AMESBURY, Mass., Oct. 26,
2023 /PRNewswire/ -- Provident Bancorp, Inc. (the
"Company") (NasdaqCM: PVBC), the holding company for BankProv (the
"Bank"), reported net income for the quarter ended September 30, 2023 of $2.5
million, or $0.15 per diluted
share, compared to $3.5 million, or
$0.21 per diluted share, for the
quarter ended June 30, 2023. The
Company reported a net loss of $35.3
million, or ($2.15) per
diluted share, for the quarter ended September 30, 2022. Net
income for the nine months ended September
30, 2023 was $8.0 million, or
$0.48 per diluted share, compared to
a net loss of $24.2 million, or
($1.47) per diluted share, for the
nine months ended September 30,
2022.
In announcing these results, Carol
Houle, Co-Chief Executive Officer and Chief Financial
Officer said, "The challenging rate environment continues to impact
the entire industry resulting in an increased demand for deposits
and a weakening demand for loans. While we have continued to see
net interest margin compression throughout the quarter, our team
has remained focused on cost management efforts to increase
profitability."
"The leadership team took proactive steps and instituted a
workforce realignment plan that resulted in eleven team members
separating from the Bank. In addition, leadership has decided not
to fill the positions of four team members that have left the Bank.
These actions were in response to the new strategic plan which was
materially different than the workforce infrastructure that had
been built to support the prior plan," said Co-Chief Executive
Officer Joe Reilly. "The eliminated
roles did not target any single area, rather, they crossed many
areas including risk, credit, operations, sales, and other
departments. The reduction provides a cost savings of approximately
7% and will assist us with meeting our current stated business
objectives."
Income Statement Results
Quarter Ended September 30,
2023 Compared to Quarter Ended June
30, 2023
For the quarter ended September 30,
2023, net interest and dividend income was $13.9 million, which represents a decrease of
$1.0 million, or 6.8%, compared to
the quarter ended June 30, 2023. Net
interest and dividend income was negatively impacted by an increase
in interest expense of $1.3 million,
or 17.1%, to $9.3 million for the
quarter ended September 30, 2023,
compared to $8.0 million for the
quarter ended June 30, 2023,
partially offset by an increase in interest and dividend income of
$352,000, or 1.5%, to $23.2 million for the quarter ended September 30, 2023 compared to $22.9 million for the quarter ended June 30, 2023. Interest expense increased
primarily due to an increase in the cost of interest-bearing
deposits and an increase in the average balance of interest-bearing
deposits. The cost of interest-bearing deposits increased 37 basis
points to 3.41% for the quarter ended September 30, 2023,
compared to 3.04% for the quarter ended June
30, 2023, primarily due to rising interest rates and a
larger proportion of the portfolio consisting of higher-cost money
market accounts and savings accounts. The average balance of
interest-bearing deposits increased $61.6
million, or 6.1%, to $1.07
billion for the quarter ended September 30, 2023, primarily due to increases in
the average balances of money market accounts and savings
accounts.
Interest and dividend income increased due to an increase in the
average balance of short-term investments and a higher yield on
loans. The average balance of short-term investments increased
$21.2 million to $257.6 million for the quarter ended September 30, 2023, compared to $236.4 million for the quarter ended June 30, 2023. The increase in the average
balance of short-term investments resulted in an increase of
interest earned of $206,000 to
$3.2 million for the quarter ended
September 30, 2023, compared to
$3.0 million for the quarter ended
June 30, 2023. The yield on loans
increased 13 basis points to 5.97% for the quarter ended
September 30, 2023, compared to 5.84%
for the quarter ended June 30, 2023,
resulting in an increase in interest and fees on loans of
$159,000 to $19.8 million as of September 30, 2023. The increase in interest and
fees on loans was partially offset by a decrease in average loan
balances of $19.2 million, or 1.4%,
to $1.33 billion for the quarter
ended September 30, 2023, compared to
$1.35 billion for the quarter ended
30, 2023.
A credit loss benefit of $156,000
was recognized for the quarter ended September 30, 2023, primarily due to reduced loan
balances in the commercial and enterprise value loan portfolios and
improvements in the near-term Gross Domestic Product ("GDP") and
unemployment rate forecasts. The credit loss benefit was partially
offset by an increase in the reserve for individually analyzed
loans of $483,000 within the
enterprise value portfolio.
For the quarter ended September 30,
2023, noninterest income was $1.8
million, which represents an increase of $63,000, or 3.7%, compared to the quarter ended
June 30, 2023. The increase was due
to an increase in customer services fees on deposit accounts,
partially offset by a decrease in other income. Customer service
fees on deposit accounts increased $134,000, or 17.4%, to $903,000 for the quarter ended September 30, 2023, compared to $769,000 for the quarter ended June 30, 2023, primarily due to increased
implementation and activity fees charged to Banking as a Service
("BaaS") customers. BaaS implementation and activity fees on
deposit accounts was $357,000 for the
quarter ended September 30, 2023,
compared to $238,000 for the quarter
ended June 30, 2023. Other income
decreased $67,000, or 50.0%,
primarily due to insurance proceeds received for replacement of
damaged equipment during the quarter ended June 30, 2023.
For the quarter ended September 30,
2023, noninterest expense was $12.7
million, which represents a decrease of $36,000, or 0.3%, compared to the quarter ended
June 30, 2023. The decrease was
primarily due to a decrease in salaries and employee benefits,
partially offset by an increase in deposit insurance and
professional fees. Salaries and employee benefits decreased
$333,000, or 4.1%, to $7.8 million for the quarter ended September 30, 2023, from $8.1 million for the quarter ended June 30, 2023 primarily due to an evaluation of
anticipated year-end bonus payouts. Deposit insurance increased
$132,000, or 35.9%, to $500,000 for the quarter ended September 30, 2023 from $368,000 for the quarter ended June 30, 2023 due to an increase in the Federal
Deposit Insurance Corporation's ("FDIC") insurance assessment rate
schedules. Professional fees increased $115,000, or 12.5%, to $1.0 million for the quarter ended September 30, 2023, from $919,000 for the quarter ended June 30, 2023 due to increased consulting
services related to the development of deposit service
processes.
Quarter Ended September 30,
2023 Compared to Quarter Ended September 30, 2022
For the quarter ended September 30,
2023, net interest and dividend income was $13.9 million, which represents a decrease of
$5.9 million, or 29.7%, from the
quarter ended September 30, 2022. The
net interest and dividend income for the quarter ended September 30, 2023 was negatively impacted by an
increase in interest expense of $8.4
million to $9.3 million
compared to $952,000 for the quarter
ended September 30, 2022, which was
partially offset by an increase in interest and dividend income of
$2.5 million, or 12.2%, to
$23.2 million for the quarter ended
September 30, 2023, compared to
$20.7 million for the quarter ended
September 30, 2022. Interest expense
increased primarily due to rising interest rates and a larger
proportion of higher-cost money market accounts, certificates of
deposit, and savings accounts in the portfolio. Rising interest
rates resulted in an increase in the cost of interest-bearing
deposits of 297 basis points to 3.41% for the quarter ended
September 30, 2023, compared to 0.44%
for the quarter ended September 30,
2022. The increase in interest expense was also driven by an
increase in the average balance of interest-bearing deposits of
$305.0 million, or 39.8%, to
$1.07 billion for the quarter ended
September 30, 2023, compared to
$765.4 million for the quarter ended
September 30, 2022.
Interest and dividend income increased primarily due to rising
interest rates, which resulted in an increased yield on
interest-earning assets of 68 basis points to 5.76% for the quarter
ended September 30, 2023, compared to
5.08% for the quarter ended September 30,
2022. Rising interest rates and higher average balances
resulted in interest on short-term investments of $3.2 million for the quarter ended September 30, 2023, compared to $357,000 for the quarter ended September 30, 2022. Interest earned on loans
decreased $300,000 to $19.8 million for the quarter ended September 30, 2023, compared to $20.1 million for the quarter ended September 30, 2022, due to a reduction in the
average balance of loans to $1.33
billion for the quarter ended September 30, 2023 from $1.53 billion for the quarter ended September 30, 2022. The decrease in interest
earned on loans was partially offset by a 69 basis point increase
in the yield on loans to 5.97% for the quarter ended September 30, 2023, compared to 5.28% for the
quarter ended September 30, 2022.
A credit loss benefit of $156,000
was recognized for the quarter ended September 30, 2023, primarily due to reduced loan
balances in the commercial and enterprise value loan portfolios and
improvements in the near-term GDP and unemployment rate forecasts.
The credit loss benefit was partially offset by an increase in the
reserve for individually analyzed loans of $483,000 within the enterprise value portfolio.
The credit loss expense of $56.3
million for the quarter ended September 30, 2022 was driven by volatility in
the Bitcoin markets during the second half of 2022,
resulting in net charge-offs of $46.2
million relating to loans secured by
cryptocurrency mining rigs.
For the quarter ended September 30,
2023, noninterest income was $1.8
million, which represents an increase of $426,000, or 31.8%, compared to the quarter ended
September 30, 2022. The increase was
due to increases in service charges and fees and customer service
fees on deposit accounts. Service charges and fees increased
$289,000, or 130.2%, to $511,000 for the quarter ended September 30, 2023, compared to $222,000 for the quarter ended September 30, 2022, primarily due to income from
loan payoff charges on commercial real estate loans. Customer
service fees on deposit accounts increased $114,000, or 14.4%, to $903,000 for the quarter ended September 30, 2023, compared to $789,000 for the quarter ended September 30, 2022, primarily due to increased
implementation and activity fees charged to BaaS customers,
partially offset by fees generated from customer debit card usage.
BaaS implementation and activity fees on deposit accounts was
$357,000 for the quarter ended
September 30, 2023, compared to
$105,000 for the quarter ended
September 30, 2022.
For the quarter ended September 30,
2023, noninterest expense was $12.7
million, which represents an increase of $671,000, or 5.6%, compared to the quarter ended
September 30, 2022. The increase in
noninterest expense was primarily due to increases in deposit
insurance expense, professional fees, marketing expense, salaries
and employee benefits, and software depreciation and
implementation, partially offset by a decrease in other expenses.
Deposit insurance increased $339,000,
or 210.6%, to $500,000 for the
quarter ended September 30, 2023,
from $161,000 for the quarter ended
September 30, 2022, due to an
increase in the FDIC's insurance assessment rate schedules.
Professional fees increased $298,000,
or 40.5%, to $1.0 million for the
quarter ended September 30, 2023,
from $736,000 for the quarter ended
September 30, 2022, primarily due to
an increase in audit and compliance costs. Marketing fees increased
$137,000, or 207.6%, to $203,000 for the quarter ended September 30, 2023, from $66,000 for the quarter ended September 30, 2022, primarily due to advertising.
Salaries and employee benefits increased $123,000, or 1.6%, to $7.8
million for the quarter ended September 30, 2023, from $7.7 million for the quarter ended September 30, 2022, due to increased staff.
Software depreciation and implementation increased $111,000, or 27.9%, to $509,000 for the quarter ended September 30, 2023, due to software licenses
needed for increased staff. Other expenses decreased $291,000, or 25.8%, to $837,000 for the quarter ended September 30, 2023, primarily due to elevated
loan servicing expenses relating to loans secured by
cryptocurrency mining rigs for the quarter ended
September 30, 2022.
Nine Months Ended September 30,
2023 Compared to Nine Months Ended September 30, 2022
For the nine months ended September 30,
2023, net interest and dividend income was $44.6 million, which represents a decrease of
$11.7 million, or 20.7%, compared to
the nine months ended September 30,
2022. This decrease was primarily attributable to rising
interest rates, which resulted in increased costs of
interest-bearing deposits and borrowings. The cost of
interest-bearing deposits increased 260 basis points to 2.90% for
the nine months ended September 30,
2023, compared to 0.30% for the nine months ended
September 30, 2022. The cost of borrowings increased 184 basis
points to 3.94% for the nine months ended September 30, 2023, compared to 2.10% for the
nine months ended September 30, 2022. The decrease in net
interest and dividend income was further supported by an increase
in average interest-bearing liabilities of $192.6 million, or 23.9%, which was due to an
increase in average interest-bearing deposits of $159.5 million, or 20.2%, and an increase in
average total borrowings of $33.1
million, or 211.6%.
Interest and dividend income increased $8.4 million, or 14.4%, to $66.7 million for the nine months ended
September 30, 2023, compared to $58.3
million for the nine months ended September 30, 2022.
The increase was primarily driven by an increase in interest on
short-term investments of $5.7
million and an increase in interest and fees on loans of
$2.6 million, or 4.5%. The yield on
short-term investments increased 410 basis points to 4.87% for the
nine months ended September 30, 2023,
compared to 0.77% for the nine months ended September 30,
2022. The yield on loans increased 75 basis points to 5.85% for the
nine months ended September 30, 2023,
compared to 5.10% for the nine months ended September 30,
2022.
A credit loss expense of $556,000
was recognized for the nine months ended September 30, 2023, compared to a credit loss
expense of $57.4 million for the nine
months ended September 30, 2022,
which represents a decrease of $56.8
million, or 99.0%. The credit loss expense for the nine
months ended September 30, 2023 was
primarily driven by the need to replenish the allowance due net
charge-offs that occurred during the quarter ended March 31, 2023 in the enterprise value portfolio.
The expense was partially offset by improvements in the near-term
Gross Domestic Product ("GDP") and unemployment rate forecasts, as
well as a reduction of the loan balances in the commercial real
estate, commercial, and enterprise value loan portfolios The credit
loss expense of $57.4 million for the
nine months ended September 30, 2022
was primarily caused by net charge-offs of $47.8 million.
For the nine months ended September 30,
2023, noninterest income was $5.4
million, which represents an increase of $1.2 million, or 28.6%, compared to the nine
months ended September 30, 2022. The
increase was due to customer service fees on deposit accounts,
service charges and fees, and other income, partially offset by a
decrease in gain on loans sold. Customer service fees on deposit
accounts increased $662,000, or
33.3%, to $2.7 million for the nine
months ended September 30, 2023, due
to implementation and activity fees charged to BaaS customers. BaaS
implementation and activity fees on deposit accounts was
$840,000 for the nine months ended
September 30, 2023, compared to
$184,000 for the nine months ended
September 30, 2022. Service charges
and fees increased $439,000 to
$1.5 million for the nine months
ended September 30, 2023, due to
income from loan payoff charges on commercial real estate loans.
Other income increased $330,000
primarily due to gains on sales of other repossessed assets and
insurance proceeds received for replacement of damaged equipment.
Gain on loans sold decreased $272,000
primarily due to the sale of residential mortgage loans in
June 2022. No loans were sold in
2023.
For the nine months ended September 30,
2023, noninterest expense was $38.7
million, which represents an increase of $3.9 million, or 11.3% compared to $34.8 million for the nine months ended
September 30, 2022. The increase was
due to salaries and employee benefits, professional fees, deposit
insurance expense, and software depreciation and implementation
expense, partially offset by decreases in write downs of other
assets and receivables and other expenses. Salaries and employee
benefits increased $2.3 million, or
10.2%, for the nine months ended September
30, 2023, primarily due to an increase in staff to support
strategic initiatives within the deposit products and services.
Professional fees increased $1.2
million, or 54.4%, for the nine months ended September 30, 2023 due to increased legal, audit,
and compliance costs which were elevated for the first quarter of
2023, due to the events that led to losses recorded during 2022.
Deposit insurance increased $680,000,
or 145.9%, for the nine months ended September 30, 2023, primarily due to an increase
in the FDIC's insurance assessment rate schedules. Software
depreciation and implementation expenses increased $390,000, or 38.3%, for the nine months ended
September 30, 2023 primarily due to
software licenses needed for increased staff. Write downs of other
assets and receivables decreased $395,000 due to a write down of an SBA
receivable in the first quarter of 2022. Other expenses decreased
$355,000, or 13.0%, for the nine
months ended September 30, 2023,
primarily due to elevated loan servicing expenses relating to loans
secured by cryptocurrency mining rigs for the nine
months ended September 30, 2022.
Balance Sheet Results
Results for the quarter ended September
30, 2023 reflect the Bank's continued focus on its revised
business plan, operations and risk tolerance in light of the events
and the losses that occurred in late 2022. Concerted efforts have
been made to revise the Bank's business practices and strategies so
as to better monitor and manage the risk position, capital
position, liquidity, growth of the Bank's BaaS operations and
overall asset growth. In this regard, the Bank re-established
metrics and limitations in these areas to better manage and monitor
the Bank's overall risk position, including generally managing
overall asset growth to 5% per year, and adopting more
comprehensive capital management policies and procedures.
September 30, 2023 Compared to
June 30, 2023
Total assets increased $46.9
million, or 2.7%, to $1.81
billion at September 30, 2023,
compared to $1.76 billion at
June 30, 2023. The primary reason for
the increase was increases in cash and cash equivalents partially
offset by a decrease in net loans. Cash and cash equivalents
increased $68.5 million, or 23.0%,
primarily due to increased deposit balances. The Bank deems certain
deposits expected to be short-term as volatile. The Bank held
$249.7 million of these deposits as
of September 30, 2023, compared to
$171.3 million as of June 30, 2023. These deposits are currently being
held as cash in short-term investments. Included in volatile
deposits are $136.9 million relating
to three specialty deposit relationships that will be exiting the
Bank prior to year-end.
Net loans decreased $19.9 million,
or 1.5%, to $1.31 billion at
September 30, 2023, compared to
$1.33 billion at June 30, 2023. The decrease was primarily driven
by decreases in commercial loans of $11.1
million, or 5.9%, and enterprise value loans of $4.1 million, or 0.9%. The Bank's continued
efforts to reduce its digital asset lending portfolio resulted in a
decrease of $1.5 million, or 9.1%, to
$15.3 million at September 30, 2023. The decrease in the digital
asset loan portfolio was driven by paydowns.
Total liabilities increased $44.3
million, or 2.9%, to $1.59
billion as of September 30,
2023, compared to $1.55
billion at June 30, 2023,
primarily due to an increase in deposits. Deposits were
$1.49 billion as of September 30, 2023, compared to $1.45 billion as of June
30, 2023, which represents an increase of $41.6 million, or 2.9%. This increase included an
increase in interest-bearing deposits of $60.2 million, or 5.8%, offset by a decrease in
noninterest-bearing deposits of $18.5
million, or 4.6%. Interest-bearing deposits increased
primarily due to an increase in utilization of brokered
certificates of deposit, which increased $29.6 million, or 15.5%, and were $220.0 million as of September 30, 2023, compared to $190.4 million as of June
30, 2023. Specialty deposits increased $5.5 million, or 2.1%, to $266.4 million as of September 30, 2023, compared to $260.9 million as of June
30, 2023. Specialty deposits consist of deposits from BaaS
and digital asset customers. BaaS deposits totaled $213.9 million as of September 30, 2023, which represents a
$21.7 million, or 9.2%, decrease from
June 30, 2023. Digital asset deposits
totaled $52.5 million as of
September 30, 2023, which represents
a $27.2 million, or 107.8%, increase
from June 30, 2023.
Management continues to refine the criteria for specialty
deposit relationships and will exit when deemed appropriate. As a
result of review and refinement of eligibility criteria, three
specialty deposit relationships totaling $136.9 million as of September 30, 2023, will be exiting the Bank
prior to year-end. The relationships are currently deemed volatile
and are included in the amount being held as cash in short-term
investments. Total borrowings increased $9.9 million, or 12.5%, to $89.7 million as of September 30, 2023, compared to $79.8 million at June 30,
2023.
As of September 30, 2023,
shareholders' equity was $217.6
million compared to $215.1
million at June 30, 2023,
which represents an increase of $2.5
million, or 1.2%. The increase was primarily due to net
income of $2.5
million, stock-based compensation expense of
$329,000, and employee stock
ownership plan shares earned of $213,000, partially offset by other comprehensive
loss of $502,000.
September 30, 2023 Compared to
December 31, 2022
Total assets increased $172.1
million, or 10.5%, to $1.81
billion at September 30, 2023,
compared to $1.64 billion at
December 31, 2022 due to an increase
in cash and cash equivalents, partially offset by decreases in net
loans and other repossessed assets. Cash and cash equivalents
increased $285.7 million, or 354.4%
due to increased deposit balances and a decrease in net loans. The
Bank deems certain deposits expected to be short-term as volatile.
The Bank held $249.7 million of these
deposits as of September 30, 2023 as
cash in short-term investments. No deposits were held as volatile
as of December 31, 2022. Other repossessed assets decreased
$6.1 million due to the sale of the
remaining cryptocurrency mining rigs that were
repossessed during 2022.
Net loans decreased $102.4
million, or 7.2%, and were $1.31
billion at September 30, 2023,
compared to $1.42 billion at
December 31, 2022. The decrease was
primarily driven by decreases in mortgage warehouse loans of
$41.2 million, or 19.3%,
commercial loans of $40.1 million, or
18.5%, commercial real estate loans of $15.6
million, or 3.4%, enterprise value loans of $6.3 million, or 1.4%, and digital asset loans.
The Bank's continued efforts to reduce its digital asset portfolio
resulted in a decrease of $25.5
million, or 62.6%. The decrease in the digital asset loan
portfolio was driven by paydowns on outstanding lines of credit as
well as the payoff of a $4.8 million
loan secured by cryptocurrency mining rigs during the
first quarter of 2023 and the payoff of a $5.7 million line of credit during the second
quarter of 2023. The decrease in net loans was partially offset by
an increase in the construction and land development portfolio of
$23.1 million, or 31.9%.
Total liabilities increased $162.0
million, or 11.3%, to $1.59
billion as of September 30,
2023, compared to $1.43
billion at December 31, 2022,
primarily due to an increase in deposits, partially offset by a
decrease in borrowings. Deposits were $1.49
billion as of September 30,
2023, compared to $1.28
billion as of December 31,
2022, which represents an increase of $210.1 million, or 16.4%. Specialty deposits
increased $163.6 million, or 159.2%,
to $266.4 million as of September 30, 2023, compared to $102.8 million as of December 31, 2022. Specialty deposits consist of
deposits from BaaS and digital asset customers. BaaS deposits
totaled $213.9 million as of
September 30, 2023, which represents
a $168.6 million, or 372.5%, increase
from December 31, 2022. Digital asset
deposits totaled $52.5 million as of
September 30, 2023, which represents
a $5.0 million, or 8.7%, decrease
from December 31, 2022. The increase
in deposits was partially offset by a decrease in borrowings of
$37.1 million, or 29.3%, primarily
driven by a decrease in overnight borrowings.
As of September 30, 2023,
shareholders' equity was $217.6
million compared to $207.5
million at December 31, 2022,
which represents an increase of $10.0
million, or 4.8%. The increase was primarily due to net
income of $8.0 million. Also
contributing to the increase was a one-time, cumulative-effect
adjustment for the adoption of CECL which increased retained
earnings by $696,000. Shareholders'
equity also increased due to stock-based compensation expense of
$981,000, and employee stock
ownership plan shares earned of $568,000, partially offset by other comprehensive
loss of $193,000.
About Provident Bancorp, Inc.
BankProv, a subsidiary of Provident Bancorp, Inc. (NASDAQ:
PVBC), is a future-ready commercial bank for corporate clients,
specializing in offering adaptive and technology-first banking
solutions to niche markets. We are committed to offering
state-of-the-art APIs (application programming interfaces) for all
business clients and BaaS partners. Through our offerings, BankProv
insures 100% of deposits through a combination of insurance
provided by the Federal Deposit Insurance Corporation (FDIC) and
the Depositors Insurance Fund (DIF). For more information
about BankProv please visit our website www.bankprov.com or
call 877-487-2977.
Forward-looking statements
This news release may contain certain forward-looking
statements, such as statements of the Company's or the Bank's
plans, objectives, expectations, estimates and intentions.
Forward-looking statements may be identified by the use of words
such as, "expects," "subject," "believe," "will," "intends," "may,"
"will be" or "would." These statements are subject to change based
on various important factors (some of which are beyond the
Company's or the Bank's control) and actual results may differ
materially. Accordingly, readers should not place undue reliance on
any forward-looking statements (which reflect management's analysis
of factors only as of the date of which they are given). These
factors include: general economic conditions; the impact of the
COVID-19 pandemic or any other pandemic on our operations and
financial results and those of our customers; global and national
war and terrorism; trends in interest rates; inflation; potential
recessionary conditions; levels of unemployment; legislative,
regulatory and accounting changes; monetary and fiscal policies of
the U.S. Government, including policies of the U.S. Treasury and
the Board of Governors of the Federal Reserve Bank; a potential
government shutdown; deposit flows; our ability to access
cost-effective funding; changes in liquidity, including the size
and composition of our deposit portfolio and the percentage of
uninsured deposits in the portfolio; changes in consumer spending,
borrowing and savings habits; competition; real estate values in
the market area; loan demand; the adequacy of our allowance for
credit losses, changes in the quality of our loan and securities
portfolios; the ability of our borrowers to repay their loans; an
unexpected adverse financial, regulatory or bankruptcy event
experienced by our cryptocurrency, digital asset or
financial technology ("fintech") customers; our ability to retain
key employees; failures or breaches of our IT systems, including
cyberattacks; the failure to maintain current technologies; the
ability of the Company or the Bank to effectively manage its
growth; and results of regulatory examinations, among other
factors. The foregoing list of important factors is not exclusive.
Readers should carefully review the risk factors described in other
documents of the Company files from time to time with the
Securities and Exchange Commission, including Annual and Quarterly
Reports on Forms 10-K and 10-Q, and Current Reports on Form
8-K.
Provident Bancorp, Inc.
Carol Houle, 617-546-7365
Co-President and Co-Chief Executive Officer,
and Chief Financial Officer
choule@bankprov.com
Provident Bancorp,
Inc.
Consolidated Balance
Sheet
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At
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At
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At
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September 30,
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June 30,
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December 31,
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2023
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2023
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2022
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(Dollars in
thousands)
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(unaudited)
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(unaudited)
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Assets
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Cash and due from
banks
|
$
|
22,445
|
|
$
|
32,254
|
|
$
|
42,923
|
Short-term
investments
|
|
343,924
|
|
|
265,604
|
|
|
37,706
|
Cash and cash
equivalents
|
|
366,369
|
|
|
297,858
|
|
|
80,629
|
Debt securities
available-for-sale (at fair value)
|
|
26,179
|
|
|
27,656
|
|
|
28,600
|
Federal Home Loan Bank
stock, at cost
|
|
3,607
|
|
|
3,309
|
|
|
4,266
|
Loans, net of allowance
for credit losses of $24,023, $23,981, and $28,069 as of
|
|
|
|
|
|
|
|
|
September 30, 2023,
June 30, 2023, and December 31, 2022, respectively
|
|
1,313,666
|
|
|
1,333,564
|
|
|
1,416,047
|
Bank owned life
insurance
|
|
44,437
|
|
|
44,153
|
|
|
43,615
|
Premises and equipment,
net
|
|
13,187
|
|
|
13,400
|
|
|
13,580
|
Other repossessed
assets
|
|
—
|
|
|
—
|
|
|
6,051
|
Accrued interest
receivable
|
|
5,585
|
|
|
5,007
|
|
|
6,597
|
Right-of-use
assets
|
|
3,821
|
|
|
3,861
|
|
|
3,942
|
Deferred tax asset,
net
|
|
15,599
|
|
|
15,722
|
|
|
16,793
|
Other assets
|
|
15,990
|
|
|
17,057
|
|
|
16,261
|
Total
assets
|
$
|
1,808,440
|
|
$
|
1,761,587
|
|
$
|
1,636,381
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
$
|
385,488
|
|
$
|
404,012
|
|
$
|
520,226
|
Interest-bearing
|
|
1,104,237
|
|
|
1,044,074
|
|
|
759,356
|
Total
deposits
|
|
1,489,725
|
|
|
1,448,086
|
|
|
1,279,582
|
Borrowings:
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
80,000
|
|
|
70,000
|
|
|
108,500
|
Long-term
borrowings
|
|
9,730
|
|
|
9,763
|
|
|
18,329
|
Total
borrowings
|
|
89,730
|
|
|
79,763
|
|
|
126,829
|
Operating lease
liabilities
|
|
4,199
|
|
|
4,227
|
|
|
4,282
|
Other
liabilities
|
|
7,206
|
|
|
14,439
|
|
|
18,146
|
Total
liabilities
|
|
1,590,860
|
|
|
1,546,515
|
|
|
1,428,839
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
Preferred stock;
authorized 50,000 shares:
|
|
|
|
|
|
|
|
|
no shares issued and
outstanding
|
|
—
|
|
|
—
|
|
|
—
|
Common stock, $0.01 par
value, 100,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
17,681,916, 17,684,720
and 17,669,698 shares issued and outstanding
|
|
|
|
|
|
|
|
|
at September 30, 2023,
June 30, 2023, and December 31, 2022, respectively
|
|
177
|
|
|
177
|
|
|
177
|
Additional paid-in
capital
|
|
123,808
|
|
|
123,444
|
|
|
122,847
|
Retained
earnings
|
|
103,361
|
|
|
100,894
|
|
|
94,630
|
Accumulated other
comprehensive loss
|
|
(2,393)
|
|
|
(1,891)
|
|
|
(2,200)
|
Unearned compensation -
ESOP
|
|
(7,373)
|
|
|
(7,552)
|
|
|
(7,912)
|
Total shareholders'
equity
|
|
217,580
|
|
|
215,072
|
|
|
207,542
|
Total liabilities
and shareholders' equity
|
$
|
1,808,440
|
|
$
|
1,761,587
|
|
$
|
1,636,381
|
Provident Bancorp,
Inc.
Consolidated Income
Statements
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September
30,
|
|
September
30,
|
(Dollars in
thousands, except per share data)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Interest and
dividend income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
19,811
|
|
$
|
19,652
|
|
$
|
20,147
|
|
$
|
59,469
|
|
$
|
56,917
|
Interest and dividends
on debt securities available-for-sale
|
|
233
|
|
|
246
|
|
|
203
|
|
|
717
|
|
|
576
|
Interest on short-term
investments
|
|
3,184
|
|
|
2,978
|
|
|
357
|
|
|
6,545
|
|
|
816
|
Total interest and
dividend income
|
|
23,228
|
|
|
22,876
|
|
|
20,707
|
|
|
66,731
|
|
|
58,309
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
9,113
|
|
|
7,670
|
|
|
846
|
|
|
20,684
|
|
|
1,777
|
Interest on short-term
borrowings
|
|
196
|
|
|
230
|
|
|
34
|
|
|
1,250
|
|
|
34
|
Interest on long-term
borrowings
|
|
31
|
|
|
74
|
|
|
72
|
|
|
191
|
|
|
213
|
Total interest
expense
|
|
9,340
|
|
|
7,974
|
|
|
952
|
|
|
22,125
|
|
|
2,024
|
Net interest and
dividend income
|
|
13,888
|
|
|
14,902
|
|
|
19,755
|
|
|
44,606
|
|
|
56,285
|
Credit loss (benefit)
expense - loans
|
|
(105)
|
|
|
(740)
|
|
|
56,310
|
|
|
2,090
|
|
|
57,398
|
Credit loss (benefit)
expense - off-balance sheet credit exposures
|
|
(51)
|
|
|
(327)
|
|
|
5
|
|
|
(1,534)
|
|
|
41
|
Total credit loss
(benefit) expense
|
|
(156)
|
|
|
(1,067)
|
|
|
56,315
|
|
|
556
|
|
|
57,439
|
Net interest and
dividend income after credit loss (benefit) expense
|
|
14,044
|
|
|
15,969
|
|
|
(36,560)
|
|
|
44,050
|
|
|
(1,154)
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer service fees
on deposit accounts
|
|
903
|
|
|
769
|
|
|
789
|
|
|
2,651
|
|
|
1,989
|
Service charges and
fees - other
|
|
511
|
|
|
527
|
|
|
222
|
|
|
1,489
|
|
|
1,050
|
Bank owned life
insurance income
|
|
284
|
|
|
272
|
|
|
264
|
|
|
822
|
|
|
778
|
Gain (loss) on loans
sold, net
|
|
—
|
|
|
—
|
|
|
(12)
|
|
|
—
|
|
|
272
|
Other income
|
|
67
|
|
|
134
|
|
|
76
|
|
|
452
|
|
|
122
|
Total
noninterest income
|
|
1,765
|
|
|
1,702
|
|
|
1,339
|
|
|
5,414
|
|
|
4,211
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
7,776
|
|
|
8,109
|
|
|
7,653
|
|
|
24,429
|
|
|
22,164
|
Occupancy
expense
|
|
429
|
|
|
421
|
|
|
450
|
|
|
1,271
|
|
|
1,287
|
Equipment
expense
|
|
148
|
|
|
151
|
|
|
147
|
|
|
443
|
|
|
428
|
Deposit
insurance
|
|
500
|
|
|
368
|
|
|
161
|
|
|
1,146
|
|
|
466
|
Data
processing
|
|
378
|
|
|
374
|
|
|
347
|
|
|
1,113
|
|
|
1,026
|
Marketing
expense
|
|
203
|
|
|
161
|
|
|
66
|
|
|
447
|
|
|
263
|
Professional
fees
|
|
1,034
|
|
|
919
|
|
|
736
|
|
|
3,356
|
|
|
2,173
|
Directors'
compensation
|
|
178
|
|
|
164
|
|
|
255
|
|
|
542
|
|
|
776
|
Software depreciation
and implementation
|
|
509
|
|
|
483
|
|
|
398
|
|
|
1,409
|
|
|
1,019
|
Insurance
expense
|
|
451
|
|
|
450
|
|
|
448
|
|
|
1,353
|
|
|
1,343
|
Service fees
|
|
272
|
|
|
281
|
|
|
255
|
|
|
789
|
|
|
688
|
Write down of other
assets and receivables
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
395
|
Other
|
|
837
|
|
|
870
|
|
|
1,128
|
|
|
2,379
|
|
|
2,734
|
Total noninterest
expense
|
|
12,715
|
|
|
12,751
|
|
|
12,044
|
|
|
38,677
|
|
|
34,762
|
Income (loss) before
income tax expense
|
|
3,094
|
|
|
4,920
|
|
|
(47,265)
|
|
|
10,787
|
|
|
(31,705)
|
Income tax expense
(benefit)
|
|
628
|
|
|
1,459
|
|
|
(11,956)
|
|
|
2,757
|
|
|
(7,540)
|
Net income
(loss)
|
$
|
2,466
|
|
$
|
3,461
|
|
$
|
(35,309)
|
|
$
|
8,030
|
|
$
|
(24,165)
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.15
|
|
$
|
0.21
|
|
$
|
(2.15)
|
|
$
|
0.48
|
|
$
|
(1.47)
|
Diluted
|
|
0.15
|
|
$
|
0.21
|
|
$
|
(2.15)
|
|
|
0.48
|
|
$
|
(1.47)
|
Weighted Average
Shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
16,604,886
|
|
|
16,568,664
|
|
|
16,456,274
|
|
|
16,568,331
|
|
|
16,477,933
|
Diluted
|
|
16,648,657
|
|
|
16,570,017
|
|
|
16,456,274
|
|
|
16,569,526
|
|
|
16,477,933
|
Provident Bancorp,
Inc.
Net Interest Income
Analysis
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
September 30,
2023
|
|
June 30,
2023
|
|
|
September 30,
2022
|
|
|
|
|
Interest
|
|
|
|
|
|
|
Interest
|
|
|
|
|
|
|
|
Interest
|
|
|
|
Average
|
|
Earned/
|
|
Yield/
|
|
Average
|
|
Earned/
|
|
Yield/
|
|
|
Average
|
|
Earned/
|
|
Yield/
|
(Dollars in
thousands)
|
Balance
|
|
Paid
|
|
Rate (6)
|
|
Balance
|
|
Paid
|
|
Rate (6)
|
|
|
Balance
|
|
Paid
|
|
Rate (6)
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1)(2)
|
$
|
1,327,373
|
|
$
|
19,811
|
|
5.97 %
|
|
$
|
1,346,654
|
|
$
|
19,652
|
|
5.84 %
|
|
|
$
|
1,526,917
|
|
$
|
20,147
|
|
5.28 %
|
Short-term
investments
|
|
257,580
|
|
|
3,184
|
|
4.94 %
|
|
|
236,367
|
|
|
2,978
|
|
5.04 %
|
|
|
|
70,178
|
|
|
357
|
|
2.03 %
|
Debt securities
available-for-sale
|
|
27,363
|
|
|
188
|
|
2.75 %
|
|
|
28,278
|
|
|
197
|
|
2.79 %
|
|
|
|
30,950
|
|
|
190
|
|
2.46 %
|
Federal Home Loan Bank
stock
|
|
1,902
|
|
|
45
|
|
9.46 %
|
|
|
2,254
|
|
|
49
|
|
8.70 %
|
|
|
|
1,752
|
|
|
13
|
|
2.97 %
|
Total interest-earning
assets
|
|
1,614,218
|
|
|
23,228
|
|
5.76 %
|
|
|
1,613,553
|
|
|
22,876
|
|
5.67 %
|
|
|
|
1,629,797
|
|
|
20,707
|
|
5.08 %
|
Non-interest earning
assets
|
|
103,453
|
|
|
|
|
|
|
|
99,685
|
|
|
|
|
|
|
|
|
97,342
|
|
|
|
|
|
Total
assets
|
$
|
1,717,671
|
|
|
|
|
|
|
$
|
1,713,238
|
|
|
|
|
|
|
|
$
|
1,727,139
|
|
|
|
|
|
Liabilities and
shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
|
184,239
|
|
$
|
1,021
|
|
2.22 %
|
|
$
|
149,625
|
|
$
|
408
|
|
1.09 %
|
|
|
$
|
157,096
|
|
$
|
80
|
|
0.20 %
|
Money market
accounts
|
|
551,344
|
|
|
5,207
|
|
3.78 %
|
|
|
513,348
|
|
|
4,550
|
|
3.55 %
|
|
|
|
299,214
|
|
|
428
|
|
0.57 %
|
NOW accounts
|
|
103,966
|
|
|
181
|
|
0.70 %
|
|
|
115,869
|
|
|
202
|
|
0.70 %
|
|
|
|
243,426
|
|
|
171
|
|
0.28 %
|
Certificates of
deposit
|
|
230,884
|
|
|
2,704
|
|
4.68 %
|
|
|
230,023
|
|
|
2,510
|
|
4.36 %
|
|
|
|
65,689
|
|
|
167
|
|
1.02 %
|
Total interest-bearing
deposits
|
|
1,070,433
|
|
|
9,113
|
|
3.41 %
|
|
|
1,008,865
|
|
|
7,670
|
|
3.04 %
|
|
|
|
765,425
|
|
|
846
|
|
0.44 %
|
Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
14,897
|
|
|
196
|
|
5.26 %
|
|
|
18,352
|
|
|
230
|
|
5.01 %
|
|
|
|
5,564
|
|
|
34
|
|
2.44 %
|
Long-term
borrowings
|
|
9,741
|
|
|
31
|
|
1.27 %
|
|
|
16,148
|
|
|
74
|
|
1.83 %
|
|
|
|
13,500
|
|
|
72
|
|
2.13 %
|
Total
borrowings
|
|
24,638
|
|
|
227
|
|
3.69 %
|
|
|
34,500
|
|
|
304
|
|
3.52 %
|
|
|
|
19,064
|
|
|
106
|
|
2.22 %
|
Total interest-bearing
liabilities
|
|
1,095,071
|
|
|
9,340
|
|
3.41 %
|
|
|
1,043,365
|
|
|
7,974
|
|
3.06 %
|
|
|
|
784,489
|
|
|
952
|
|
0.49 %
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
391,917
|
|
|
|
|
|
|
|
437,167
|
|
|
|
|
|
|
|
|
681,681
|
|
|
|
|
|
Other
noninterest-bearing liabilities
|
|
13,864
|
|
|
|
|
|
|
|
19,380
|
|
|
|
|
|
|
|
|
17,343
|
|
|
|
|
|
Total
liabilities
|
|
1,500,852
|
|
|
|
|
|
|
|
1,499,912
|
|
|
|
|
|
|
|
|
1,483,513
|
|
|
|
|
|
Total equity
|
|
216,819
|
|
|
|
|
|
|
|
213,326
|
|
|
|
|
|
|
|
|
243,626
|
|
|
|
|
|
Total liabilities
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equity
|
$
|
1,717,671
|
|
|
|
|
|
|
$
|
1,713,238
|
|
|
|
|
|
|
|
$
|
1,727,139
|
|
|
|
|
|
Net interest
income
|
|
|
|
$
|
13,888
|
|
|
|
|
|
|
$
|
14,902
|
|
|
|
|
|
|
|
$
|
19,755
|
|
|
Interest rate spread
(3)
|
|
|
|
|
|
|
2.35 %
|
|
|
|
|
|
|
|
2.61 %
|
|
|
|
|
|
|
|
|
4.59 %
|
Net interest-earning
assets (4)
|
$
|
519,147
|
|
|
|
|
|
|
$
|
570,188
|
|
|
|
|
|
|
|
$
|
845,308
|
|
|
|
|
|
Net interest margin
(5)
|
|
|
|
|
|
|
3.44 %
|
|
|
|
|
|
|
|
3.69 %
|
|
|
|
|
|
|
|
|
4.85 %
|
Average
interest-earning assets
to
interest-bearing liabilities
|
|
147.41 %
|
|
|
|
|
|
|
|
154.65 %
|
|
|
|
|
|
|
|
|
207.75 %
|
|
|
|
|
|
|
|
(1)
|
Interest earned/paid on
loans includes mortgage warehouse loan origination fee income of
$199,000, $213,000, and $260,000 for the three months ended
September 30, 2023, June 30, 2023, and September 30, 2022,
respectively.
|
(2)
|
Includes loans held for
sale.
|
(3)
|
Net interest rate
spread represents the difference between the weighted average yield
on interest-bearing assets and the weighted average rate of
interest-bearing liabilities.
|
(4)
|
Net interest-earning
assets represent total interest-earning assets less total
interest-bearing liabilities.
|
(5)
|
Net interest margin
represents net interest income divided by average total
interest-earning assets.
|
(6)
|
Annualized.
|
|
For the Nine Months
Ended September 30,
|
|
2023
|
|
2022
|
|
|
|
|
Interest
|
|
|
|
|
|
|
Interest
|
|
|
|
Average
|
|
Earned/
|
|
Yield/
|
|
Average
|
|
Earned/
|
|
Yield/
|
(Dollars in
thousands)
|
Balance
|
|
Paid
|
|
Rate (6)
|
|
Balance
|
|
Paid
|
|
Rate (6)
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1)(2)
|
$
|
1,355,086
|
|
$
|
59,469
|
|
5.85 %
|
|
$
|
1,487,273
|
|
$
|
56,917
|
|
5.10 %
|
Short-term
investments
|
|
179,086
|
|
|
6,545
|
|
4.87 %
|
|
|
141,984
|
|
|
816
|
|
0.77 %
|
Debt securities
available-for-sale
|
|
28,118
|
|
|
577
|
|
2.74 %
|
|
|
33,135
|
|
|
555
|
|
2.23 %
|
Federal Home Loan Bank
stock
|
|
2,262
|
|
|
140
|
|
8.25 %
|
|
|
1,312
|
|
|
21
|
|
2.13 %
|
Total interest-earning assets
|
|
1,564,552
|
|
|
66,731
|
|
5.69 %
|
|
|
1,663,704
|
|
|
58,309
|
|
4.67 %
|
Non-interest earning
assets
|
|
106,722
|
|
|
|
|
|
|
|
90,648
|
|
|
|
|
|
Total assets
|
$
|
1,671,274
|
|
|
|
|
|
|
$
|
1,754,352
|
|
|
|
|
|
Liabilities and
shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
|
158,927
|
|
$
|
1,540
|
|
1.29 %
|
|
$
|
154,516
|
|
$
|
171
|
|
0.15 %
|
Money market
accounts
|
|
460,129
|
|
|
11,669
|
|
3.38 %
|
|
|
341,019
|
|
|
888
|
|
0.35 %
|
NOW accounts
|
|
115,568
|
|
|
529
|
|
0.61 %
|
|
|
233,529
|
|
|
389
|
|
0.22 %
|
Certificates of
deposit
|
|
215,625
|
|
|
6,946
|
|
4.30 %
|
|
|
61,717
|
|
|
329
|
|
0.71 %
|
Total interest-bearing
deposits
|
|
950,249
|
|
|
20,684
|
|
2.90 %
|
|
|
790,781
|
|
|
1,777
|
|
0.30 %
|
Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
34,098
|
|
|
1,250
|
|
4.89 %
|
|
|
2,161
|
|
|
34
|
|
2.10 %
|
Long-term
borrowings
|
|
14,701
|
|
|
191
|
|
1.73 %
|
|
|
13,500
|
|
|
213
|
|
2.10 %
|
Total
borrowings
|
|
48,799
|
|
|
1,441
|
|
3.94 %
|
|
|
15,661
|
|
|
247
|
|
2.10 %
|
Total interest-bearing
liabilities
|
|
999,048
|
|
|
22,125
|
|
2.95 %
|
|
|
806,442
|
|
|
2,024
|
|
0.33 %
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
441,006
|
|
|
|
|
|
|
|
688,784
|
|
|
|
|
|
Other
noninterest-bearing liabilities
|
|
17,880
|
|
|
|
|
|
|
|
19,311
|
|
|
|
|
|
Total
liabilities
|
|
1,457,934
|
|
|
|
|
|
|
|
1,514,537
|
|
|
|
|
|
Total equity
|
|
213,340
|
|
|
|
|
|
|
|
239,815
|
|
|
|
|
|
Total liabilities
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equity
|
$
|
1,671,274
|
|
|
|
|
|
|
$
|
1,754,352
|
|
|
|
|
|
Net interest
income
|
|
|
|
$
|
44,606
|
|
|
|
|
|
|
$
|
56,285
|
|
|
Interest rate spread
(3)
|
|
|
|
|
|
|
2.74 %
|
|
|
|
|
|
|
|
4.34 %
|
Net interest-earning
assets (4)
|
$
|
565,504
|
|
|
|
|
|
|
$
|
857,262
|
|
|
|
|
|
Net interest margin
(5)
|
|
|
|
|
|
|
3.80 %
|
|
|
|
|
|
|
|
4.51 %
|
Average
interest-earning assets to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
interest-bearing
liabilities
|
|
156.60 %
|
|
|
|
|
|
|
|
206.30 %
|
|
|
|
|
|
|
|
(1)
|
Interest earned/paid on
loans includes mortgage warehouse loan origination fee income of
$674,000 and $841,000 for the nine months ended September 30, 2023
and September 30, 2022, respectively.
|
(2)
|
Includes loans held for
sale.
|
(3)
|
Net interest rate
spread represents the difference between the weighted average yield
on interest-bearing assets and the weighted average rate of
interest-bearing liabilities.
|
(4)
|
Net interest-earning
assets represent total interest-earning assets less total
interest-bearing liabilities.
|
(5)
|
Net interest margin
represents net interest income divided by average total
interest-earning assets.
|
(6)
|
Annualized.
|
Provident Bancorp,
Inc.
Select Financial
Highlights
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
|
September
30,
|
|
2023
|
|
2023
|
|
2022
|
|
|
2023
|
|
|
2022
|
Performance
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return (loss) on
average assets (1)
|
|
0.57 %
|
|
|
0.81 %
|
|
|
(8.18 %)
|
|
|
0.64 %
|
|
|
(1.84 %)
|
Return (loss) on
average equity (1)
|
|
4.55 %
|
|
|
6.49 %
|
|
|
(57.97 %)
|
|
|
5.02 %
|
|
|
(13.44 %)
|
Interest rate spread
(1) (2)
|
|
2.34 %
|
|
|
2.61 %
|
|
|
4.59 %
|
|
|
2.73 %
|
|
|
4.34 %
|
Net interest margin (1)
(3)
|
|
3.44 %
|
|
|
3.69 %
|
|
|
4.85 %
|
|
|
3.80 %
|
|
|
4.51 %
|
Non-interest expense to
average assets (1)
|
|
2.96 %
|
|
|
2.98 %
|
|
|
2.79 %
|
|
|
3.09 %
|
|
|
2.64 %
|
Efficiency ratio
(4)
|
|
81.23 %
|
|
|
76.79 %
|
|
|
57.10 %
|
|
|
77.32 %
|
|
|
57.46 %
|
Average
interest-earning assets to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average
interest-bearing liabilities
|
|
147.41 %
|
|
|
154.65 %
|
|
|
207.75 %
|
|
|
156.60 %
|
|
|
206.30 %
|
Average equity to
average assets
|
|
12.62 %
|
|
|
12.45 %
|
|
|
14.11 %
|
|
|
12.77 %
|
|
|
13.67 %
|
|
At
|
|
At
|
|
At
|
|
September 30,
|
|
June 30,
|
|
December 31,
|
|
2023
|
|
2023
|
|
2022
|
Asset
Quality
|
|
|
|
|
|
|
|
|
Non-accrual
loans:
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
$
|
155
|
|
$
|
160
|
|
$
|
56
|
Commercial
|
|
235
|
|
|
70
|
|
|
101
|
Enterprise
value
|
|
4,114
|
|
|
4,310
|
|
|
92
|
Digital
asset
|
|
15,248
|
|
|
16,768
|
|
|
26,488
|
Residential real
estate
|
|
381
|
|
|
361
|
|
|
227
|
Construction and land
development
|
|
—
|
|
|
—
|
|
|
—
|
Consumer
|
|
4
|
|
|
—
|
|
|
—
|
Mortgage
warehouse
|
|
—
|
|
|
—
|
|
|
—
|
Total non-accrual
loans
|
|
20,137
|
|
|
21,669
|
|
|
26,964
|
Accruing loans past due
90 days or more
|
|
—
|
|
|
—
|
|
|
—
|
Other repossessed
assets
|
|
—
|
|
|
—
|
|
|
6,051
|
Total non-performing
assets
|
$
|
20,137
|
|
$
|
21,669
|
|
$
|
33,015
|
Asset Quality
Ratios
|
|
|
|
|
|
|
|
|
Allowance for credit
losses as a percent of total loans (5)
|
|
1.80 %
|
|
|
1.77 %
|
|
|
1.94 %
|
Allowance for credit
losses as a percent of non-performing loans
|
|
119.30 %
|
|
|
110.67 %
|
|
|
104.10 %
|
Non-performing loans as
a percent of total loans (5)
|
|
1.51 %
|
|
|
1.60 %
|
|
|
1.87 %
|
Non-performing loans as
a percent of total assets
|
|
1.11 %
|
|
|
1.23 %
|
|
|
1.65 %
|
Non-performing assets
as a percent of total assets (6)
|
|
1.11 %
|
|
|
1.23 %
|
|
|
2.02 %
|
Capital and Share
Related
|
|
|
|
|
|
|
|
|
Stockholders' equity to
total assets
|
|
12.0 %
|
|
|
12.2 %
|
|
|
12.7 %
|
Book value per
share
|
$
|
12.31
|
|
$
|
12.16
|
|
$
|
11.75
|
Market value per
share
|
$
|
9.69
|
|
$
|
8.28
|
|
$
|
7.28
|
Shares
outstanding
|
|
17,681,916
|
|
|
17,684,720
|
|
|
17,669,698
|
|
|
(1)
|
Annualized.
|
(2)
|
Represents the
difference between the weighted average yield on average
interest-earning assets and the weighted average cost of
interest-bearing liabilities.
|
(3)
|
Represents net interest
income as a percent of average interest-earning assets.
|
(4)
|
Represents noninterest
expense divided by the sum of net interest income and noninterest
income, excluding gains on securities available for sale,
net.
|
(5)
|
Loans are presented at
amortized cost (excluding accrued interest).
|
(6)
|
Non-performing assets
consists of non-accrual loans plus loans accruing but 90 days
overdue and other repossessed assets.
|
|
At
|
|
At
|
|
At
|
|
September 30,
|
|
June 30,
|
|
December 31,
|
|
2023
|
|
2023
|
|
2022
|
(In
thousands)
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
Commercial real
estate
|
$
|
438,039
|
|
32.74 %
|
|
$
|
438,029
|
|
32.26 %
|
|
$
|
453,592
|
|
31.41 %
|
Commercial
|
|
176,817
|
|
13.22 %
|
|
|
187,965
|
|
13.85 %
|
|
|
216,931
|
|
15.02 %
|
Enterprise
value
|
|
432,449
|
|
32.33 %
|
|
|
436,574
|
|
32.15 %
|
|
|
438,745
|
|
30.38 %
|
Digital asset
(1)
|
|
15,247
|
|
1.14 %
|
|
|
16,768
|
|
1.24 %
|
|
|
40,781
|
|
2.82 %
|
Residential real
estate
|
|
7,444
|
|
0.56 %
|
|
|
7,490
|
|
0.55 %
|
|
|
8,165
|
|
0.57 %
|
Construction and land
development
|
|
95,327
|
|
7.13 %
|
|
|
96,757
|
|
7.13 %
|
|
|
72,267
|
|
5.00 %
|
Consumer
|
|
315
|
|
0.02 %
|
|
|
207
|
|
0.02 %
|
|
|
391
|
|
0.03 %
|
Mortgage
warehouse
|
|
172,051
|
|
12.86 %
|
|
|
173,755
|
|
12.80 %
|
|
|
213,244
|
|
14.77 %
|
|
|
1,337,689
|
|
100.00 %
|
|
|
1,357,545
|
|
100.00 %
|
|
|
1,444,116
|
|
100.00 %
|
Allowance for credit
losses - loans
|
|
(24,023)
|
|
|
|
|
(23,981)
|
|
|
|
|
(28,069)
|
|
|
Net loans
|
$
|
1,313,666
|
|
|
|
$
|
1,333,564
|
|
|
|
$
|
1,416,047
|
|
|
|
|
(1)
|
Includes $15.2 million,
$16.8 million, and $26.5 million in loans secured by cryptocurrency
mining rigs at September 30, 2023, June 30, 2023, and December 31,
2022, respectively. The remaining balance at December 31, 2022
consisted of digital asset lines of credit.
|
|
At
|
|
At
|
|
At
|
|
September 30,
|
|
June 30,
|
|
December 31,
|
(In
thousands)
|
2023
|
|
2023
|
|
2022
|
Noninterest-bearing:
|
|
|
|
|
|
|
|
|
Demand (1)
|
$
|
385,488
|
|
$
|
404,012
|
|
$
|
520,226
|
Interest-bearing:
|
|
|
|
|
|
|
|
|
NOW
|
|
111,786
|
|
|
111,701
|
|
|
145,533
|
Regular
savings
|
|
177,865
|
|
|
159,940
|
|
|
141,802
|
Money market
deposits
|
|
541,200
|
|
|
530,964
|
|
|
318,417
|
Certificates of
deposit:
|
|
|
|
|
|
|
|
|
Certificate accounts
of $250,000 or more
|
|
21,027
|
|
|
20,869
|
|
|
11,449
|
Certificate accounts
less than $250,000
|
|
252,359
|
|
|
220,600
|
|
|
142,155
|
Total interest-bearing
(2)
|
|
1,104,237
|
|
|
1,044,074
|
|
|
759,356
|
Total deposits
(3)
|
$
|
1,489,725
|
|
$
|
1,448,086
|
|
$
|
1,279,582
|
|
|
(1)
|
Noninterest-bearing
deposits included $15.6 million, $37.8 million, and $40.2 million
in BaaS deposits as of September 30, 2023, June 30, 2023, and
December 31, 2023, respectively. Noninterest-bearing deposits
included $52.5 million, $20.8 million, and $40.3 million in digital
assets deposits as of September 30, 2023, June 30, 2023, and
December 31, 2022, respectively.
|
(2)
|
Interest-bearing
deposits included $198.3 million in BaaS deposits and no digital
assets deposits as of September 30, 2023. Interest-bearing deposits
included $197.9 million and $4.4 million in BaaS and digital assets
deposits, respectively, as of June 30, 2023. As of December 31,
2022, there were $5.0 million and $17.2 million interest-bearing
BaaS and digital asset deposits, respectively.
|
(3)
|
Of total deposits as of
September 30, 2023, June 30, 2023, and December 31, 2022, the
Federal Deposit Insurance Corporation ("FDIC") insured
approximately 57%, 53%, and 55%, respectively, and the remaining
43%, 47%, and 45%, respectively, were insured through the
Depositors Insurance Fund ("DIF"). The DIF is a private,
industry-sponsored insurance fund that insures all deposits above
FDIC limits at member banks.
|
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SOURCE Provident Bancorp, Inc.