PROVIDENT FINANCIAL HOLDINGS INC - Quarter Report: 2002 December (Form 10-Q)

Interest expense on deposits for the quarter ended December 31, 2002 was $4.2 million as compared to $6.3 million for the same period of fiscal 2002, a decrease of $2.1 million, or 33 percent. The decrease in interest expense on deposits was primarily attributable to a lower average cost, partially offset by a higher average balance. The average cost of deposits decreased to 2.34 percent during the quarter ended December 31, 2002 from 3.52 percent during the same quarter of fiscal 2002, a decline of 118 basis points. The decline in the average cost of deposits was attributable to the general decline in interest rates and also to the change in the composition of the deposits. The average balance of transaction accounts increased to 52 percent of total deposits in the second quarter of fiscal 2003, compared to 42 percent of the total deposits in the same period of fiscal 2002. Average deposits increased $4.0 million, or 1 percent, to $709.4 million during the quarter ended December 31, 2002 from $705.4 million during the same period of fiscal 2002.

Interest expense on borrowings for the quarter ended December 31, 2002 was $3.1 million as compared to $3.9 million for the same period of fiscal 2002, a decrease of $775,000, or 20 percent. The decrease in interest expense on borrowings was primarily due to a lower average cost, partially offset by a higher average balance. The average cost of borrowings decreased to 4.29 percent for the quarter ended December 31, 2002 from 6.26 percent in the same quarter of fiscal 2002, a decline of 197 basis points. The decline in the average cost of borrowings was primarily attributable to the utilization of overnight funding with an average balance of $81.8 million and an average cost of 1.49 percent in the second quarter of fiscal 2003 as compared to no overnight funding in the same quarter of fiscal 2002. In addition, $5.0 million of long-term advances with an average cost of 6.71 percent matured while $30.0 million of new long-term advances with an average cost of 3.30 percent were added in the second quarter of fiscal 2003. The average balance of borrowings was $289.8 million during the quarter ended December 31, 2002 as compared to $247.8 million for the same quarter of fiscal 2002, an increase of $42.0 million, or 17 percent.

For the six months ended December 31, 2002, total interest expense decreased $7.0 million, or 32 percent, to $14.9 million as compared to $21.9 million for the same period of fiscal 2002. The decrease in total interest expense was primarily attributable to a lower average cost and a lower average balance. The average cost of interest-bearing liabilities decreased 137 basis points to 3.13 percent during the first six months of fiscal 2003 as compared to 4.50 percent during the same period of fiscal 2002. The average balance of interest-bearing liabilities during the six-month period of fiscal 2003 decreased $23.7 million, or 2 percent, to $942.0 million as compared to $965.7 million during the same period of fiscal 2002.

For the six months ended December 31, 2002, interest expense on deposits decreased $5.2 million, or 37 percent, to $8.7 million as compared to $13.9 million for the same period of fiscal 2002. The decrease in interest expense on deposits was primarily a result of a lower average balance and a lower average cost. The average cost of deposits decreased $15.2 million, or 2 percent, to $697.3 million in the first six months of fiscal 2003 as compared to $712.5 million during the same period of fiscal 2002. The average cost of deposits decreased 138 basis points to 2.48 percent during the first six months of fiscal 2003 as compared to 3.86 percent during the same period of fiscal 2002. The decline in the average cost was attributable to the general decline in interest rates and also to the change in the composition of deposits. The average balance of transaction deposits increased to 52 percent of total deposits in the first six months of fiscal 2003, compared to 41 percent of the total deposits in the same period of fiscal 2002.

For the six months ended December 31, 2002, interest expense on borrowings decreased $1.9 million, or 23 percent, to $6.2 million as compared to $8.1 million for the same period of fiscal 2002. The decrease in interest expense on borrowings was primarily attributable to a lower average cost and a lower average balance. The average cost of borrowings decreased 133 basis points to 4.99 percent during the first six months of fiscal 2003 as compared to 6.32 percent during the same period of fiscal 2002. The average balance of borrowings decreased $8.5 million, or 3 percent, to $244.7 million in the first six months of fiscal 2003 as compared to $253.2 million during the same period of fiscal 2002. A decline in the average cost of borrowings was primarily a result of increased overnight funding with an average balance of $52.0 million and an average cost of 1.55 percent in the first six months of fiscal 2003 as compared to no overnight funding in the same period of fiscal 2002. In addition, $25.0 million of long-term advances with an average cost of 6.56 percent matured while $70.0 million of new long-term advances with an average cost of 3.56 percent were added in the first six months of fiscal 2003. The Bank prepaid $20.0 million of long-term advances with an average cost of 6.52 percent and paid interest penalties of $298,000 in the first six months of fiscal 2003 as compared to the prepayment of $10.0 million of long-term advances with an

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average cost of 6.93 percent and the payment of interest penalties of $55,000 in the same period of fiscal 2002.

The following table depicts the average balance sheets for the quarter and six months ended December 31, 2002 and 2001, respectively:

Average Balance Sheets
(Dollars in thousands)

	Quarter Ended December 31, 2002			Quarter Ended December 31, 2001
	Average Balance	Interest	Yield/ Cost	Average Balance	Interest	Yield/ Cost
Interest-earning assets:
Loans receivable, net (1)	$   751,270	$    12,471	6.64%	$   694,222	$    13,002	7.49%
Investment securities	302,671	2,478	3.27%	247,856	3,264	5.27%
FHLB stock (2)	16,044	201	5.01%	15,640	182	4.65%
Interest-earning deposits	954	3	1.26%	67,519	354	2.10%
Total interest-earning assets	1,070,939	15,153	5.66%	1,025,237	16,802	6.56%
Non interest-earning assets	76,172			54,126
Total assets	$  1,147,111			$  1,079,363
Interest-bearing liabilities:
Checking and money market deposits	$   190,156	380	0.79%	$   169,340	643	1.51%
Savings deposits	180,864	993	2.18%	127,406	707	2.20%
Time deposits	338,422	2,810	3.29%	408,627	4,908	4.77%
Total deposits	709,442	4,183	2.34%	705,373	6,258	3.52%
Borrowings	289,753	3,135	4.29%	247,790	3,910	6.26%
Total interest-bearing liabilities	999,195	7,318	2.91%	953,163	10,168	4.23%
Non interest-bearing liabilities	46,251			26,297
Total liabilities	1,045,446			979,460
Stockholders' equity	101,665			99,903
Total liabilities and stockholders'    equity	$  1,147,111			$  1,079,363
Net interest income		$      7,835			$      6,634
Interest rate spread (3)			2.75%			2.32%
Net interest margin (4)			2.93%			2.59%
Ratio of average interest-earning    assets to average interest-bearing    liabilities			107.18%			107.56%
Return on average assets			1.36%			0.92%
Return of average equity			15.30%			9.95%

(1)   Includes loans held for sale and receivable from sale of loans.
(2)   Includes dividend accrual adjustments in the second quarter of fiscal 2003 and 2002 totaling $30,000 and $13,000, respectively,
       resulting from the actual dividend received for the prior period; excluding the adjustments, the average yield would have been 4.26 percent
       and 4.32 percent, respectively.
(3)   Represents the difference between weighted average yield on all interest-earning assets and weighted average rate on all
       interest-bearing liabilities.
(4)   Represents net interest income before provision for loan losses as a percentage of average interest-earning assets.

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Average Balance Sheets
(Dollars in thousands)

	Six Months Ended December 31, 2002			Six Months Ended December 31, 2001
	Average Balance	Interest	Yield/ Cost	Average Balance	Interest	Yield/ Cost
Interest-earning assets:
Loans receivable, net (1)	$   711,968	$    24,205	6.80%	$   730,251	$    27,555	7.55%
Investment securities	289,051	5,157	3.57%	232,044	6,635	5.72%
FHLB stock (2)	14,234	393	5.52%	15,837	383	4.84%
Interest-earning deposits	1,243	9	1.45%	60,422	812	2.69%
Total interest-earning assets	1,016,496	29,764	5.86%	1,038,554	35,385	6.81%
Non interest-earning assets	65,697			53,583
Total assets	$  1,082,193			$  1,092,137
Interest-bearing liabilities:
Checking and money market deposits	$   185,021	816	0.87%	$   166,468	1,442	1.72%
Savings deposits	176,533	1,924	2.16%	124,351	1,580	2.52%
Time deposits	335,713	5,966	3.53%	421,705	10,834	5.10%
Total deposits	697,267	8,706	2.48%	712,524	13,856	3.86%
Borrowings (3)	244,700	6,152	4.99%	253,222	8,067	6.32%
Total interest-bearing liabilities	941,967	14,858	3.13%	965,746	21,923	4.50%
Non interest-bearing liabilities	37,797			27,209
Total liabilities	979,764			992,955
Stockholders' equity	102,429			99,182
Total liabilities and stockholders'    equity	$  1,082,193			$  1,092,137
Net interest income		$      14,906			$      13,462
Interest rate spread (4)			2.73%			2.31%
Net interest margin (5)			2.93%			2.59%
Ratio of average interest-earning    Assets to average interest-bearing    liabilities			107.91%			107.54%
Return on average assets			1.40%			0.86%
Return of average equity			14.81%			9.45%

(1)   Includes loans held for sale and receivable from sale of loans.
(2)   Includes dividend accrual adjustments in the first six months of fiscal 2003 and 2002 totaling $58,000 and a reversal of $8,000,
       respectively, resulting from the actual dividend received for the prior period; excluding the adjustments, the average yield would have been
       4.71 percent and 4.94 percent, respectively.
(3)   Includes the FHLB interest penalties in the first half of fiscal 2003 and 2002 of $298 and $55, respectively; excluding the prepayments,
       the cost of borrowings would have been 4.75 percent and 6.28 percent, respectively.
(4)   Represents the difference between weighted average yield on all interest-earning assets and weighted average rate on all
       interest-bearing liabilities.
(5)   Represents net interest income before provision for loan losses as a percentage of average interest-earning assets.

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The following tables provide the rate/volume variances for the quarters and six months ended December 31, 2002 and 2001, respectively:

Rate/Volume Variance
(Dollars in thousands)

	Quarter Ended December 31, 2002 Compared to Quarter Ended December 31, 2001 Increase (Decrease) Due to
	Rate	Volume	Rate/ Volume	Net
Interest income:
Loans receivable (1)	$   (1,478)	$    1,068	$     (121)	$     (531)
Investment securities	(1,234)	722	(274)	(786)
FHLB stock	14	5	--	19
Interest-bearing deposits	(142)	(349)	140	(351)
Total net change in income     on interest-earning assets	(2,840)	1,446	(255)	(1,649)
Interest-bearing liabilities:
Savings accounts	(304)	79	(38)	(263)
Demand and NOW accounts	(7)	296	(3)	286
Certificates of deposit	(1,516)	(844)	262	(2,098)
Borrowings	(1,229)	662	(208)	(775)
Total net change in expense on     interest-bearing liabilities	(3,056)	193	13	(2,850)
Net change in net interest     (loss) income	$      216	$    1,253	$     (268)	$    1,201

(1)   Includes loans held for sale and receivable from sale of loans. For purposes of calculating volume, rate and
        rate/volume variances, non-accrual loans were included in the weighted average balance outstanding.

	Six Months Ended December 31, 2002 Compared to Six Months Ended December 31, 2001 Increase (Decrease) Due to
	Rate	Volume	Rate/ Volume	Net
Interest income:
Loans receivable (1)	$   (2,729)	$    (690)	$     69	$     (3,350)
Investment securities	(2,495)	1,630	(613)	(1,478)
FHLB stock	54	(39)	(5)	10
Interest-bearing deposits	(374)	(796)	367	(803)
Total net change in income     on interest-earning assets	(5,544)	105	(182)	(5,621)
Interest-bearing liabilities:
Savings accounts	(708)	161	(79)	(626)
Demand and NOW accounts	(224)	663	(95)	344
Certificates of deposit	(3,338)	(2,211)	681	(4,868)
Borrowings	(1,700)	(272)	57	(1,915)
Total net change in expense on     interest-bearing liabilities	(5,970)	(1,659)	564	(7,065)
Net change in net interest     (loss) income	$      426	$    1,764	$     (746)	$    1,444

(1)   Includes loans held for sale and receivable from sale of loans. For purposes of calculating volume, rate and
        rate/volume variances, non-accrual loans were included in the weighted average balance outstanding.

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Provision for Loan Losses. A $565,000 loan loss provision was recorded during the second quarter of fiscal 2003, as compared to $126,000 during the same period of fiscal 2002. The increase in the provision was primarily a result of the sequential quarter growth in loans held for investment, a higher proportion of “preferred” loans in the loans held for investment and specific loan loss provisions, totaling $233,000 for commercial business loans to two borrowers. For six months ended December 31, 2002, a $765,000 of loan loss provisions was recorded as compared to $246,000 for the same period of fiscal 2002.

The allowance for loan losses was $7.4 million at December 31, 2002 as compared to $6.6 million at June 30, 2002. The allowance for loan losses as a percentage of gross loans held for investment was 1.08 percent at December 31, 2002 as compared to 1.10 percent at June 30, 2002.

The allowance for loan losses is maintained at a level sufficient to provide for estimated losses based on evaluating known and inherent risks in the loan portfolio and upon management's continuing analysis of the factors underlying the quality of the loan portfolio. These factors include changes in the size and composition of the loan portfolio, actual loan loss experience, current economic conditions, detailed analysis of individual loans for which full collectibility may not be assured, and determination of the realizable value of the collateral securing the loans. Provisions for losses are charged against operations on a monthly basis as necessary to maintain the allowance at appropriate levels. Management believes that the amount maintained in the allowance will be adequate to absorb losses inherent in the portfolio. Although management believes it uses the best information available to make such determinations, there can be no assurance that regulators, in reviewing the Corporation's loan portfolio, will not request the Corporation to increase significantly its allowance for loan losses. Future adjustments to the allowance for loan losses may be necessary and results of operations could be significantly and adversely affected due to economic, operating, regulatory, and other conditions beyond the control of the Corporation.

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The following table is provided to disclose additional details on the Corporation's allowance for loan losses and asset quality:

	For the Quarter Ended December 31,		For the Six Months Ended December 31,
	2002	2001	2002	2001
Allowance at beginning of period	$   6,794	$   6,255	$   6,579	$   6,068
Provision for loan and lease losses	565	126	765	246
Recoveries:
Mortgage loans:
Single-family	--	19	--	19
Multi-family	--	--	--	67
Commercial real estate	--	--	--	--
Construction	--	--	--	--
Commercial business loans	--	--	--	--
Consumer loans	21	--	41	--
Total recoveries	21	19	41	86
Charge-offs:
Mortgage loans:
Single-family	(16)	(9)	(16)	(9)
Multi-family	--	--	--	--
Commercial real estate	--	--	--	--
Construction	--	--	--	--
Commercial business loans (1)	--	(20)	--	(20)
Consumer loans	(3)	(3)	(8)	(3)
Total charge-offs	(19)	(32)	(24)	(32)
Net (charge-offs) recoveries	2	(13)	17	54
Balance at end of period	$   7,361	$   6,368	$   7,361	$   6,368
Allowance for loan and lease losses as a percentage of gross loans held for investment	1.08%	1.06%	1.08%	1.06%
Net charge-offs as a percentage of average loans outstanding during the period	--	0.01%	-0.01%	-0.03%
Allowance for loan and lease losses as a percentage of non-performing loans at the end of the period	481.43%	500.24%	481.43%	500.24%

(1)   Reclassifications of charge-off amounts and recovery amounts have been made to those amounts previously reported
       in the second quarter ended and for the six months ended in fiscal 2002 to comply with the current reporting
       practices of the Corporation as stated in the Form 10-K ended June 30, 2002.

Non-Interest Income. Total non-interest income increased $1.9 million, or 44 percent, to $6.2 million during the quarter ended December 31, 2002 from $4.3 million during the same period of fiscal 2002. The increase in non-interest income was primarily attributable to an increase in the gain on sale of loans.

The gain on sale of loans increased $2.0 million, or 69 percent, to $4.9 million for the quarter ended December 31, 2002 from $2.9 million during the same quarter of fiscal 2002. This increase was primarily

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the result of a higher average loan sale margin, partly offset by a lower volume of loans originated for sale and an unfavorable SFAS No. 133 adjustment. Included in the gain on sale of loans was an unfavorable SFAS No. 133 adjustment of $248,000 in the second quarter of fiscal 2003 as compared to a favorable adjustment of $6,000 in the same quarter of fiscal 2002. The average loan sale margin during the second quarter of fiscal 2003 was 1.61 percent as compared to 0.83 percent during the same period of fiscal 2002. The higher loan sale margin was primarily due to the high demand for mortgage loans, an improved product mix (a larger percentage of loans sold with a higher loan sale margin) and better execution in the sale of loans. Total loans originated for sale during the second quarter of fiscal 2003 decreased $13.3 million, or 4 percent, to $322.0 million as compared to $335.3 million in the same period of fiscal 2002. The decrease in the loans originated for sale was a result of a larger portion of loan origination volume retained as loans held for investment. Total loan originations, which included $16.2 million of purchased loans, were $481.3 million in the second quarter of fiscal 2003 as compared to $399.7 million, which included $9.6 million of purchased loans, in the same period in fiscal 2002. Loan originations held for investment, including purchased loans, were $159.3 million in the second quarter of fiscal 2003, compared to $64.4 million in the same period in fiscal 2002.

The average profit margin for PBM in the second quarter of fiscal 2003 and 2002 was 109 basis points and 56 basis points, respectively. The average profit margin is defined as income before taxes divided by total loans funded during the period (including brokered loans) adjusted for the change in commitments to extend credit. There were three main reasons for the increase of the profit margin. The first reason was the emphasis on originating the most profitable mortgage loan products. The second reason was the economies of scale realized by producing larger loan volumes with relatively fixed operating expenses. The third reason was the extraordinary pricing opportunities given the consumer demand for mortgage loan products during the period.

For the six months ended December 31, 2002, total non-interest income increased $4.3 million, or 54 percent, to $12.3 million from $8.0 million during the same period of fiscal 2002. The increase in non-interest income was primarily attributable to an increase in the gain on sale of loans.

For the six months ended December 31, 2002, the gain on sale of loans increased $3.9 million, or 76 percent, to $9.0 million from $5.1 million during the same period of fiscal 2002. This increase was primarily as a result of a higher average loan sale margin, a higher volume of loans originated for sale and a favorable SFAS No. 133 adjustment. Included in the gain on sale of loans was a favorable SFAS No. 133 adjustment of $38,000 in the first six months of fiscal 2003 as compared to an unfavorable adjustment of $293,000 in the same period of fiscal 2002. The average loan sale margin during the first six months of fiscal 2003 was 1.53 percent as compared to 0.77 percent during the same period of fiscal 2002. The higher loan sale margin was primarily due to the high demand for mortgage loans, an improved product mix (a larger percentage of loans sold with a higher loan sale margin) and better execution in the sale of loans. Total loans originated for sale during the first six months of fiscal 2003 decreased $26.5 million, or 5 percent, to $577.9 million as compared to $604.4 million in the same period of fiscal 2002. The decrease in the loans originated for sale was a result of a larger portion of loan origination volume retained as loans held for investment. Total loan originations, which included $28.3 million of purchased loans, were $866.5 million in the first half of fiscal 2003 as compared to $708.6 million, which included $19.4 million of purchased loans, in the same period in fiscal 2002. Loan originations held for investment, including purchased loans, were $288.6 million in the second quarter of fiscal 2003, compared to $104.2 million in the same period in fiscal 2002.

The average profit margin for PBM in the first six months of fiscal 2003 and 2002 was 103 basis points and 54 basis points, respectively. For additional detail on PBM operations refer to “Note 3: Operating Segment Reports”.

Non-Interest Expense. Total non-interest expense increased $487,000, or 7 percent, to $7.1 million in the quarter ended December 31, 2002 from $6.6 million in the same quarter of fiscal 2002. This increase was primarily attributable to an increase in premises and occupancy expenses and an increase in loan production related expenses, such as commissions paid to loan agents, employee incentives and other loan origination expenses. These increases were partially offset by a decrease in equipment and marketing expenses. The efficiency ratio in the second quarter of fiscal 2003 improved to 50 percent as compared to 60 percent during the same period of fiscal 2002.

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For the six months ended December 31, 2002, total non-interest expense increased $563,000, or 4 percent, to $13.8 million from $13.2 million during the same period of fiscal 2002. This increase was primarily attributable to an increase in premises and occupancy expenses and an increase in loan production related expenses, such as commissions paid to loan agents, employee incentives and other loan origination expenses. These increases were partially offset by a decrease in equipment expenses. For the six months ended December 31, 2002, the efficiency ratio improved to 51 percent from 61 percent during the same period of fiscal 2002.

Income taxes. Income tax expense was $2.5 million for the quarter ended December 31, 2002 as compared to $1.8 million during the same period of fiscal 2002. In December 2002, the Corporation filed an amended state tax return for fiscal 2000 resulting in a $78,000 refund. This amount was recorded as a receivable in December 2002. The effective tax rate for the quarters ended December 31, 2002 and 2001 was approximately 39 percent and 42 percent, respectively.

For the six months ended December 31, 2002, income tax expense was $5.1 million as compared to $3.3 million during the same period of fiscal 2002. The effective tax rate for the first six months ended December 31, 2002 and 2001 was approximately 40 percent and 42 percent, respectively.


Asset Quality. Non-accrual loans, which primarily consisted of single-family loans, increased $256,000, or 20 percent, to $1.5 million at December 31, 2002 from $1.3 million at December 31, 2001. No interest accruals were made for loans that were past due 90 days or more.

The non-accrual and 90 days or more past due loans as a percentage of net loans held for investment increased to 0.23 percent at December 31, 2002 from 0.21 percent at December 31, 2001. Non-performing assets, including real estate owned, as a percentage of total assets increased slightly to 0.17 percent at December 31, 2002 from 0.16 percent at December 31, 2001. The increase in the non-performing assets at December 31, 2002 was due primarily to the addition of three non-accrual loans, of which, two were commercial business loans to a single borrower and one was a consumer loan. In the second quarter of fiscal 2003, a specific loan loss allowance of $233,000 was established for four commercial business loans to two borrowers.

The Corporation reviews loans individually and identifies when impairment has occurred. Loans are identified as impaired when it is deemed probable that the borrower will be unable to meet the scheduled principal and interest payments under the terms of the loan agreement. Impairment is based on the present value of expected future cash flows discounted at the loan's effective interest rate, except that as a practical expedient, the Corporation may measure impairment based on a loan's observable market price or the fair value of the collateral if the loan is collateral dependent.

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The following table is provided to disclose details on asset quality (dollars in thousands):

	At December 31,		At December 31,
	2002		2001
Loans accounted for on a non-accrual basis:
Mortgage loans:
Single-family		$    1,236		$    1,259
Multi-family		--		--
Commercial real estate		--		--
Construction		--		--
Commercial business loans		195		--
Consumer loans		98		14
Other loans		--		--
Total		1,529		1,273
Accruing loans which are contractually past due 90 days or more:
Mortgage loans:
Single-family		--		--
Multi-family		--		--
Commercial real estate		--		--
Construction		--		--
Commercial business loans		--		--
Consumer loans
Other loans		--		--
Total		--		--
Total of non-accrual and 90 days past due loans		1,529		1,273
Real estate owned		488		443
Total non-performing assets		$    2,017		$    1,716
Restructured loans		--		$    1,419
Non-accrual and 90 days or more past due loans    as a percentage of loans held for    investment, net		0.23%		0.21%
Non-accrual and 90 days or more past due loans    as a percentage of total assets		0.13%		0.12%
Non-performing assets as a percentage of    total assets		0.17%		0.16%

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The following table is provided to disclose details related to the volume of loans originated, purchased and sold:

Loan Volume Activities
(Dollars in thousands)

	For the Quarter Ended December 31,		For the Six Months Ended December 31,
	2002	2001	2002	2001
Loans originated for sale:
Retail originations	$ 122,355	$ 134,119	$ 219,617	$ 236,360
Wholesale originations	199,633	201,179	358,322	367,993
Total loans originated for sale	321,988	335,298	577,939	604,353
Loans sold:
Servicing released	(303,273)	(312,151)	(537,640)	(647,586)
Servicing retained	(3,202)	(571)	(8,796)	(2,071)
Total loans sold	(306,475)	(312,722)	(546,436)	(649,657)
Loans originated for portfolio:
Mortgage loans:
Single-family	104,505	34,735	186,057	42,939
Multi-family	--	1,298	375	2,994
Commercial real estate	17,013	3,320	31,443	7,470
Construction	20,185	13,712	39,128	28,039
Commercial business loans	810	1,467	1,821	1,964
Consumer loans	--	30	--	30
Other loans	579	312	1,450	1,367
Total loans originated for portfolio	143,092	54,874	260,274	84,803
Loans purchased for portfolio:
Mortgage loans:
Multi-family	4,570	--	4,570	1,590
Commercial real estate	2,530	800	7,592	800
Construction	9,103	8,766	16,130	17,011
Total loans purchased for portfolio	16,203	9,566	28,292	19,401
Mortgage loan principal repayments	(111,140)	(106,278)	(205,716)	(199,541)
Real estate acquired in settlement of loans	--	(313)	(649)	(406)
Decrease (increase) in receivable from     sale of loans	(26,438)	(23,318)	(37,327)	43,448
Increase (decrease) in other items, net (1)	3,709	(1,198)	6,405	(2,971)
Net increase (decrease) in loans held for     investment and loans held for sale	$  40,939	$  (44,091)	$  82,782	$ (100,570)

(1)   Includes changes in loans in process, discounts, deferred fees and costs and allowances for loan losses.

Liquidity and Capital Resources. The Corporation's primary sources of funding includes deposits, proceeds from loan principal and interest payments, sales of loans, the maturity of, principal payments on and interest income on investment securities, and FHLB advances. While maturities and scheduled amortization of loans are predictable sources of funds, deposit flows, loan sales, and mortgage prepayments are greatly influenced by interest rates, economic conditions, and competition.

The Bank has a standard credit facility available from the FHLB of San Francisco equal to 40 percent of its total assets, collateralized by loans and securities. As of December 31, 2002, the Bank's available credit facility from the FHLB was $133.8 million. In addition to the FHLB credit facility, the Bank has an unsecured line of credit in the amount of $45.0 million with its correspondent bank. Additionally, selling

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available for sale investment securities can also generate liquidity, which total $190.2 million as of December 31, 2002.

The Bank must maintain an adequate level of liquidity to ensure the availability of sufficient funds to support loan growth and deposit withdrawals, to satisfy financial commitments and to take advantage of investment opportunities. The Bank generally maintains sufficient cash to meet short-term liquidity needs. At December 31, 2002, cash and cash equivalents totaled $34.1 million, or 3 percent of total assets. Depending on market conditions and the pricing of deposit products and FHLB borrowings, the Bank may rely on FHLB borrowings or unsecured lines of credit for its liquidity needs.

Although the OTS eliminated the minimum liquidity requirement for savings institutions in April 2001, regulation still requires thrifts to maintain adequate liquidity to assure safe and sound operation. The Bank's average liquidity ratio for the quarter ended December 31, 2002 decreased to 36 percent from 39 percent during the same period ending December 31, 2001. This decrease was primarily due to the redeployment of available cash flows into loans held for investment or non-qualifying investments.

The Bank continues to experience a large volume of loan prepayments in its loan portfolio and it continues to be a challenge to reinvest these cash flows in assets that carry similar or better interest rate risk characteristics. The recent refinance market has been dominated by fixed rate loans and the Bank does not add long-term fixed rate loans to its portfolio particularly when interest rates are at or near historical lows. Therefore, while the Bank has taken steps to address the issue of rising liquidity levels, the Bank finds that a larger percentage of its earning assets are invested at significantly lower rates than the Bank would like. The Bank has mitigated the impact of this in several ways. The Bank has increased the balance of the investment securities portfolio, generated more loans for portfolio from its mortgage banking, business banking and major loan divisions, and purchased commercial real estate and construction loans from other financial institutions. This has been accomplished with prudent interest-rate-risk management practices.

The Bank is committed to changing the loan portfolio composition with more emphasis on multi-family, commercial real estate, construction and commercial business loans (“preferred” loans). These loans generally have higher yields than single-family loans. During the second quarter of fiscal 2003, the volume of loans generated for portfolio increased $94.9 million, or 147 percent, to $159.3 million as compared to $64.4 million in the comparable period last year. Of the total loans generated for portfolio, $54.2 million, or 34 percent were “preferred” loans. For the first six months of fiscal 2003, the volume of loans generated for portfolio increased $184.4 million, or 177 percent, to $288.6 million as compared to $104.2 million in the comparable period last year. Of the total loans generated for portfolio, $101.1 million, or 35 percent were “preferred” loans.

The Bank is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum requirements can initiate certain mandatory actions by regulators that, if undertaken, could have a direct material effect on the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet certain specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

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The Bank's actual and required capital amounts and ratios as of December 31, 2002 are as follows (dollars in thousands):

	Amount	Percent
Tangible capital	$ 74,328	6.41%
Requirement	23,198	2.00%
Excess over requirement	$ 51,130	4.41%
Tier 1 (core) capital	$ 74,328	6.41%
Requirement to be “Well Capitalized”	$ 57,995	5.00%
Excess over requirement	$ 16,333	1.41%
Total risk-based capital	$ 81,184	13.12%
Requirement to be “Well Capitalized”	$ 61,860	10.00%
Excess over requirement	$ 19,324	3.12%
Tier 1 risk-based capital	$ 74,328	12.02%
Requirement to be “Well Capitalized”	$ 37,116	6.00%
Excess over requirement	$ 37,212	6.02%

Commitments and Derivatives. The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, in the form of originating loans or providing funds under existing lines of credit, and forward loan sale agreements to third parties. These instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amount recognized in the accompanying consolidated statements of financial condition. The Corporation's exposure to credit loss, in the event of non-performance by the counter party to these financial instruments, is represented by the contractual amount of these instruments. The Corporation uses the same credit policies in making commitments to extend credit as it does for on-balance sheet instruments.

Commitments	December 31, 2002	June 30, 2002
(In Thousands)
Undisbursed loan funds - Construction loans	$ 36,126	$ 30,536
Undisbursed loan funds - Construction loans serviced by    others	13,484	18,777
Undisbursed lines of credit - Commercial business loans	8,387	10,285
Undisbursed lines of credit - Consumer loans	10,972	11,730
	$   68,969	$   71,328

Commitments to extend credit are agreements to lend money to a customer at some future date as long as all conditions have been met in the agreement. These commitments generally have expiration dates within 60 days of the commitment date and may require the payment of a fee. Since some of these commitments are expected to expire, the total commitment amount outstanding does not necessarily represent future cash requirements. The Corporation evaluates each customer's creditworthiness on a case-by-case basis prior to issuing a commitment. Interest rates on commitments to extend credit ranged from 4.00% to 11.50% at December 31, 2002 as compared to 6.00% to 14.50% at June 30, 2002. Commitments to extend credit on loans to be held for investment were $16.4 million at December 31, 2002 as compared to $18.2 million at June 30, 2002.

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In an effort to minimize its exposure to interest rate fluctuations on commitments to extend credit where the underlying loan will be sold, the Corporation enters into forward loan sale agreements to sell certain dollar amounts of fixed rate and adjustable rate loans to third parties. These agreements specify the minimum maturity of the loans, the yield to the purchaser, the servicing spread to the Corporation (if servicing is retained), the maximum principal amount of all loans to be delivered and the maximum principal amount of individual loans to be delivered. The Corporation typically satisfies these forward loan sale agreements with its current loan production; at December 31, 2002 and June 30, 2002 the aggregate amount of loans held for sale and of commitments to extend credit on loans to be sold exceeded the Corporation's forward loan sale agreements, due to the commitments to extend credit which may not fund. Interest rates on forward loan sale agreements ranged from 4.50 percent to 6.00 percent at December 31, 2002 as compared to 5.50 percent to 7.00 percent at June 30, 2002.

In addition to the instruments described above, the Corporation also purchases over-the-counter put option contracts (with expiration dates that generally coincide with the terms of the commitments to extend credit) which mitigate the interest rate risk inherent in commitments to extend credit. The contract amount of these instruments reflects the extent of involvement the Corporation has in this particular class of financial instruments. The Corporation's exposure to loss on these financial instruments is limited to the premiums paid for the put option contracts. Put options are adjusted to market in accordance with SFAS No. 133.

In accordance with SFAS No. 133 and interpretations of the FASB's Derivative Implementation Group, the fair value of the commitments to extend credit on loans to be held for sale, forward loan sale agreements and put option contracts are recorded at fair value on the balance sheet, and are included in other assets or (other liabilities). The Corporation is not applying hedge accounting to its derivative financial instruments; therefore, all changes in fair value are recorded in earnings. The net impact of derivative financial instruments on the consolidated statements of operations during the quarters ended December 31, 2002 and 2001 was a loss of $248,000 and a gain of $5,000, respectively. For the first six months of fiscal 2003 and 2002, the impact of derivative financial instruments on the consolidated statements of operations was a gain of $38,000 and a loss of $294,000, respectively.

	December 31, 2002		June 30, 2002
Derivative financial instruments	Amount	Fair Value	Amount	Fair Value
(In Thousands)
Commitments to extend credit on loans to be held for    sale, including servicing released premiums (1) (2)	$   61,212	$    1,235	$   56,738	$     779
Forward loan sale agreements	59,024	(438)	45,709	(237)
Put option contracts	12,500	13	11,000	17
Total	$  132,736	$     810	$  113,447	$     559

(1)   Net of an estimated 34.3% of commitments at December 31, 2002 and 26.7% of commitments at June 30, 2002,
       which may not fund.
(2)   The fair value of servicing released premiums at December 31, 2002 and June 30, 2002 were $916 and
       $702, respectively.

Stockholders' Equity. The ability of the Corporation to pay dividends depends > primarily on the >ability of the Bank to pay dividends to the Corporation. The >Bank may not declare or pay a cash dividend if the effect thereof >would cause its net worth to be reduced below either the amounts required >for its liquidation account or the regulatory capital requirements imposed >by federal and state regulation. On October 28, 2002, the Corporation's Board of Directors declared a quarterly dividend of $0.05 per share on the Corporation's outstanding shares of common stock; a total of $261,000 was paid on December 6, 2002 to shareholders of record on November 15, 2002. Subsequently, a quarter cash dividend was also approved by the Corporation's Board of Directors on January 29, 2003, which is described in Note 5 of the Selected Notes to Unaudited Interim Financial Statements.

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Consistent with the 10 Percent Stock Repurchase Plan announced in September of 2002, 192,000 shares, or 36 percent, of 529,000 shares were repurchased during the second quarter of fiscal 2003. As of December 31, 2002, a total of 267,000 shares or 50 percent of the September 2002 stock repurchase plan were repurchased with an average cost of $25.94 per share. Year to date, the Corporation has repurchased 446,700 shares with an average cost of $24.85 per share. During the second quarter of fiscal 2003, the Bank paid cash dividends of $10.6 million to the Corporation for the primary purpose of funding the Stock Repurchase Plan and cash dividends declared to shareholders. Year to date, the Bank paid $23.2 million of cash dividends to the Corporation.


Stock Option Plan and Management Recognition Plan. Pursuant to the Stock Option Plan, options vest at a rate of 20 percent per year over a five-year period. In the second quarter of fiscal 2003, no options were granted, while 16,875 options were exercised. As of December 31, 2002, a total of 637,625 options were outstanding with an average exercise price of $11.52 per share and an average remaining life of 5.36 years.

Pursuant to the Management Recognition Plan, the restricted shares awarded under the plan vest at a rate of 20 percent per year over a five-year period. In the second quarter of fiscal 2003, no MRP shares were awarded. As of December 31, 2002, a total of 33,329 shares were allocated and outstanding, pending their respective distribution schedules.


Supplemental Information

	December 31, 2002	June 30, 2002	December 31, 2002
Loans serviced for others (in thousands)	$  108,724	$  136,059	$  170,261
Book value per share	$      19.91	$      18.86	$      17.99

Forward-Looking Statements

Certain matters in this quarterly report on Form 10-Q for the quarter ended December 31, 2002 constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among others, expectations of the business environment in which the Corporation operates, projections of future performance, perceived opportunities in the market, potential future credit experience, and statements regarding the Corporation's mission and vision. These forward-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties. The Corporation's actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements due to a wide range of factors including, but not limited to, the general business environment, interest rates, the California real estate market, competitive conditions between banks and non-bank financial services providers, regulatory changes, and other risks detailed in the Corporation's reports filed with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended June 30, 2002. Forward-looking statements are effective only as of the date that they are made and the Corporation assumes no obligation to update this information.

ITEM 3 - Quantitative and Qualitative Disclosures about Market Risk

The principal financial objective of the Corporation's interest rate risk management function is to achieve long-term profitability while limiting its exposure to the fluctuation of interest rates. The Bank, through its Asset and Liability Committee (“ALCO”), has sought to reduce the exposure of its earnings to changes in market interest rates by managing the mismatch between asset and liability maturities. The principal element in achieving this objective is to manage the interest-rate sensitivity of the Bank's assets by holding loans with interest rates subject to periodic market adjustments. In addition, the Bank

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maintains a liquid investment portfolio comprised of government agency securities, including mortgage backed securities, and investment grade securities. The Bank relies on retail deposits as its primary source of funding while utilizing FHLB advances as a secondary source of funding. As part of its interest rate risk management strategy, the Bank promotes transaction accounts and certificates of deposit with terms up to five years.

Through the use of an internal interest rate risk model, the Bank is able to analyze its interest rate risk exposure by measuring the change in Net Portfolio Value (“NPV”) over a variety of interest rate scenarios. NPV is the net present value of expected cash flows from assets, liabilities and off-balance sheet contracts. The calculation is intended to illustrate the change in NPV that would occur in the event of an immediate change in interest rates of at least 100 basis points with no effect given to any steps which management might take to counter the effect of that interest rate movement.

The following table represents the NPV based on the indicated changes in interest rates as of December 31, 2002 (dollars in thousands).

Basis Points ("bp") Change in Rates	Net     Portfolio Value	NPV     Change (1)	Portfolio Value of  Assets	NPV as Percentage of Portfolio Value   Assets (2)	Sensitivity Measure   (3)
+ 300 bp	$ 81,541	$ (15,624)	$ 1,135,800	7.18%	-93 bp
+200 bp	91,827	(5,338)	1,160,538	7.91%	-20 bp
+100 bp	98,111	946	1,181,126	8.31%	20 bp
0 bp	97,165		1,197,993	8.11%
-100 bp	94,886	(2,280)	1,210,178	7.84%	-27 bp
-200 bp	84,701	(12,464)	1,217,238	6.96%	-115 bp

(1)   Represents the (decrease) increase of the NPV at the indicated interest rate change in comparison to the NPV
       at December 31, 2002 (“base case”).
(2)   Calculated as the NPV divided by the Portfolio Value of Assets (“PV Assets”).
(3)   Calculated as the change in the NPV ratio from the base case amount assuming the indicated change in interest
       rates (expressed in basis points).

The following table represents the change in the NPV at a -200 basis point rate shock at December 31, 2002 and a +200 basis point rate shock at June 30, 2002.

Risk measure: +/- 200 basis point rate shock	At December 31, 2002	At June 30, 2002 (1)
	(-200 bps. rate shock)	(+200 bps. rate shock)
Pre-shock NPV ratio: NPV as a % of PV Assets	8.11%	11.71%
Post-shock NPV ratio: NPV as a % of PV Assets	6.96%	10.33%
Sensitivity measure: Change in NPV Ratio	115 bps.	138 bps.

(1)   Based on IRR analysis provided by the OTS.

The results of the internal IRR model are reconciled with the results provided by the OTS on a quarterly basis. Any significant deviations are researched and adjusted where applicable. Historically, the internal model has generally reflected a more conservative position.

As with any method of measuring interest rate risk, certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types of assets and liabilities may lag behind changes in market interest rates. Additionally, certain assets, such as adjustable rate mortgage (“ARM”) loans, have

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features, which restrict changes in interest rates on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, expected rates of prepayments on loans and early withdrawals from certificates of deposit could likely deviate significantly from those assumed when calculating the tables above. It is also possible that, as a result of an interest rate increase; the higher mortgage payments required from ARM borrowers could result in an increase in delinquencies and defaults. Changes in market interest rates may also affect the volume and profitability of the Corporation's mortgage banking operations. Accordingly, the data presented in the tables above should not be relied upon as indicative of actual results in the event of changes in interest rates. Furthermore, the NPV presented in the foregoing tables is not intended to present the fair market value of the Bank, nor does it represent amounts that would be available for distribution to stockholders in the event of the liquidation of the Corporation.


ITEM 4 - Controls and Procedures

(a)	Evaluation of Disclosure Controls and Procedures. An evaluation of the Registrant's disclosure controls and procedure (as defined in Section 13(a)-14(c) of the Securities Exchange Act of 1934 (the “Act”)) was carried out under the supervision and with the participation of the Registrant's Chief Executive Officer, Chief Financial Officer and several other members of the Registrant's senior management within the 90-day period preceding the filing date of this quarterly report. The Registrant's Chief Executive Officer and Chief Financial Officer concluded that the Registrant's disclosure controls and procedures as currently in effect are effective in ensuring that the information required to be disclosed by the Registrant in the reports it files or submits under the Act is (i) accumulated and communicated to the Registrant's management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.
(b)	Changes in Internal Controls. In the quarter ended December 31, 2002, the Registrant did not make any significant changes in, nor take any corrective actions regarding, its internal controls or other factors that could significantly affect these controls.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time the Corporation or its subsidiaries are engaged in legal proceedings in the ordinary course of business, none of which are currently considered to have a material impact on the Corporation's financial position or results of operations.


Item 2. Changes in Securities

Not applicable.


Item 3. Defaults Upon Senior Securities

Not applicable.


Item 4. Submission of Matters to a Vote of Shareholders

A proxy statement dated December 27, 2002 was sent to shareholders of the Corporation to vote at the Annual Meeting of Shareholders of the Corporation held on January 28, 2003 at the Riverside Art Museum, 3425 Mission Inn Avenue, Riverside California.


Item 5. Other Information

Not applicable.

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Item 6. Exhibits and Reports on Form 8-K

a)	Exhibits : 99.1 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act.
b)	Reports on Form 8-K:
	(1)  On October 28, 2002: A quarterly cash dividend of $0.05 per share on the Corporation's outstanding shares        of common stock.
	(2)  On November 22, 2002: The annual meeting of shareholders' announcement.
	(3)  On November 27, 2002: The appointment of a new member to the board of directors of the Corporation        and the Bank.
	(4)  On December 17, 2002: The completion of the acquisition of Valley Bank's Sun City branch office's deposits,        pursuant to the Deposit Purchase and Assumption Agreement announced on August 30, 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Provident Financial Holdings, Inc.
February 12, 2003	/s/ Craig G. Blunden
	Craig G. Blunden Chairman, President and Chief Executive Officer (Principal Executive Officer)
February 12, 2003	/s/ Donavon P. Ternes
	Donavon P. Ternes Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

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CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Craig G. Blunden, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Provident Financial Holdings, Inc.;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b)	evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
	c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
	a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6.	The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: February 12, 2003	/s/ Craig G. Blunden
	Craig G. Blunden Chairman, President and Chief Executive Officer

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CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Donavon P. Ternes, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Provident Financial Holdings, Inc.;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b)	evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
	c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
	a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6.	The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: February 12, 2003	/s/ Donavon P. Ternes
	Donavon P. Ternes Chief Financial Officer

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Exhibit 99.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying quarterly report on Form 10-Q of Provident Financial Holdings, Inc. (the "Corporation") for the period ending December 31, 2002 (the "Report"), I, Craig G. Blunden, Chairman, President and Chief Executive Officer of the Corporation, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

Date: February 12, 2003	/s/ Craig G. Blunden
	Craig G. Blunden Chairman, President and Chief Executive Officer

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CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the accompanying quarterly report on Form 10-Q of Provident Financial Holdings, Inc. (the "Corporation") for the period ending December 31, 2002 (the "Report"), I, Donavon P. Ternes, Chief Financial Officer of the Corporation, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

 

Date: February 12, 2003	/s/ Donavon P. Ternes
	Donavon P. Ternes Chief Financial Officer

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