Provident Increases 1Q Profit After Revising Results

Provident Financial Holdings (PROV) in Riverside, Calif., has increased its fiscal-year first-quarter earnings after uncovering an accounting error.

The $1.3 billion-asset company increased its net income by $825,000, to $8.73 million, from the previously reported $7.91 million for the quarter that ended Sept. 30, Provident said Thursday. Earnings per share increased to 80 cents from 72 cents.
 
In August, the company received notice that it had previously overpaid taxes and underestimated its deferred tax liability because of an accounting method change related to the company’s adjustment to certain items for tax reporting purposes from 2006 through 2007.
 
Provident reversed the $825,000 tax liability recorded in the quarter that ended June 30. The company had incorrectly recorded the tax liability recovery to retained earnings in the stockholders’ equity section rather than in the provision for income taxes. This decreased the provision for income taxes and increased net income.

The change increased the company’s return on average assets to 2.78% from the previously reported 2.52% and return on average stockholders’ equity to 23.76% from 21.51%.