AMESBURY, Mass., April 25, 2025 /PRNewswire/ -- Provident Bancorp, Inc. (the "Company") (NasdaqCM: PVBC), the holding company for BankProv (the "Bank"), reported net income for the quarter ended March 31, 2025 of $2.2 million, or $0.13 per diluted share, compared to $4.9 million, or $0.29 per diluted share, for the quarter ended December 31, 2024, and $5.0 million, or $0.30 per diluted share, for the quarter ended March 31, 2024. The Company's return on average assets was 0.58% for the quarter ended March 31, 2025, compared to 1.22% for the quarter ended December 31, 2024, and 1.26% for the quarter ended March 31, 2024. The Company's return on average equity was 3.71% for the quarter ended March 31, 2025, compared to 8.54% for the quarter ended December 31, 2024, and 8.93% for the quarter ended March 31, 2024.

In announcing these results, Joseph Reilly, Chief Executive Officer, said "We are pleased to report financial results consistent with expectations, despite the uncertainties presented by the current macroeconomic environment. We are closely monitoring our portfolios and proactively positioning the Bank to capitalize on any opportunities presented and mitigate exposure to potential risks of these volatile economic conditions. We remain focused on the execution of our strategic plan and continuing to build strong, lasting relationships within our markets. We are confident these efforts will be instrumental as we continue to serve the communities that have trusted BankProv for nearly 200 years, upholding our standard for the safety and security of our customers' financial assets, which includes deposit insurance coverage beyond federal limits through our participation in the Depositors Insurance Fund."

For the quarter ended March 31, 2025, net interest and dividend income was $12.9 million, a decrease of $768,000, or 5.6%, from the quarter ended December 31, 2024, and an increase of $389,000, or 3.1%, compared to the quarter ended March 31, 2024. The interest rate spread and net interest margin were 2.62% and 3.65%, respectively, for the quarter ended March 31, 2025, compared to 2.53% and 3.62%, respectively, for the quarter ended December 31, 2024, and 2.28% and 3.38%, respectively, for the quarter ended March 31, 2024.

Total interest and dividend income was $20.6 million for the quarter ended March 31, 2025, a decrease of $2.5 million, or 11.0%, from the quarter ended December 31, 2024, and a decrease of $1.5 million, or 6.6%, from the quarter ended March 31, 2024. The Company's yield on interest-earning assets was 5.84% for the quarter, down 30 basis points from the prior quarter, and down 13 basis points year-over-year due to the lower market interest rate environment. Interest and fees on loans decreased $2.2 million, or 10.4%, from the quarter ended December 31, 2024, and $762,000, or 3.8%, from the quarter ended March 31, 2024. These decreases were primarily driven by decreases in the average balance of loans of $80.7 million, or 5.9%, from December 31, 2024, and $31.7 million, or 2.4%, from March 31, 2024. The yield on loans was 5.98% for the quarter, which represents a decrease of 30 basis points from the quarter ended December 31, 2024, and a decrease of nine basis points from the quarter ended March 31, 2024. These decreases in yield reflect the impact of lower prevailing interest rates, coupled with the significant reduction in our enterprise value portfolio, which typically generates higher returns relative to our other portfolios.

Total interest expense was $7.7 million for the quarter ended March 31, 2025, a decrease of $1.8 million, or 18.7%, from the quarter ended December 31, 2024, and a decrease of $1.8 million, or 19.3%, from the quarter ended March 31, 2024. The decrease in interest expense was primarily driven by a decrease in the cost and average balance of interest-bearing deposits. The cost of interest-bearing deposits was 3.25% for the quarter ended March 31, 2025, a decrease of 28 basis points from 3.53% for the quarter ended December 31, 2024, and a decrease of 44 basis points from 3.69% for the quarter ended March 31, 2024. The average balance of interest-bearing deposits decreased $73.7 million, or 7.5%, from December 31, 2024, and $104.2 million, or 10.3%, from March 31, 2024. These decreases reflect our continued success in reducing high-cost brokered and listing service deposits, along with our proactive efforts to capture cost savings tied to prevailing interest rate trends. Interest expense on borrowings totaled $336,000 for the quarter ended March 31, 2025, a decrease of $479,000, or 58.8%, from the quarter ended December 31, 2024, and an increase of $127,000, or 60.8%, from the quarter ended March 31, 2024. The decrease in interest expense on borrowings from the prior quarter was primarily driven by a 188-basis point decrease in the cost of borrowings and a $21.8 million, or 31.4%, decrease in the average balance of borrowings. The increase in interest expense on borrowings from the quarter ended March 31, 2024, was primarily driven by an increase in the average balance of borrowings of $25.6 million, or 117.2%, partially offset by a 100-basis point decrease in the cost of borrowings. The Company's total cost of interest-bearing liabilities was 3.22% for the quarter ended March 31, 2025, a decrease of 39 basis points, from 3.61%, for the quarter ended December 31, 2024, and a decrease of 47 basis points from 3.69% for the quarter ended March 31, 2024.

The Company recognized a $12,000 credit loss benefit for the quarter ended March 31, 2025, compared to a $1.6 million benefit for the quarter ended December 31, 2024, and a $5.6 million benefit for the quarter ended March 31, 2024. The credit loss benefit for the quarter ended March 31, 2025 was primarily driven by a decrease in pooled reserves, mainly due to a $47.3 million decrease in the enterprise value portfolio, which typically carries a higher reserve rate than other loan segments. This was partially offset by a $647,000 increase in individually analyzed reserves on a $17.6 million enterprise value relationship which carried a total reserve of $10.8 million as of March 31, 2025. The credit loss benefits for the quarters ended December 31, 2024 and March 31, 2024, were primarily driven by successful workouts or recoveries on individually analyzed or previously charged-off loans. Net recoveries totaled $2,000 for the quarter ended March 31, 2025, compared to net recoveries of $867,000 for the quarter ended December 31, 2024, and net charge-offs of $22,000 for the quarter ended March 31, 2024.

Noninterest income remained consistent at $1.4 million for the quarter ended March 31, 2025, $1.3 million for the quarter ended December 31, 2024, and $1.4 million for the quarter ended March 31, 2024. Noninterest expense was $11.4 million for the quarter ended March 31, 2025, compared to $10.1 million and $12.7 million for the quarters ended December 31, 2024 and March 31, 2024, respectively. The increase in noninterest expense from the prior quarter of $1.3 million, or 12.5%, was primarily driven by the reversal in the fourth quarter of 2024 of a $750,000 management fee accrual in connection with a loan modification, as well as an increase in salaries and employee benefits. The management fee reversal and prior period recoveries contributed to quarter over quarter declines in performance ratios, such as the return on average assets, return on average equity, and the efficiency ratio. Noninterest expense decreased $1.4 million, or 10.7%, compared to the quarter ended March 31, 2024, primarily due to lower professional fees as well as reduced salaries and employee benefits, reflecting the Bank's ongoing efforts to improve operational efficiency.

The Company recorded an income tax provision of $665,000 for the quarter ended March 31, 2025, reflecting an effective tax rate of 23.5%, compared to $1.5 million, or an effective tax rate of 24.0%, for the quarter ended December 31, 2024, and $1.7 million, or an effective tax rate of 25.5%, for the quarter ended March 31, 2024.

Total assets were $1.55 billion at March 31, 2025, a decrease of $39.2 million, or 2.5%, from $1.59 billion at December 31, 2024. Cash and cash equivalents decreased $44.2 million, or 26.1% from December 31, 2024, primarily due to a decrease in total deposits. Net loans were $1.31 billion at March 31, 2025, an increase of $5.7 million, or 0.4%, from December 31, 2024. The increase in net loans was primarily driven by commercial loan growth of $36.7 million, or 4.9% and includes growth in the commercial, commercial real estate, and construction and land development loan segments. Mortgage warehouse loans also increased $16.9 million, or 6.5%, from December 31, 2024. This growth was partially offset by the decrease in enterprise value loans of $47.3 million, or 15.3%.

Mr. Reilly noted "The Bank has been successful in expanding our loan portfolio in the areas targeted for growth and reducing exposures in the enterprise value portfolio, rapidly shifting our mix from this riskier segment to traditional in-market commercial and commercial real estate. While we are disappointed to place an additional enterprise value relationship on non-accrual at quarter end, it illustrates the importance of remaining focused on reducing the exposure in this portfolio, which materially decreased by over 15% in the prior quarter alone. We are actively engaging with the borrower to mitigate the impact of this troubled credit and determine the most effective path to preserving the Bank's interest and reach a mutually agreeable resolution. While we are hopeful we can successfully mitigate our loss exposure, our lending and credit teams will continue evaluating the need for a reserve and if new information suggests a reserve is necessary, we will appropriately reserve such amounts."

The allowance for credit losses for loans was $21.2 million, or 1.59% of total loans, as of March 31, 2025, compared to $21.1 million, or 1.59% of total loans, as of December 31, 2024. Non-accrual loans were $31.4 million, or 2.02% of total assets, as of March 31, 2025, compared to $20.9 million, or 1.31% of total assets, as of December 31, 2024. The increase in non-accrual loans, along with the related downturn in asset quality ratios, as of March 31, 2025, was primarily driven by a $10.4 million enterprise value loan relationship that was placed on non-accrual status during the first quarter of 2025.

Total deposits were $1.18 billion at March 31, 2025, a decrease of $124.4 million, or 9.5%, from $1.31 billion at December 31, 2024. The decreases in deposits were primarily in areas where the Bank has intentionally scaled back its strategic focus, including specialty deposits which decreased $34.5 million, or 27.8%, deposits related to our enterprise value portfolio which decreased $13.1 million, or 8.7%, brokered deposits which decreased $25.2 million, or 16.8%, and deposits obtained through listing services which decreased $20.8 million, or 43.7%. Total borrowings were $127.5 million at March 31, 2025, an increase of $83.0 million, or 186.2%, from December 31, 2024. As a result of the decrease in deposits, the Bank utilized overnight borrowings to meet short-term liquidity obligations at March 31, 2025. The Bank will consider extending funding should the needs become permanent, however, opting for a more efficient short-term funding alternative preserves the Bank's optionality while navigating the current volatile economic environment.

As of March 31, 2025, shareholders' equity totaled $234.0 million, an increase of $2.9 million, or 1.3%, from December 31, 2024. The increase includes the Company's net income, which totaled $2.2 million for the quarter ended March 31, 2025. Shareholders' equity to total assets was 15.1% at March 31, 2025, compared to 14.5% at December 31, 2024. Book value per share was $13.16 at March 31, 2025, an increase from $12.99 at December 31, 2024. Market value per share increased to $11.48 at March 31, 2025, an increase of 0.7% from $11.40 at December 31, 2024. As of March 31, 2025, the Bank was categorized as well capitalized under the Federal Deposit Insurance Corporation regulatory framework for prompt corrective action.

About Provident Bancorp, Inc.

Provident Bancorp, Inc. (NASDAQ:PVBC) is the holding company for BankProv, a full-service commercial bank headquartered in Massachusetts. With retail branches in the Seacoast Region of Northeastern Massachusetts and New Hampshire, as well as commercial banking offices in the Manchester/Concord market in Central New Hampshire, BankProv delivers a unique combination of traditional banking services and innovative financial solutions to its markets. Founded in Amesbury, Massachusetts in 1828, BankProv holds the honor of being the 10th oldest bank in the nation. The Bank 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, visit bankprov.com.

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, including potential recessionary conditions; interest rates; inflation; 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; changes in consumer spending, borrowing and savings habits; competition; the imposition of tariffs or other domestic or international governmental policies; our ability to successfully shift the balance sheet to that of a traditional community bank; real estate values in the market area; loan demand; the adequacy of our level and methodology for calculating 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.

Investor contact:

Joseph Reilly

President and Chief Executive Officer

Provident Bancorp, Inc.

jreilly@bankprov.com

Provident Bancorp, Inc. Consolidated Balance Sheet

	At		At
	March 31,		December 31,
	2025		2024
(Dollars in thousands)	(unaudited)
Assets
Cash and due from banks	$	21,444	$	27,536
Short-term investments		103,540		141,606
Cash and cash equivalents		124,984		169,142
Debt securities available-for-sale (at fair value)		25,199		25,693
Federal Home Loan Bank stock, at cost		2,696		2,697
Loans:
Commercial real estate		587,541		559,325
Construction and land development		32,401		28,097
Residential real estate		5,647		6,008
Mortgage warehouse		276,069		259,181
Commercial		168,087		163,927
Enterprise value		262,445		309,786
Consumer		165		271
Total Loans		1,332,355		1,326,595
Allowance for credit losses for loans		(21,160)		(21,087)
Net loans		1,311,195		1,305,508
Bank owned life insurance		46,344		46,017
Premises and equipment, net		10,021		10,188
Accrued interest receivable		4,968		5,296
Right-of-use assets		3,391		3,429
Deferred tax asset, net		13,399		13,808
Other assets		11,759		11,392
Total assets	$	1,553,956	$	1,593,170
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing demand deposits	$	302,275	$	351,528
NOW		69,394		83,270
Regular savings		112,961		132,198
Money market deposits		445,313		463,687
Certificates of deposit		254,579		278,277
Total deposits		1,184,522		1,308,960
Borrowings:
Short-term borrowings		118,000		35,000
Long-term borrowings		9,529		9,563
Total borrowings		127,529		44,563
Operating lease liabilities		3,833		3,862
Other liabilities		4,037		4,698
Total liabilities		1,319,921		1,362,083
Shareholders' equity:
Preferred stock, $0.01 par value, 50,000 shares authorized; no shares issued and outstanding		—		—
Common stock, $0.01 par value, 100,000,000 shares authorized; 17,788,543 shares issued and outstanding at March 31, 2025 and December 31, 2024		178		178
Additional paid-in capital		125,895		125,446
Retained earnings		115,731		113,561
Accumulated other comprehensive loss		(1,476)		(1,625)
Unearned compensation - ESOP		(6,293)		(6,473)
Total shareholders' equity		234,035		231,087
Total liabilities and shareholders' equity	$	1,553,956	$	1,593,170

Provident Bancorp, Inc. Consolidated Income Statements (Unaudited)

	Three Months Ended
	March 31,		December 31,		March 31,
(Dollars in thousands, except per share data)	2025		2024		2024
Interest and dividend income:
Interest and fees on loans	$	19,307	$	21,541	$	20,069
Interest and dividends on debt securities available-for-sale		260		267		237
Interest on short-term investments		1,013		1,313		1,729
Total interest and dividend income		20,580		23,121		22,035
Interest expense:
Interest on deposits		7,369		8,663		9,340
Interest on short-term borrowings		306		789		178
Interest on long-term borrowings		30		26		31
Total interest expense		7,705		9,478		9,549
Net interest and dividend income		12,875		13,643		12,486
Credit loss expense (benefit) - loans		70		(1,703)		(5,543)
Credit loss (benefit) expense - off-balance sheet credit exposures		(82)		136		(38)
Total credit loss benefit		(12)		(1,567)		(5,581)
Net interest and dividend income after credit loss benefit		12,887		15,210		18,067
Noninterest income:
Customer service fees on deposit accounts		715		661		674
Service charges and fees - other		276		325		309
Bank owned life insurance income		327		334		302
Other income		62		5		71
Total noninterest income		1,380		1,325		1,356
Noninterest expense:
Salaries and employee benefits		7,576		6,963		8,145
Occupancy expense		448		364		443
Equipment expense		144		139		152
Deposit insurance		332		319		333
Data processing		421		404		413
Marketing expense		45		43		18
Professional fees		569		585		1,314
Directors' compensation		195		198		174
Software depreciation and implementation		553		614		543
Insurance expense		221		303		301
Service fees		318		248		242
Other		610		(66)		657
Total noninterest expense		11,432		10,114		12,735
Income before income tax expense		2,835		6,421		6,688
Income tax expense		665		1,539		1,707
Net income	$	2,170	$	4,882	$	4,981
Earnings per share:
Basic	$	0.13	$	0.29	$	0.30
Diluted	$	0.13	$	0.29	$	0.30
Weighted Average Shares:
Basic		16,822,196		16,783,976		16,669,451
Diluted		16,924,083		16,864,240		16,720,653

Provident Bancorp, Inc. Net Interest Income Analysis (Unaudited)

	For the Three Months Ended
	March 31, 2025						December 31, 2024								March 31, 2024
				Interest						Interest								Interest
	Average			Earned/		Yield/	Average			Earned/		Yield/			Average			Earned/		Yield/
(Dollars in thousands)	Balance			Paid		Rate (5)	Balance			Paid		Rate (5)			Balance			Paid		Rate (5)
Assets:
Interest-earning assets:
Loans (1)	$	1,291,583		$	19,307	5.98 %	$	1,372,245		$	21,541		6.28	%	$	1,323,260		$	20,069		6.07	%
Short-term investments		90,198			1,013	4.49 %		104,385			1,313		5.03	%		123,546			1,729		5.60	%
Debt securities available-for-sale		25,594			190	2.97 %		26,871			194		2.89	%		28,234			205		2.90	%
Federal Home Loan Bank stock		2,696			70	10.39 %		3,609			73		8.09	%		1,783			32		7.18	%
Total interest-earning assets		1,410,071			20,580	5.84 %		1,507,110			23,121		6.14	%		1,476,823			22,035		5.97	%
Noninterest earning assets		92,277						94,795								98,890
Total assets	$	1,502,348					$	1,601,905							$	1,575,713
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$	118,713		$	264	0.89 %	$	158,626		$	777		1.96	%	$	244,148		$	1,961		3.21	%
Money market accounts		447,792			3,756	3.36 %		469,922			4,363		3.71	%		454,883			4,238		3.73	%
NOW accounts		72,893			257	1.41 %		80,645			340		1.69	%		82,831			183		0.88	%
Certificates of deposit		268,879			3,092	4.60 %		272,803			3,183		4.67	%		230,616			2,958		5.13	%
Total interest-bearing deposits		908,277			7,369	3.25 %		981,996			8,663		3.53	%		1,012,478			9,340		3.69	%
Borrowings
Short-term borrowings		37,922			306	3.23 %		59,641			789		5.29	%		12,181			178		5.85	%
Long-term borrowings		9,542			30	1.26 %		9,574			26		1.09	%		9,675			31		1.28	%
Total borrowings		47,464			336	2.83 %		69,215			815		4.71	%		21,856			209		3.83	%
Total interest-bearing liabilities		955,741			7,705	3.22 %		1,051,211			9,478		3.61	%		1,034,334			9,549		3.69	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits		304,601						312,382								306,349
Other noninterest-bearing liabilities		8,277						9,779								12,041
Total liabilities		1,268,619						1,373,372								1,352,724
Total equity		233,729						228,533								222,989
Total liabilities and equity	$	1,502,348					$	1,601,905							$	1,575,713
Net interest income				$	12,875					$	13,643							$	12,486
Interest rate spread (2)						2.62 %							2.53	%							2.28	%
Net interest-earning assets (3)	$	454,330					$	455,899							$	442,489
Net interest margin (4)						3.65 %							3.62	%							3.38	%
Average interest-earning assets to interest-bearing liabilities		147.54	%					143.37	%							142.78	%


(1)	Interest earned/paid on loans includes $780,000, $833,000, and $734,000 in loan fee income for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively.

(2)	Interest rate spread represents the difference between the weighted average yield on interest-bearing assets and the weighted average rate of interest-bearing liabilities.

(3)	Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4)	Net interest margin represents net interest income divided by average total interest-earning assets.

(5)	Annualized.

Provident Bancorp, Inc. Select Financial Highlights (Unaudited)

	Three Months Ended
	March 31,			December 31,			March 31,
	2025			2024			2024
Performance Ratios:
Return on average assets (1)		0.58	%		1.22	%		1.26	%
Return on average equity (1)		3.71	%		8.54	%		8.93	%
Interest rate spread (1) (2)		2.62	%		2.53	%		2.28	%
Net interest margin (1) (3)		3.65	%		3.62	%		3.38	%
Noninterest expense to average assets (1)		3.04	%		2.53	%		3.23	%
Efficiency ratio (4)		80.20	%		67.57	%		92.00	%
Average interest-earning assets to average interest-bearing liabilities		147.54	%		143.37	%		142.78	%
Average equity to average assets		15.56	%		14.27	%		14.15	%

	At			At			At
	March 31,			December 31,			March 31,
(Dollars in thousands)	2025			2024			2024
Asset Quality
Non-accrual loans:
Commercial real estate	$	217		$	57		$	—
Residential real estate		360			366			357
Commercial		1,543			1,543			1,923
Enterprise value		29,298			18,920			—
Digital asset		—			—			10,071
Consumer		1			1			1
Total non-accrual loans		31,419			20,887			12,352
Total non-performing assets	$	31,419		$	20,887		$	12,352

Asset Quality Ratios
Allowance for credit losses for loans as a percent of total loans (5)		1.59	%		1.59	%		1.18	%
Allowance for credit losses for loans as a percent of non-performing loans		67.35	%		100.96	%		129.58	%
Non-performing loans as a percent of total loans (5)		2.36	%		1.57	%		0.91	%
Non-performing loans as a percent of total assets		2.02	%		1.31	%		0.74	%

Capital and Share Related
Shareholders' equity to total assets		15.06	%		14.50	%		13.70	%
Book value per share	$	13.16		$	12.99		$	12.87
Market value per share	$	11.48		$	11.40		$	9.10
Shares outstanding		17,788,543			17,788,543			17,659,146


(1)	Annualized.

(2)	Interest rate spread represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of interest-bearing liabilities.

(3)	Net interest margin represents net interest income as a percent of average interest-earning assets.

(4)	The efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income, excluding gains on securities available for sale, net (if applicable).

(5)	Loans are presented at amortized cost.

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SOURCE Provident Bancorp, Inc.

Provident Bancorp, Inc. Reports Results for the March 31, 2025 Quarter