Market Overview

Provident Financial Holdings Revises Upward First Quarter Fiscal 2013 Earnings

RIVERSIDE, Calif., Nov. 8, 2012 (GLOBE NEWSWIRE) -- Provident Financial Holdings, Inc. ("Company"), (Nasdaq: PROV), the holding company for Provident Savings Bank, F.S.B. ("Bank"), today announced that it has revised upward its first quarter earnings for the fiscal year ending June 30, 2013.

For the quarter ended September 30, 2012, the Company increased its previously reported net income by $825,000 to $8.73 million ($0.80 per diluted share on 10.97 million average shares outstanding) from the previously reported $7.91 million ($0.72 per diluted share on 10.97 million average shares outstanding). The upward revision was made after discovering that an error occurred in accounting for the recovery of an $825,000 tax liability. On August 2, 2012, the Company received a notification from the tax authorities indicating the acceptance of the accounting method change attributable to the Company's adjustment to certain income items for tax reporting purposes from 2006 through 2007 resulting in an overpayment of taxes and an understatement of the deferred tax liability. As a result, the Corporation reversed the $825,000 tax liability recorded in the quarter ended June 30, 2012.

The Company initially erroneously recorded the tax liability recovery to retained earnings in the stockholders' equity section of the Consolidated Statements of Financial Condition rather than recording the non-recurring item through the provision for income taxes in the Consolidated Statements of Operations, which decreases the provision for income taxes, and in turn, increases net income.

Please note that as a result of the increase in net income, return on average assets for the fist quarter of fiscal 2013 increased to 2.78 percent from the previously reported 2.52 percent and return on average stockholders' equity for the first quarter of fiscal 2013 increased to 23.76 percent from the previously reported 21.51 percent. Additionally, basic earnings per share was revised to $0.81 (on 10.80 million average shares outstanding) rather than the previously reported $0.73 per share (on 10.80 million average shares outstanding).

For more information regarding this matter, please refer to the Form 10-Q for the period ended September 30, 2012 which is scheduled to be filed with the Securities and Exchange Commission on November 9, 2012.

Safe-Harbor Statement

This press release and the conference call noted above contain statements that the Company believes are "forward-looking statements." These statements relate to the Company's financial condition, results of operations, plans, objectives, future performance or business. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make.  Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors which could cause actual results to differ materially include, but are not limited to the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets and may lead to increased losses and non-performing assets and may result in our allowance for loan losses not being adequate to cover actual losses and require us to materially increase our reserve; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas; secondary market conditions for loans and our ability to sell loans in the secondary market; results of examinations of the Company by the Board of Governors of the Federal Reserve System and our bank subsidiary by the Office of Comptroller of the Currency or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our reserve for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits,or impose additional requirements and restrictions on us, any of which could adversely affect our liquidity and earnings; legislative or regulatory changes that adversely affect our business including changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules, including changes related to Basel III; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the implementing regulations; our ability to attract and retain deposits; further increases in premiums for deposit insurance; our ability to control operating costs and expenses; the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risk associated with the loans on our balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges; computer systems on which we depend could fail or experience a security breach; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to implement our branch expansion strategy; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we have acquired or may in the future acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; our ability to pay dividends on our common stock; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; and other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2012.

CONTACT: Craig G. Blunden Chairman and Chief Executive Officer Donavon P. Ternes President, Chief Operating Officer, and Chief Financial Officer (951) 686-6060
 

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