AMESBURY, Mass., Jan. 25,
2024 /PRNewswire/ -- Provident Bancorp, Inc. (the
"Company") (NasdaqCM: PVBC), the holding company for BankProv (the
"Bank"), reported net income for the quarter ended December 31, 2023 of $2.9
million, or $0.18 per diluted
share, compared to $2.5 million, or
$0.15 per diluted share, for the
quarter ended September 30, 2023, and
$2.7 million, or $0.16 per diluted share, for the quarter ended
December 31, 2022. The Company
reported net income of $11.0 million,
or $0.66 per diluted share, for the
year ended December 31, 2023. Net
loss for the year ended December 31,
2022 was $21.5 million, or
($1.30) per diluted share.
In announcing these results, Joe
Reilly, Co-Chief Executive Officer said "Over the course of
the year, rising interest rates and industry turmoil created a
challenging and unpredictable market for banks. High interest rates
continue to drive competition for deposits and put downward
pressure on net interest margins. While these challenges persist
into 2024, we continue to focus our efforts on improving asset
quality, cost discipline, growing our core business banking base,
and prioritizing safe and sound strategic banking practices. Our
team has made significant strides in winding down our digital asset
loan portfolio, with a nearly 70% reduction year over year. I am
proud of the results and profitability the team was able to achieve
in 2023. Despite the economic challenges that continue to put
pressure on net interest margins, I look forward to continued
progress towards our strategic objectives in 2024."
Income Statement Results
Quarter Ended December 31, 2023
Compared to Quarter Ended September 30,
2023
For the quarter ended December 31,
2023, net interest and dividend income was $13.6 million, which represents a decrease of
$323,000, or 2.3%, compared to the
quarter ended September 30, 2023. Net
interest and dividend income was negatively impacted by an increase
in interest expense of $661,000, or
7.1%, to $10.0 million for the
quarter ended December 31, 2023,
compared to $9.3 million for the
quarter ended September 30, 2023,
partially offset by an increase in interest and dividend income of
$338,000, or 1.5%, to $23.6 million for the quarter ended December 31, 2023 compared to $23.2 million for the quarter ended September 30, 2023. Interest expense increased
primarily due to an increase in the cost of interest-bearing
deposits and, to a lesser extent, an increase in the average
balance of interest-bearing deposits. The cost of interest-bearing
deposits increased 24 basis points to 3.65% for the quarter ended
December 31, 2023, compared to 3.41%
for the quarter ended September 30,
2023, primarily due to rising interest rates and a larger
proportion of the portfolio consisting of higher-cost savings
accounts and certificates of deposit. The average balance of
interest-bearing deposits increased $15.1
million, or 1.4%, to $1.09
billion for the quarter ended December 31, 2023, primarily due to increases in
the average balances of savings accounts and certificates of
deposit, partially offset by a decrease in the average balance of
money market accounts.
Interest and dividend income increased due to increases in
interest and fees on loans and interest on short-term investments.
Interest and fees on loans increased $189,000 to $20.0
million for the quarter ended December 31, 2023, compared to $19.8 million for the quarter ended September 30, 2023, mainly due to elevated
interest rates resulting in a five basis point increase in the
yield on loans. Interest earned on short-term investments increased
$150,000 to $3.3 million for the quarter ended December 31, 2023 due to elevated rates,
resulting in a 121 basis point increase in the yield on short-term
investments to 6.15% for the quarter ended December 31, 2023. Although the yield on
short-term investments increased, the average balance of short-term
investments decreased $40.9 million
to $216.7 million for the quarter
ended December 31, 2023, compared to
$257.6 million for the quarter ended
September 30, 2023.
A credit loss benefit of $1.2
million was recognized for the quarter ended December 31, 2023, compared to a $156,000 credit loss benefit recognized for the
quarter ended September 30, 2023. The
credit loss benefit for the quarter ended December 31, 2023, was primarily due to a
decrease in the reserve for individually analyzed loans. The
reserve for individually analyzed loans decreased due to the
restructuring of an enterprise value loan relationship which
resulted in a reduction to the reserve for individually analyzed
loans of $1.9 million, of which
$1.2 million was related to previous
reserves that were charged-off. The reserve for individually
analyzed loans was further decreased by a $1.2 million reduction in the reserves related to
the digital asset loan portfolio which was the result of continued
principal paydowns and improvements in the value of the underlying
collateral. The credit loss benefit was partially offset by an
increase in the reserve resulting from decreased prepayment and
curtailment rate forecasts updated for current market and economic
conditions. The credit loss benefit of $156,000 recognized for the quarter ended
September 30, 2023, was 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 for the quarter ended September 30,
2023 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 December 31,
2023, noninterest income was $1.6
million, which represents a decrease of $118,000, or 6.7%, compared to the quarter ended
September 30, 2023. The decrease was
primarily due to a decrease in other service charges and fees,
partially offset by an increase in customer service fees on deposit
accounts. Other service charges and fees decreased $175,000, or 34.2%, primarily due to decreases in
prepayment penalties on commercial and commercial real estate loans
received during the third quarter of 2023. Customer service fees on
deposit accounts increased $104,000,
or 11.5%, primarily due to fees recognized on customer
accounts.
For the quarter ended December 31,
2023, noninterest expense was $12.5
million, which represents a decrease of $259,000, or 2.0%, compared to the quarter ended
September 30, 2023. The decrease was
primarily due to decreases in salaries and employee benefits and
deposit insurance, partially offset by increases in professional
fees and other expenses. Salaries and employee benefits decreased
$939,000, or 12.1%, to $6.8 million for the quarter ended December 31, 2023, from $7.8 million for the quarter ended September 30, 2023 primarily due to reduced
salaries and employee benefits resulting from a workforce
realignment during the third quarter of 2023 and an updated
assessment of 2023 accrued incentive compensation. Deposit
insurance decreased $132,000, or
26.4%, to $368,000 for the quarter
ended December 31, 2023 from
$500,000 for the quarter ended
September 30, 2023 due to a decrease
in the Federal Deposit Insurance Corporation's ("FDIC") insurance
assessment rate schedules. Professional fees increased $453,000, or 43.8%, to $1.5 million for the quarter ended December 31, 2023, from $1.0 million for the quarter ended September 30, 2023 due to increased legal fees,
audits and compliance expense, and professional services relating
to consultants. Other expenses increased $178,000, or 21.3%, to $1.0 million for the quarter ended December 31, 2023, compared to $837,000 for the quarter ended September 30, 2023 due to the termination of
corporate vendor partnerships.
Quarter Ended December 31, 2023
Compared to Quarter Ended December 31,
2022
For the quarter ended December 31,
2023, net interest and dividend income was $13.6 million, which represents a decrease of
$5.2 million, or 27.6%, from the
quarter ended December 31, 2022. Net
interest and dividend income for the quarter ended December 31, 2023 was negatively impacted by an
increase in interest expense of $7.7
million to $10.0 million for
the quarter ended December 31, 2023
compared to $2.3 million for the
quarter ended December 31, 2022,
which was partially offset by an increase in interest and dividend
income of $2.5 million, or 12.1%, to
$23.6 million for the quarter ended
December 31, 2023, compared to
$21.0 million for the quarter ended
December 31, 2022. Interest expense
increased primarily due to rising interest rates, an increase in
the average balance of interest-bearing deposits, 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 273 basis points to 3.65% for the quarter ended
December 31, 2023, compared to 0.92%
for the quarter ended December 31,
2022. The increase in interest expense was also driven by an
increase in the average balance of interest-bearing deposits of
$301.7 million, or 38.5%, to
$1.09 billion for the quarter ended
December 31, 2023, compared to
$783.8 million for the quarter ended
December 31, 2022.
Interest and dividend income increased primarily due to rising
interest rates, which resulted in an increased yield on
interest-earning assets of 48 basis points to 5.99% for the quarter
ended December 31, 2023, compared to
5.51% for the quarter ended December 31,
2022. Higher average balances and rising interest rates
resulted in interest on short-term investments of $3.3 million for the quarter ended December 31, 2023, compared to $461,000 for the quarter ended December 31, 2022. Interest earned on loans
decreased $336,000 to $20.0 million for the quarter ended December 31, 2023, compared to $20.3 million for the quarter ended December 31, 2022, due to a reduction of
$115.6 million, or 8.0%, in the
average balance of loans to $1.33
billion for the quarter ended December 31, 2023 from $1.44 billion for the quarter ended December 31, 2022. The decrease in interest
earned on loans was partially offset by a 39 basis point increase
in the yield on loans to 6.02% for the quarter ended December 31, 2023, compared to 5.63% for the
quarter ended December 31, 2022.
A credit loss benefit of $1.2
million was recognized for the quarter ended December 31, 2023, compared to a $992,000 credit loss benefit recognized for the
quarter ended December 31, 2022. The
credit loss benefit for the quarter ended December 31, 2023, was primarily due to a
decrease in the reserve for individually analyzed loans. The
reserve for individually analyzed loans decreased due to the
restructuring of an enterprise value loan relationship which
resulted in a reduction to the reserve for individually analyzed
loans of $1.9 million, of which
$1.2 million was related to previous
reserves that were charged-off. The reserve for individually
analyzed loans was further decreased by a $1.2 million reduction in the reserves related to
the digital asset loan portfolio which was the result of continued
principal paydowns and improvements in the value of the underlying
collateral. The credit loss benefit was partially offset by an
increase in the reserve resulting from decreased prepayment and
curtailment rate forecasts updated for current market and economic
conditions. The credit loss benefit of $992,000 recognized for the quarter ended
December 31, 2022, was primarily the
result of a decrease in loans during the fourth quarter of
2022.
For the quarter ended December 31,
2023, noninterest income was $1.6
million, which represents a decrease of $291,000, or 15.0%, compared to the quarter ended
December 31, 2022, which was
primarily due to a decrease in service charges and fees. Service
charges and fees decreased $384,000,
or 53.3%, to $336,000 for the quarter
ended December 31, 2023, compared to
$720,000 for the quarter ended
December 31, 2022 primarily due to
decreases in prepayment penalties on commercial and commercial real
estate loans received during the fourth quarter of 2022 when
compared to the fourth quarter of 2023. These decreases were
partially offset by implementation and activity fees charged to
Banking as a Service ("BaaS") customers. BaaS implementation and
activity fees on deposit accounts were $323,000 for the quarter ended December 31, 2023, compared to $93,000 for the quarter ended December 31, 2022.
For the quarter ended December 31,
2023, noninterest expense was $12.5
million, which represents a decrease of $4.8 million, or 27.7%, compared to the quarter
ended December 31, 2022. The decrease
in noninterest expense was primarily due to decreases in salaries
and employee benefits, professional fees, and other expenses.
Salaries and employee benefits decreased $2.8 million, or 28.6%, to $6.8 million for the quarter ended December 31, 2023, from $9.6 million for the quarter ended December 31, 2022, primarily due to an expense
during the fourth quarter of 2022 related to an agreement between
the Bank and the Company and their former President and Chief
Executive Officer entered into upon his separation from employment,
as well as reduced salaries and employee benefits resulting from a
workforce realignment during the third quarter of 2023.
Professional fees decreased $1.0
million, or 41.0%, to $1.5
million for the quarter ended December 31, 2023, from $2.5 million for the quarter ended December 31, 2022, primarily due to higher legal
fees and audit and compliance costs during the fourth quarter of
2022, resulting primarily from a review of the Company's digital
asset lending practices following the events that caused the losses
recorded in the third quarter of 2022. Other expenses decreased
$1.1 million, or 52.5%, to
$1.0 million for the quarter ended
December 31, 2023, primarily due to
costs related to repossessed assets incurred during the quarter
ended December 31, 2022. There were
no costs related to repossessed assets incurred during the quarter
ended December 31, 2023.
Year Ended December 31, 2023
Compared to the Year Ended December 31,
2022
For the year ended December 31,
2023, net interest and dividend income was $58.2 million, which represents a decrease of
$16.9 million, or 22.5%, compared to
the year ended December 31, 2022. Net
interest and dividend income was negatively impacted by an increase
in interest expense of $27.8 million
to $32.1 million for the year ended
December 31, 2023, partially offset
by an increase in interest and dividend income of $11.0 million, or 13.8%, to $90.3 million for the year ended December 31, 2023 compared to $79.3 million for the year ended December 31, 2022. 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 266 basis
points to 3.11% for the year ended December
31, 2023, compared to 0.45% for the year ended December 31, 2022, primarily due to rising
interest rates and a larger proportion of the portfolio consisting
of higher-cost money market accounts, savings accounts, and
certificates of deposit. The cost of borrowings increased 101 basis
points to 3.80% for the year ended December
31, 2023, compared to 2.79% for the year ended December 31, 2022. The average balance of
interest-bearing liabilities increased $210.1 million, or 25.8%, and the average total
interest-earning assets decreased $62.2
million, or 3.8%.
The increase in interest and dividend income was primarily
driven by the higher interest rate environment, which resulted in
an increase in interest on short-term investments of $8.6 million, or 673.6%, and an increase in
interest and fees on loans of $2.2
million, or 2.9%. The yield on short-term investments
increased 416 basis points to 5.24% for the year ended December 31, 2023, compared to 1.08% for the year
ended December 21, 2022. The yield on
loans increased 66 basis points to 5.89% for the year ended
December 31, 2023, compared to 5.23%
for the year ended December 31, 2022.
The increases caused by an increase in the yields were partially
offset by a decrease in the average balance of loans of
$128.0 million, to $1.35 billion, for the year ended December 31, 2023, compared to $1.48 billion for the year ended December 31, 2022.
A credit loss benefit of $678,000
was recognized for the year ended December
31, 2023, and was based on the new expected loss model,
compared to an expense of $56.4
million for the year ended December
31, 2022, which was based on the incurred loss model. The
credit loss benefit recognized for the year ended December 31, 2023, was primarily driven by the
credit loss benefit for unfunded commitments of $1.5 million which was primarily due to a
decrease in the balance of unfunded commitments resulting from the
closure of approximately $7.1 million
in digital asset lines of credit during the first quarter of 2023.
This benefit was offset by credit loss expense related to loans of
$863,000 which was primarily driven
by the need to replenish the allowance due to net charge-offs of
$4.8 million for the year ended
December 31, 2023, partially offset
by decreases related to concentration changes. The credit loss
expense for the year ended December 31,
2022, was primarily driven by the need to replenish the
allowance due to net charge-offs, which totaled $47.9 million for the year ended December 31, 2022, which were predominantly
related to our portfolio of loans secured by
cryptocurrency mining rigs. Net charge offs for the
year ended December 31, 2023 totaled
approximately $4.8 million and were
predominantly related to our enterprise value portfolio.
For the year ended December 31,
2023, noninterest income was $7.1
million, which represents an increase of $912,000, or 14.8%, compared to the year ended
December 31, 2022. The increase was
primarily due to customer service fees on deposit accounts and
other income, partially offset by a decrease in gain on loans sold.
Customer service fees on deposit accounts increased $727,000, or 24.8%, to $3.7 million for the year ended December 31, 2023, due to implementation and
activity fees charged to BaaS customers. BaaS implementation and
activity fees on deposit accounts was $1.2
million for the year ended December
31, 2023 compared to $278,000
for the year ended December 31, 2022.
Other income increased $328,000
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 year ended December 31,
2023, noninterest expense was $51.1
million, which represents a decrease of $876,000, or 1.7%, compared to $52.0 million for the year ended December 31, 2022. The decrease was primarily due
to decreases in other expenses, salaries and employee benefits, and
directors' compensation, partially offset by increases in software
depreciation and implementation and deposit insurance. Other
expenses decreased $1.9 million, or
35.8%, for the year ended December 31,
2023, primarily due to a write down of a Small Business
Administration ("SBA") receivable in the first quarter of 2022, and
elevated loan servicing expenses relating to loans secured by
cryptocurrency mining rigs for the year ended
December 31, 2022. Salaries and
employee benefits decreased $471,000,
or 1.5%, for the year ended December 31,
2023, primarily due to an expense during the fourth quarter
of 2022 related to an agreement between the Bank and the Company
and their former President and Chief Executive Officer entered into
upon his separation from employment. Directors' compensation
decreased $349,000, or 34.0%, due to
fewer directors in 2023 when compared to 2022. Software
depreciation and implementation expenses increased $555,000, or 38.3%, for the year ended
December 31, 2023 due to the
implementation of new software to support business processes and
product improvements. Deposit insurance increased $491,000, or 48.0%, for the year ended
December 31, 2023, primarily due to
an increase in the FDIC's insurance assessment rate schedules.
Balance Sheet Results
Results for the quarter and year ended December 31, 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.
December 31, 2023 Compared to
September 30, 2023
Total assets decreased $138.1
million, or 7.6%, to $1.67
billion at December 31, 2023,
compared to $1.81 billion at
September 30, 2023 primarily due to a
decrease in cash and cash equivalents partially offset by an
increase in net loans. Cash and cash equivalents decreased
$146.0 million, or 39.9%, primarily
due to a decrease in volatile deposits of $156.4 million for the quarter ended December 31, 2023. Volatile deposits are those
deposits that the Bank reasonably expects to be short-term in
nature. Due to the expectation of volatility, these deposits are
held as cash. The Bank held $93.3
million of volatile deposits at December 31, 2023, compared to $249.7 million at September 30, 2023.
Total loans increased $5.0
million, or 0.4%, to $1.34
billion at December 31, 2023,
compared to $1.33 billion at
September 30, 2023. The increase was
primarily driven by an increase in commercial real estate loans of
$30.9 million, or 7.1%, partially
offset by decreases in the construction and land development
portfolio of $17.5 million, or 18.3%,
the mortgage warehouse portfolio of $5.5
million, or 3.2%, and the digital asset loan portfolio of
$3.0 million, or 19.4%. The increase
in the commercial real estate portfolio and decrease in the
construction and land development portfolio was primarily due to
the conversion of construction loans to permanent commercial real
estate loans during the quarter ended December 31, 2023.
Total liabilities decreased $142.5
million, or 9.0%, to $1.45
billion as of December 31,
2023, compared to $1.59
billion at September 30, 2023,
primarily due to a decrease in deposits, partially offset by an
increase in short-term borrowings. Deposits were $1.33 billion as of December 31, 2023, compared to $1.49 billion as of September 30, 2023, which represents a decrease
of $158.5 million, or 10.6%. The
decrease was primarily driven by a decrease in specialty deposits.
Specialty deposits span various product types, including demand,
money market and savings deposits, and consist of deposits from
BaaS and digital asset customers. Management continues to refine
the eligibility criteria for specialty deposit relationships and
will exit when deemed appropriate. The decrease in specialty
deposits of $158.3 million, or 59.4%,
was primarily the result of the Bank's review and refinement of
eligibility criteria and its decision to discontinue specialty
deposit relationships that did not meet the criteria. At
December 31, 2023, BaaS deposits
totaled $102.8 million, which
represents a 52.0% decrease from September
30, 2023 and digital asset deposits totaled $5.3 million, which represents an 89.8% decrease
from September 30, 2023. Short-term
borrowings increased $15.0 million,
or 18.8%, to $95.0 million as of
December 31, 2023, compared to
$80.0 million at September 30, 2023, driven by an increase in
overnight borrowings.
As of December 31, 2023,
shareholders' equity was $221.9
million compared to $217.6
million at September 30, 2023,
which represents an increase of $4.3
million, or 2.0%. The increase was primarily due to net
income of $2.9 million and other
comprehensive income of $897,000.
December 31, 2023 Compared to
December 31, 2022
Total assets increased $33.9
million, or 2.1%, to $1.67
billion at December 31, 2023,
compared to $1.64 billion at
December 31, 2022 due primarily to an
increase in cash and cash equivalents, partially offset by
decreases in net loans and other repossessed assets. Cash and cash
equivalents increased $139.7 million,
or 173.3%, primarily due to an increase in volatile deposits.
Volatile deposits held in cash totaled $93.3
million as of December 31,
2023. There were no volatile deposits as of December 31, 2022.
Total loans decreased $101.4
million, or 7.0%, and were $1.34
billion at December 31, 2023,
compared to $1.44 billion at
December 31, 2022. The decrease was
primarily driven by decreases in mortgage warehouse loans of
$46.7 million, or 21.9%, commercial
loans of $40.8 million, or 18.8%, the
digital asset loan portfolio of $28.5
million, or 69.9%, and enterprise value loans of
$5.1 million, or 1.2%. 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 has continued
its efforts to wind-down its digital asset lending exposure. The
remaining balance of the digital asset loan portfolio as of
December 31, 2023 was $12.3 million. The decrease in 2023 of
$28.5 million was driven by the
payoff and closure of two lines of credit totaling $15.7 million, the payoff of a $4.8 million loan secured by
cryptocurrency mining rigs, as well as paydowns
on the remaining portfolio. The decrease in total loans was
partially offset by increases in commercial real estate loans of
$15.3 million, or 3.4%, and
construction and land development loans of $5.6 million, or 7.7%.
Total liabilities increased $19.6
million, or 1.4%, to $1.45
billion as of December 31,
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 $1.33
billion as of December 31,
2023, compared to $1.28
billion as of December 31,
2022, which represents an increase of $51.6 million, or 4.0%. The increase in deposits
was primarily driven by an increase of $129.8 million in deposits obtained on a national
exchange, which totaled $136.8
million at December 31, 2023
compared to $7.0 million at
December 31, 2022. Also contributing
to the increase was an increase in deposits related to enterprise
value customers of $13.2 million, or
12.2%, totaling $121.4 million at
December 31, 2023, compared to
$108.2 million at December 31, 2022. These increases were offset by
a decrease in retail deposits of $98.4
million, or 9.5%. The increase in total liabilities was
partially offset by a decrease in borrowings of $22.1 million, or 17.5%, primarily driven by a
decrease in overnight borrowings.
As of December 31, 2023,
shareholders' equity was $221.9
million compared to $207.5
million at December 31, 2022,
which represents an increase of $14.4
million, or 6.9%. The increase was primarily due to net
income of $11.0 million.
Shareholders' equity also increased due to stock-based compensation
expense of $1.3 million, employee
stock ownership plan shares earned of $785,000, and a one-time cumulative-effect
adjustment for the adoption of CECL which increased retained
earnings by $696,000.
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 on which they are given). These
factors include: general economic conditions; 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; global and
national war and terrorism; the impact of the COVID-19 pandemic or
any other pandemic on our operations and financial results and
those of our customers; 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 that 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.
Joseph Reilly, 603-494-8552
Co-President and Co-Chief Executive Officer
jreilly@bankprov.com
Provident Bancorp,
Inc.
Consolidated Balance
Sheet
(Unaudited)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
|
|
At
|
|
At
|
|
December 31,
|
|
September
30,
|
|
December 31,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
Assets
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
$
|
22,200
|
|
$
|
22,445
|
|
$
|
42,923
|
Short-term
investments
|
|
198,132
|
|
|
343,924
|
|
|
37,706
|
Cash and cash
equivalents
|
|
220,332
|
|
|
366,369
|
|
|
80,629
|
Debt securities
available-for-sale (at fair value)
|
|
28,571
|
|
|
26,179
|
|
|
28,600
|
Federal Home Loan Bank
stock, at cost
|
|
4,056
|
|
|
3,607
|
|
|
4,266
|
Loans, net of allowance
for credit losses of $21,571, $24,023, and $28,069 as of
|
|
|
|
|
|
|
|
|
December 31, 2023,
September 30, 2023, and December 31, 2022, respectively
|
|
1,321,158
|
|
|
1,313,666
|
|
|
1,416,047
|
Bank owned life
insurance
|
|
44,735
|
|
|
44,437
|
|
|
43,615
|
Premises and equipment,
net
|
|
12,986
|
|
|
13,187
|
|
|
13,580
|
Other repossessed
assets
|
|
—
|
|
|
—
|
|
|
6,051
|
Accrued interest
receivable
|
|
6,090
|
|
|
5,585
|
|
|
6,597
|
Right-of-use
assets
|
|
3,780
|
|
|
3,821
|
|
|
3,942
|
Deferred tax asset,
net
|
|
14,461
|
|
|
15,599
|
|
|
16,793
|
Other assets
|
|
14,140
|
|
|
15,990
|
|
|
16,261
|
Total
assets
|
$
|
1,670,309
|
|
$
|
1,808,440
|
|
$
|
1,636,381
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
$
|
308,769
|
|
$
|
385,488
|
|
$
|
520,226
|
Interest-bearing
|
|
1,022,453
|
|
|
1,104,237
|
|
|
759,356
|
Total
deposits
|
|
1,331,222
|
|
|
1,489,725
|
|
|
1,279,582
|
Borrowings:
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
95,000
|
|
|
80,000
|
|
|
108,500
|
Long-term
borrowings
|
|
9,697
|
|
|
9,730
|
|
|
18,329
|
Total
borrowings
|
|
104,697
|
|
|
89,730
|
|
|
126,829
|
Operating lease
liabilities
|
|
4,171
|
|
|
4,199
|
|
|
4,282
|
Other
liabilities
|
|
8,317
|
|
|
7,206
|
|
|
18,146
|
Total
liabilities
|
|
1,448,407
|
|
|
1,590,860
|
|
|
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;
|
|
|
|
|
|
|
|
|
17,677,479,
17,681,916, and 17,669,698 shares issued and outstanding
|
|
|
|
|
|
|
|
|
at December 31, 2023,
September 30, 2023, and December 31, 2022, respectively
|
|
177
|
|
|
177
|
|
|
177
|
Additional paid-in
capital
|
|
124,129
|
|
|
123,808
|
|
|
122,847
|
Retained
earnings
|
|
106,285
|
|
|
103,361
|
|
|
94,630
|
Accumulated other
comprehensive loss
|
|
(1,496)
|
|
|
(2,393)
|
|
|
(2,200)
|
Unearned compensation -
ESOP
|
|
(7,193)
|
|
|
(7,373)
|
|
|
(7,912)
|
Total shareholders'
equity
|
|
221,902
|
|
|
217,580
|
|
|
207,542
|
Total liabilities
and shareholders' equity
|
$
|
1,670,309
|
|
$
|
1,808,440
|
|
$
|
1,636,381
|
Provident Bancorp,
Inc.
Consolidated Income
Statements
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year Ended
|
|
December 31,
|
|
September
30,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
(Dollars in
thousands, except per share data)
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Interest and
dividend income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
20,000
|
|
$
|
19,811
|
|
$
|
20,336
|
|
$
|
79,469
|
|
$
|
77,253
|
Interest and dividends
on debt securities available-for-sale
|
|
232
|
|
|
233
|
|
|
221
|
|
|
949
|
|
|
797
|
Interest on short-term
investments
|
|
3,334
|
|
|
3,184
|
|
|
461
|
|
|
9,879
|
|
|
1,277
|
Total interest and
dividend income
|
|
23,566
|
|
|
23,228
|
|
|
21,018
|
|
|
90,297
|
|
|
79,327
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
9,905
|
|
|
9,113
|
|
|
1,801
|
|
|
30,589
|
|
|
3,578
|
Interest on short-term
borrowings
|
|
64
|
|
|
196
|
|
|
388
|
|
|
1,314
|
|
|
422
|
Interest on long-term
borrowings
|
|
32
|
|
|
31
|
|
|
84
|
|
|
223
|
|
|
297
|
Total interest
expense
|
|
10,001
|
|
|
9,340
|
|
|
2,273
|
|
|
32,126
|
|
|
4,297
|
Net interest and
dividend income
|
|
13,565
|
|
|
13,888
|
|
|
18,745
|
|
|
58,171
|
|
|
75,030
|
Credit loss (benefit)
expense - loans
|
|
(1,227)
|
|
|
(105)
|
|
|
(970)
|
|
|
863
|
|
|
56,409
|
Credit loss (benefit)
expense - off-balance sheet credit exposures
|
|
(7)
|
|
|
(51)
|
|
|
(22)
|
|
|
(1,541)
|
|
|
19
|
Total credit loss
(benefit) expense
|
|
(1,234)
|
|
|
(156)
|
|
|
(992)
|
|
|
(678)
|
|
|
56,428
|
Net interest and
dividend income after credit loss (benefit) expense
|
|
14,799
|
|
|
14,044
|
|
|
19,737
|
|
|
58,849
|
|
|
18,602
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer service fees
on deposit accounts
|
|
1,007
|
|
|
903
|
|
|
942
|
|
|
3,658
|
|
|
2,931
|
Service charges and
fees - other
|
|
336
|
|
|
511
|
|
|
720
|
|
|
1,825
|
|
|
1,770
|
Bank owned life
insurance income
|
|
298
|
|
|
284
|
|
|
268
|
|
|
1,120
|
|
|
1,046
|
Gain on loans sold,
net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
272
|
Other income
|
|
6
|
|
|
67
|
|
|
8
|
|
|
458
|
|
|
130
|
Total
noninterest income
|
|
1,647
|
|
|
1,765
|
|
|
1,938
|
|
|
7,061
|
|
|
6,149
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
6,837
|
|
|
7,776
|
|
|
9,573
|
|
|
31,266
|
|
|
31,737
|
Occupancy
expense
|
|
421
|
|
|
429
|
|
|
415
|
|
|
1,692
|
|
|
1,702
|
Equipment
expense
|
|
156
|
|
|
148
|
|
|
154
|
|
|
599
|
|
|
582
|
Deposit
insurance
|
|
368
|
|
|
500
|
|
|
557
|
|
|
1,514
|
|
|
1,023
|
Data
processing
|
|
432
|
|
|
378
|
|
|
348
|
|
|
1,545
|
|
|
1,374
|
Marketing
expense
|
|
193
|
|
|
203
|
|
|
149
|
|
|
640
|
|
|
412
|
Professional
fees
|
|
1,487
|
|
|
1,034
|
|
|
2,522
|
|
|
4,843
|
|
|
4,695
|
Directors'
compensation
|
|
135
|
|
|
178
|
|
|
250
|
|
|
677
|
|
|
1,026
|
Software depreciation
and implementation
|
|
596
|
|
|
509
|
|
|
431
|
|
|
2,005
|
|
|
1,450
|
Insurance
expense
|
|
451
|
|
|
451
|
|
|
448
|
|
|
1,804
|
|
|
1,791
|
Service fees
|
|
365
|
|
|
272
|
|
|
243
|
|
|
1,154
|
|
|
931
|
Other
|
|
1,015
|
|
|
837
|
|
|
2,138
|
|
|
3,394
|
|
|
5,286
|
Total noninterest
expense
|
|
12,456
|
|
|
12,715
|
|
|
17,228
|
|
|
51,133
|
|
|
52,009
|
Income (loss) before
income tax expense (benefit)
|
|
3,990
|
|
|
3,094
|
|
|
4,447
|
|
|
14,777
|
|
|
(27,258)
|
Income tax expense
(benefit)
|
|
1,066
|
|
|
628
|
|
|
1,750
|
|
|
3,823
|
|
|
(5,790)
|
Net income
(loss)
|
$
|
2,924
|
|
$
|
2,466
|
|
$
|
2,697
|
|
$
|
10,954
|
|
$
|
(21,468)
|
Earnings (Loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.18
|
|
$
|
0.15
|
|
$
|
0.16
|
|
$
|
0.66
|
|
$
|
(1.30)
|
Diluted
|
$
|
0.18
|
|
$
|
0.15
|
|
$
|
0.16
|
|
$
|
0.66
|
|
$
|
(1.30)
|
Weighted Average
Shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
16,639,142
|
|
|
16,604,886
|
|
|
16,496,543
|
|
|
16,586,180
|
|
|
16,482,623
|
Diluted
|
|
16,690,937
|
|
|
16,648,657
|
|
|
16,607,719
|
|
|
16,594,685
|
|
|
16,482,623
|
Provident Bancorp,
Inc.
Net Interest Income
Analysis
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
December 31,
|
|
September
30,
|
|
|
December 31,
|
|
2023
|
|
2023
|
|
|
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)
|
$
|
1,328,658
|
|
$
|
20,000
|
|
6.02 %
|
|
$
|
1,327,373
|
|
$
|
19,811
|
|
5.97 %
|
|
|
$
|
1,444,239
|
|
$
|
20,336
|
|
5.63 %
|
Short-term
investments
|
|
216,722
|
|
|
3,334
|
|
6.15 %
|
|
|
257,580
|
|
|
3,184
|
|
4.94 %
|
|
|
|
49,711
|
|
|
461
|
|
3.71 %
|
Debt securities
available-for-sale
|
|
25,968
|
|
|
192
|
|
2.96 %
|
|
|
27,363
|
|
|
188
|
|
2.75 %
|
|
|
|
28,654
|
|
|
198
|
|
2.76 %
|
Federal Home Loan Bank
stock
|
|
1,507
|
|
|
40
|
|
10.62 %
|
|
|
1,902
|
|
|
45
|
|
9.46 %
|
|
|
|
2,718
|
|
|
23
|
|
3.38 %
|
Total interest-earning
assets
|
|
1,572,855
|
|
|
23,566
|
|
5.99 %
|
|
|
1,614,218
|
|
|
23,228
|
|
5.76 %
|
|
|
|
1,525,322
|
|
|
21,018
|
|
5.51 %
|
Non-interest earning
assets
|
|
100,634
|
|
|
|
|
|
|
|
103,453
|
|
|
|
|
|
|
|
|
120,009
|
|
|
|
|
|
Total assets
|
$
|
1,673,489
|
|
|
|
|
|
|
$
|
1,717,671
|
|
|
|
|
|
|
|
$
|
1,645,331
|
|
|
|
|
|
Liabilities and
shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
|
219,162
|
|
$
|
1,588
|
|
2.90 %
|
|
$
|
184,239
|
|
$
|
1,021
|
|
2.22 %
|
|
|
$
|
148,358
|
|
$
|
64
|
|
0.17 %
|
Money market
accounts
|
|
518,511
|
|
|
4,935
|
|
3.81 %
|
|
|
551,344
|
|
|
5,207
|
|
3.78 %
|
|
|
|
342,228
|
|
|
1,079
|
|
1.26 %
|
NOW accounts
|
|
100,653
|
|
|
239
|
|
0.95 %
|
|
|
103,966
|
|
|
181
|
|
0.70 %
|
|
|
|
178,834
|
|
|
142
|
|
0.32 %
|
Certificates of
deposit
|
|
247,206
|
|
|
3,143
|
|
5.09 %
|
|
|
230,884
|
|
|
2,704
|
|
4.68 %
|
|
|
|
114,397
|
|
|
516
|
|
1.80 %
|
Total interest-bearing
deposits
|
|
1,085,532
|
|
|
9,905
|
|
3.65 %
|
|
|
1,070,433
|
|
|
9,113
|
|
3.41 %
|
|
|
|
783,817
|
|
|
1,801
|
|
0.92 %
|
Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
6,011
|
|
|
64
|
|
4.26 %
|
|
|
14,897
|
|
|
196
|
|
5.26 %
|
|
|
|
38,901
|
|
|
388
|
|
3.99 %
|
Long-term
borrowings
|
|
9,708
|
|
|
32
|
|
1.32 %
|
|
|
9,741
|
|
|
31
|
|
1.27 %
|
|
|
|
16,705
|
|
|
84
|
|
2.01 %
|
Total
borrowings
|
|
15,719
|
|
|
96
|
|
2.44 %
|
|
|
24,638
|
|
|
227
|
|
3.69 %
|
|
|
|
55,606
|
|
|
472
|
|
3.40 %
|
Total interest-bearing
liabilities
|
|
1,101,251
|
|
|
10,001
|
|
3.63 %
|
|
|
1,095,071
|
|
|
9,340
|
|
3.41 %
|
|
|
|
839,423
|
|
|
2,273
|
|
1.08 %
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
338,712
|
|
|
|
|
|
|
|
391,917
|
|
|
|
|
|
|
|
|
580,013
|
|
|
|
|
|
Other
noninterest-bearing liabilities
|
|
14,212
|
|
|
|
|
|
|
|
13,864
|
|
|
|
|
|
|
|
|
17,603
|
|
|
|
|
|
Total
liabilities
|
|
1,454,175
|
|
|
|
|
|
|
|
1,500,852
|
|
|
|
|
|
|
|
|
1,437,039
|
|
|
|
|
|
Total equity
|
|
219,314
|
|
|
|
|
|
|
|
216,819
|
|
|
|
|
|
|
|
|
208,292
|
|
|
|
|
|
Total liabilities
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equity
|
$
|
1,673,489
|
|
|
|
|
|
|
$
|
1,717,671
|
|
|
|
|
|
|
|
$
|
1,645,331
|
|
|
|
|
|
Net interest
income
|
|
|
|
$
|
13,565
|
|
|
|
|
|
|
$
|
13,888
|
|
|
|
|
|
|
|
$
|
18,745
|
|
|
Interest rate spread
(3)
|
|
|
|
|
|
|
2.36 %
|
|
|
|
|
|
|
|
2.35 %
|
|
|
|
|
|
|
|
|
4.43 %
|
Net interest-earning
assets (4)
|
$
|
471,604
|
|
|
|
|
|
|
$
|
519,147
|
|
|
|
|
|
|
|
$
|
685,899
|
|
|
|
|
|
Net interest margin
(5)
|
|
|
|
|
|
|
3.45 %
|
|
|
|
|
|
|
|
3.44 %
|
|
|
|
|
|
|
|
|
4.92 %
|
Average
interest-earning assets to interest-bearing liabilities
|
|
142.82 %
|
|
|
|
|
|
|
|
147.41 %
|
|
|
|
|
|
|
|
|
181.71 %
|
|
|
|
|
|
|
|
(1)
|
Interest earned/paid on
loans includes mortgage warehouse loan origination fee income of
$182,000, $199,000, and $205,000 for the three months ended
December 31, 2023, September 30, 2023, and December 31, 2022,
respectively.
|
(2)
|
Includes loans held for
sale.
|
(3)
|
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 Year Ended
December 31,
|
|
2023
|
|
2022
|
|
|
|
|
Interest
|
|
|
|
|
|
|
Interest
|
|
|
|
Average
|
|
Earned/
|
|
Yield/
|
|
Average
|
|
Earned/
|
|
Yield/
|
(Dollars in
thousands)
|
Balance
|
|
Paid
|
|
Rate
|
|
Balance
|
|
Paid
|
|
Rate
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1)(2)
|
$
|
1,348,425
|
|
$
|
79,469
|
|
5.89 %
|
|
$
|
1,476,426
|
|
$
|
77,253
|
|
5.23 %
|
Short-term
investments
|
|
188,572
|
|
|
9,879
|
|
5.24 %
|
|
|
118,726
|
|
|
1,277
|
|
1.08 %
|
Debt securities
available-for-sale
|
|
27,576
|
|
|
769
|
|
2.79 %
|
|
|
32,005
|
|
|
753
|
|
2.35 %
|
Federal Home Loan Bank
stock
|
|
2,072
|
|
|
180
|
|
8.69 %
|
|
|
1,667
|
|
|
44
|
|
2.64 %
|
Total interest-earning assets
|
|
1,566,645
|
|
|
90,297
|
|
5.76 %
|
|
|
1,628,824
|
|
|
79,327
|
|
4.87 %
|
Non-interest earning
assets
|
|
105,187
|
|
|
|
|
|
|
|
98,049
|
|
|
|
|
|
Total assets
|
$
|
1,671,832
|
|
|
|
|
|
|
$
|
1,726,873
|
|
|
|
|
|
Liabilities and
shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
|
174,110
|
|
|
3,128
|
|
1.80 %
|
|
$
|
152,964
|
|
|
235
|
|
0.15 %
|
Money market
accounts
|
|
474,845
|
|
|
16,605
|
|
3.50 %
|
|
|
341,324
|
|
|
1,968
|
|
0.58 %
|
NOW accounts
|
|
111,809
|
|
|
767
|
|
0.69 %
|
|
|
219,743
|
|
|
531
|
|
0.24 %
|
Certificates of
deposit
|
|
223,585
|
|
|
10,089
|
|
4.51 %
|
|
|
74,995
|
|
|
844
|
|
1.13 %
|
Total interest-bearing
deposits
|
|
984,349
|
|
|
30,589
|
|
3.11 %
|
|
|
789,026
|
|
|
3,578
|
|
0.45 %
|
Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
27,018
|
|
|
1,314
|
|
4.86 %
|
|
|
11,421
|
|
|
422
|
|
3.69 %
|
Long-term
borrowings
|
|
13,442
|
|
|
223
|
|
1.66 %
|
|
|
14,308
|
|
|
297
|
|
2.08 %
|
Total
borrowings
|
|
40,460
|
|
|
1,537
|
|
3.80 %
|
|
|
25,729
|
|
|
719
|
|
2.79 %
|
Total interest-bearing
liabilities
|
|
1,024,809
|
|
|
32,126
|
|
3.13 %
|
|
|
814,755
|
|
|
4,297
|
|
0.53 %
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
415,222
|
|
|
|
|
|
|
|
661,368
|
|
|
|
|
|
Other
noninterest-bearing liabilities
|
|
16,955
|
|
|
|
|
|
|
|
18,881
|
|
|
|
|
|
Total
liabilities
|
|
1,456,986
|
|
|
|
|
|
|
|
1,495,004
|
|
|
|
|
|
Total equity
|
|
214,846
|
|
|
|
|
|
|
|
231,869
|
|
|
|
|
|
Total liabilities
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equity
|
$
|
1,671,832
|
|
|
|
|
|
|
$
|
1,726,873
|
|
|
|
|
|
Net interest
income
|
|
|
|
$
|
58,171
|
|
|
|
|
|
|
$
|
75,030
|
|
|
Interest rate spread
(3)
|
|
|
|
|
|
|
2.63 %
|
|
|
|
|
|
|
|
4.34 %
|
Net interest-earning
assets (4)
|
$
|
541,836
|
|
|
|
|
|
|
$
|
814,069
|
|
|
|
|
|
Net interest margin
(5)
|
|
|
|
|
|
|
3.71 %
|
|
|
|
|
|
|
|
4.61 %
|
Average
interest-earning assets to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
interest-bearing liabilities
|
|
152.87 %
|
|
|
|
|
|
|
|
199.92 %
|
|
|
|
|
|
|
|
(1)
|
Interest earned/paid on
loans includes mortgage warehouse loan origination fee income of
$856,000 and $1.0 million for the year ended December 31 2023 and
2022, respectively.
|
(2)
|
Includes loans held for
sale.
|
(3)
|
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.
|
Provident Bancorp,
Inc.
Select Financial
Highlights
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year Ended
|
|
December 31,
|
|
September
30,
|
|
December 31,
|
|
December 31,
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
|
2022
|
Performance
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return (Loss) on
average assets (1)
|
|
0.70 %
|
|
|
0.57 %
|
|
|
0.66 %
|
|
0.66 %
|
|
|
(1.24 %)
|
Return (Loss) on
average equity (1)
|
|
5.33 %
|
|
|
4.55 %
|
|
|
5.18 %
|
|
5.10 %
|
|
|
(9.26 %)
|
Interest rate spread
(1) (2)
|
|
2.36 %
|
|
|
2.34 %
|
|
|
4.43 %
|
|
2.63 %
|
|
|
4.34 %
|
Net interest margin (1)
(3)
|
|
3.45 %
|
|
|
3.44 %
|
|
|
4.92 %
|
|
3.71 %
|
|
|
4.61 %
|
Non-interest expense to
average assets (1)
|
|
2.98 %
|
|
|
2.96 %
|
|
|
4.18 %
|
|
3.06 %
|
|
|
3.01 %
|
Efficiency ratio
(4)
|
|
81.88 %
|
|
|
81.23 %
|
|
|
83.33 %
|
|
78.39 %
|
|
|
64.07 %
|
Average
interest-earning assets to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average
interest-bearing liabilities
|
|
142.82 %
|
|
|
147.41 %
|
|
|
181.71 %
|
|
152.87 %
|
|
|
199.92 %
|
Average equity to
average assets
|
|
13.11 %
|
|
|
12.62 %
|
|
|
12.66 %
|
|
12.85 %
|
|
|
13.43 %
|
|
At
|
|
At
|
|
At
|
|
December 31,
|
|
September
30,
|
|
December 31,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
Asset
Quality
|
|
|
|
|
|
|
|
|
Non-accrual
loans:
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
$
|
—
|
|
$
|
155
|
|
$
|
56
|
Commercial
|
|
1,857
|
|
|
235
|
|
|
101
|
Enterprise
value
|
|
1,991
|
|
|
4,114
|
|
|
92
|
Digital
asset
|
|
12,289
|
|
|
15,247
|
|
|
26,488
|
Residential real
estate
|
|
376
|
|
|
381
|
|
|
227
|
Construction and land
development
|
|
—
|
|
|
—
|
|
|
—
|
Consumer
|
|
4
|
|
|
4
|
|
|
—
|
Mortgage
warehouse
|
|
—
|
|
|
—
|
|
|
—
|
Total non-accrual
loans
|
|
16,517
|
|
|
20,136
|
|
|
26,964
|
Accruing loans past due
90 days or more
|
|
—
|
|
|
—
|
|
|
—
|
Other repossessed
assets
|
|
—
|
|
|
—
|
|
|
6,051
|
Total non-performing
assets
|
$
|
16,517
|
|
$
|
20,136
|
|
$
|
33,015
|
Asset Quality
Ratios
|
|
|
|
|
|
|
|
|
Allowance for loan
losses as a percent of total loans (5)
|
|
1.61 %
|
|
|
1.80 %
|
|
|
1.94 %
|
Allowance for loan
losses as a percent of non-performing loans
|
|
130.60 %
|
|
|
119.30 %
|
|
|
104.10 %
|
Non-performing loans as
a percent of total loans (5)
|
|
1.23 %
|
|
|
1.51 %
|
|
|
1.87 %
|
Non-performing loans as
a percent of total assets
|
|
0.99 %
|
|
|
1.11 %
|
|
|
1.65 %
|
Non-performing assets
as a percent of total assets (6)
|
|
0.99 %
|
|
|
1.11 %
|
|
|
2.02 %
|
Capital and Share
Related
|
|
|
|
|
|
|
|
|
Stockholders' equity to
total assets
|
|
13.3 %
|
|
|
12.0 %
|
|
|
12.7 %
|
Book value per
share
|
$
|
12.55
|
|
$
|
12.31
|
|
$
|
11.75
|
Market value per
share
|
$
|
10.07
|
|
$
|
9.69
|
|
$
|
7.28
|
Shares
outstanding
|
|
17,677,479
|
|
|
17,681,916
|
|
|
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
before the allowance but include deferred costs/fees.
|
(6)
|
Non-performing assets
consists of non-accrual loans plus loans accruing but 90 days
overdue and other repossessed assets.
|
|
At
|
|
At
|
|
At
|
|
December 31,
|
|
September
30,
|
|
December 31,
|
|
2023
|
|
2023
|
|
2022
|
(Dollars in
thousands)
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
Commercial real
estate
|
$
|
468,928
|
|
34.92 %
|
|
$
|
438,039
|
|
32.74 %
|
|
$
|
453,592
|
|
31.41 %
|
Commercial
|
|
176,124
|
|
13.12 %
|
|
|
176,817
|
|
13.22 %
|
|
|
216,931
|
|
15.02 %
|
Enterprise
value
|
|
433,633
|
|
32.29 %
|
|
|
432,449
|
|
32.33 %
|
|
|
438,745
|
|
30.38 %
|
Digital asset
(1)
|
|
12,289
|
|
0.92 %
|
|
|
15,247
|
|
1.14 %
|
|
|
40,781
|
|
2.82 %
|
Residential real
estate
|
|
7,169
|
|
0.53 %
|
|
|
7,444
|
|
0.56 %
|
|
|
8,165
|
|
0.57 %
|
Construction and land
development
|
|
77,851
|
|
5.80 %
|
|
|
95,327
|
|
7.13 %
|
|
|
72,267
|
|
5.00 %
|
Consumer
|
|
168
|
|
0.01 %
|
|
|
315
|
|
0.02 %
|
|
|
391
|
|
0.03 %
|
Mortgage
warehouse
|
|
166,567
|
|
12.41 %
|
|
|
172,051
|
|
12.86 %
|
|
|
213,244
|
|
14.77 %
|
|
|
1,342,729
|
|
100.00 %
|
|
|
1,337,689
|
|
100.00 %
|
|
|
1,444,116
|
|
100.00 %
|
Allowance for credit
losses - loans
|
|
(21,571)
|
|
|
|
|
(24,023)
|
|
|
|
|
(28,069)
|
|
|
Net loans
|
$
|
1,321,158
|
|
|
|
$
|
1,313,666
|
|
|
|
$
|
1,416,047
|
|
|
|
|
(1)
|
Includes $12.3 million,
$15.2 million, and $26.5 million in loans secured by cryptocurrency
mining rigs at December 31, 2023, September 30, 2023, and December
31, 2022, respectively. The remaining balance at December 31, 2022
consisted of digital asset lines of credit.
|
|
At
|
|
At
|
|
At
|
|
December 31,
|
|
September
30,
|
|
December 31,
|
(Dollars in
thousands)
|
2023
|
|
2023
|
|
2022
|
Noninterest-bearing:
|
|
|
|
|
|
|
|
|
Demand (1)
|
$
|
308,769
|
|
$
|
385,488
|
|
$
|
520,226
|
Interest-bearing:
|
|
|
|
|
|
|
|
|
NOW
|
|
93,812
|
|
|
111,786
|
|
|
145,533
|
Regular
savings
|
|
231,593
|
|
|
177,865
|
|
|
141,802
|
Money market
deposits
|
|
456,408
|
|
|
541,200
|
|
|
318,417
|
Certificates of
deposit:
|
|
|
|
|
|
|
|
|
Certificate accounts
of $250,000 or more
|
|
24,680
|
|
|
21,027
|
|
|
11,449
|
Certificate accounts
less than $250,000
|
|
215,960
|
|
|
252,359
|
|
|
142,155
|
Total interest-bearing
(2)
|
|
1,022,453
|
|
|
1,104,237
|
|
|
759,356
|
Total deposits
(3)
|
$
|
1,331,222
|
|
$
|
1,489,725
|
|
$
|
1,279,582
|
|
|
(1)
|
Noninterest-bearing
deposits included $9.9 million, $15.6 million, and $40.2 million in
Banking as a Service ("BaaS") deposits as of December 31, 2023,
September 30, 2023, and December 31, 2022, respectively.
Noninterest-bearing deposits included $5.3 million, $52.5 million,
and $40.3 million in digital asset deposits as of December 31,
2023, September 30, 2023, and December 31, 2022,
respectively.
|
(2)
|
Interest-bearing
deposits included $92.9 million, $198.3 million, and $5.0 million
in BaaS deposits as of December 31, 2023, September 30, 2023, and
December 31, 2022, respectively. There were no interest-bearing
digital asset deposits as of December 31, 2023 and September 30,
2023. As of December 31, 2022, there were $17.2 million in
interest-bearing digital asset deposits.
|
(3)
|
Of total deposits as of
December 31, 2023, September 30, 2023, and December 31, 2022, the
Federal Deposit Insurance Corporation ("FDIC") insured
approximately 64%, 57%, and 55%, respectively, and the remaining
36%, 43%, 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 Massachusetts member banks.
|
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SOURCE Provident Bancorp, Inc.