AMESBURY, Mass., May 1, 2023
/PRNewswire/ -- Provident Bancorp, Inc. (the "Company")
(NasdaqCM: PVBC), the holding company for BankProv (the "Bank"),
reported net income for the quarter ended March 31, 2023 of $2.1
million, or $0.13 per diluted
share, compared to $2.7 million, or
$0.16 per diluted share, for the
quarter ended December 31, 2022 and
$5.5 million, or $0.32 per diluted share, for the quarter ended
March 31, 2022.
In announcing these results, Carol
Houle, Co-President and Co-Chief Executive Officer and Chief
Financial Officer said, "Heading into the first quarter our primary
objective was the development and implementation of a renewed
strategic direction. We are pleased that our financial results met
our expectations and are proud of the hard work and dedication of
our employees in their efforts to achieve our objectives."
"The high-profile failures of a few large financial institutions
had widespread impacts during the first quarter of 2023. The
importance of liquidity, diversification, and deposit insurance was
thrust into the spotlight and in response, we took decisive action
to reaffirm our secure position in each of these areas and to
reassure our customers of the safety of their deposits. We are
happy that our institution was able to weather much of the negative
fallout and are extremely thankful for the continued support of our
customers and communities." said Joe
Reilly, Co-Chief Executive Officer.
Liquidity and Capital Resources
During the first quarter of 2023, failures of two large
financial institutions resulted in increased scrutiny on the
balance sheets and liquidity positions of financial institutions
across the industry. BankProv was well insulated from the fallout
that resulted from the market turmoil and did not experience
significant deposit outflow. We believe this resulted from the
following:
- The Bank's deposit and loan portfolios were and continue to be
well-diversified;
- As of March 31, 2023 the Federal
Deposit Insurance Fund ("FDIC") insured 56% of our customers'
deposits and the remaining 44% were insured through the Depositors
Insurance Fund ("DIF");
- We have access to multiple funding sources and sufficient
capacity to borrow, if needed, as of March
31, 2023 between the Federal Home Loan Bank of Boston and the Federal Reserve Bank of
Boston's borrower-in-custody
program, we had the ability to borrow an additional $249.6 million;
- Our securities portfolio represented only 1.7% of total assets,
as of March 31, 2023 and the
accumulated other comprehensive loss on the portfolio was
$1.6 million, or 0.7% of
stockholders' equity as of that date. Management believes that the
unrealized losses on these debt security holdings are a function of
changes in investment spreads and interest rate movements and not
changes in credit quality. Based on our ability to borrow, cash
position and low deposit outflows there is no expected reliance on
security sales to meet operational needs.
Income Statement Results
Quarter Ended March 31, 2023
Compared to Quarter Ended December 31,
2022
For the quarter ended March 31,
2023, net interest and dividend income was $15.8 million, which represents a decrease of
$2.9 million, or 15.6%, when compared
to the quarter ended December 31,
2022. Net interest and dividend income was negatively
impacted by an increase in interest expense of $2.5 million, or 111.7%, to $4.8 million compared to $2.3 million for the quarter ended December
31, 2022 as well as a decrease in interest and dividend income
of $391,000, or 1.9%, to $20.6 million compared to $21.0 million for the quarter ended December 31, 2022. Interest expense increased
primarily due to an increase in the cost of interest-bearing
deposits partially offset by a decrease in the average balance of
interest-bearing deposits. The cost of interest-bearing deposits
increased 111 basis points to 2.03% for the quarter ended March
31, 2023 compared to 0.92% for the quarter ended December 31, 2022, primarily due to rising
interest rates and a larger proportion of the portfolio consisting
of higher-cost certificates of deposit. The average balance of
interest-bearing deposits decreased $15.7
million, or 2.0%, for the quarter ended March 31, 2023, primarily due to decreases in the
average balances of NOW, money market and savings accounts,
partially offset by an increase in the average balance of
certificates of deposit.
Interest and dividend income decreased primarily due to
decreases in the average balance of loans of $52.3 million, or 3.6%, driven by decreases in
our digital asset and mortgage warehouse portfolios. Interest and
dividend income also decreased due to a decrease in average
short-term investments of $8.8
million, or 17.7%. The decreases in the average balances of
loans and short-term investments was partially offset by an
increase in the yield on interest-earning assets of 12 basis points
to 5.63% for the quarter ended March 31,
2023 compared to 5.51% for the quarter ended December 31, 2022, which was primarily driven by
rising interest rates and the origination of higher-yielding
loans.
Credit loss expense of $1.8
million was recognized for the quarter ended March 31, 2023, and was based on the new expected
loss model, compared to a benefit of $992,000 for the quarter ended December 31, 2022, which was based on the
incurred loss model. The credit loss expense for the quarter ended
March 31, 2023 was primarily driven
by the need to replenish the allowance due to net charge-offs which
totaled $3.6 million for the quarter
ended March 31, 2023 and were
predominantly related to our enterprise value portfolio. The
increase in the expense caused by net charge-offs was offset by a
credit loss benefit for unfunded commitments due to a decrease in
the balance of unfunded commitments during the first quarter of
2023 primarily resulting from the closure of a $36 million digital asset line and the freeze of
the availability on an outstanding $35
million digital asset line due to non-compliance. The
benefit of $992,000 for the quarter
ended December 31, 2022 was based on
the incurred loss methodology and was primarily the result of a
decrease in loans during the fourth quarter of 2022.
Noninterest income was $1.9
million for the quarters ended March
31, 2023 and December 31,
2022. Other service charges and fees decreased $269,000, or 37.4%, primarily due to decreases in
non-recurring prepayment penalties on commercial and commercial
real estate loans received during the fourth quarter of 2022. The
decrease from other service charges and fees was offset by
increases in other income and customer service fees on deposit
accounts. Other income increased $243,000 primarily due to gains on sales of other
repossessed assets and a semi-annual commission related to a sold
loan. Customer service fees on deposit accounts increased
$37,000, or 3.9%, primarily due to
fees generated from customer debit card usage.
For the quarter ended March 31,
2023, noninterest expense was $13.2
million, which represents a decrease of $4.0 million, or 23.3%, when compared to the
quarter ended December 31, 2022. The
decrease was primarily due to decreases in other expense,
professional fees, salaries and employee benefits, and deposit
insurance. Other expense decreased $1.5
million, or 68.6%, primarily due to a decrease in
write-downs on other repossessed assets and the reduction in
expenses related to these assets, as well as a reduction in loan
servicing fees. The reduction in write-downs on other repossessed
assets and the expenses related to these assets was primarily due
to a majority of the remaining repossessed assets, which consisted
of cryptocurrency mining rigs, being sold during the
first quarter of 2023 at a gain from the December 31, 2022 valuation due to rises in the
value of Bitcoin which increased the value of the
rigs. The reduction in loan servicing fees was primarily due to the
cessation of servicing fees as a result of the non-performing
status of a loan relationship that is serviced by a third party.
Professional fees decreased $1.1
million, or 44.4%, primarily due to decreased legal, audit
and compliance costs which were elevated for the quarter ended
December 31, 2022 due to services
pertaining to the events that led to the losses recorded during
2022. Salaries and employee benefits decreased $1.0 million, or 10.7%, primarily due to a
$1.5 million expense in the
fourth quarter of 2022 related to the Separation Agreement and Full
and Final Release of Claims with our former President and Chief
Executive Officer, as reported on a Current Report on Form 8-K on
December 23, 2022. The decrease in
deposit insurance of $279,000, or
50.1%, was due to a decrease in the FDIC's insurance
assessment.
Quarter Ended March 31, 2023
Compared to Quarter Ended March 31,
2022
For the quarter ended March 31,
2023, net interest and dividend income was $15.8 million, which represents a decrease of
$2.1 million, or 11.8%, from the
quarter ended March 31, 2022. The net
interest and dividend income for the quarter ended March 31, 2023 was negatively impacted by an
increase in interest expense of $4.3
million, or 816.4%, to $4.8
million compared to $525,000
for the quarter ended March 31, 2022,
which was offset by an increase in interest and dividend income of
$2.1 million, or 11.8%, to
$20.6 million for the quarter ended
March 31, 2023 compared to
$18.5 million for the quarter ended
March 31, 2022. Interest expense
increased primarily due to rising interest rates and a larger
proportion of higher-cost certificates of deposit in the portfolio.
Rising interest rates resulted in an increase in the cost of
interest-bearing deposits of 180 basis points to 2.03% for the
quarter ended March 31, 2023 compared
to 0.23% for the quarter ended March 31,
2022. The increase in interest expense was partially offset
by a decrease in the average balance of interest-bearing deposits
of $31.4 million, or 3.9%.
Interest and dividend income increased primarily due to rising
interest rates, which resulted in an increased yield on
interest-earning assets. The yield on interest-earning assets
increased 114 basis points to 5.63% for the quarter ended
March 31, 2023 compared to 4.49% for
the quarter ended March 31, 2022. The
increased interest and dividend income caused by the increase in
yield was partially offset by a decrease in the average balance of
interest-earning assets of $178.6
million, or 10.9%. This decrease was primarily due to a
decrease in the average balance of short-term investments of
$96.0 million, or 70.1%, and a
decrease in the average balance of loans of $77.3 million, or 5.3%.
Credit loss expense of $1.8
million was recognized for the quarter ended March 31, 2023 compared to $83,000 for the quarter ended March 31, 2022, which represents an increase of
$1.7 million. The credit loss expense
for the quarter ended March 31, 2023
was primarily driven by the need to replenish the allowance due to
net charge-offs which totaled $3.6
million for the quarter ended March
31, 2023 and were predominantly related to our enterprise
value portfolio. The increase in the expense caused by net
charge-offs was offset by a credit loss benefit for unfunded
commitments recognized during the quarter ended March 31, 2023 due to a decrease in the balance
of unfunded commitments during the first quarter of 2023 primarily
resulting from the closure of a $36
million digital asset line and the freeze of the
availability on an outstanding $35
million digital asset line due to non-compliance. The
$83,000 provision for the quarter
ended March 31, 2022 was based on the
incurred loss model, and was primarily the result of growth in the
loan portfolio during the first quarter of 2022.
For the quarter ended March 31,
2023, noninterest income was $1.9
million, which represents an increase of $627,000, or 47.5%, when compared to the quarter
ended March 31, 2022. The increase
was primarily due to increases in customer service fees on deposit
accounts and other income. Customer service fees on deposit
accounts increased $398,000, or
68.5%, which was primarily attributable to implementation and
activity fees charged to Banking as a Service ("BaaS") and digital
asset customers as well as fees generated from cash vault services
for our customers who operate Bitcoin ATMs. Other
income increased $241,000 primarily
due to gains on sales of other repossessed assets and a semi-annual
commission related to a sold loan.
For the quarter ended March 31,
2023, noninterest expense was $13.2
million, which represents an increase of $2.2 million, or 19.9%, when compared to the
quarter ended March 31, 2022. The
increase in noninterest expense was primarily due to increases in
salaries and employee benefits and professional fees. The increase
of $1.4 million, or 18.8%, in salary
and employee benefits was primarily due to an increase in staff to
support the development and implementation of new technologies and
products. Professional fees increased $675,000, or 92.7%, primarily due to increased
legal fees and audit and compliance costs related to ongoing
services pertaining to the events that led to the losses recorded
during 2022.
Balance Sheet Results
March 31, 2023 Compared to
December 31, 2022
Total assets increased $65.8
million, or 4.0%, to $1.70
billion at March 31, 2023
compared to $1.64 billion at
December 31, 2022. The primary reason for the increase
was an increase in cash and cash equivalents, offset by decreases
in net loans, and other repossessed assets. Cash and cash
equivalents increased $163.5 million,
or 202.8%, primarily due to increased deposit balances and a
decrease in net loans. 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 $92.7 million,
or 6.5%, and were $1.32 billion at
March 31, 2023 compared to $1.42
billion at December 31, 2022. The decrease was
primarily driven by decreases in mortgage warehouse loans of
$64.1 million, or 30.1%,
commercial loans of $22.6 million, or
10.4%, and digital asset loans of $13.8
million, or 33.8%. The decrease in our mortgage warehouse
loan portfolio was primarily due to decreased usage of the mortgage
warehouse lines. The decrease in our commercial loan portfolio was
primarily related to payoffs in our traditional in-market loan
portfolio. The Bank continues its efforts to wind-down its digital
asset lending portfolio. Digital asset loans were $27.0 million as of March
31, 2023 compared to $40.8
million as of December 31,
2022 which represents a decrease $13.8 million, or 33.8%. The decrease in the
digital asset loan portfolio was primarily 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.
Total liabilities increased $61.9
million, or 4.3%, to $1.49
billion as of March 31, 2023
compared to $1.43 billion at December
31, 2022, primarily due to an increase in deposits offset by a
decrease in short-term borrowings. Deposits were $1.40 billion as of March 31, 2023 compared
to $1.28 billion as of December 31, 2022, which represents an increase
of $124.3 million, or 9.7%. The
increase in deposits was primarily related to an increase of
$117.0 million in specialty deposits,
which were $219.8 million as of
March 31, 2023 compared to
$102.8 million as of December 31, 2022. Specialty deposits consist of
deposits by BaaS and digital asset customers. BaaS deposits totaled
$161.7 million as of March 31, 2023 which represents a $116.4 million increase from December 31, 2022, of this balance, the Bank is
holding $91.9 million as volatile and
holding as cash, as of March 31,
2023. Included in BaaS deposits was $31.0 million related to BaaS customers whose
business model focuses on digital assets. Non-BaaS digital asset
deposits totaled $58.1 million as of
March 31, 2023, which represents a
$621,000 increase from December 31, 2022. The increase in deposits was
partially offset by a decrease in borrowings of $58.5 million primarily driven by a decrease in
overnight borrowings.
As of March 31, 2023,
shareholders' equity was $211.5
million compared to $207.5
million at December 31, 2022, which represents an
increase of $3.9 million, or 1.9%.
The increase was primarily due to net income of $2.1 million. Also contributing to the increase
was a one-time, cumulative-effect adjustment for the adoption of
CECL which increased retained earnings by $697,000. Shareholders' equity also increased due
to other comprehensive income of $631,000, stock-based compensation expense of
$319,000, and employee stock
ownership plan shares earned of $187,000.
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; 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 loan 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; and 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
|
|
|
|
|
|
|
|
At
|
|
At
|
|
March 31,
|
|
December 31,
|
|
2023
|
|
2022
|
(Dollars in
thousands)
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Cash and due from
banks
|
$
|
27,669
|
|
$
|
42,923
|
Short-term
investments
|
|
216,509
|
|
|
37,706
|
Cash and cash
equivalents
|
|
244,178
|
|
|
80,629
|
Debt securities
available-for-sale (at fair value)
|
|
28,744
|
|
|
28,600
|
Federal Home Loan Bank
stock, at cost
|
|
3,095
|
|
|
4,266
|
Loans, net of allowance
for credit losses of $24,812 and $28,069 as of March 31,
2023
|
|
|
|
|
|
and December 31, 2022,
respectively
|
|
1,323,390
|
|
|
1,416,047
|
Bank owned life
insurance
|
|
43,881
|
|
|
43,615
|
Premises and equipment,
net
|
|
13,439
|
|
|
13,580
|
Other repossessed
assets
|
|
—
|
|
|
6,051
|
Accrued interest
receivable
|
|
5,836
|
|
|
6,597
|
Right-of-use
assets
|
|
3,902
|
|
|
3,942
|
Deferred tax asset,
net
|
|
15,692
|
|
|
16,793
|
Other assets
|
|
19,996
|
|
|
16,261
|
Total
assets
|
$
|
1,702,153
|
|
$
|
1,636,381
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
Noninterest-bearing
|
$
|
460,836
|
|
$
|
520,226
|
Interest-bearing
|
|
943,085
|
|
|
759,356
|
Total
deposits
|
|
1,403,921
|
|
|
1,279,582
|
Borrowings:
|
|
|
|
|
|
Short-term
borrowings
|
|
50,000
|
|
|
108,500
|
Long-term
borrowings
|
|
18,296
|
|
|
18,329
|
Total
borrowings
|
|
68,296
|
|
|
126,829
|
Operating lease
liabilities
|
|
4,255
|
|
|
4,282
|
Other
liabilities
|
|
14,229
|
|
|
18,146
|
Total
liabilities
|
|
1,490,701
|
|
|
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;
|
|
|
|
|
|
17,693,818 and
17,669,698 shares issued and outstanding
|
|
|
|
|
|
at March 31, 2023, and
December 31, 2022, respectively
|
|
177
|
|
|
177
|
Additional paid-in
capital
|
|
123,144
|
|
|
122,847
|
Retained
earnings
|
|
97,432
|
|
|
94,630
|
Accumulated other
comprehensive loss
|
|
(1,569)
|
|
|
(2,200)
|
Unearned compensation -
ESOP
|
|
(7,732)
|
|
|
(7,912)
|
Total shareholders'
equity
|
|
211,452
|
|
|
207,542
|
Total liabilities
and shareholders' equity
|
$
|
1,702,153
|
|
$
|
1,636,381
|
Provident Bancorp,
Inc.
Consolidated Income Statements
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
(Dollars in
thousands, except per share data)
|
2023
|
|
2022
|
|
2022
|
|
Interest and
dividend income:
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
20,006
|
|
$
|
20,336
|
|
$
|
18,212
|
|
Interest and dividends
on debt securities available-for-sale
|
|
238
|
|
|
221
|
|
|
179
|
|
Interest on short-term
investments
|
|
383
|
|
|
461
|
|
|
59
|
|
Total interest and
dividend income
|
|
20,627
|
|
|
21,018
|
|
|
18,450
|
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
3,901
|
|
|
1,801
|
|
|
455
|
|
Interest on short-term
borrowings
|
|
824
|
|
|
388
|
|
|
—
|
|
Interest on long-term
borrowings
|
|
86
|
|
|
84
|
|
|
70
|
|
Total interest
expense
|
|
4,811
|
|
|
2,273
|
|
|
525
|
|
Net interest and
dividend income
|
|
15,816
|
|
|
18,745
|
|
|
17,925
|
|
Credit loss (benefit)
expense - loans
|
|
2,935
|
|
|
(970)
|
|
|
83
|
|
Credit loss benefit -
off-balance sheet credit exposures
|
|
(1,156)
|
|
|
(22)
|
|
|
—
|
|
Total credit loss
(benefit) expense
|
|
1,779
|
|
|
(992)
|
|
|
83
|
|
Net interest and
dividend income after credit loss
expense (benefit)
|
|
14,037
|
|
|
19,737
|
|
|
17,842
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
Customer service fees
on deposit accounts
|
|
979
|
|
|
942
|
|
|
581
|
|
Service charges and
fees - other
|
|
451
|
|
|
720
|
|
|
376
|
|
Bank owned life
insurance income
|
|
266
|
|
|
268
|
|
|
256
|
|
Gain on loans sold,
net
|
|
—
|
|
|
—
|
|
|
97
|
|
Other income
|
|
251
|
|
|
8
|
|
|
10
|
|
Total
noninterest income
|
|
1,947
|
|
|
1,938
|
|
|
1,320
|
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
8,544
|
|
|
9,573
|
|
|
7,189
|
|
Occupancy
expense
|
|
421
|
|
|
415
|
|
|
439
|
|
Equipment
expense
|
|
144
|
|
|
154
|
|
|
138
|
|
Deposit
insurance
|
|
278
|
|
|
557
|
|
|
151
|
|
Data
processing
|
|
361
|
|
|
348
|
|
|
335
|
|
Marketing
expense
|
|
83
|
|
|
149
|
|
|
127
|
|
Professional
fees
|
|
1,403
|
|
|
2,522
|
|
|
728
|
|
Directors'
compensation
|
|
200
|
|
|
250
|
|
|
254
|
|
Software depreciation
and implementation
|
|
417
|
|
|
431
|
|
|
294
|
|
Insurance
expense
|
|
452
|
|
|
448
|
|
|
447
|
|
Service fees
|
|
236
|
|
|
243
|
|
|
208
|
|
Write down of other
assets and receivables
|
|
—
|
|
|
—
|
|
|
395
|
|
Other
|
|
672
|
|
|
2,138
|
|
|
706
|
|
Total noninterest
expense
|
|
13,211
|
|
|
17,228
|
|
|
11,411
|
|
Income before income
tax expense
|
|
2,773
|
|
|
4,447
|
|
|
7,751
|
|
Income tax
expense
|
|
670
|
|
|
1,750
|
|
|
2,226
|
|
Net
income
|
$
|
2,103
|
|
$
|
2,697
|
|
$
|
5,525
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.13
|
|
$
|
0.16
|
|
$
|
0.33
|
|
Diluted
|
|
0.13
|
|
$
|
0.16
|
|
$
|
0.32
|
|
Weighted Average
Shares:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
16,530,627
|
|
|
16,496,543
|
|
|
16,517,952
|
|
Diluted
|
|
16,531,266
|
|
|
16,607,719
|
|
|
17,028,057
|
|
Provident Bancorp,
Inc.
Net Interest Income Analysis
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
March 31,
|
|
December 31,
|
|
|
March 31,
|
|
2023
|
|
2022
|
|
|
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)
|
$
|
1,391,941
|
|
$
|
20,006
|
|
5.75 %
|
|
$
|
1,444,239
|
|
$
|
20,336
|
|
5.63 %
|
|
|
$
|
1,469,268
|
|
$
|
18,212
|
|
4.96 %
|
Short-term
investments
|
|
40,931
|
|
|
383
|
|
3.74 %
|
|
|
49,711
|
|
|
461
|
|
3.71 %
|
|
|
|
136,954
|
|
|
59
|
|
0.17 %
|
Debt securities
available-
for-sale
|
|
28,727
|
|
|
193
|
|
2.69 %
|
|
|
28,654
|
|
|
198
|
|
2.76 %
|
|
|
|
35,820
|
|
|
175
|
|
1.95 %
|
Federal Home Loan
Bank
stock
|
|
2,639
|
|
|
45
|
|
6.82 %
|
|
|
2,718
|
|
|
23
|
|
3.38 %
|
|
|
|
785
|
|
|
4
|
|
2.04 %
|
Total
interest-earning
assets
|
|
1,464,238
|
|
|
20,627
|
|
5.63 %
|
|
|
1,525,322
|
|
|
21,018
|
|
5.51 %
|
|
|
|
1,642,827
|
|
|
18,450
|
|
4.49 %
|
Non-interest earning
assets
|
|
117,178
|
|
|
|
|
|
|
|
120,009
|
|
|
|
|
|
|
|
|
85,542
|
|
|
|
|
|
Total
assets
|
$
|
1,581,416
|
|
|
|
|
|
|
$
|
1,645,331
|
|
|
|
|
|
|
|
$
|
1,728,369
|
|
|
|
|
|
Liabilities and
shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
|
142,457
|
|
$
|
111
|
|
0.31 %
|
|
$
|
148,358
|
|
$
|
64
|
|
0.17 %
|
|
|
$
|
153,480
|
|
$
|
40
|
|
0.10 %
|
Money market
accounts
|
|
313,077
|
|
|
1,913
|
|
2.44 %
|
|
|
342,228
|
|
|
1,079
|
|
1.26 %
|
|
|
|
392,874
|
|
|
250
|
|
0.25 %
|
NOW accounts
|
|
127,124
|
|
|
146
|
|
0.46 %
|
|
|
178,834
|
|
|
142
|
|
0.32 %
|
|
|
|
192,564
|
|
|
83
|
|
0.17 %
|
Certificates of
deposit
|
|
185,470
|
|
|
1,731
|
|
3.73 %
|
|
|
114,397
|
|
|
516
|
|
1.80 %
|
|
|
|
60,627
|
|
|
82
|
|
0.54 %
|
Total interest-bearing
deposits
|
|
768,128
|
|
|
3,901
|
|
2.03 %
|
|
|
783,817
|
|
|
1,801
|
|
0.92 %
|
|
|
|
799,545
|
|
|
455
|
|
0.23 %
|
Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
69,647
|
|
|
824
|
|
4.73 %
|
|
|
38,901
|
|
|
388
|
|
3.99 %
|
|
|
|
—
|
|
|
—
|
|
— %
|
Long-term
borrowings
|
|
18,307
|
|
|
86
|
|
1.88 %
|
|
|
16,705
|
|
|
84
|
|
2.01 %
|
|
|
|
13,500
|
|
|
70
|
|
2.07 %
|
Total
borrowings
|
|
87,954
|
|
|
910
|
|
4.14 %
|
|
|
55,606
|
|
|
472
|
|
3.40 %
|
|
|
|
13,500
|
|
|
70
|
|
2.07 %
|
Total interest-bearing
liabilities
|
|
856,082
|
|
|
4,811
|
|
2.25 %
|
|
|
839,423
|
|
|
2,273
|
|
1.08 %
|
|
|
|
813,045
|
|
|
525
|
|
0.26 %
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
495,067
|
|
|
|
|
|
|
|
580,013
|
|
|
|
|
|
|
|
|
657,784
|
|
|
|
|
|
Other
noninterest-bearing
liabilities
|
|
20,469
|
|
|
|
|
|
|
|
17,603
|
|
|
|
|
|
|
|
|
21,064
|
|
|
|
|
|
Total
liabilities
|
|
1,371,618
|
|
|
|
|
|
|
|
1,437,039
|
|
|
|
|
|
|
|
|
1,491,893
|
|
|
|
|
|
Total equity
|
|
209,798
|
|
|
|
|
|
|
|
208,292
|
|
|
|
|
|
|
|
|
236,476
|
|
|
|
|
|
Total liabilities
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equity
|
$
|
1,581,416
|
|
|
|
|
|
|
$
|
1,645,331
|
|
|
|
|
|
|
|
$
|
1,728,369
|
|
|
|
|
|
Net interest
income
|
|
|
|
$
|
15,816
|
|
|
|
|
|
|
$
|
18,745
|
|
|
|
|
|
|
|
$
|
17,925
|
|
|
Interest rate spread
(3)
|
|
|
|
|
|
|
3.38 %
|
|
|
|
|
|
|
|
4.43 %
|
|
|
|
|
|
|
|
|
4.23 %
|
Net interest-earning
assets (4)
|
$
|
608,156
|
|
|
|
|
|
|
$
|
685,899
|
|
|
|
|
|
|
|
$
|
829,782
|
|
|
|
|
|
Net interest margin
(5)
|
|
|
|
|
|
|
4.32 %
|
|
|
|
|
|
|
|
4.92 %
|
|
|
|
|
|
|
|
|
4.36 %
|
Average
interest-earning
assets to interest-bearing
liabilities
|
|
171.04 %
|
|
|
|
|
|
|
|
181.71 %
|
|
|
|
|
|
|
|
|
202.06 %
|
|
|
|
|
|
|
|
(1)
|
Interest earned/paid on
loans includes mortgage warehouse loan origination fee income of
$262,000, $205,000, and $342,000 for the three months ended March
31, 2023, December 31, 2022, and March 31, 2022,
respectively.
|
(2)
|
Includes loans held for
sale at March 31, 2022.
|
(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
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
2023
|
|
2022
|
|
2022
|
|
Performance
Ratios:
|
|
|
|
|
|
|
|
|
|
Return on average
assets (1)
|
|
0.53 %
|
|
|
0.66 %
|
|
|
1.28 %
|
|
Return on average
equity (1)
|
|
4.01 %
|
|
|
5.18 %
|
|
|
9.35 %
|
|
Interest rate spread
(1) (2)
|
|
3.39 %
|
|
|
4.43 %
|
|
|
4.23 %
|
|
Net interest margin (1)
(3)
|
|
4.32 %
|
|
|
4.92 %
|
|
|
4.36 %
|
|
Non-interest expense to
average assets (1)
|
|
3.34 %
|
|
|
4.19 %
|
|
|
2.64 %
|
|
Efficiency ratio
(4)
|
|
74.37 %
|
|
|
83.30 %
|
|
|
59.29 %
|
|
Average
interest-earning assets to
|
|
|
|
|
|
|
|
|
|
average
interest-bearing liabilities
|
|
171.04 %
|
|
|
181.71 %
|
|
|
202.06 %
|
|
Average equity to
average assets
|
|
13.27 %
|
|
|
12.66 %
|
|
|
13.68 %
|
|
|
At
|
|
At
|
|
March 31,
|
|
December 31,
|
|
2023
|
|
2022
|
Asset
Quality
|
|
|
|
|
|
Non-accrual
loans:
|
|
|
|
|
|
Commercial real
estate
|
$
|
55
|
|
$
|
56
|
Commercial
|
|
193
|
|
|
101
|
Enterprise
value
|
|
4,397
|
|
|
92
|
Digital
asset
|
|
26,602
|
|
|
26,488
|
Residential real
estate
|
|
224
|
|
|
227
|
Construction and land
development
|
|
—
|
|
|
—
|
Consumer
|
|
—
|
|
|
—
|
Mortgage
warehouse
|
|
—
|
|
|
—
|
Total non-accrual
loans
|
|
31,471
|
|
|
26,964
|
Accruing loans past due
90 days or more
|
|
—
|
|
|
—
|
Other repossessed
assets
|
|
—
|
|
|
6,051
|
Total non-performing
assets
|
$
|
31,471
|
|
$
|
33,015
|
Asset Quality
Ratios
|
|
|
|
|
|
Allowance for loan
losses as a percent of total loans (5)
|
|
1.84 %
|
|
|
1.94 %
|
Allowance for loan
losses as a percent of non-performing loans
|
|
78.84 %
|
|
|
104.10 %
|
Non-performing loans as
a percent of total loans (5)
|
|
2.33 %
|
|
|
1.87 %
|
Non-performing loans as
a percent of total assets
|
|
1.85 %
|
|
|
1.65 %
|
Non-performing assets
as a percent of total assets (6)
|
|
1.85 %
|
|
|
2.02 %
|
Capital and Share
Related
|
|
|
|
|
|
Stockholders' equity to
total assets
|
|
12.4 %
|
|
|
12.7 %
|
Book value per
share
|
$
|
11.95
|
|
$
|
11.75
|
Market value per
share
|
$
|
6.84
|
|
$
|
7.28
|
Shares
outstanding
|
|
17,693,818
|
|
|
17,669,698
|
|
|
(1)
|
Annualized where
appropriate.
|
(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
|
|
March 31,
|
|
December 31,
|
|
2023
|
|
2022
|
(In
thousands)
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
Commercial real
estate
|
$
|
447,461
|
|
33.19 %
|
|
$
|
453,592
|
|
31.41 %
|
Commercial
|
|
194,335
|
|
14.41 %
|
|
|
216,931
|
|
15.02 %
|
Enterprise
value
|
|
437,570
|
|
32.46 %
|
|
|
438,745
|
|
30.38 %
|
Digital asset
(1)
|
|
26,981
|
|
2.00 %
|
|
|
40,781
|
|
2.82 %
|
Residential real
estate
|
|
7,661
|
|
0.57 %
|
|
|
8,165
|
|
0.57 %
|
Construction and land
development
|
|
84,800
|
|
6.29 %
|
|
|
72,267
|
|
5.00 %
|
Consumer
|
|
281
|
|
0.02 %
|
|
|
391
|
|
0.03 %
|
Mortgage
warehouse
|
|
149,113
|
|
11.06 %
|
|
|
213,244
|
|
14.77 %
|
|
|
1,348,202
|
|
100.00 %
|
|
|
1,444,116
|
|
100.00 %
|
Allowance for credit
losses - loans
|
|
(24,812)
|
|
|
|
|
(28,069)
|
|
|
Net loans
|
$
|
1,323,390
|
|
|
|
$
|
1,416,047
|
|
|
|
|
(1)
|
Includes $20.9 million
and $26.5 million in loans secured by cryptocurrency mining rigs at
March 31, 2023 and December 31, 2022, respectively. The
remaining balances consist of digital asset lines of
credit.
|
|
At
|
At
|
|
March 31,
|
December 31,
|
(In
thousands)
|
2023
|
2022
|
Noninterest-bearing:
|
|
|
|
|
Demand
|
$
|
460,836
|
$
|
520,226
|
Interest-bearing:
|
|
|
|
|
NOW
|
|
122,721
|
|
145,533
|
Regular
savings
|
|
158,470
|
|
141,802
|
Money market
deposits
|
|
451,427
|
|
318,417
|
Certificates of
deposit:
|
|
|
|
|
Certificate accounts
of $250,000 or more
|
|
17,659
|
|
11,449
|
Certificate accounts
less than $250,000
|
|
192,808
|
|
142,155
|
Total
interest-bearing
|
|
943,085
|
|
759,356
|
Total deposits
(1)(2)(3)
|
$
|
1,403,921
|
$
|
1,279,582
|
|
|
(1)
|
Includes $161.7 million
and $45.3 million in BaaS deposits at March 31, 2023 and December
31, 2022, respectively.
|
(2)
|
Includes $58.1 million
and $57.5 million in digital asset deposits at March 31, 2023 and
December 31, 2022, respectively.
|
(3)
|
Of total deposits the
FDIC insured approximately 56% and 55% and the remaining 44% and
45% were insured through the DIF, as of March 31, 2023 and December
31, 2022, respectively.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/provident-bancorp-inc-reports-results-for-the-march-31-2023-quarter-301812413.html
SOURCE Provident Bancorp, Inc.