ ​ ​ ​ Loans on non-performing status: ​ ​ Mortgage loans: ​ ​ Single-family ​ $ 948 ​ $ 2,596 ​ Multi-family ​ 466 ​ — ​ Total ​ 1,414 ​ 2,596 ​ ​ ​ ​ ​ ​ ​ ​ ​ Accruing loans past due 90 days or more ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ Total non-performing loans ​ 1,414 ​ 2,596 ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate owned, net ​ — ​ — ​ Total non-performing assets ​ $ 1,414 ​ $ 2,596 ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-performing loans as a percentage of loans held for investment, net ​ 0.14 % 0.25 % ​ ​ ​ ​ ​ ​ ​ ​ Non-performing loans as a percentage of total assets ​ 0.11 % 0.20 % ​ ​ ​ ​ ​ ​ ​ ​ Non-performing assets as a percentage of total assets ​ 0.11 % 0.20 % ​ The Bank assesses loans individually and classifies the loans as non-performing and substandard in accordance with regulatory requirements when the accrual of interest has been discontinued, loans have been modified or management has serious doubts about the future collectability of principal and interest, even though the loans may be currently performing.
In addition, the Bank pledged investment securities totaling $3.9 million and $4.2 million at June 30, 2024 and 2023, respectively, to collateralize its FHLB – San Francisco advances under the Securities-Backed Credit (“SBC”) facility.
In addition, the Bank pledged investment securities totaling $4.7 million and $3.9 million at June 30, 2025 and 2024, respectively, to collateralize its FHLB – San Francisco advances under the Securities-Backed Credit (“SBC”) facility.
As of June 30, 2024 and 2023, the Bank maintained 92.3% and 92.1% of its portfolio assets in qualified thrift investments, respectively, and therefore, met the qualified thrift lender test at both dates. During fiscal 2024 and 2023, the Bank was in compliance with the QTL test as of each month end. ​ Capital Requirements.
As of June 30, 2025 and 2024, the Bank maintained 93.0% and 92.3% of its portfolio assets in qualified thrift investments, respectively, and therefore met the qualified thrift lender test at both dates. During fiscal 2025 and 2024, the Bank was in compliance with the QTL test as of each month end. ​ Capital Requirements.
The FHLB – San Francisco has served as the Bank’s primary borrowing source. ​ As of June 30, 2024, the FHLB – San Francisco borrowing capacity was limited to 40% of the Bank’s total assets, amounting to $516.0 million, as compared to $534.1 million at June 30, 2023.
The FHLB – San Francisco has served as the Bank’s primary borrowing source. ​ As of June 30, 2025, the FHLB – San Francisco borrowing capacity was limited to 40% of the Bank’s total assets, amounting to $504.1 million, as compared to $516.0 million at June 30, 2024.
As of June 30, 2024, there were no loan modifications for borrowers experiencing financial difficulties. ​ Foreclosed Real Estate. Real estate acquired by the Bank as a result of foreclosure or by deed-in-lieu of foreclosure is classified as REO until it is sold.
As of June 30, 2025 and 2024, there were no loan modifications for borrowers experiencing financial difficulties at both dates. ​ Foreclosed Real Estate. Real estate acquired by the Bank as a result of foreclosure or by deed-in-lieu of foreclosure is classified as REO until it is sold.
At that date, stated income loans totaled $13.0 million, more than 30-year amortization loans totaled $6.0 million, low FICO score loans totaled $1.7 million, and negative amortization loans totaled $402,000 (the outstanding balances described may overlap more than one category). The Bank currently offers fixed-rate loans in Riverside and San Bernardino counties, along with adjustable-rate mortgage (“ARM”) loans throughout California.
At that date, stated income loans totaled $11.3 million, more than 30-year amortization loans totaled $5.7 million, low FICO score loans totaled $1.6 million, and negative amortization loans totaled $380,000 (the outstanding balances described may overlap more than one category). The Bank currently offers fixed-rate loans in Riverside and San Bernardino counties, along with adjustable-rate mortgage (“ARM”) loans throughout California.
As of June 30, 2024, the average outstanding loan balance was approximately $724,000 for multi-family loans and approximately $731,000 for commercial real estate loans. ​ The multi-family loans originated by the Bank are predominately adjustable-rate loans, including hybrid ARM loans, with terms ranging from 10 to 30 years and amortization schedules of 25 to 30 years.
As of June 30, 2025, the average outstanding loan balance was approximately $713,000 for multi-family loans and approximately $720,000 for commercial real estate loans. ​ The multi-family loans originated by the Bank are predominately adjustable-rate loans, including hybrid ARM loans, with terms ranging from 10 to 30 years and amortization schedules of 25 to 30 years.
The Bank also considers the effect that the proposed investment would have on the Bank’s risk-based capital requirements and interest rate risk sensitivity. ​ At June 30, 2024 and 2023, the Bank’s investment securities portfolio was $131.9 million and $156.6 million, respectively, which primarily consisted of federal agency and GSE obligations.
The Bank also considers the effect that the proposed investment would have on the Bank’s risk-based capital requirements and interest rate risk sensitivity. ​ At June 30, 2025 and 2024, the Bank’s investment securities portfolio was $111.0 million and $131.9 million, respectively, which primarily consisted of federal agency and GSE obligations.
Ritter was the Chief Operating Officer at California Mortgage Advisors since November 2011 where he was responsible for overseeing all of California Mortgage Advisors' operations, including product development, underwriting, loan processing and information technology.
Prior to joining the Bank, Mr. Ritter was the Chief Operating Officer at California Mortgage Advisors since November 2011 where he was responsible for overseeing all of California Mortgage Advisors' operations, including product development, underwriting, loan processing and information technology.
At June 30, 2024, $428.4 million, or 96%, of the Bank’s multi-family loans were secured by projects with five to 36 units. The Bank’s commercial real estate loan portfolio primarily consists of loans secured by small office buildings, light industrial buildings, warehouses, and small retail centers.
At June 30, 2025, $407.1 million, or 96%, of the Bank’s multi-family loans were secured by projects with five to 36 units. The Bank’s commercial real estate loan portfolio primarily consists of loans secured by small office buildings, light industrial buildings, warehouses, and small retail centers.
The Corporation did not opt in to the community bank leverage ratio framework for the year ended June 30, 2024. ​ The FASB has issued a new accounting standard, ASC 326, for U.S. GAAP that was adopted by the Corporation on July 1, 2023.
The Corporation did not opt in to the community bank leverage ratio framework for the year ended June 30, 2025. ​ 26 Table of Contents The FASB has issued a new accounting standard, ASC 326, for U.S. GAAP that was adopted by the Corporation on July 1, 2023.
While CRA modernization is underway and scheduled for implementation by 2026, the current evaluation system focuses on three tests: (1) a lending test, to evaluate the institution's record of making loans in its assessment areas; (2) an investment test, to evaluate the institution's record of investing in community development projects, affordable housing and programs benefiting low or moderate income individuals and businesses; and (3) a service test, to evaluate the institution's delivery of banking services through its branches, ATM centers and other offices.
The current CRA evaluation system focuses on three tests: (1) a lending test, to evaluate the institution's record of making loans in its assessment areas; (2) an investment test, to evaluate the institution's record of investing in community development projects, affordable housing and programs benefiting low income or moderate income individuals and businesses; and (3) a service test, to evaluate the institution's delivery of banking services through its branches, ATM centers and other offices.
Loans of this type have embedded interest rate risk if interest rates should rise during the initial fixed rate period or if rates should rise beyond the periodic or lifetime caps. ​ Borrower demand for ARM loans versus fixed-rate mortgage loans is a function of the level of interest rates, the expectations of changes in the level of interest rates and the difference between the initial interest rates and fees charged for each type of loan.
These loans have embedded interest rate risk, which may arise if interest rates increase during the initial fixed rate period or if rates rise beyond the periodic or lifetime caps. ​ Borrower demand for ARM loans versus fixed-rate mortgage loans is a function of the level of interest rates, the expectations of changes in the level of interest rates and the difference between the initial interest rates and fees charged for each type of loan.
At June 30, 2024 and 2023, the Bank had $238.5 million and $235.0 million of outstanding advances, respectively, from the FHLB – San Francisco with a remaining available credit facility of $261.3 million and $287.9 million, respectively, based on 40% of total assets for both dates, which is limited to available collateral.
At June 30, 2025 and 2024, the Bank had $213.0 million and $238.5 million of outstanding advances, respectively, from the FHLB – San Francisco with a remaining available credit facility of $282.3 million and $261.3 million, respectively, based on 40% of total assets for both dates, which is limited to available collateral.
In addition, the Bank’s loans held for investment may include single-family, commercial and multi-family real estate loans with a balance exceeding the current market value of the collateral which are not classified because they are performing and have borrowers and/or guarantor who have sufficient resources to support the repayment of the loan. ​ Allowance for Credit Losses.
In addition, the Bank’s loans held for investment may include single-family, commercial and multi-family real estate loans with a balance exceeding the current market value of the collateral which are not classified because they are performing and have borrowers and/or guarantor who have sufficient resources to support the repayment of the loan. ​ The Bank has established a formal methodology for determining the provision for credit losses.
Many of these institutions are significantly larger than the Bank and therefore have greater financial and marketing resources than the Bank.
Many of these institutions are significantly larger 2 Table of Contents than the Bank and therefore have greater financial and marketing resources than the Bank.
The letters of credit are used to collateralize the local agency deposits. The outstanding letters of credit were $16.0 million and $11.0 million at June 30, 2024 and 2023; while the outstanding MPF credit enhancement was $216,000 at both June 30, 2024 and 2023.
The letters of credit are used to collateralize the local agency deposits. The outstanding letters of credit were $8.5 million and $16.0 million at June 30, 2025 and 2024; while the outstanding MPF credit enhancement was $216,000 at both June 30, 2025 and 2024.
The real estate collateral for these loans are primarily located in Southern and Northern California. At June 30, 2024, all of these loans were performing in accordance with their repayment terms. ​ 3 Table of Contents Loans Held For Investment Analysis .
The real estate collateral securing these loans is primarily located in Southern and Northern California. At June 30, 2025, all of these loans were performing in accordance with their contractual repayment terms. ​ 3 Table of Contents Loans Held For Investment Analysis .
Weiant 65 — Senior Vice President ​ ​ ​ Chief Lending Officer ​ ​ ​ Gwendolyn L. Wertz 58 — Senior Vice President ​ ​ ​ Retail Banking Division ​ (1) As of June 30, 2024. ​ Biographical Information ​ Set forth below is certain information regarding the executive officers of the Corporation and the Bank.
Weiant 66 — Senior Vice President ​ ​ ​ Chief Lending Officer ​ ​ ​ Gwendolyn L. Wertz 59 — Senior Vice President ​ ​ ​ Retail Banking Division ​ (1) As of June 30, 2025. ​ Biographical Information ​ Set forth below is certain information regarding the executive officers of the Corporation and the Bank.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeChanges in agreements or relationships between the United States and other countries may also affect these businesses. ​ A deterioration in economic conditions in our market areas could result in the following consequences, any of which could have a materially adverse impact on our business, financial condition and results of operations: ​ ● an increase in loan delinquencies, problem assets and foreclosures; ● an increase in our ACL; ● the slowing of sales of foreclosed assets; ● a decline in demand for our products and services; ● a decline in the value of collateral for loans may in turn reduce customers' borrowing power, and the value of assets and collateral associated with existing loans; ● the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and ● a decrease in the amount of our low cost or noninterest-bearing deposits. ​ 37 Table of Contents A decline in California economic conditions may have a greater effect on our earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are more geographically diverse.
Biggest changeSuch instability may also increase cybersecurity threats, including those from state-sponsored actors, heightening operational and reputational risk. ​ A deterioration in economic conditions in our market areas could result in: ​ ● higher loan delinquencies, problem assets and foreclosures; ● an increase in our ACL; ● the slowing of sales of foreclosed assets; ● a decline in demand for our products and services; ● a decline in the value of collateral for loans may in turn reduce customers' borrowing power, and the value of assets and collateral associated with existing loans; ● the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and ● a decrease in the amount of our low cost or noninterest-bearing deposits. ​ Because our loan portfolio is more geographically concentrated than those of larger financial institutions, adverse changes in California’s economy, including those tied to immigration policy shifts, may have a greater impact on our earnings and capital.
In addition to the risk factors described below, other risks and uncertainties not specifically mentioned, or that are currently known to, or deemed by, management to be immaterial also may materially and adversely affect our financial position, results of operation and/or cash flows.
In addition to the risk factors described below, other risks and uncertainties not specifically mentioned, or that are currently known to, or deemed by, management to be immaterial may also materially and adversely affect our financial position, results of operation and/or cash flows.
Earnings could also be adversely affected if the interest rates received on loans and other investments fall more quickly than the interest rates paid on deposits and other borrowings. ​ In addition, most of our mortgage loans have adjustable interest rates.
Earnings could also be adversely affected if the interest rates received on loans and other investments fall more quickly than the interest rates paid on deposits and borrowings. ​ In addition, most of our mortgage loans have adjustable interest rates.
Accordingly, our operations are exposed to the risk that these vendors will not perform in accordance with the contracted arrangements under service level agreements.
Accordingly, our operations are exposed to risk that these vendors will not perform in accordance with the contracted arrangements under service level agreements.
The amount of this allowance is determined by management through periodic reviews and consideration of several factors, including, but not limited to: ● our collective allowance, for loans evaluated on a pool basis with similar risk characteristics based on our and peer life of loan historical loss experience, certain qualitative factors consisting of macroeconomic conditions and external factors as regulatory requirements, and reasonable and supportable forecasts relating to management’s expectations of future events; and ● our individual allowance, for evaluation of individual loans that do not share similar risk characteristics based on the present value of the expected future cash flows or the fair value of the underlying collateral. ​ The determination of the appropriate ACL involves a significant degree of subjectivity, relying on substantial estimates of both current credit risks and future trends, all of which are subject to potential material changes.
The amount of this allowance is determined by management through periodic reviews and consideration of several factors, including, but not limited to: ● our collective allowance, for loans evaluated on a pool basis with similar risk characteristics based on our and peer life of loan historical loss experience, certain qualitative factors consisting of macroeconomic conditions and external factors as regulatory requirements, and reasonable and supportable forecasts relating to management’s expectations of future events; and ● our individual allowance, for evaluation of individual loans that do not share similar risk characteristics based on the present value of the expected future cash flows or the fair value of the underlying collateral, less selling costs. ​ The determination of the appropriate ACL involves a significant degree of subjectivity, relying on substantial estimates of both current credit risks and future trends, all of which are subject to potential material changes.
Under the CECL model, financial assets carried at amortized cost, such as loans and held-to-maturity debt securities, are presented at the net amount expected to be collected. This forward-looking approach in estimating expected credit losses contrasts starkly with the prior, "incurred loss" model, which delays recognition until a loss is probable.
Under the CECL model, financial assets carried at amortized cost, such as loans held for investment and held-to-maturity debt securities, are presented at the net amount expected to be collected. This forward-looking approach in estimating expected credit losses contrasts starkly with the prior, "incurred loss" model, which delays recognition until a loss is probable.
In addition, many of our multi-family and commercial real estate loans are not fully amortizing and contain large balloon payments upon maturity, which would require the borrower to either sell or refinance the underlying property to make the balloon payment at maturity, thus increasing the risk of default or non-payment. ​ A secondary market for many types of multi-family and commercial real estate loans is not readily liquid, so we have less opportunity to mitigate credit risk by selling part or all of our interest in these loans.
In addition, many of our multi-family and commercial real estate loans are not fully amortizing and contain large balloon 36 Table of Contents payments upon maturity, which would require the borrower to either sell or refinance the underlying property to make the balloon payment at maturity, thus increasing the risk of default or non-payment. ​ A secondary market for many types of multi-family and commercial real estate loans is not readily liquid, so we have less opportunity to mitigate credit risk by selling part or all of our interest in these loans.
Any claims asserted against us in the future by one of our loan purchasers may result in liabilities or legal expenses that could have a material adverse effect on our results of operations and financial condition. During fiscal 2024 and 2023, the Bank did not repurchase any loans.
Any claims asserted against us in the future by one of our loan purchasers may result in liabilities or legal expenses that could have a material adverse effect on our results of operations and financial condition. During fiscal 2025 and 2024, the Bank did not repurchase any loans.
If any of the circumstances described in the following risk factors actually occur, the value of our common stock could decline and you could lose all or part of your investment. ​ Risks Related to Macroeconomic Conditions ​ Our business may be adversely affected by downturns in the national economy and the regional economies on which we depend. ​ As of June 30, 2024, approximately 66% of our real estate loans were secured by collateral and made to borrowers located in Southern California with the balance located predominantly throughout the rest of California.
If any of the circumstances described in the following risk factors actually occur, the value of our common stock could decline and you could lose all or part of your investment. ​ Risks Related to Macroeconomic Conditions ​ Our business may be adversely affected by downturns in the national economy and the regional economies on which we depend. ​ As of June 30, 2025, approximately 64% of our real estate loans were secured by collateral and made to borrowers located in Southern California, with the balance located predominantly throughout the rest of California.
Further, if we are unable to raise additional capital when required by our bank regulators, we may be subject to adverse regulatory action. ​ The financial services market is undergoing rapid technological changes, and if we are unable to stay current with those changes, we will not be able to effectively compete. ​ The financial services market is undergoing rapid changes with frequent introductions of new technology-driven products and services.
Further, if we are unable to raise additional capital when required by our bank regulators, we may be subject to adverse regulatory action. 43 Table of Contents ​ The financial services market is undergoing rapid technological changes, and if we are unable to stay current with those changes, we will not be able to effectively compete. ​ The financial services market is undergoing rapid changes with frequent introductions of new technology-driven products and services.
Also, our right to participate in a distribution of assets upon a subsidiary's liquidation or reorganization is subject to the prior claims of the subsidiary's creditors. In fiscal 2024 and 2023, the Bank paid cash dividends to its holding company totaling $7.0 million and $9.5 million, respectively. ​ ​ Item 1B. Unresolved Staff Comments ​ None. ​ ​
Also, our right to participate in a distribution of assets upon a subsidiary's liquidation or reorganization is subject to the prior claims of the subsidiary's creditors. In fiscal 2025 and 2024, the Bank paid cash dividends to its holding company totaling $9.0 million and $7.0 million, respectively. ​ ​ Item 1B. Unresolved Staff Comments ​ None. ​ ​
Additionally, as we acknowledge the potential impact of significant portfolio growth, new loan products, and refinancing activities, these actions may result in portfolios consisting of unseasoned loans that may not perform as anticipated, elevating the risk of an inadequate allowance to absorb losses without additional provisions.
Additionally, as we acknowledge the potential impact of significant portfolio growth, new loan products, and refinancing activities, these actions may result in portfolios consisting of unseasoned loans that may not perform as anticipated, elevating the risk of an inadequate 37 Table of Contents allowance to absorb losses without additional provisions.
If our risk management framework proves ineffective, we could suffer unexpected losses and our business, financial condition, results of operations or growth prospects could be materially adversely affected. We may also be subject to potentially adverse regulatory consequences. 42 Table of Contents ​ Climate change and related legislative and regulatory initiatives may materially affect our business and results of operations.
If our risk management framework proves ineffective, we could suffer unexpected losses and our business, financial condition, results of operations or growth prospects could be materially adversely affected. We may also be subject to potentially adverse regulatory consequences. ​ Climate change and related legislative and regulatory initiatives may materially affect our business and results of operations.
Replacing these third-party vendors could also entail significant delay and expense. Threats to information security also exist in the processing of customer information through various other vendors and their personnel.
Replacing these third-party vendors could also entail significant delays and expense. Threats to information security also exist in the processing of customer information through various other vendors and their personnel.
The Bank's ability to pay dividends is subject to its ability to earn net income and to meet certain regulatory requirements. In the event the Bank is unable to pay dividends to us, we may not be able to pay dividends on our common stock nor share buybacks.
The Bank's ability to pay dividends is subject to its ability to earn net income and to meet certain regulatory requirements. In the event the Bank is unable to pay dividends to us, we may not be able to pay dividends on our common stock or conduct share buybacks.
Periodic changes to such rules may change the treatment and recognition of critical financial line items and affect our profitability. ​ Our business operations are significantly influenced by the extensive body of accounting regulations in the United States.
Periodic changes to such rules may change the treatment and recognition of critical financial line items and affect our profitability. ​ Our business operations are significantly influenced by the extensive body of accounting regulations in the United States, which are subject to periodic updates and changes.
The net deferred tax asset results primarily from (1) deferred loan costs, (2) provisions for credit losses recorded for financial reporting purposes, which were in the past significantly larger than net loan charge-offs deducted for tax reporting proposes and (3) deferred compensation, among others. ​ We regularly review our deferred tax assets for recoverability based on our history of earnings, expectations for future earnings and expected timing of reversals of temporary differences.
The net deferred tax asset or liability results primarily from (1) deferred loan costs, (2) provision for credit losses recorded for financial reporting purposes, which were in the past significantly larger than net loan charge-offs deducted for tax reporting purposes and (3) deferred compensation, among others. ​ We regularly review our deferred tax assets for recoverability based on our history of earnings, expectations for future earnings and expected timing of reversals of temporary differences.
Further, the occurrence of any systems failure or interruption could damage our reputation and result in a loss of customers and 44 Table of Contents business, could subject us to additional regulatory scrutiny, or could expose us to legal liability.
Further, the occurrence of any systems failure or interruption could damage our reputation and result in a loss of customers and business, could subject us to additional regulatory scrutiny, or could expose us to legal liability.
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” of this Form 10-K. ​ We rely on other companies to provide key components of our business infrastructure. ​ We rely on numerous external vendors to provide us with products and services necessary to maintain our day-to-day operations.
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” of this Form 10-K. ​ We rely on other companies to provide key components of our business infrastructure. ​ We rely on numerous external vendors to provide products and services necessary for our day-to-day operations.
Repayment on these loans typically is dependent upon income generated, or expected to be generated, by the property securing the loan 38 Table of Contents in amounts sufficient to cover operating expenses and debt service, which may be adversely affected by changes in the economy or local market conditions.
Repayment on these loans typically is dependent upon income generated, or expected to be generated, by the property securing the loan in amounts sufficient to cover operating expenses and debt service, which may be adversely affected by changes in the economy or local market conditions.
While we have policies and procedures designed to prevent such losses, there can be no assurance that such losses will not occur. ​ Risks Related to Our Business and Industry Generally ​ Ineffective liquidity management could adversely affect our financial results and condition. ​ Liquidity is essential to our business.
While we have policies and procedures designed to prevent such losses, there can be no assurance that such losses will not occur. ​ ​ 42 Table of Contents Risks Related to Our Business and Industry Generally ​ Ineffective liquidity management could adversely affect our financial results and condition. ​ Liquidity is essential to our business.
In addition, the resolution of non-performing assets often requires a significant time commitment from management, diverting their attention from other aspects of our operations. ​ Risks Related to Market and Interest Rate Changes ​ Fluctuating interest rates can adversely affect our profitability. ​ Our earnings and cash flows are largely dependent upon our net interest income.
In addition, the resolution of non-performing assets often requires a significant time commitment from management, diverting their attention from other aspects of our operations. ​ Risks Related to Market and Interest Rate Changes ​ Fluctuating interest rates can adversely affect our profitability. ​ Our earnings and cash flows are largely dependent upon our net interest income, which is significantly affected by interest rates.
We may also incur other costs related to data security breaches, such as replacing cards 43 Table of Contents associated with compromised card accounts or credit monitoring services.
We may also incur other costs related to data security breaches, such as replacing cards associated with compromised card accounts or credit monitoring services.
We reverse accrued interest on non-performing loans and do not record interest income on foreclosed assets. Additionally, non-performing loans increase our loan administration costs and costs also increase due to the improvement, maintenance and repairs of the foreclosed assets.
We reverse accrued interest on non-performing loans and do not record interest income on foreclosed assets. Additionally, non-performing loans increase our loan administration costs, including increased costs related to the improvement, maintenance and repairs of the foreclosed assets.
We have policies and procedures in place to protect 45 Table of Contents our reputation and promote ethical conduct, but these policies and procedures may not be fully effective.
We have policies and procedures in place to protect our reputation and promote ethical conduct, but these policies and procedures may not be fully effective.
We did not purchase any loans in fiscal 2024 and 2023.
We did not purchase any loans in fiscal 2025 and 2024.
Inaccuracies in our estimations could lead to an insufficient ACL, necessitating increases through provisions for credit losses, adversely impacting our recorded income. ​ 39 Table of Contents Further, included in our single-family residential loan portfolio, which comprised 49% of our total loan portfolio at June 30, 2024, were $17.7 million or 2% of total loans held for investment that were non-traditional single-family loans, which include negative amortization and more than 30-year amortization loans, stated income loans and low FICO score loans, all of which have a higher risk of default and loss than conforming residential mortgage loans.
Inaccuracies in our estimations could lead to an insufficient ACL, necessitating increases through provisions for credit losses, adversely impacting our recorded net income. ​ Included in our single-family residential loan portfolio, which comprised 52% of our total loan portfolio at June 30, 2025, were $16.9 million or 2% of total loans held for investment that were non-traditional single-family loans, which include negative amortization and more than 30-year amortization loans, stated income loans and low FICO score loans, all of which have a higher risk of default and loss than conforming residential mortgage loans.
At June 30, 2024, we had $528.5 million or 50% of total loans held for investment in multi-family and commercial real estate loans. These loans typically involve higher principal amounts than other types of loans and some of our commercial borrowers have more than one loan outstanding with us.
At June 30, 2025, we had $496.2 million or 48% of total loans held for investment in multi-family and commercial real estate loans. These loans typically involve higher principal amounts than other types of loans and some of our commercial borrowers have more than one loan outstanding with us.
We evaluate individual investment securities quarterly for expected credit losses based on Accounting Standards Codification (“ASC”) 326, “Financial Instruments – Credit Losses,” since the adoption on July 1, 2023.
We evaluate individual investment securities quarterly for expected credit losses based on ASC 326, “Financial Instruments – Credit Losses,” since the adoption on July 1, 2023.
Risks Related to our Lending Activities ​ Our business may be adversely affected by credit risk associated with residential property. ​ At June 30, 2024, $518.1 million, or 49% of our loans held for investment, were secured by single-family residential real property.
Risks Related to our Lending Activities ​ Our business may be adversely affected by credit risk associated with residential property. ​ At June 30, 2025, $544.4 million, or 52% of our loans held for investment, were secured by single-family residential real property.
Insider or employee cyber and security threats are increasingly a concern for companies, including ours.
Insider or employee cyber and security threats 41 Table of Contents are increasingly a concern for companies, including ours.
We principally manage interest rate risk by managing our volume and mix of our earning assets and funding liabilities. If we are unable to manage interest rate risk effectively, our business, financial condition and results of operations could be materially affected. ​ A sustained increase in market interest rates could adversely affect our earnings.
If we are unable to manage interest rate risk effectively, our business, financial condition and results of operations could be materially affected. ​ A sustained increase in market interest rates could adversely affect our earnings.
Our financial condition and results of operations are affected by credit policies of monetary authorities, particularly the FRB. Actions by monetary and fiscal authorities, including the FRB, could lead to inflation, deflation, or other economic phenomena that could adversely affect our financial performance. Inflation has risen sharply since the end of 2021 and, while dissipating, remains elevated.
Our financial condition and results of operations are affected by credit policies of monetary authorities, particularly the FRB. Actions by monetary and fiscal authorities, including the FRB, could lead to inflation, deflation, or other economic phenomena that could adversely affect our financial performance.
Additionally, the Bank did not have any claims or settlements for previously sold loans during fiscal 2024 and 2023. ​ ​ 46 Table of Contents Our assets as of June 30, 2024 include a deferred tax asset, the full value of which we may not be able to realize. ​ We recognize deferred tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of assets and liabilities.
Additionally, the Bank did not have any claims or settlements for previously sold loans during fiscal 2025 and 2024. ​ Having net deferred tax asset or liability, the full value of which we may not be able to realize. ​ We recognize deferred tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of assets and liabilities.
At June 30, 2024, we had $245.7 million in time 40 Table of Contents deposits that mature within one year, $95.6 million in noninterest-bearing checking accounts and $518.8 million in interest-bearing checking, savings and money market accounts. We would incur a higher cost of funds to retain these deposits in a rising interest rate environment.
At June 30, 2025, we had $278.3 million in time deposits that mature within one year, $83.6 million in noninterest-bearing checking accounts and $492.9 million in interest-bearing checking, savings and money market accounts. We would incur a higher cost of funds to retain these deposits in a 38 Table of Contents rising interest rate environment.
Also, our interest rate risk modeling techniques and assumptions likely may not fully predict or capture the impact of actual interest rate changes on our consolidated balance sheet or projected operating results.
Additionally, our interest rate risk models and assumptions may not fully capture the impact of actual rate changes on our balance sheet or projected operating results.
These changes might necessitate retrospective application, potentially leading to restatements of prior period financial statements. ​ One such significant change in fiscal 2024 was the implementation of the CECL model, which we adopted on July 1, 2023.
Additionally, such 39 Table of Contents regulatory changes could necessitate retrospective application, which might result in the restatement of prior period financial statements. ​ One such significant change in fiscal 2024 was the implementation of the CECL model, which we adopted on July 1, 2023.
Conversely, periods with stable or declining loan levels might seem relatively more profitable as income accrues gradually for loans where losses had been previously recognized. ​ As a result of the change in methodology from the incurred loss model to the CECL model, on July 1, 2024, the Corporation recorded a one-time, net of tax charge of $824,000 to retained earnings, a $1.2 million increase to the ACL for credit losses for loans, and no change to the ACL on unfunded loan commitments. ​ Non-compliance with the USA Patriot Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions. ​ The USA Patriot and Bank Secrecy Acts require financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities.
Conversely, periods with stable or declining loan levels might seem relatively more profitable as income accrues gradually for loans where losses had been previously recognized. ​ Non-compliance with the USA Patriot Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions. ​ The USA Patriot and Bank Secrecy Acts require financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities.
Despite our efforts to evaluate these factors, there can be no assurance that the declines in market value will not result in credit losses on these assets. Such credit losses could lead to accounting charges that might materially impact our net income and capital levels.
Despite our efforts to evaluate these factors, there can be no assurance that the declines in market value will not result in credit losses on these assets.
Decreases in the fair value of securities available for sale resulting from increases in interest rates could have an adverse effect on stockholders’ equity. ​ Although management believes it has implemented effective asset and liability management strategies to reduce the potential effects of changes in interest rates on our results of operations, any substantial, unexpected or prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations.
Decreases in the fair value of securities available for sale resulting from increases in interest rates could have an adverse effect on stockholders’ equity. ​ While we employ asset and liability management strategies to mitigate interest rate risk, unexpected, substantial, or prolonged rate changes could materially affect our financial condition and results of operations.
If we are required to liquidate a significant amount of collateral during a period of reduced real estate values, our financial condition and profitability could be adversely affected. ​ External economic factors, such as changes in monetary policy and inflation and deflation, may have an adverse effect on our business, financial condition and results of operations.
If we must liquidate a significant amount of collateral during a period of reduced real estate values, our financial condition and profitability could be adversely affected. ​ Monetary policy, inflation, deflation, and other external economic factors could adversely impact our financial performance and operations.
Our litigation related costs may increase. ​ We are subject to a variety of legal proceedings that have arisen in the ordinary course of the Bank's business. Our involvement in litigation may increase significantly. The expenses of some legal proceedings will adversely affect our results of operations until they are resolved.
Our involvement in litigation may increase significantly. The expenses of some legal proceedings will adversely affect our results of operations until they are resolved.
We also could be adversely affected to the extent such an agreement is not renewed by a third party vendor or is renewed on terms less favorable to us. Additionally, the bank regulatory agencies expect financial institutions to be responsible for all aspects of our vendors’ performance, including aspects which they delegate to third parties.
Furthermore, we could be adversely affected if a vendor agreement is not renewed or is renewed on terms less favorable to us. Regulatory agencies also require financial institutions to remain accountable for all aspects of vendor performance, including activities delegated to third parties.
Disruptions or failures in the physical infrastructure or operating systems that support our business and customers, or cyber-attacks or security breaches of the networks, systems or devices that our customers use to access our products and services could result in customer attrition, regulatory fines, penalties or intervention, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs, any of which could materially adversely affect our results of operations or financial condition. ​ Managing reputational risk is important to attracting and maintaining customers, investors and employees. ​ Threats to our reputation can come from many sources, including adverse sentiment about financial institutions generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance deficiencies, and questionable or fraudulent activities of our customers.
Any of these outcomes could materially and adversely affect our financial condition and results of operations. ​ Managing reputational risk is important to attracting and maintaining customers, investors and employees. ​ Threats to our reputation can come from many sources, including adverse sentiment about financial institutions generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance deficiencies, and questionable or fraudulent activities of our customers.
At June 30, 2024, the net deferred tax asset was approximately $606,000, an increase from $218,000 at the prior fiscal year end.
At June 30, 2025, the net deferred tax liability was approximately $832,000, as opposed to the net deferred tax asset of $606,000 at the prior fiscal year end.
While we have developed policies and procedures designed to assist in compliance with these laws and regulations, no assurance can be given that these policies and procedures will be effective in preventing violations of these laws and regulations. ​ If our enterprise risk management framework is not effective at mitigating risk and loss to us, we could suffer unexpected losses and our results of operations could be materially adversely affected. ​ Our enterprise risk management framework seeks to achieve an appropriate balance between risk and return, which is critical to optimizing stockholder value.
These outcomes could have a material adverse effect on our business, financial condition, results of operations, and growth prospects. ​ If our enterprise risk management framework is not effective at mitigating risk and loss, we could suffer unexpected losses and our results of operations could be materially adversely affected. ​ Our enterprise risk management framework seeks to achieve an appropriate balance between risk and return, which is critical to optimizing stockholder value.
As a result, interest rates tend to have a more significant impact on our performance than general levels of inflation or deflation. Interest rates do not necessarily move in the same direction or by the same magnitude as the prices of goods and services.
Virtually all of our assets and liabilities are monetary in nature, and as a result, interest rates tend to have a more significant impact on our performance than general levels of inflation or deflation.
A material decrease in the credit quality of our loan portfolio, significant changes in the risk profile of markets, industries, or customer groups, or inadequacy in the ACL could have a materially adverse impact on our business, financial condition, liquidity, capital, and results of operations. ​ Bank regulatory agencies also periodically review our ACL and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on their judgment about information available to them at the time of their examination. ​ If charge-offs in future periods exceed the ACL, we may need additional provisions to increase the ACL.
While we regularly evaluate the adequacy of our allowance, there can be no assurance that it will be sufficient to cover actual losses resulting from wildfire-related events. ​ Bank regulatory agencies also periodically review our ACL and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on their judgment about information available to them at the time of their examination. ​ If charge-offs in future periods exceed the ACL, we may need additional provisions to increase the ACL.
The failure of an external vendor to perform in accordance with the contracted arrangements under service level agreements because of changes in the vendor’s organizational structure, financial condition, support for existing products and services, strategic focus or for any other reason, could be disruptive to our operations, which in turn could have a material negative impact on our financial condition and results of operations.
If a vendor fails to meet its contractual obligations due to changes in its organizational structure, financial condition, support for existing products and services, strategic focus, or any other reason, our operations could be disrupted, potentially causing a material adverse impact on our financial condition and results of operations.
New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, due diligence, and disclosure. ​ We rely on dividends from the Bank for substantially all of our revenue at the holding company level. ​ We are an entity separate and distinct from our principal subsidiary, the Bank, and derive substantially all of our revenue at the holding company level in the form of dividends from that subsidiary.
However, uncertainty remains, and misalignment could adversely affect our brand, employee morale, client relationships, and financial results. ​ We rely on dividends from the Bank for substantially all of our revenue at the holding company level. ​ We are an entity separate and distinct from our principal subsidiary, the Bank, and derive substantially all of our revenue at the holding company level in the form of dividends from that subsidiary.
Furthermore, a prolonged period of inflation could cause wages and other costs to the Corporation to increase, which could adversely affect our results of operations and financial condition. Virtually all of our assets and liabilities are monetary in nature.
Consequently, our business customers may experience increased financial strain, reducing their ability to repay loans and adversely impacting our results of operations and financial condition. Furthermore, a prolonged period of inflation could cause wages and other costs to us to increase, which could adversely affect our results of operations and financial condition.
We believe the recorded net deferred tax asset at June 30, 2024 is fully realizable based on our expected future earnings; however, expected future earnings may not be realized, which could impact our deferred tax assets. ​ Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks. ​ Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social and governance (“ESG”) practices and disclosure.
We believe the recorded net deferred tax liability at June 30, 2025 is fully realizable based on our expected future earnings; however, expected future earnings may not be realized, which could impact the deductibility of our deferred tax assets. ​ 44 Table of Contents Regulatory changes to diversity, equity and inclusion (“DEI”) and environmental, social and governance (“ESG”) practices could impact our reputation, compliance costs, and operations.
Regulatory bodies periodically issue new guidance, altering accounting rules and reporting requirements, which can substantially affect the preparation and reporting of our financial statements.
Regulatory bodies, including the FASB and the SEC, periodically issue new guidance or alter existing accounting rules and reporting requirements, which can substantially impact the preparation and reporting of our financial statements. These changes may require us to adopt new accounting standards, leading to potential adjustments in how we report our financial position, performance, and risk exposures.
Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies and, in particular, the FRB. Beginning in March 2022, in response to high inflation, the FOMC commenced increasing the target range for the federal funds rates by implementing multiple increases.
Interest rates are highly sensitive to factors beyond our control, such as general economic conditions and policies set by governmental and regulatory bodies, particularly the FRB.
Small to medium-sized businesses may be impacted more during periods of high inflation as they are not able to leverage economies of scale to mitigate cost pressures compared to larger businesses.
Higher U.S. tariffs on imported goods could exacerbate inflationary pressures by increasing the cost of goods and materials for businesses and consumers. This may particularly affect small to medium-sized businesses, as they are less able to leverage economies of scale to mitigate cost pressures compared to larger businesses.
Removed
A return of recessionary conditions or adverse economic conditions in California may reduce our rate of growth, affect our customers' ability to repay loans and adversely impact our capital, liquidity, financial condition and earnings. General economic conditions, including inflation, unemployment and money supply fluctuations, may also adversely affect our profitability.
Added
Accordingly, our financial performance is closely tied to economic conditions in these areas.
Removed
Weakness in the global economy and global supply chain issues have adversely affected many businesses operating in our markets that are dependent upon international trade.
Added
A downturn in local or regional economic conditions, as a result of inflation, rising interest rates, unemployment, recessions, natural disasters, or other adverse events, could materially affect our business, financial condition, and results of operations. ​ Changes in U.S. immigration policies, particularly those that could lead to mass deportations, may disrupt key industries in our region such as agriculture, construction, and manufacturing.
Removed
Many of the loans in our portfolio are secured by real estate. Deterioration in the real estate markets where collateral for a mortgage loan is located could negatively affect the borrower’s ability to repay the loan and the value of the collateral securing the loan.
Added
These disruptions could exacerbate labor shortages, reduce productivity, and cause financial instability among affected businesses, impairing the repayment abilities of borrowers in these sectors. ​ Global geopolitical tensions, including international conflicts, sanctions, trade disputes, and tariffs, could further disrupt manufacturing, agriculture, and transportation in our markets, leading to higher costs, reduced investment, supply chain delays, and lower credit demand.
Removed
Real estate values are affected by various other factors, including changes in general or regional economic conditions, governmental rules or policies and natural disasters such as fires, droughts and earthquakes.
Added
Any deterioration in real estate markets could significantly affect borrowers’ repayment capabilities and collateral values. Real estate values are influenced by a range of factors, including economic conditions, regulatory changes, natural disasters (such as fires, droughts, earthquakes, and flooding), and trade-related issues affecting construction costs and 35 Table of Contents material availability.
Removed
Consequently, the ability of our business customers to repay their loans may deteriorate, and in some cases this deterioration may occur quickly, which would adversely impact our results of operations and financial condition.
Added
However, interest rates do not necessarily move in the same direction or magnitude as the prices of goods and services, creating additional uncertainty in the economic environment.
Removed
As of June 30, 2024, the FOMC target range for the federal funds rate was 5.25% to 5.50% as economic conditions remained relatively resilient and inflation remained elevated. As inflation eases, the FOMC has indicated rate decreases may be expected during the second half of 2024, although to date that has not been the case.
Added
A material decrease in the credit quality of our loan portfolio, significant changes in the risk profile of markets, industries, or customer groups, or inadequacy in the ACL could have a materially adverse impact on our business, financial condition, liquidity, capital, and results of operations. ​ Wildfires in California, including those that began in January 2025 and more recent events in other regions of the state, present ongoing risks to our loan portfolio.
Removed
However, if the FOMC further increases the targeted federal funds rate, overall interest rates will likely continue to rise, which will negatively impact our net interest income and may negatively impact both the housing market, by reducing refinancing activity and new home purchases, and the U.S. economy.
Added
Borrowers in affected areas may experience financial hardship, which could increase loan defaults, reduce repayment capacity, and impair collateral values. Inadequate insurance coverage or denied claims may further limit recovery efforts. In addition, local economic disruptions, such as business closures and job losses, may adversely affect borrowers’ ability to meet financial obligations.
Removed
There were no ACL on investment securities held to maturity at adoption of ASC 326 or at June 30, 2024 and there were no impairment on investment securities available for sale at June 30, 2024. ​ 41 Table of Contents Risks Related to Regulatory, Legal and Compliance Matters ​ We are subject to an extensive body of accounting rules and best practices.
Added
Given the increasing frequency and severity of wildfires associated with climate change, we may be required to increase our allowance for loan losses.
Removed
Failure to comply with these regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions.
Added
Increases in interest rates could reduce our net interest income, weaken the housing market by reducing refinancing activity and home purchases, and negatively affect the broader U.S. economy, potentially leading to slower economic growth or recessionary conditions. We principally manage interest rate risk by managing our volume and mix of our earning assets and funding liabilities.
Removed
Climate change continues to be a pressing concern, prompting heightened awareness and action on a global scale. Efforts include international agreements such as the Paris Agreement, with the United States rejoining, and ongoing initiatives at various governmental levels to address climate-related issues.
Added
Such credit losses could lead to accounting charges that might materially impact our net income and capital levels. ​ Risks Related to Regulatory, Legal and Compliance Matters ​ We are subject to an extensive body of accounting rules and best practices.
Removed
Under the current administration, additional measures are anticipated, potentially impacting banks' risk management practices, stress testing, credit portfolio concentrations, and investment strategies. The lack of empirical data makes it challenging to predict the precise financial impact of climate change, though its physical effects, such as more frequent weather disasters, could directly affect our real estate collateral and loan portfolios.
Added
Additionally, any perceived or actual failure to prevent money laundering or terrorist financing activities could significantly damage our reputation.
Removed
Inadequate insurance coverage for borrowers may compound these risks, impacting our financial condition. Furthermore, climate change's broader economic effects could adversely affect our customers and the communities we serve, potentially impacting our financial performance. On March 6, 2024, the SEC implemented new climate-related disclosure rules for U.S. public companies and foreign private issuers.
Added
The effects of climate change continue to raise significant concerns about the state of the environment. However, under the current administration, federal policy has shifted to reduce emphasis on climate change initiatives and environmental regulations. This includes scaling back federal involvement in international agreements like the Paris Agreement and easing regulatory pressures on businesses, including banks, to address climate-related risks.
Removed
These rules introduce extensive disclosure requirements, increasing reporting costs, risks, and complexity. Challenges include short compliance timelines, interpretive issues, legal liabilities, and global regulatory overlaps. Lawsuits contesting these rules add further uncertainty. However, on March 15, 2024, the Fifth Circuit granted an administrative stay, temporarily halting the implementation of the SEC's climate rules.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+1 added−0 removed8 unchanged
Biggest changeThis department is led by the Chief Information Officer (“CIO”), who has over 27 years of experience in technology risk management, and the Information Security Officer (“ISO”), who has a bachelor in computer science and has over 18 years of experience in cybersecurity risk management.
Biggest changeThis department is led by the Chief Information Officer (“CIO”), who has a bachelor of science in information technology and many certifications such as Certified Information Systems Security Professional, Certified Cloud Security Professional and Certified Information Privacy Professional, and the Information Security Officer (“ISO”), who has a bachelor of science in computer science and has over 19 years of experience in cybersecurity risk management.
When an incident occurs, the Corporation responds by remediating the incident while complying with regulatory obligations, and then evaluates the remediation’s effectiveness. Communication about risk management matters is conducted through documented policies and procedures, management and Board 47 Table of Contents committee reporting, and employee training and communications.
When an incident occurs, the Corporation responds by remediating the incident while complying with regulatory obligations, and then evaluates the remediation’s effectiveness. Communication about risk management matters is conducted through documented policies and procedures, management and Board committee reporting, and employee training and communications.
For a detailed description of how cybersecurity risks may materially affect the Corporation’s business strategy or results, see "Item 1A. Risk Factors.” ​ The Corporation’s information technology risk management department consists of professionals with experience and expertise in cybersecurity, including specialists in identity and access management, cyber defense operations, security engineering, and information technology governance, risk, and compliance.
Risk Factors.” ​ 45 Table of Contents The Corporation’s information technology risk management department consists of professionals with experience and expertise in cybersecurity, including specialists in identity and access management, cyber defense operations, security engineering, and information technology governance, risk, and compliance.
Added
For a detailed description of how cybersecurity risks may materially affect the Corporation’s business strategy or results, see "Item 1A.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Corporation owns six of the retail banking offices and has seven leased retail banking offices. The lease term maturity dates range from 2024 to 2029, some of which has remaining extension options.
Biggest changeThe Corporation owns six of the retail banking offices and has seven leased retail banking offices. The lease term maturity dates range from 2026 to 2029, some of which have remaining extension options.
Item 2. Properties ​ At June 30, 2024, the net book value of the Corporation’s properties (including land and buildings) and its furniture, fixtures and equipment was $8.0 million. The Corporation’s home office is located in Riverside, California.
Item 2. Properties ​ At June 30, 2025, the net book value of the Corporation’s properties (including land and buildings) and its furniture, fixtures and equipment was $9.3 million. The Corporation’s home office is located in Riverside, California.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Corporation is not a party to any pending legal proceedings that it believes would have a material adverse effect on its financial condition, operations or cash flows. ​ ​ 48 Table of Contents Item 4. Mine Safety Disclosures ​ Not applicable. ​ PART II ​
Biggest changeAdditionally, in some actions, it is difficult to assess potential exposure because the Corporation is still in the early stages of the litigation. ​ The Corporation is not a party to any pending legal proceedings that it believes would have a material adverse effect on its financial condition, operations or cash flows. ​ ​ 46 Table of Contents Item 4.
These proceedings and the associated legal claims are often contested and the outcome of individual matters is not always predictable. Additionally, in some actions, it is difficult to assess potential exposure because the Corporation is still in the early stages of the litigation.
These proceedings and the associated legal claims are often contested and the outcome of individual matters is not always predictable.
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Mine Safety Disclosures ​ Not applicable. ​ PART II ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe September 2023 stock repurchase plan terminates on September 28, 2024, unless completed sooner or extended. ​ The table below sets forth information regarding the Corporation’s purchases of its common stock during the fourth quarter of fiscal 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Number of Shares ​ ​ ​ ​ ​ ​ ​ Shares Purchased as ​ that May Yet Be ​ ​ Total Number of ​ Average Price ​ Part of Publicly ​ Purchased Under Period ​ Shares Purchased ​ Paid per Share ​ Announced Plan ​ the Plan (1) April 1, 2024 – April 30, 2024 18,351 ​ $ 13.52 18,351 219,241 May 1, 2024 – May 31, 2024 18,494 ​ $ 12.71 18,494 200,747 June 1, 2024 – June 30, 2024 11,631 ​ $ 12.64 11,631 189,116 Total 48,476 ​ $ 13.00 48,476 189,116 ​ (1) Represents the remaining shares available for future purchases under the September 2023 stock repurchase plan. ​ 49 Table of Contents Performance Graph ​ The following graph compares the cumulative total shareholder return on the Corporation’s common stock with the cumulative total return of the Nasdaq Stock Index (U.S.
Biggest changeIn connection with this January 2025 plan, the previously extended September 2023 stock repurchase plan, which was extended for an additional year on September 26, 2024, and had 21,691 shares remaining available for repurchase as of January 23, 2025, was canceled effective January 24, 2025. ​ The Corporation may purchase the shares from time to time in the open market or through privately negotiated transactions depending on market conditions, the capital requirements of the Corporation, and available cash that can be allocated to the stock repurchase program, among other considerations. ​ ​ 47 Table of Contents The table below sets forth information regarding the Corporation’s purchases of its common stock during the fourth quarter of fiscal 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Number of Shares ​ ​ ​ ​ ​ ​ ​ Shares Purchased as ​ that May Yet Be ​ ​ Total Number of ​ Average Price ​ Part of Publicly ​ Purchased Under Period ​ Shares Purchased ​ Paid per Share ​ Announced Plan ​ the Plan (1) April 1, 2025 – April 30, 2025 32,672 ​ $ 14.37 32,672 260,460 May 1, 2025 – May 31, 2025 32,824 ​ $ 15.45 32,824 227,636 June 1, 2025 – June 30, 2025 10,608 ​ $ 15.59 10,608 217,028 Total 76,104 ​ $ 15.00 76,104 217,028 ​ (1) Represents the remaining shares available for future purchases under the January 2025 stock repurchase plan. ​ Performance Graph ​ The following graph compares the cumulative total shareholder return on the Corporation’s common stock with the cumulative total return of the Nasdaq Stock Index (U.S.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ Market Information and Holders ​ The common stock of Provident Financial Holdings, Inc. is listed on the NASDAQ Global Select Market under the symbol “PROV.” At August 15, 2024, there were 400 shareholders of record, and there were approximately 1,917 persons or entities that hold stock in nominee or “street name” accounts with brokers. ​ Dividends ​ The Corporation’s cash dividend payout policy is reviewed regularly by management and the Board of Directors.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ Market Information and Holders ​ The common stock of Provident Financial Holdings, Inc. is listed on the NASDAQ Global Select Market under the symbol “PROV.” At August 18, 2025, there were 405 shareholders of record, and there were approximately 1,953 investors that hold stock in nominee or “street name” accounts with brokers. ​ Dividends ​ The Corporation’s cash dividend payout policy is reviewed regularly by management and the Board of Directors.
Management’s projections show an expectation that cash dividends will continue for the foreseeable future. ​ Purchases of Equity Securities by the Issuer and Affiliated Purchasers ​ On September 28, 2023, the Board approved a stock repurchase plan, authorizing the purchase of up to 350,353 shares of the Corporation’s outstanding common stock over a one-year period.
Management’s projections show an expectation that cash dividends will continue for the foreseeable future. ​ Purchases of Equity Securities by the Issuer and Affiliated Purchasers ​ On January 23, 2025, the Corporation’s Board of Directors announced a stock repurchase plan, authorizing the purchase of up to 334,773 shares of the Corporation’s outstanding common stock over a one-year period.
Total return assumes the reinvestment of all dividends. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 PROV ​ $ 100.00 ​ $ 65.88 ​ $ 88.15 ​ $ 78.33 ​ $ 70.14 ​ $ 71.83 NASDAQ Stock Index ​ $ 100.00 ​ $ 106.96 ​ $ 154.52 ​ $ 132.54 ​ $ 157.83 ​ $ 195.09 NASDAQ Bank Index ​ $ 100.00 ​ $ 77.27 ​ $ 133.59 ​ $ 109.09 ​ $ 105.72 ​ $ 144.54 ​ (1) Assumes that the value of the investment in the Corporation’s common stock and each index was $100 on June 30, 2019 and that all dividends were reinvested. ​ Securities Authorized for Issuance under Equity Compensation Plans ​ See Part III, Item 12 of this Form 10-K for information regarding the Corporation’s Equity Compensation Plans, which is incorporated into this Item 5 by reference. ​ ​
Total return assumes the reinvestment of all dividends. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 6/30/2025 PROV ​ $ 100.00 ​ $ 133.88 ​ $ 118.93 ​ $ 106.52 ​ $ 109.06 ​ $ 140.40 NASDAQ Stock Index ​ $ 100.00 ​ $ 144.47 ​ $ 123.91 ​ $ 147.56 ​ $ 182.40 ​ $ 210.65 NASDAQ Bank Index ​ $ 100.00 ​ $ 172.87 ​ $ 141.17 ​ $ 136.81 ​ $ 187.05 ​ $ 249.72 ​ (1) Assumes that the value of the investment in the Corporation’s common stock and each index was $100 on June 30, 2020 and that all dividends were reinvested. 48 Table of Contents ​ Securities Authorized for Issuance under Equity Compensation Plans ​ See Part III, Item 12 of this Form 10-K for information regarding the Corporation’s Equity Compensation Plans, which is incorporated into this Item 5 by reference. ​ ​ Item 6. [Reserved] ​ ​
The Board of Directors has declared quarterly cash dividends on the Corporation’s common stock for consecutive quarters since September 30, 2002. On April 25, 2024, the Corporation declared a quarterly cash dividend of $0.14 per share with a record date of May 16, 2024 and the dividend was paid on June 6, 2024.
The Board of Directors has declared quarterly cash dividends on the Corporation’s common stock for consecutive quarters since September 30, 2002.
Removed
Simultaneously, the Board canceled the remaining 25,428 shares available for purchase under the prior repurchase plan. The Corporation may purchase the shares from time to time in the open market or through privately negotiated transactions depending on market conditions, the capital requirements of the Corporation, and available cash that can be allocated to the stock repurchase program, among other considerations.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFactors which could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements include, but are not limited to: ● adverse economic conditions in our local market areas or other markets where we have lending relationships ● effects of employment levels, labor shortages, inflation, a recession or slowed economic growth; ● changes in the interest rate environment, including the past increases in the Federal Reserve benchmark rate and the duration of such increased levels, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; ● the impact of inflation and the Federal Reserve monetary policy; ● the effects of any Federal government shutdown; ● credit risks of lending activities, including loan delinquencies, write-offs, changes in our ACL, and provision for credit losses; ● increased competitive pressures; ● quality and composition of our securities portfolio and the impact of adverse changes in the securities markets; ● quality and composition of our securities portfolio and the impact of adverse changes in the securities markets; ● fluctuations in deposits; ● secondary market conditions for loans and our ability to sell loans in the secondary market; ● liquidity issues, including our ability to borrow funds or raise additional capital, if necessary; ● expectations regarding key growth initiatives and strategic priorities; ● the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; ● results of examinations of us by regulatory authorities, which may the possibility that any such regulatory authority may, among other things, institute a formal or informal enforcement action against us or our bank subsidiary which could require us to increase our ACL, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits or impose additional requirements or restrictions on us, any of which could adversely affect our liquidity and earnings; ● legislative and regulatory changes, including changes in banking, securities and tax law, in regulatory policies and principles, or the interpretation of regulatory capital or other rules; ● use of estimates in determining the fair value of assets, which may prove incorrect; ● disruptions or security breaches, or other adverse events, failures or interruptions in or attacks on our information technology systems or on the our third-party vendors; ● staffing fluctuations in response to product demand or corporate implementation strategies; ● our ability to pay dividends on our common stock; ● environmental, social and governance goals; ● effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events; ● and other factors described in this Form 10-K and in Quarterly Reports on Form 10-Q and other reports filed with and furnished to the Securities and Exchange Commission (“SEC”), which are available on our website at www.myprovident.com and on the SEC’s website at www.sec.gov . ​ 51 Table of Contents Forward-looking statements are based upon management’s beliefs and assumptions at the time they are made.
Biggest changeFactors which could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements include, but are not limited to: ​ ● adverse economic conditions in our local market areas or other markets where we have lending relationships; ● effects of employment levels, labor shortages, persistent inflation, recessionary pressures or slowing economic growth; ● changes in interest rate levels and the duration of such changes, including actions by the Federal Reserve, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; ● the impact of inflation and monetary and fiscal policy responses thereto, and their impact on consumer and business behavior; ● the effects of a Federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty; ● credit risks of lending activities, including loan delinquencies, loan charge-offs, changes in our allowance for credit losses (“ACL”), and provision for credit losses; ● increased competitive pressures among financial services companies, including repricing and competitors’ pricing initiatives, and their impact on our market position, loan, and deposit products; ● quality and composition of our securities portfolio and the impact of adverse changes in the securities markets; ● fluctuations in deposits; ● secondary market conditions for loans and our ability to sell loans in the secondary market; ● liquidity issues, including our ability to borrow funds or raise additional capital, if necessary; ● expectations regarding key growth initiatives and strategic priorities; ● the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; ● results of examinations of us by regulatory authorities, which may include the possibility that any such regulatory authority may, among other things, institute a formal or informal enforcement action against us or our bank subsidiary which could require us to increase our ACL, write down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits or impose additional requirements or restrictions on us, any of which could adversely affect our liquidity and earnings; ● the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking, and cybersecurity; 49 Table of Contents ● legislative or regulatory changes, including but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws; ● use of estimates in determining the fair value of assets, which may prove incorrect; ● vulnerabilities in information systems or third-party service providers, including disruptions, breaches, or attacks; ● geopolitical developments and international conflicts, including but not limited to tensions or instability in Eastern Europe, the Middle East, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, energy prices, or economic activity in specific industry sectors; ● staffing fluctuations in response to product demand or corporate implementation of strategies; ● our ability to pay dividends on our common stock; ● environmental, social and governance goals; ● effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, domestic political unrest and other external events; ● availability of appropriate insurance products in our market areas; and ● other factors described in this Form 10-K and in our Quarterly Reports on Form 10-Q and other reports filed with and furnished to the Securities and Exchange Commission (“SEC”), which are available on our website at www.myprovident.com and on the SEC’s website at www.sec.gov. ​ Forward-looking statements are based upon management’s beliefs and assumptions at the time they are made.
Investment services and trustee services contribute a very small percentage of gross revenue. ​ 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. ​ There are a number of risks associated with the business activities of the Corporation, many of which are beyond the Corporation’s control, including: changes in accounting principles, laws, regulation, interest rates and the economy, among others.
Investment services and trustee services contribute a very small percentage to gross revenue. ​ 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. ​ There are a number of risks associated with the business activities of the Corporation, many of which are beyond the Corporation’s control, including: changes in accounting principles, laws, regulation, interest rates and the economy, among others.
Our current quarterly common stock dividend rate is $0.14 per share, as approved by our Board of Directors, which we believe is a dividend rate per share which enables us to balance our multiple objectives of managing and investing in the Bank, and returning a substantial portion of our cash to our shareholders.
Our current quarterly common stock dividend rate is $0.14 per share, as approved by our Board of Directors, which we believe is a dividend rate per share which enables us to balance our multiple objectives of managing and investing in the Bank, and returning a substantial portion of our cash flow to our shareholders.
These factors could cause our actual results for the fiscal 2025 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us and could negatively affect the Corporation’s consolidated financial condition and consolidated results of operations as well as its stock price performance. ​ General ​ Provident, a Delaware corporation, was organized in January 1996 for the purpose of becoming the holding company of the Bank upon the Bank’s conversion completed on June 27, 1996.
These factors could cause our actual results for fiscal 2026 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us and could negatively affect the Corporation’s consolidated financial condition and consolidated results of operations as well as its stock price performance. ​ General ​ Provident, a Delaware corporation, was organized in January 1996 for the purpose of becoming the holding company of the Bank upon the Bank’s conversion completed on June 27, 1996.
For additional information, see Note 8, "Income Taxes," of the Notes to Consolidated Financial Statements, contained in Item 8 of this Form 10-K. ​ 58 Table of Contents Average Balances, Interest and Average Yields/Costs ​ The following table sets forth certain information for the periods regarding average balances of assets and liabilities as well as the total dollar amounts of interest income from average interest-earning assets and interest expense on average interest-bearing liabilities and average yields and costs thereof.
For additional information, see Note 8, "Income Taxes," of the Notes to Consolidated Financial Statements, contained in Item 8 of this Form 10-K. ​ 57 Table of Contents Average Balances, Interest and Average Yields/Costs ​ The following table sets forth certain information for the periods regarding average balances of assets and liabilities as well as the total dollar amounts of interest income from average interest-earning assets and interest expense on average interest-bearing liabilities and average yields and costs thereof.
The Bank's activities include attracting deposits, offering banking services and originating and purchasing single-family, multi-family, commercial real estate, construction and, to a lesser extent, other mortgage (generally land loans), commercial business and consumer loans. Deposits are collected primarily from 13 banking locations located in Riverside and San Bernardino counties in California.
The Bank's activities include attracting deposits, offering banking services and originating and purchasing single-family, multi-family, commercial real estate, construction and, to a lesser extent, other mortgage, commercial business and consumer loans. Deposits are collected primarily from 13 banking locations located in Riverside and San Bernardino counties in California.
(5) Represents net interest income as a percentage of average interest-earning assets. ​ 59 Table of Contents Rate/Volume Variance ​ The following table sets forth the effects of changing rates and volumes on interest income and expense of the Corporation for the period presented.
(5) Represents net interest income as a percentage of average interest-earning assets. ​ 58 Table of Contents Rate/Volume Variance ​ The following table sets forth the effects of changing rates and volumes on interest income and expense of the Corporation for the period presented.
At June 30, 2024, Provident (on an unconsolidated basis) had liquid assets of approximately $3.4 million. ​ The Bank, as a federally-chartered, federally insured savings bank, is subject to the capital requirements established by the OCC.
At June 30, 2025, Provident (on an unconsolidated basis) had liquid assets of approximately $3.4 million. ​ The Bank, as a federally-chartered, federally insured savings bank, is subject to the capital requirements established by the OCC.
Depending on market conditions and the pricing of deposit products and FHLB - San Francisco advances, the Bank may continue to rely on FHLB - San Francisco advances for part 60 Table of Contents of its liquidity needs.
Depending on market conditions and the pricing of deposit products and FHLB - San Francisco advances, the Bank may continue to rely on FHLB - San Francisco advances for part 59 Table of Contents of its liquidity needs.
The decrease in the liquidity ratio was due primarily to the decrease in average qualifying liquid assets which exceeded the decrease in average deposits and borrowings during the quarter ended June 30, 2024 in comparison to the quarter ended June 30, 2023.
The decrease in the liquidity ratio was due primarily to the decrease in average qualifying liquid assets which exceeded the decrease in average deposits and borrowings during the quarter ended June 30, 2025 in comparison to the quarter ended June 30, 2024.
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. The California economic environment presents heightened risk for the Corporation primarily with respect to real estate values and loan delinquencies.
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. ​ The California economic environment presents heightened risk to the Corporation, particularly with respect to real estate values and loan delinquencies.
The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors. In addition, Provident Financial Holdings, Inc., as a savings and loan holding company registered with the FRB, is required by the FRB to maintain capital adequacy that generally parallels the OCC requirements.
The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors. In addition, 60 Table of Contents Provident Financial Holdings, Inc., as a savings and loan holding company registered with the FRB, is required by the FRB to maintain capital adequacy that generally parallels the OCC requirements.
Under the prompt corrective action provisions, minimum ratios of 5.0% for Tier 1 Leverage Capital, 6.5% for CET1 Capital, 8.0% for Tier 1 Risk-based Capital and 10.0% for Total Risk-based Capital are required to be deemed “well capitalized.” As of June 30, 2024, the Bank exceeded the capital ratios needed to be considered well capitalized with Tier 1 Leverage Capital, CET1 Capital, Tier 1 Risk-based Capital and Total Risk-based Capital ratios of 10.0%, 19.3%, 19.3% and 20.4%, respectively.
Under the prompt corrective action provisions, minimum ratios of 5.0% for Tier 1 Leverage Capital, 6.5% for CET1 Capital, 8.0% for Tier 1 Risk-based Capital and 10.0% for Total Risk-based Capital are required to be deemed “well capitalized.” As of June 30, 2025, the Bank exceeded the capital ratios needed to be considered well capitalized with Tier 1 Leverage Capital, CET1 Capital, Tier 1 Risk-based Capital and Total Risk-based Capital ratios of 10.1%, 19.5%, 19.5% and 20.5%, respectively.
The amount of capital investment is influenced by, among other things, current and projected demand for our services and products, cash flow generated by operating activities, cash required for other purposes and regulatory considerations. ​ Based on our current capital allocation objectives, during fiscal 2025 we project expenditures of ranging from $270,000 to $1.5 million for capital investment in premises and equipment.
The amount of capital investment is influenced by, among other things, current and projected demand for our services and products, cash flow generated by operating activities, cash required for other purposes and regulatory considerations. ​ Based on our current capital allocation objectives, during fiscal 2026 we project expenditures ranging from $532,000 to $1.1 million for capital investment in premises and equipment.
Assuming continued payment during fiscal 2025 at this rate of $0.14 per share, our average total dividend paid each quarter would be approximately $959,000 based on the number of our current outstanding shares as of June 30, 2024.
Assuming continued payment during fiscal 2026 at this rate of $0.14 per share, our average total dividend paid each quarter would be approximately $921,000 based on the number of our current outstanding shares as of June 30, 2025.
Since the holding company has less than $3.0 billion in assets, the capital guidelines apply on a bank only basis, and the FRB expects the holding company’s subsidiary bank to be well capitalized under the prompt corrective action regulations. 61 Table of Contents ​ At June 30, 2024, the Bank exceeded all regulatory capital requirements.
Since the holding company has less than $3.0 billion in assets, the capital guidelines apply on a bank only basis, and the FRB expects the holding company’s subsidiary bank to be well capitalized under the prompt corrective action regulations. ​ At June 30, 2025, the Bank exceeded all regulatory capital requirements.
The Bank also has a federal funds facility with its correspondent bank for $50.0 million which matures on June 30, 2025. As of June 30, 2024, there were no outstanding borrowings under the discount window facility or the federal funds facility with its correspondent bank.
The Bank also has a federal funds facility with a correspondent bank for $50.0 million which matures on March 31, 2026. As of June 30, 2025, there were no outstanding borrowings under the discount window facility or the federal funds facility with the correspondent bank.
For additional information on borrowings, see Note 7 of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. ​ Total stockholders’ equity increased slightly to $129.9 million at June 30, 2024 from $129.7 million at June 30, 2023, primarily as a result of net income and the amortization of stock-based compensation in fiscal 2024, partly offset by stock repurchases (see Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” of this Form 10-K) and quarterly cash dividends paid to shareholders. ​ ​ Comparison of Operating Results for the Fiscal Years Ended June 30, 2024 and 2023 ​ General.
For additional information on borrowings, see Note 7 of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. 53 Table of Contents ​ Total stockholders’ equity decreased $1.4 million, or 1%, to $128.5 million at June 30, 2025 from $129.9 million at June 30, 2024, primarily as a result of stock repurchases (see Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” of this Form 10-K) and quarterly cash dividends paid to shareholders, partly offset by net income and the amortization of stock-based compensation in fiscal 2025. ​ ​ Comparison of Operating Results for the Fiscal Years Ended June 30, 2025 and 2024 ​ General.
For additional information on investment securities, see Note 2 of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. ​ Loans held for investment, net decreased $24.7 million, or 2%, to $1.05 billion at June 30, 2024 from $1.08 billion at June 30, 2023.
For additional information on investment securities, see Note 2 of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. ​ Loans held for investment, net decreased $7.2 million, or 1%, to $1.05 billion at June 30, 2025 as compared to June 30, 2024.
The ACL on loans as a percentage of gross loans held for investment was 0.67% at June 30, 2024, compared to 0.55% at June 30, 2023.
The ACL on loans as a percentage of gross loans held for investment was 0.62% at June 30, 2025, compared to 0.67% at June 30, 2024.
During the fiscal years ended June 30, 2024 and 2023, the Bank originated loans held for investment of $75.5 million and $237.1 million, respectively. The Bank did not purchase any loans held for investment from other financial institutions in fiscal 2024 or 2023.
During the fiscal years ended June 30, 2025 and 2024, the Bank originated loans held for investment of $122.7 million and $75.5 million, respectively. The Bank did not purchase any loans held for investment from other financial institutions in fiscal 2025 or 2024.
For additional information on loans held for investment, see Note 3 of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. ​ FHLB – San Francisco and other equity investments increased $603,000, or 6%, to $10.1 million at June 30, 2024 from $9.5 million at June 30, 2023.
For additional information on loans held for investment, see Note 3 of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. ​ FHLB – San Francisco stock and other equity investments increased $190,000, or 2%, to $10.3 million at June 30, 2025, from $10.1 million at June 30, 2024.
The Bank's average liquidity ratio (defined as the ratio of average qualifying liquid assets to average deposits and borrowings) for the quarter ended June 30, 2024 decreased to 16.6% from 18.1% during the same quarter ended June 30, 2023.
The Bank's average liquidity ratio (defined as the ratio of average qualifying liquid assets to average deposits and borrowings) for the quarter ended June 30, 2025 decreased to 8.9% from 16.6% during the same quarter ended June 30, 2024.
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 53 Table of Contents needs.
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 funding base, the Corporation will consider utilizing brokered certificates of deposit and public funds, subject to market conditions and funding needs.
The information contained in this section should be read in conjunction with the audited Consolidated Financial Statements and accompanying selected Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. ​ Critical Accounting Estimates ​ The discussion and analysis of the Corporation’s financial condition and results of operations is based upon the Corporation’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.
The information contained in this section should be read in conjunction with the audited Consolidated Financial Statements and accompanying selected Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. ​ 50 Table of Contents Critical Accounting Estimates ​ The discussion and analysis of the Corporation’s financial condition and results of operations is based upon the Corporation’s consolidated financial statements, which have been prepared in accordance with U.S.
The decrease was consistent with the Corporation’s strategy of adequately managing credit and liquidity risk. ​ Total investment securities (held to maturity and available for sale) decreased $24.6 million, or 16%, to $131.9 million at June 30, 2024 from $156.5 million at June 30, 2023. The decrease was the result of scheduled and accelerated principal payments on investment securities.
The increase was consistent with the Corporation’s strategy of adequately managing credit and liquidity risk. ​ Total investment securities (held to maturity and available for sale) decreased $20.9 million, or 16%, to $111.0 million at June 30, 2025 from $131.9 million at June 30, 2024. The decrease was the result of scheduled and accelerated principal payments on investment securities.
Provident’s primary sources of funds consist of capital raised through dividends or capital distributions from the Bank, although there are regulatory restrictions on the ability of the Bank to pay dividends. During fiscal 2024, the Corporation purchased 197,349 shares of the Corporation’s common stock with a weighted average cost of $13.05 per share.
Provident’s primary sources of funds consist of capital raised through dividends or capital distributions from the Bank, although there are regulatory restrictions on the ability of the Bank to pay dividends. During fiscal 2025, the Corporation purchased 285,170 shares of the Corporation’s common stock with a weighted average cost of $15.04 per share.
Provident is regulated by the FRB. At June 30, 2024, the Corporation, on a consolidated basis, had total assets of $1.27 billion, total deposits of $888.3 million and total stockholders’ equity of $129.9 million. Provident has not engaged in any significant activity other than holding the stock of the Bank.
Provident is regulated by the FRB. At June 30, 2025, the Corporation, on a consolidated basis, had total assets of $1.25 billion, total deposits of $888.8 million and total stockholders’ equity of $128.5 million. Provident has not engaged in any significant activity other than holding the stock of the Bank.
Therefore, there are fluctuations in the effective income tax rate from period to period based on the relationship of net permanent differences to income before tax. ​ The provision for income taxes was $3.0 million for fiscal 2024, representing an effective tax rate of 29.2%, down $788,000 or 21% from $3.8 million in fiscal 2023, representing an effective tax rate of 30.8%.
Therefore, there are fluctuations in the effective income tax rate from period to period based on the relationship of net permanent differences to income before taxes. ​ The provision for income taxes was $2.6 million for fiscal 2025, representing an effective tax rate of 29.5%, down $418,000 or 14% from $3.0 million in fiscal 2024, representing an effective tax rate of 29.2%.
The Bank generally maintains sufficient cash and cash equivalents to meet short-term liquidity needs. At June 30, 2024, total cash and cash equivalents were $51.4 million, or 4.0% of total assets.
The Bank generally maintains sufficient cash and cash equivalents to meet short-term liquidity needs. At June 30, 2025, total cash and cash equivalents were $53.1 million, or 4.3% of total assets.
For additional information on deposits, see Note 6 of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. ​ Borrowings, consisting of FHLB – San Francisco advances increased $3.5 million, or 1%, to $238.5 million at June 30, 2024 from $235.0 million at June 30, 2023.
For additional information on deposits, see Note 6 of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. ​ Borrowings, consisting primarily of FHLB – San Francisco advances, decreased $25.4 million, or 11%, to $213.1 million at June 30, 2025 from $238.5 million at June 30, 2024.
(2) Includes the average balance of noninterest-bearing checking accounts of $97.3 million and $112.9 million in the fiscal years ended June 30, 2024 and 2023, respectively. (3) Includes the average balance of uninsured deposits of $135.7 million and $170.2 million in the fiscal years ended June 30, 2024 and 2023, respectively.
(2) Includes the average balance of noninterest-bearing checking accounts of $88.2 million and $97.3 million in the fiscal years ended June 30, 2025 and 2024, respectively. (3) Includes the average balance of uninsured deposits of $127.1 million and $135.7 million in the fiscal years ended June 30, 2025 and 2024, respectively.
At June 30, 2024 and 2023, the Bank had loan origination commitments totaling $9.4 million and $2.4 million, with undisbursed loan funds of $435,000 and $2.0 million, respectively.
At June 30, 2025 and 2024, the Bank had loan origination commitments totaling $6.1 million and $9.4 million, with undisbursed loan funds of $582,000 and $435,000, respectively.
The total available borrowing capacity across all sources totals approximately $519.9 million at June 30, 2024. ​ Regulations require the Bank to maintain adequate liquidity to assure safe and sound operations.
The total available borrowing capacity across all sources was approximately $474.8 million at June 30, 2025. ​ Regulations require the Bank to maintain adequate liquidity to assure safe and sound operations.
The Bank conducts its business operations as Provident Bank and through its subsidiary, PFC.
The Bank conducts its business 51 Table of Contents operations as Provident Bank and through its subsidiary, PFC.
The Corporation's efficiency ratio, defined as non-interest expense divided by the sum of net interest income and non-interest income, increased to 73% in fiscal 2024 from 69% in fiscal 2023 due to both an increase in non-interest expenses and a decline in revenues.
The Corporation's efficiency ratio, defined as non-interest expense divided by the sum of net interest income and non-interest income, increased to 79% in fiscal 2025 from 73% in fiscal 2024 due primarily to an increase in non-interest expenses.
As of June 30, 2024, there are 189,116 shares available for purchase under the Corporation’s existing stock repurchase plan.
As of June 30, 2025, there are 217,028 shares available for purchase under the Corporation’s existing stock repurchase plan.
The decrease was primarily attributable to decreases in loans held for investment, investment securities and cash and cash equivalents. ​ Total cash and cash equivalents, primarily excess cash deposited with the FRB of San Francisco, decreased $14.4 million, or 22%, to $51.4 million at June 30, 2024 from $65.8 million at June 30, 2023.
The decrease was primarily attributable to decreases in investment securities and loans held for investment. ​ Total cash and cash equivalents, primarily excess cash deposited with the FRB of San Francisco, increased $1.7 million, or 3%, to $53.1 million at June 30, 2025 from $51.4 million at June 30, 2024.
The average balance of investment securities decreased $27.5 million, or 16%, to $144.5 million in fiscal 2024 from $172.0 million in fiscal 2023 as a result of scheduled and accelerated principal payments on mortgage-backed securities. The average yield on investment securities increased 17 basis points to 1.43% for fiscal 2024 from 1.26% for fiscal 2023.
The average balance of investment securities decreased $23.1 million, or 16%, to $121.4 million in fiscal 2025 from $144.5 million in fiscal 2024 mainly as a result of scheduled and accelerated principal payments on mortgage-backed securities. The average yield on investment securities increased 10 basis points to 1.53% for fiscal 2025 from 1.43% for fiscal 2024.
The Corporation recorded net income of $7.4 million, or $1.06 per diluted share, for the fiscal year ended June 30, 2024, down $1.2 million, or 14%, from $8.6 million, or $1.19 per diluted share, for the fiscal year ended June 30, 2023.
The Corporation recorded net income of $6.3 million, or $0.93 per diluted share, for the fiscal year ended June 30, 2025, down $1.1 million, or 15%, from $7.4 million, or $1.06 per diluted share, for the fiscal year ended June 30, 2024.
During fiscal 2024, the Corporation recorded a recovery of credit losses of $63,000, compared to a provision for credit losses of $374,000 during fiscal 2023.
During fiscal 2025, the Corporation recorded a recovery of credit losses of $666,000, compared to a recovery of $63,000 during fiscal 2024.
The average balance of loans receivable increased $40.6 million, or 4%, to $1.07 billion during fiscal 2024 from $1.03 billion during fiscal 2023. ​ Interest income on investment securities decreased $109,000, or 5%, to $2.1 million in fiscal 2024 from $2.2 million in fiscal 2023, due to a decrease in the average balance, partly offset by an increase in the average yield..
The average balance of loans receivable decreased $18.2 million, or 2%, to $1.05 billion during fiscal 2025 from $1.07 billion during fiscal 2024. ​ Interest income on investment securities decreased $202,000, or 10%, to $1.9 million in fiscal 2025 from $2.1 million in fiscal 2024, due to a decrease in the average balance, partly offset by an increase in the average yield.
The balance of multi-family, commercial real estate, construction and commercial business loans, net of undisbursed loan funds, decreased $22.6 million, or 4%, to $532.6 million at June 30, 2024 from $555.2 million at June 30, 2023, and represented 51% and 52% of loans held for investment, respectively.
The balance of multi-family, commercial real estate, construction and commercial business loans, net of undisbursed loan funds, decreased $34.7 million, or 7%, to $497.9 million at June 30, 2025, from $532.6 million at June 30, 2024, representing 48% and 51% of loans held for investment, respectively.
During fiscal 2024 and 2023, the Bank did not purchase or sell any investment securities.
During fiscal 2025, the Bank purchased $981,000 of investment securities and did not sell any investment securities; while during fiscal 2024, the Bank did not purchase or sell any investment securities.
The average cost of interest-bearing liabilities was 1.74% during fiscal 2024, up 94 basis points from 0.80% during fiscal 2023, and the average balance of interest-bearing liabilities was $1.14 billion during fiscal 2024, up $16.8 million or 2% from $1.12 billion during fiscal 2023. ​ Interest expense on deposits for fiscal 2024 was $9.7 million compared to $3.1 million for fiscal 2023, an increase of $6.6 million or 213%.
The average cost of interest-bearing liabilities was 1.93% during fiscal 2025, up 19 basis points from 1.74% during fiscal 2024, while the average balance of interest-bearing liabilities was $1.10 billion during fiscal 2025, down $39.4 million, or 3%, from $1.14 billion during fiscal 2024. ​ Interest expense on deposits for fiscal 2025 was $11.2 million compared to $9.7 million for fiscal 2024, an increase of $1.5 million or 16%.
The decrease in net income was primarily attributable to a $2.1 million decrease in net interest income, a $270,000 increase in non-interest expense and a $134,000 decrease in non-interest income, partly offset by a $437,000 change in the provision for credit losses resulting from a $63,000 recovery of credit losses recorded during fiscal 2024 compared to a $374,000 provision for credit losses during fiscal 2023.
The decrease in net income was primarily attributable to a $2.3 million increase in non-interest expense and a $410,000 decrease in non-interest income, partly offset by a $666,000 recovery of credit losses recorded during fiscal 2025 as compared to a $63,000 recovery of credit losses during fiscal 2024, and a $546,000 increase in net interest income.
As of June 30, 2024, the remaining financing availability at the FHLB - San Francisco was $261.3 million and the remaining available collateral was $367.4 million. In addition, the Bank has secured a $208.6 million discount window facility at the FRB of San Francisco, collateralized by $126.6 million of investment securities and $178.6 million of loans held for investment.
As of June 30, 2025, the remaining financing availability at the FHLB - San Francisco was $282.3 million and the remaining available collateral was $364.9 million. In addition, the Bank has a $142.5 million discount window facility at the FRB of San Francisco, collateralized by $24.8 million of investment securities and $227.0 million of loans held for investment.
Total interest income increased $8.7 million, or 19%, to $54.7 million for fiscal 2024 from $46.0 million for fiscal 2023. The increase was primarily attributable to an increase of interest income from loans receivable. ​ Interest income on loans receivable increased $8.0 million, or 19%, to $50.2 million in fiscal 2024 from $42.2 million in fiscal 2023.
Total interest income increased $1.9 million, or 3%, to $56.6 million in fiscal 2025 from $54.7 million in fiscal 2024. The increase was primarily attributable to an increase of interest income on loans receivable. ​ Interest income on loans receivable increased $2.3 million, or 5%, to $52.5 million in fiscal 2025 from $50.2 million in fiscal 2024.
Brokered certificates of deposit increased $25.4 million, or 24%, to $131.8 million at June 30, 2024 from $106.4 million at June 30, 2023. As of June 30, 2024 and 2023, the percentage of transaction accounts to total deposits was 69% and 77%, respectively.
Time deposits included brokered certificates of deposit of $131.0 million as of June 30, 2025, down slightly from $131.8 million at June 30, 2024. As of June 30, 2025 and 2024, the percentage of transaction accounts to total deposits was 65% and 69%, respectively.
The increase in interest expense on borrowings was due to a higher average balance and, to a lesser extent, a higher average cost.
The decrease in interest expense on borrowings was due to a lower average balance, partly offset by a higher average cost.
The average balance of borrowings increased $61.7 million, or 39%, to $221.4 million during fiscal 2024 from $159.7 million during fiscal 2023 and the average cost of borrowings was 4.58% in fiscal 2024, up 91 basis points from 3.67% in fiscal 2023. ​ Provision for (Recovery of) Credit Losses.
The average balance of borrowings decreased $5.1 million, or 2%, to $216.3 million during fiscal 2025 from $221.4 million during fiscal 2024 and the average cost of borrowings was 4.59% in fiscal 2025, up one basis point from 4.58% in fiscal 2024. ​ Provision for (Recovery of) Credit Losses.
Yields and costs for the periods indicated are derived by dividing income or expense by the average monthly balance of assets or liabilities, respectively, for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2024 ​ 2023 ​ ​ ​ Average ​ ​ ​ ​ Yield/ ​ Average ​ ​ ​ ​ Yield/ ​ (Dollars In Thousands) ​ Balance ​ Interest ​ Cost ​ Balance ​ Interest ​ Cost ​ Interest-earning assets: ​ ​ ​ ​ Loans receivable, net (1) ​ $ 1,069,616 ​ $ 50,194 4.69 % $ 1,029,000 ​ $ 42,191 4.10 % Investment securities ​ 144,466 ​ 2,060 1.43 % 172,005 ​ 2,169 1.26 % FHLB - San Francisco and other equity investments ​ 9,601 ​ 802 8.35 % 8,488 ​ 556 6.55 % Interest-earning deposits ​ 30,610 ​ 1,674 5.38 % 26,214 ​ 1,076 4.05 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest-earning assets ​ 1,254,293 ​ 54,730 4.36 % 1,235,707 ​ 45,992 3.72 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-earning assets ​ 30,655 ​ ​ 32,763 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 1,284,948 ​ ​ $ 1,268,470 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ Checking and money market accounts (2) ​ $ 407,938 ​ 290 0.07 % $ 479,921 ​ 227 0.05 % Savings accounts ​ 260,249 ​ 313 0.12 % 318,795 ​ 168 0.05 % Time deposits ​ 247,863 ​ 9,063 3.66 % 162,144 ​ 2,751 1.70 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deposits (3) ​ 916,050 ​ 9,666 1.06 % 960,860 ​ 3,146 0.33 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Borrowings ​ 221,368 ​ 10,141 4.58 % 159,742 ​ 5,861 3.67 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest-bearing liabilities ​ 1,137,418 ​ 19,807 1.74 % 1,120,602 ​ 9,007 0.80 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-bearing liabilities ​ 16,731 ​ ​ 17,307 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ​ 1,154,149 ​ ​ 1,137,909 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ 130,799 ​ ​ 130,561 ​ ​ Total liabilities and stockholders’ equity ​ $ 1,284,948 ​ ​ $ 1,268,470 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income ​ ​ $ 34,923 ​ ​ $ 36,985 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate spread (4) ​ ​ 2.62 % ​ 2.92 % Net interest margin (5) ​ ​ 2.78 % ​ 2.99 % Ratio of average interest- earning assets to average interest-bearing liabilities ​ ​ 110.28 % ​ 110.27 % ​ (1) Includes the average balance of non-performing loans of $2.1 million and $1.1 million, as well as net deferred loan costs of $955 thousand and $959 thousand for the fiscal years ended June 30, 2024 and 2023, respectively.
Yields and costs for the periods indicated are derived by dividing income or expense by the average daily balance of assets or liabilities, respectively, for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2025 ​ 2024 ​ ​ ​ Average ​ ​ ​ ​ Yield/ ​ Average ​ ​ ​ ​ Yield/ ​ (Dollars In Thousands) ​ Balance ​ Interest ​ Cost ​ Balance ​ Interest ​ Cost ​ Interest-earning assets: ​ ​ ​ ​ Loans receivable, net (1) ​ $ 1,051,448 ​ $ 52,543 5.00 % $ 1,069,616 ​ $ 50,194 4.69 % Investment securities ​ 121,399 ​ 1,858 1.53 % 144,466 ​ 2,060 1.43 % FHLB - San Francisco and other equity investments ​ 10,213 ​ 845 8.27 % 9,601 ​ 802 8.35 % Interest-earning deposits ​ 28,990 ​ 1,378 4.69 % 30,610 ​ 1,674 5.38 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest-earning assets ​ 1,212,050 ​ 56,624 4.67 % 1,254,293 ​ 54,730 4.36 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-earning assets ​ 30,352 ​ ​ 30,655 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 1,242,402 ​ ​ $ 1,284,948 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ Checking and money market accounts (2) ​ $ 363,859 ​ 190 0.05 % $ 407,938 ​ 290 0.07 % Savings accounts ​ 235,390 ​ 500 0.21 % 260,249 ​ 313 0.12 % Time deposits ​ 282,489 ​ 10,536 3.73 % 247,863 ​ 9,063 3.66 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deposits (3) ​ 881,738 ​ 11,226 1.27 % 916,050 ​ 9,666 1.06 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Borrowings ​ 216,290 ​ 9,929 4.59 % 221,368 ​ 10,141 4.58 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest-bearing liabilities ​ 1,098,028 ​ 21,155 1.93 % 1,137,418 ​ 19,807 1.74 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-bearing liabilities ​ 13,710 ​ ​ 16,731 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ​ 1,111,738 ​ ​ 1,154,149 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ 130,664 ​ ​ 130,799 ​ ​ Total liabilities and stockholders’ equity ​ $ 1,242,402 ​ ​ $ 1,284,948 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income ​ ​ $ 35,469 ​ ​ $ 34,923 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate spread (4) ​ ​ 2.74 % ​ 2.62 % Net interest margin (5) ​ ​ 2.93 % ​ 2.78 % Ratio of average interest- earning assets to average interest-bearing liabilities ​ ​ 110.38 % ​ 110.28 % ​ (1) Includes the average balance of non-performing loans of $2.1 million and $2.1 million, as well as net deferred loan costs of $1.4 million and $955 thousand for the fiscal years ended June 30, 2025 and 2024, respectively.
Results for reporting periods beginning after July 1, 2023 are presented under CECL while prior period amounts continue to be reported in accordance with previously applicable accounting standards. ​ As required by ASC 326, on July 1, 2023 the Corporation implemented CECL and recognized a $1.2 million one-time increase to its ACL, which was recorded directly to retained earnings.
Results for reporting periods beginning after July 1, 2023 are presented under CECL. ​ As required by ASC 326, on July 1, 2023 the Corporation implemented CECL and recognized a $1.2 million one-time increase to its ACL and a net of tax charge of $824,000 to retained earnings.
Total interest expense for fiscal 2024 was $19.8 million compared to $9.0 million for fiscal 2023, an increase of $10.8 million or 120%. This increase was primarily attributable to a higher interest expense on deposits, particularly time deposits and, to a lesser extent, a higher interest expense on borrowings.
Total interest expense for fiscal 2025 was $21.2 million compared to $19.8 million for fiscal 2024, an increase of $1.4 million or 7%. This increase was primarily attributable to a higher interest expense on deposits, particularly time deposits, partly offset by a lower interest expense on borrowings.
Total retail deposits, defined as total deposits excluding brokered certificates of deposit, decreased by $87.7 million, or 10% to $756.5 million at June 30, 2024 from $844.2 million at June 30, 2023, due primarily to the decline of transaction account balances related to some customers seeking higher interest rates elsewhere.
Total retail deposits, defined as total deposits excluding brokered certificates of deposit, increased to $757.8 million at June 30, 2025 from $756.5 million at June 30, 2024. This increase was due primarily to the increase in retail time deposits, which was largely offset by the decline in transaction account balances as some customers sought higher interest rates elsewhere.
The Bank anticipates that it will have sufficient funds available to meet its current loan origination commitments. ​ The Bank's primary financing activity is gathering deposits, which include both retail and brokered deposits. During the fiscal years ended June 30, 2024 and 2023, the net decrease in deposits was $62.2 million and $4.9 million, respectively.
The Bank anticipates that it will have sufficient funds available to meet its current loan origination commitments. ​ The Bank's primary financing activity is gathering deposits, which include both retail and brokered certificates of deposit.
Return on average assets in fiscal 2024 decreased to 0.57% from 0.68% in fiscal 2023 and return on average stockholders' equity in fiscal 2024 decreased to 5.62% from 6.58% in fiscal 2023. ​ Net Interest Income. Net interest income decreased $2.1 million, or 6%, to $34.9 million in fiscal 2024 from $37.0 million in fiscal 2023.
Return on average assets in fiscal 2025 was 0.50% compared to 0.57% in fiscal 2024, and return on average stockholders' equity in fiscal 2025 was 4.79%, compared to 5.62% in fiscal 2024. ​ Net Interest Income. Net interest income increased $546,000, or 2%, to $35.5 million in fiscal 2025 from $34.9 million in fiscal 2024.
The lower effective tax rate in fiscal 2024 was attributable primarily to the decreased tax benefit in fiscal 2023 from the equity incentive awards with the share price lower at vesting and distribution than the fair value estimated at the grant date, which was not replicated in fiscal 2024. ​ The Corporation’s effective tax rate may differ from the estimated tax rates described above due to discrete items such as further adjustments to net deferred tax assets, excess tax benefits derived from stock option exercises and non-taxable earnings from bank owned life insurance, among other items.
The decrease in the provision for income taxes in fiscal 2025 compared to fiscal 2024 was due primarily to a lower income before the provision for income taxes. ​ The Corporation’s effective tax rate may differ from the estimated tax rates described above due to discrete items such as further adjustments to net deferred tax assets or liabilities, excess tax benefits derived from stock option exercises and non-taxable earnings from bank owned life insurance, among other items.
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 also inhibit the Corporation’s ability to recover on defaulted loans by selling the underlying real estate.
Because the majority of the Corporation’s loans are secured by real estate located in California, significant declines in California property values could limit the Corporation’s ability to recover on defaulted loans through the sale of the underlying collateral.
The average cost of time deposits in fiscal 2024 was 3.66%, up 196 basis points, from 1.70% in fiscal 2023, while the average cost of transaction accounts was 0.09% in fiscal 2024, up four basis points from 0.05% in fiscal 2023.
The average cost of time deposits (including brokered certificates of deposit) in fiscal 2025 was 3.73%, up seven basis points, from 3.66% in fiscal 2025, while the average cost of transaction accounts was 0.12% in fiscal 2025, up three basis points from 0.09% in fiscal 2024.
See also, “Regulation – Federal Regulation of Savings Institutions – Capital Requirements” and Note 9, "Capital" of the Notes to Consolidated Financial Statements contained in Items 1 and 8 of this Form 10-K, respectively. ​ Impact of New Accounting Pronouncements ​ Various elements of the Corporation's accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments.
See also, “Regulation – Federal Regulation of Savings Institutions – Capital Requirements” and Note 9, "Capital" of the Notes to Consolidated Financial Statements contained in Items 1 and 8 of this Form 10-K, respectively. ​ ​
For further details on risk factors and uncertainties, see “Safe-Harbor Statement” included above in this Item 7, and Item 1A, "Risk Factors.” ​ Comparison of Financial Condition at June 30, 2024 and 2023 ​ Total assets decreased $60.7 million, or 5%, to $1.27 billion at June 30, 2024 from $1.33 billion at June 30, 2023.
The Corporation remains committed to prudent risk management practices to mitigate potential impacts and support customers in navigating any related financial challenges. 52 Table of Contents ​ For further details on risk factors and uncertainties, see “Safe-Harbor Statement” included above in this Item 7, and Item 1A, "Risk Factors.” ​ Comparison of Financial Condition at June 30, 2025 and 2024 ​ Total assets decreased $26.6 million, or 2%, to $1.25 billion at June 30, 2025 from $1.27 billion at June 30, 2024.
The average balance of interest-earning assets increased $18.6 million, or 2%, to $1.25 billion in fiscal 2024 from $1.24 billion in fiscal 2023. The average balance of interest-bearing liabilities increased $16.8 million, or 2%, to $1.13 billion during fiscal 2024 as compared to $1.12 billion during fiscal 2023. ​ Interest Income.
The average balance of interest-earning assets decreased $42.2 million, or 3%, to $1.21 billion in fiscal 2025 from $1.25 billion in fiscal 2024. The average balance of interest-bearing liabilities decreased $39.4 million, or 3%, to $1.10 billion during fiscal 2025 as compared to $1.14 billion during fiscal 2024. ​ Interest Income.
The increase was primarily due to new advances to augment the decrease in deposits. The weighted average maturity of the Corporation’s FHLB – San Francisco advances was approximately 13 months at June 30, 2024, up from 12 months at June 30, 2023.
The decrease was primarily due to scheduled maturities that were not fully renewed. The weighted average maturity of the Corporation’s FHLB – San Francisco advances was approximately 10 months at June 30, 2025, down from 13 months at June 30, 2024.
The increase was primarily attributable to a higher average cost for time deposits and, to a lesser extent, a higher average balance of such deposit.
The increase was primarily attributable to a higher average balance of time deposits and modestly higher rates on time deposits and savings accounts.
The following chart quantifies the factors contributing to the changes in the ACL on loans held for investment (“LHFI”) for the year ended June 30, 2024 subsequent to the adoption of the CECL methodology on July 1, 2023. ​ ​ Management believes, based on currently available information, the ACL is sufficient to absorb expected losses inherent in loans held for investment at June 30, 2024 under the CECL methodology adopted since July 1, 2023.
The decrease in the ACL on loans was due primarily to the recovery of credit losses recorded in fiscal 2025. ​ 55 Table of Contents The following chart quantifies the factors contributing to the changes in the ACL on loans held for investment (“LHFI”) for the years ended June 30, 2025 and 2024. ​ ​ ​ Management believes, based on currently available information, that the ACL is sufficient to absorb expected credit losses in loans held for investment at June 30, 2025 and 2024.
The weighted average loan yield during fiscal 2024 increased 59 basis points to 4.69% from 4.10% in fiscal 2023, reflecting new loans being originated at higher interest rates and adjustable rate loans repricing higher due to overall higher market interest rates resulting from the FOMC increases in the targeted federal funds rate during the latter half of fiscal 55 Table of Contents 2023.
The increase was attributable to a higher average loan yield, partly offset by a lower average loan balance. The weighted average loan yield during fiscal 2025 increased 31 basis points to 5.00% from 4.69% in fiscal 2024, reflecting new loans being originated at higher interest rates and adjustable rate loans repricing higher due to overall higher market interest rates.
The increase in non-interest expense was primarily attributable to increases in premises and occupancy expenses, equipment expense, deposit insurance premiums and regulatory assessments, partly offset by decreases in salaries and employee benefits and other operating expenses. ​ Salaries and employee benefits expense decreased $95,000, or 1%, to $17.6 million in fiscal 2024 from $17.7 million in fiscal 2023.
The increase in non-interest expense was primarily attributable to increases in salaries and employee benefits, equipment expense and other non-interest expenses. ​ Salaries and employee benefits increased $1.4 million, or 8%, to $19.0 million in fiscal 2025 from $17.6 million in fiscal 2024.
See Note 1 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for a summary of significant accounting policies and the effect on our financial statements. ​ 52 Table of Contents ​ Allowance for Credit Losses.
We evaluate these estimates on an ongoing basis and discuss them with the Audit Committee of our Board of Directors. For a summary of our significant accounting policies, see Note 1—Summary of Significant Accounting Policies in Item 8 of this Annual Report on Form 10-K. ​ Allowance for Credit Losses.
The average yield increased 133 basis points to 5.38% in fiscal 2024 from 4.05% in fiscal 2023, resulting from increases in the targeted federal funds interest rate since March 2022 to July 2023. The average balance of interest-earning deposits increased $4.4 million, or 17%, to $30.6 million in fiscal 2024 from $26.2 million in fiscal 2023. ​ Interest Expense.
The average yield decreased 69 basis points to 4.69% in fiscal 2025 from 5.38% in fiscal 2024, resulting from decreases in the targeted federal funds interest rates during fiscal 2025. The average balance of interest-earning deposits decreased $1.6 million, or 5%, to $29.0 million in fiscal 2025 from $30.6 million in fiscal 2024. 54 Table of Contents ​ Interest Expense.
The preparation of these financial statements requires management to make difficult, subjective or complex judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities at the date of the consolidated financial statements and, therefore, management considers the following to be critical accounting estimates.
GAAP. The preparation of our consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities as of the reporting date.
In fiscal 2024, the Bank originated $75.5 million of loans held for investment, down 68% from $237.1 million during fiscal 2023. In both years these loans consisted primarily of single-family, multi-family and commercial real estate loans. The Bank did not purchase any loans in fiscal 2024 or 2023.
Total loan principal payments in fiscal 2025 were $133.3 million, up 33% from $99.9 million in fiscal 2024, while the Bank originated $122.7 million of loans held for investment in fiscal 2025, up 62% from $75.5 million in fiscal 2024. In both years these loans consisted primarily of single-family, multi-family and commercial real estate loans.
The balance of single-family loans held for investment decreased slightly to $518.1 million at June 30, 2024, from $518.8 million at June 30, 2023.
The balance of single-family loans held for investment increased $26.3 million, or 5%, to $544.4 million at June 30, 2025, from $518.1 million at June 30, 2024. There was no REO in fiscal 2025 and 2024.
Total premium amortization in fiscal 2024 was $532,000, down $259,000, or 33%, from $791,000 in fiscal 2023. ​ During fiscal 2024, the Bank received $802,000 of cash dividends from the FHLB - San Francisco and other equity investments, an increase of $246,000 or 44% from the $556,000 of cash dividends received in fiscal 2023, resulting in an average yield of 8.35% during fiscal 2024 compared to 6.55% during fiscal 2023. ​ Interest income on interest-earning deposits, primarily cash deposited at the FRB of San Francisco, increased $598,000, or 56%, to $1.7 million in fiscal 2024 from $1.1 million in fiscal 2023, due to a higher average yield and, to a lesser extent, a higher average balance.
The total premium amortization in fiscal 2025 was $374,000, down $158,000, or 30%, from $532,000 in fiscal 2024. ​ During fiscal 2025, the Bank received $845,000 of cash dividends from the FHLB - San Francisco and other equity investments, an increase of $43,000, or 5%, from the $802,000 of cash dividends received in fiscal 2024, resulting in an average yield of 8.27% during fiscal 2025 compared to 8.35% during fiscal 2024.
The Bank augments its liquidity by maintaining sufficient borrowing capacity at the FHLB - San Francisco, FRB of San Francisco and its correspondent bank. ​ We incur capital expenditures on an ongoing basis to expand and improve our product offerings, enhance and modernize our technology infrastructure, and to introduce new technology-based products to compete effectively in our markets.
Management will continue to adjust the balance of liquid assets and funding sources as necessary to maintain adequate liquidity and support the Bank’s operations and lending activities. ​ We incur capital expenditures on an ongoing basis to expand and improve our product offerings, enhance and modernize our technology infrastructure, and to introduce new technology-based products to compete effectively in our markets.
Transaction accounts decreased $115.1 million, or 16%, to $614.5 million at June 30, 2024 from $729.6 million at June 30, 2023, while time deposits increased $53.0 million, or 24%, to $273.9 million at June 30, 2024 from $220.9 million at June 30, 2023. The increase in time deposits includes the increased utilization of brokered certificates of deposit.
Transaction accounts decreased $38.0 million, or 6%, to $576.5 million at June 30, 2025 from $614.5 million at June 30, 2024, while time deposits increased $38.4 million, or 14%, to $312.3 million at June 30, 2025 from $273.9 million at June 30, 2024.
The provision for credit losses in fiscal 2023 was primarily due to a higher outstanding balance of loans held for investment. ​ 56 Table of Contents At June 30, 2024, the ACL on loans held for investment was $7.1 million, comprised of collectively evaluated allowances of $7.1 million and individually evaluated allowances of $37,000; up 20% from $5.9 million at June 30, 2023.
The increase in the recovery of credit losses in fiscal 2025 was primarily due to improved qualitative factors related to the single-family residential loans and lower historical loss rates, partially offset by an increase in the balance of single-family loans. ​ At June 30, 2025, the ACL on loans held for investment was $6.4 million, comprised of all collectively evaluated allowances, down 9% from $7.1 million at June 30, 2024.
On June 30, 2024, time deposits scheduled to mature in one year or less were $245.7 million.
During the fiscal year ended June 30, 2025, the net increase in deposits was $424,000, compared to the net decrease of $62.2 million during fiscal 2024. On June 30, 2025, time deposits scheduled to mature in one year or less were $278.3 million.
Information is provided with respect to the effects attributable to changes in volume (changes in volume multiplied by prior rate), the effects attributable to changes in rate (changes in rate multiplied by prior volume) and the effects attributable to changes that cannot be allocated between rate and volume. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, 2024 Compared ​ ​ To Year Ended June 30, 2023 ​ ​ Increase (Decrease) Due to (In Thousands) ​ Rate ​ Volume ​ Rate/Volume ​ Net Interest-earning assets: ​ ​ ​ ​ Loans receivable (1) ​ $ 6,098 ​ $ 1,665 ​ $ 240 ​ $ 8,003 Investment securities ​ 285 ​ (347) ​ (47) ​ (109) FHLB – San Francisco and other equity investments ​ 153 ​ 73 ​ 20 ​ 246 Interest-bearing deposits ​ 362 ​ 178 ​ 58 ​ 598 Total net change in income on interest-earning assets ​ 6,898 ​ 1,569 ​ 271 ​ 8,738 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ Checking and money market accounts ​ 113 ​ (36) ​ (14) ​ 63 Savings accounts ​ 215 ​ (29) ​ (41) ​ 145 Time deposits ​ 3,175 ​ 1,457 ​ 1,680 ​ 6,312 Borrowings ​ 1,457 ​ 2,262 ​ 561 ​ 4,280 Total net change in expense on interest-bearing liabilities ​ 4,960 ​ 3,654 ​ 2,186 ​ 10,800 Net increase (decrease) in net interest income ​ $ 1,938 ​ $ (2,085) ​ $ (1,915) ​ $ (2,062) ​ (1) Includes non-performing loans.
Information is provided with respect to the effects attributable to changes in volume (changes in volume multiplied by prior rate), the effects attributable to changes in rate (changes in rate multiplied by prior volume) and the effects attributable to changes that cannot be allocated between rate and volume. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, 2025 Compared ​ ​ To Year Ended June 30, 2024 ​ ​ Increase (Decrease) Due to (In Thousands) ​ Rate ​ Volume ​ Rate/Volume ​ Net Interest-earning assets: ​ ​ ​ ​ Loans receivable (1) ​ $ 3,257 ​ $ (852) ​ $ (56) ​ $ 2,349 Investment securities ​ 151 ​ (330) ​ (23) ​ (202) FHLB – San Francisco and other equity investments ​ (8) ​ 51 ​ — ​ 43 Interest-bearing deposits ​ (220) ​ (87) ​ 11 ​ (296) Total net change in income on interest-earning assets ​ 3,180 ​ (1,218) ​ (68) ​ 1,894 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ Checking and money market accounts ​ (78) ​ (31) ​ 9 ​ (100) Savings accounts ​ 239 ​ (30) ​ (22) ​ 187 Time deposits ​ 182 ​ 1,267 ​ 24 ​ 1,473 Borrowings ​ 22 ​ (233) ​ (1) ​ (212) Total net change in expense on interest-bearing liabilities ​ 365 ​ 973 ​ 10 ​ 1,348 Net increase (decrease) in net interest income ​ $ 2,815 ​ $ (2,191) ​ $ (78) ​ $ 546 ​ (1) Includes non-performing loans.
The average balance of brokered certificates of deposit in fiscal 2024 was $118.8 million with the average cost of 5.17% compared to the average balance of $48.7 million with the average cost of 3.97% in fiscal 2023. ​ Interest expense on borrowings, consisting of FHLB - San Francisco advances, for fiscal 2024 increased $4.2 million, or 71%, to $10.1 million as compared to $5.9 million in fiscal 2023.
The average cost of all deposits (including non-interest bearing deposits) increased 21 basis points to 1.27% in fiscal 2025 from 1.06% in fiscal 2024. ​ Interest expense on borrowings, consisting primarily FHLB - San Francisco advances, for fiscal 2025 decreased $212,000, or 2%, to $9.9 million as compared to $10.1 million in fiscal 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

14 edited+4 added−7 removed14 unchanged
Biggest changeResults are likely to be different from that predicted solely on the basis of the interest rate sensitivity analysis set forth in the previous table. ​ The Corporation also models the sensitivity of net interest income for the 12-month period subsequent to any given month-end assuming a dynamic balance sheet accounting for, among other items: ​ ● The Corporation’s current balance sheet and repricing characteristics; ● Forecasted balance sheet growth consistent with the business plan; ● Current interest rates and yield curves and management estimates of projected interest rates; ● Embedded options, interest rate floors, periodic caps and lifetime caps; ● Repricing characteristics for market rate sensitive instruments; ● Loan, investment security, deposit and borrowing cash flows; ● Loan prepayment estimates for each type of loan; and ● Immediate, permanent and parallel movements in interest rates of +300, +200 +100, and -100, -200 and -300 bp. ​ The following table describes the results of the analysis at June 30, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, 2024 ​ At June 30, 2023 Basis Point (bp) ​ Change in ​ Basis Point (bp) ​ Change in Change in Rates ​ Net Interest Income ​ Change in Rates ​ Net Interest Income +300 bp -8.12% ​ +300 bp -10.56% ​ +200 bp -3.45% ​ +200 bp -5.26% ​ +100 bp -0.51% ​ +100 bp -1.95% ​ -100 bp -0.67% ​ -100 bp 1.25% ​ -200 bp -1.15% ​ -200 bp -0.59% ​ -300 bp ​ -1.86% ​ -300 bp ​ -3.33% ​ ​ At June 30, 2024, the Corporation was close to neutral with regard to the sensitivity of net interest income as projected net interest income declines slightly under rising or declining interest rates during the subsequent 12-month period. ​ At June 30, 2023, the Corporation was liability sensitive as its interest-bearing liabilities are expected to reprice more quickly than its interest-earning assets during the subsequent 12-month period.
Biggest changeActual results could differ materially due to variations in customer behavior, market conditions, and competitive pressures. ​ The Corporation also models the sensitivity of net interest income for the 12-month period subsequent to any given month-end assuming a dynamic balance sheet accounting for, among other items: ​ ● The Corporation’s current balance sheet and repricing characteristics; ● Forecasted balance sheet growth consistent with the business plan; ● Current interest rates and yield curves and management estimates of projected interest rates; ● Embedded options, interest rate floors, periodic caps and lifetime caps; ● Repricing characteristics for market rate sensitive instruments; ● Loan, investment security, deposit and borrowing cash flows; ● Loan prepayment estimates for each type of loan; and ● Immediate, permanent and parallel movements in interest rates of +300, +200 +100, and -100, -200 and -300 bp. ​ The following table describes the results of the analysis at June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, 2025 ​ At June 30, 2024 Basis Point (bp) ​ Change in ​ Basis Point (bp) ​ Change in Change in Rates ​ Net Interest Income ​ Change in Rates ​ Net Interest Income +300 bp -1.35% ​ +300 bp -8.12% ​ +200 bp +2.01% ​ +200 bp -3.45% ​ +100 bp +2.23% ​ +100 bp -0.51% ​ -100 bp -1.80% ​ -100 bp -0.67% ​ -200 bp -3.24% ​ -200 bp -1.15% ​ -300 bp ​ -6.38% ​ -300 bp ​ -1.86% ​ ​ At June 30, 2025, the Corporation was asset sensitive as its interest-earning assets are expected to reprice more quickly than its interest-bearing liabilities during the subsequent 12-month period; while at June 30, 2024, the Corporation was close to neutral with regard to the sensitivity of net interest income as projected net interest income declines slightly under rising or declining interest rates during the subsequent 12-month period. ​ Therefore at June 30, 2025, in a rising interest rate environment, the model projects an increase in net interest income over the subsequent 12-month period, except at the +300 basis point scenario.
(2) Calculated as the NPV divided by the portfolio value of total assets.
(2) Calculated as the NPV divided by the total portfolio value of assets.
Furthermore, the NPV presented in the foregoing tables is not intended to present the fair market value of the Corporation, nor does it represent amounts that would be available for distribution to shareholders in the event of the liquidation of the Corporation. ​ 63 Table of Contents The Corporation measures and evaluates the potential effects of interest rate movements through an interest rate sensitivity "gap" analysis.
Furthermore, the NPV presented in the foregoing tables is not intended to present the fair market value of the Corporation, nor does it represent amounts that would be available for distribution to shareholders in the event of the liquidation of the Corporation. ​ The Corporation measures and evaluates the potential effects of interest rate movements through an interest rate sensitivity "gap" analysis.
The calculation is intended to illustrate the change in NPV that would occur in the event of an immediate change in interest rates of -300, - 62 Table of Contents 200, -100, +100, +200 and +300 basis points (“bp”) with no effect given to steps that management might take to counter the effect of the interest rate movement.
The calculation is intended to illustrate the change in NPV that would occur in the event of an immediate change in interest rates of -300, -200, -100, +100, +200 and +300 basis points (“bp”) with no effect given to steps that management might take to counter the effect of the interest rate movement.
Therefore, the model results that the Corporation discloses should be thought of as a risk management tool to compare the trends of the Corporation’s current disclosure to previous disclosures, over time, within the context of the actual performance of the treasury yield curve. ​ ​
Therefore, the model results that the Corporation discloses should be thought of as a risk management tool to compare the trends of the Corporation’s current disclosure to previous disclosures, over time, within the context of the actual performance of the treasury yield curve. ​ ​ 64 Table of Contents
NPV is defined as the net present value of expected future cash flows from assets, liabilities and off-balance sheet contracts.
NPV is defined as the net present value of expected future cash flows from assets, liabilities and off-balance sheet obligations.
The principal element in achieving this objective is to increase the interest rate sensitivity of the Corporation's interest-earning assets by retaining for its portfolio new loan originations with interest rates subject to periodic adjustment to market conditions.
The principal element in achieving this objective is to increase the interest rate sensitivity of the Corporation's interest-earning assets by retaining new loan originations with interest rates subject to periodic adjustment to market conditions.
Management views noninterest-bearing deposits to be the least sensitive to changes in market interest rates and these accounts are therefore characterized as long-term funding. Interest-bearing checking deposits are considered more sensitive, followed by increased sensitivity 64 Table of Contents for savings and money market deposits.
Management views noninterest-bearing deposits to be the least sensitive to changes in market interest rates and these accounts are therefore characterized as long-term funding. Interest-bearing checking deposits are considered more sensitive, followed by increased sensitivity for savings and money market deposits.
The sensitivity measure increased to 95 basis points at June 30, 2024 from 92 basis points at June 30, 2023. ​ As with any method of measuring interest rate risk, certain shortcomings are inherent in the method of analysis presented in the foregoing tables.
The sensitivity measure increased to 98 basis points at June 30, 2025 from 95 basis points at June 30, 2024. ​ As with any method of measuring interest rate risk, certain shortcomings are inherent in the method of analysis presented in the foregoing tables.
(3) Calculated as the change in the NPV ratio (NPV as a Percentage of Portfolio Value Assets) from the base case amount assuming the indicated change in interest rates (expressed in basis points). ​ The following table is derived from the internal interest rate risk model and represents the change in the NPV at a +200 bp rate shock at June 30, 2024 and -200 bp rate shock at June 30, 2023 which has been determined to be the most detrimental to the interest rate risk of the Corporation in a -200, -100, +100 and +200 bp rate shock scenario: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, 2024 At June 30, 2023 ​ (+200 bp rate shock) (-200 bp rate shock) ​ Pre-Shock NPV Ratio: NPV as a % of PV Assets 10.12 % ​ 9.29 % ​ Post-Shock NPV Ratio: NPV as a % of PV Assets 9.17 % ​ 8.37 % ​ Sensitivity Measure: Change in NPV Ratio -95 bp -92 bp ​ ​ The pre-shock NPV ratio increased 83 basis points to 10.12% at June 30, 2024 from 9.29% at June 30, 2023, and the post-shock NPV ratio increased 80 basis points to 9.17% (+200 basis point rate shock) at June 30, 2024 from 8.37% (-200 basis point rate shock) at June 30, 2023.
(3) Calculated as the change in the NPV ratio (NPV as a Percentage of Portfolio Value Assets) from the base case amount assuming the indicated change in interest rates (expressed in basis points). ​ The following table is derived from the internal interest rate risk model and represents the change in the NPV at a -200 bp rate shock at June 30, 2025 and +200 bp rate shock at June 30, 2024 which has been determined to be the worst scenario to the interest rate risk of the Corporation in a -200, -100, +100 and +200 bp rate shock. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, 2025 At June 30, 2024 ​ (-200 bp rate shock) (+200 bp rate shock) ​ Pre-Shock NPV Ratio: NPV as a % of PV Assets 12.15 % ​ 10.12 % ​ Post-Shock NPV Ratio: NPV as a % of PV Assets 11.17 % ​ 9.17 % ​ Sensitivity Measure: Change in NPV Ratio -98 bp -95 bp ​ ​ The pre-shock NPV ratio increased 203 basis points to 12.15% at June 30, 2025 from 10.12% at June 30, 2024, and the post-shock NPV ratio increased 200 basis points to 11.17% (-200 basis point rate shock) at June 30, 2025 from 9.17% (+200 basis point rate shock) at June 30, 2024.
For the purpose of calculating gap, a portion of these interest-bearing deposit balances are assumed to be subject to estimated repricing as follows: interest-bearing checking deposits at 15% per year, savings deposits at 20% per year and money market deposits at 50% in the first and second years. ​ The gap results presented above could vary substantially if different assumptions are used or if actual experience differs from the assumptions used in the preparation of the gap analysis.
For the purpose of calculating gap, a portion of these interest-bearing deposit balances are assumed to be subject to estimated repricing as follows: interest-bearing checking deposits at 15% per year, savings deposits at 20% per year and money market deposits at 50% in the first and second years. ​ 63 Table of Contents The gap results presented above are based on specific assumptions and represent a static view of interest rate risk at a point in time.
In a falling interest rate environment, the results project an increase in net interest income over the subsequent 12-month period at the -100 basis point scenario and a decrease in net interest income over the subsequent 12-month period for the -200 and -300 basis point scenarios. ​ Management believes that the assumptions used to complete the analysis described in the table above are reasonable.
In a falling interest rate environment, the results project a decrease in net interest income over the subsequent 12-month period. ​ Management believes that the assumptions used to complete the analysis described in the table above are reasonable. However, past experience has shown that immediate, permanent and parallel movements in interest rates will not necessarily occur.
For transaction accounts (checking, money market and savings deposits) that have no contractual maturity, the table presents estimated principal cash flows and, as applicable, the Corporation's historical experience, management's judgment and statistical analysis concerning their most likely withdrawal behaviors. ​ The following table represents the interest rate gap analysis of the Corporation's assets and liabilities as of June 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term to Contractual Repricing, Estimated Repricing, or Contractual ​ ​ Maturity (1) ​ ​ As of June 30, 2024 ​ ​ ​ Greater than Greater than Greater than ​ ​ ​ ​ 12 months or ​ 1 year to 3 ​ 3 years to ​ 5 years or ​ ​ ​ (Dollars In Thousands) ​ less years 5 years non-sensitive ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repricing Assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 45,058 ​ $ — ​ $ — ​ $ 6,318 ​ $ 51,376 ​ Investment securities ​ 7,176 ​ — ​ — ​ 124,724 ​ 131,900 ​ Loans held for investment ​ 273,678 ​ 199,276 ​ 245,557 ​ 334,468 ​ 1,052,979 ​ FHLB - San Francisco and other equity investments ​ 10,108 ​ — ​ — ​ — ​ 10,108 ​ Other assets ​ 4,287 ​ — ​ — ​ 21,550 ​ 25,837 ​ Total assets ​ 340,307 ​ 199,276 ​ 245,557 ​ 487,060 ​ 1,272,200 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repricing Liabilities and Equity: ​ ​ ​ ​ ​ ​ Checking deposits - noninterest-bearing ​ — ​ — ​ — ​ 95,627 ​ 95,627 ​ Checking deposits - interest bearing ​ 38,194 ​ 76,387 ​ 76,387 ​ 63,656 ​ 254,624 ​ Savings deposits ​ 47,776 ​ 95,551 ​ 95,551 ​ — ​ 238,878 ​ Money market deposits ​ 12,662 ​ 12,662 ​ — ​ — ​ 25,324 ​ Time deposits ​ 245,713 ​ 23,383 ​ 3,545 ​ 1,254 ​ 273,895 ​ Borrowings ​ 145,500 ​ 78,000 ​ 15,000 ​ — ​ 238,500 ​ Other liabilities ​ 1,783 ​ — ​ — ​ 13,628 ​ 15,411 ​ Stockholders' equity ​ — ​ — ​ — ​ 129,941 ​ 129,941 ​ Total liabilities and stockholders' equity ​ 491,628 ​ 285,983 ​ 190,483 ​ 304,106 ​ 1,272,200 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repricing gap positive (negative) ​ $ (151,321) ​ $ (86,707) ​ $ 55,074 ​ $ 182,954 ​ $ — ​ Cumulative repricing gap: ​ ​ ​ ​ ​ ​ Dollar amount ​ $ (151,321) ​ $ (238,028) ​ $ (182,954) ​ $ — ​ $ — ​ Percent of total assets ​ (12) % (19) % (14) % — % — % ​ (1) Cash and cash equivalents are presented as estimated repricing; investment securities and loans held for investment are presented as contractual maturities or contractual repricing (without consideration for prepayments); FHLB - San Francisco and other equity investments are presented as contractual repricing; transaction accounts (checking, savings and money market deposits) are presented as estimated repricing; and time deposits (without consideration for early withdrawals) and borrowings are presented as contractual maturities. ​ The static gap analysis under “12 months or less” duration, “Greater than 1 year to 3 years” duration and “Greater than 3 years to 5 years” duration show negative positions in the "Cumulative repricing gap - dollar amount" category, indicating more liabilities are sensitive to repricing than assets in the short and intermediate terms.
For transaction accounts (checking, money market and savings deposits) that have no contractual 62 Table of Contents maturity, the table presents estimated principal cash flows and, as applicable, the Corporation's historical experience, management's judgment and statistical analysis concerning their most likely withdrawal behaviors. ​ The following table represents the interest rate gap analysis of the Corporation’s assets and liabilities as of June 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term to Contractual Repricing, Estimated Repricing, or Contractual ​ ​ Maturity (1) ​ ​ As of June 30, 2025 ​ ​ ​ Greater than Greater than Greater than ​ ​ ​ ​ 12 months or ​ 1 year to 3 ​ 3 years to ​ 5 years or ​ ​ ​ (Dollars In Thousands) ​ less years 5 years non-sensitive ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repricing Assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 45,856 ​ $ — ​ $ — ​ $ 7,234 ​ $ 53,090 ​ Investment securities ​ 6,154 ​ — ​ — ​ 104,852 ​ 111,006 ​ Loans held for investment ​ 292,650 ​ 229,190 ​ 214,724 ​ 309,181 ​ 1,045,745 ​ FHLB - San Francisco and other equity investments ​ 10,298 ​ — ​ — ​ — ​ 10,298 ​ Other assets ​ 4,215 ​ — ​ — ​ 21,259 ​ 25,474 ​ Total assets ​ 359,173 ​ 229,190 ​ 214,724 ​ 442,526 ​ 1,245,613 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repricing Liabilities and Equity: ​ ​ ​ ​ ​ ​ Checking deposits - noninterest-bearing ​ — ​ — ​ — ​ 83,566 ​ 83,566 ​ Checking deposits - interest bearing ​ 36,090 ​ 72,179 ​ 72,179 ​ 60,149 ​ 240,597 ​ Savings deposits ​ 46,122 ​ 92,244 ​ 92,244 ​ — ​ 230,610 ​ Money market deposits ​ 10,852 ​ 10,851 ​ — ​ — ​ 21,703 ​ Time deposits ​ 278,268 ​ 28,283 ​ 5,397 ​ 348 ​ 312,296 ​ Borrowings ​ 163,000 ​ 40,073 ​ 10,000 ​ — ​ 213,073 ​ Other liabilities ​ 1,534 ​ — ​ — ​ 13,689 ​ 15,223 ​ Stockholders' equity ​ — ​ — ​ — ​ 128,545 ​ 128,545 ​ Total liabilities and stockholders' equity ​ 535,866 ​ 243,630 ​ 179,820 ​ 286,297 ​ 1,245,613 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repricing gap positive (negative) ​ $ (176,693) ​ $ (14,440) ​ $ 34,904 ​ $ 156,229 ​ $ — ​ Cumulative repricing gap: ​ ​ ​ ​ ​ ​ Dollar amount ​ $ (176,693) ​ $ (191,133) ​ $ (156,229) ​ $ — ​ $ — ​ Percent of total assets ​ (14) % (15) % (13) % — % — % ​ (1) Cash and cash equivalents are presented as estimated repricing; investment securities and loans held for investment are presented as contractual maturities or contractual repricing (without consideration for prepayments); FHLB - San Francisco and other equity investments are presented as contractual repricing; transaction accounts (checking, savings and money market deposits) are presented as estimated repricing; and time deposits (without consideration for early withdrawals) and borrowings are presented as contractual maturities. ​ The static gap analysis under “12 months or less” duration, “Greater than 1 year to 3 years” duration and “Greater than 3 years to 5 years” duration show negative positions in the "Cumulative repricing gap - dollar amount" category, indicating more liabilities are sensitive to repricing than assets in the short and intermediate terms.
As of June 30, 2024, the targeted federal funds rate range was 5.25% to 5.50%. ​ The following table sets forth as of June 30, 2024 the estimated changes in NPV based on the indicated interest rate environment (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ Portfolio NPV as Percentage ​ ​ Basis Points ("bp") ​ Portfolio ​ NPV ​ Value of ​ of Portfolio Value ​ Sensitivity ​ Change in Rates ​ Value ​ Change (1) ​ Assets ​ Assets (2) ​ Measure (3) ​ +300 bp ​ $ 99,797 ​ $ (29,127) ​ $ 1,233,560 8.09 % (203) bp +200 bp ​ $ 114,840 ​ $ (14,084) ​ $ 1,252,262 9.17 % (95) bp +100 bp ​ $ 124,386 ​ $ (4,538) ​ $ 1,265,538 9.83 % (29) bp - ​ $ 128,924 ​ $ — ​ $ 1,273,858 10.12 % — ​ -100 bp ​ $ 136,297 ​ $ 7,373 ​ $ 1,285,088 10.61 % 49 bp -200 bp ​ $ 128,436 ​ $ (488) ​ $ 1,281,017 10.03 % (9) bp -300 bp ​ $ 129,438 ​ $ 514 ​ $ 1,286,155 ​ 10.06 % (6) bp ​ (1) Represents the (decrease) increase of the NPV at the indicated interest rate change in comparison to the NPV at June 30, 2024 (“base case”).
As of June 30, 2025, the targeted federal funds rate range was 4.25% to 4.50%. ​ ​ 61 Table of Contents The following table sets forth as of June 30, 2025 the estimated changes in NPV based on the indicated interest rate environment (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ Portfolio NPV as Percentage ​ ​ Basis Points ("bp") ​ Portfolio ​ NPV ​ Value of ​ of Portfolio Value ​ Sensitivity ​ Change in Rates ​ Value ​ Change (1) ​ Assets ​ Assets (2) ​ Measure (3) ​ +300 bp ​ $ 136,140 ​ $ (18,905) ​ $ 1,247,388 10.91 % (124) bp +200 bp ​ $ 149,344 ​ $ (5,701) ​ $ 1,263,834 11.82 % (33) bp +100 bp ​ $ 156,040 ​ $ 995 ​ $ 1,273,820 12.25 % 10 bp - ​ $ 155,045 ​ $ — ​ $ 1,276,171 12.15 % — ​ -100 bp ​ $ 153,594 ​ $ (1,451) ​ $ 1,278,122 12.02 % (13) bp -200 bp ​ $ 141,899 ​ $ (13,146) ​ $ 1,269,888 11.17 % (98) bp -300 bp ​ $ 141,857 ​ $ (13,188) ​ $ 1,273,364 ​ 11.14 % (101) bp ​ (1) Represents the (decrease) increase of the NPV at the indicated interest rate change in comparison to the NPV at June 30, 2025 (“base case”).
Removed
In addition, the Corporation maintains an investment portfolio, which is largely comprised of U.S. government agency MBS and U.S. government sponsored enterprise MBS and CMO with contractual maturities of up to 30 years that reprice frequently or have a relatively short-average life.
Added
The increase of the NPV ratios was primarily attributable changes in asset and liability balances, interest rates, and portfolio composition.
Removed
The increase of the NPV ratios was primarily attributable to the net income in fiscal 2024 and amortization of stock-based compensation, partly offset by a $7.0 million cash dividend distribution from the Bank to the Corporation in September 2023, an $824,000 CECL adoption charged to equity, and increases in market interest rates.
Added
Actual experience may vary if assumptions differ or if customers’ behaviors and market conditions change. ​ The impact of changes in prevailing interest rates on the Corporation’s net interest margin will depend on how quickly interest-earning assets and interest-bearing liabilities adjust to rate changes.
Removed
Furthermore, the gap analysis provides a static view of interest rate risk exposure at a specific point in time without taking into account redirection of cash flows activity and deposit fluctuations. ​ The extent to which the net interest margin will be impacted by changes in prevailing interest rates will depend on a number of factors, including how quickly interest-earning assets and interest-bearing liabilities react to interest rate changes.
Added
Rates on certain assets or liabilities may lag behind market rates, and factors such as loan prepayments or early deposit withdrawals can further affect cash flows.
Removed
It is not uncommon for rates on certain assets or liabilities to lag behind changes in the market rates of interest. Additionally, prepayments of loans and early withdrawals of time deposits could cause interest sensitivities to vary.
Added
Management believes the results of the interest rate sensitivity analysis reflect the Corporation’s current asset-liability positioning, but the projected changes in net interest income assume immediate and sustained shifts in market rates and do not include any actions management might take in response.
Removed
As a result, the relationship between interest-earning assets and interest-bearing liabilities, as shown in the previous table, is only a general indicator of interest rate sensitivity and the effect of changing interest rates on net interest income.
Removed
Therefore, in a rising interest rate environment, the model projects a decrease in net interest income over the subsequent 12-month period.
Removed
However, past experience has shown that immediate, permanent and parallel movements in interest rates will not 65 Table of Contents necessarily occur.

Other PROV 10-K year-over-year comparisons