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Provident Bancorp, Inc. Reports Earnings for the December 31, 2021 Quarter and Year and Continues Payment of Quarterly Cash Dividends of $0.04 per Share
Provident Bancorp (PVBC) reported net income of $3.6 million ($0.21 per diluted share) for Q4 2021, a decrease from $4.3 million ($0.24) in Q4 2020. The full year income rose to $16.1 million ($0.93) from $12.0 million ($0.66). An expense of $984,000 related to the resignation of a senior officer impacted quarterly earnings. The board declared a dividend of $0.04 per share, payable February 25, 2022. Total assets increased by 14.8% to $1.73 billion, while total liabilities rose 17.8% to $1.46 billion due to increased deposits. Loan growth in specialty areas is seen as a positive trend.
Positive
Year-end net income rose 34.2% to $16.1 million.
Total assets increased 14.8% to $1.73 billion.
Significant loan growth, particularly in digital asset lending, up 703.1%.
Negative
Q4 net income decreased 16.3% compared to Q4 2020.
Noninterest expense increased 24.9% to $11.8 million in Q4 2021.
Provision for loan losses increased to $1.2 million for Q4 2021.
AMESBURY, Mass., Jan. 27, 2022 /PRNewswire/ -- Provident Bancorp, Inc. (the "Company") (NasdaqCM: PVBC), the holding company for The Provident Bank (the "Bank"), reported net income for the three months ended December 31, 2021 of $3.6 million, or $0.21 per diluted share, compared to $4.3 million, or $0.24 per diluted share, for the three months ended December 31, 2020. Net income for the year ended December 31, 2021 was $16.1 million, or $0.93 per diluted share, compared to $12.0 million, or $0.66 per diluted share, for the year ended December 31, 2020. Included in the fourth quarter earnings is expense totaling $984,000 relating to the Resignation, Separation Agreement and Full Release of Claims Agreement (the "Agreement") between the Bank and its President and Chief Lending Officer of the Bank entered into on November 1, 2021.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.04 per share, which will be paid on February 25, 2022 to stockholders of record as of February 10, 2022.
In reporting these results, Dave Mansfield, Chief Executive Officer said, "The execution of our strategic initiatives culminated in a successful year for BankProv and I am proud to report the 2021 year-end results. Our specialty lending, particularly enterprise value and digital assets, drove our loan growth in the fourth quarter after experiencing loan decline in the third quarter from prepayments. We were able to align all the components needed to service our digital asset and banking as a service customers, placing BankProv in an optimal position heading into 2022. Our diverse earning streams, strategic partnerships along with strong loan and deposit growth, credit quality and capital demonstrate a unique and attractive growth profile."
COVID–19 Response
The Company continues to focus on meeting the needs of its customers through the pandemic and current economic recovery. We continue to maintain close communication with commercial customers, especially in those industries most heavily impacted by the pandemic. All loans that were modified under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act have resumed repayment or have been paid off. We have not experienced any significant delinquencies related to the loans that have resumed repayment.
In December 2020, Congress approved a bill which allocated additional funds to the Small Business Administration ("SBA") for a second round of Paycheck Protection Program ("PPP") loans to assist with the economic fallout caused by the COVID-19 pandemic. The SBA, in consultation with the U.S. Treasury department, resumed the PPP in January of 2021 through May 31, 2021. During the first round of the PPP, which ran from March to August 2020, the Company originated $78.0 million in PPP loans and during the second round an additional $46.0 million was originated. The Company continues to work with customers who received PPP loans on applying for loan forgiveness, and as of December 31, 2021, of the $124.0 million in PPP loans issued, only $12.4 million remained outstanding with unaccreted fee income totaling $503,000.
Financial Results
For the three-month period ended December 31, 2021, net interest and dividend income increased by $1.0 million, or 6.8% compared to the three months ended December 31, 2020. For the three months ended December 31, 2021 interest and dividend income increased $583,000, or 3.5%, to $17.1 million compared to $16.5 million for the same period in 2020. For the three months ended December 31, 2021 interest and dividend income benefited from PPP loan fee accretion totaling $592,000 compared to $1.2 million for the three months ended December 31, 2020. In addition, interest and dividend income increased due to an increase in average interest earning assets of $190.3 million, partially offset by a decrease in the yield on interest earning assets of 41 basis points to 4.27% for the three months ended December 31, 2021 compared to 4.68% for the same period in 2020. The decrease of 41 basis points on the yield of average assets was primarily due to a $122.0 million, or 147.1%, increase in short-term investments, which have a lower rate. Also contributing to the increase in net interest and dividend income for the three months ended December 31, 2021 was a decrease in interest expense of $465,000, or 41.8%, to $647,000 compared to $1.1 million for the three months ended December 31, 2020. Interest expense decreased primarily due to the cost of interest-bearing deposits decreasing 23 basis points to 0.27% for the three months ended December 31, 2021 from 0.50% for the three months ended December 31, 2020 due to the lower interest rate environment and the higher percentage of core deposits in the portfolio.
Net interest and dividend income increased by $7.0 million, or 12.8%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. For the year ended December 31, 2021, interest and dividend income increased $4.4 million, or 7.3%, to $64.8 million compared to $60.4 million for 2020. For the year ended December 31, 2021 interest and dividend income benefited from PPP loan fee accretion totaling $2.4 million compared to $1.8 million for the year ended December 31, 2020. In addition, interest and dividend income increased due to an increase in average interest earning assets of $228.0 million, partially offset by a decrease in the yield on interest earning assets of 41 basis points to 4.28% for the year ended December 31, 2021 compared to 4.69% for 2020. The decrease of 41 basis points on the yield of average assets was primarily due to a $121.6 million, or 319.6%, increase in short-term investments, which have a lower rate. Also contributing to the increase in net interest and dividend income for the year ended December 31, 2021 was a decrease in interest expense of $2.6 million, or 43.2%, to $3.4 million compared to $5.9 million for the year ended December 31, 2020. Interest expense decreased primarily due to the cost of interest-bearing deposits decreasing 34 basis points to 0.37% for the three months ended December 31, 2021 from 0.71% for the three months ended December 31, 2020 due to the lower interest rate environment and the higher percentage of core deposits in the portfolio. The decreasing rate environment and increase in short-term investments resulted in a decrease in our net interest margin of 26 basis points to 4.11% from 4.37% for the three months ended December 31, 2021, and 17 basis points to 4.06% from 4.23% for the year ended December 31, 2021 when compared to the same periods in 2020.
Provision for loan losses of $1.2 million were recorded for the three months ended December 31, 2021 compared to $866,000 for the same period in 2020. For the year ended December 31, 2021, a provision of $3.9 million was recorded compared to $5.6 million for the year ended December 31, 2020. The changes in the provision were based on management's assessment of economic conditions, including the impact of the COVID-19 pandemic, loan portfolio growth and composition changes, historical charge-off trends, levels of problem loans and other asset quality trends.
The allowance for loan losses as a percentage of total loans was 1.34% as of December 31, 2021 compared to 1.39% as of December 31, 2020. The primary reason for the decrease was lower impaired loan balances due to charge-offs previously reserved for impaired loans. Net charge-offs for the year ended December 31, 2021 were $2.9 million compared to $923,000 for 2020. The increase in net charge-offs was the result of a second quarter 2021 charge-off of a $1.1 million impaired loan that was previously reserved for during the first quarter of 2021 as well as a third quarter 2021 charge-off of a $1.4 million relationship that was previously reserved for in the fourth quarter of 2020. Also contributing to the decrease was a first quarter 2021 decrease in the provision allocated to mortgage warehouse loan balances. The decrease in the provision allocated to mortgage warehouse loan balances was the result of the Bank's seasoning experience with this line of lending. There were $253.8 million and $265.4 million in outstanding mortgage warehouse loan balances at December 31, 2021 and 2020, respectively. Loans in this segment are facility lines to non-bank mortgage origination companies for sale into secondary markets, which typically occurs within 15 days of the loan funding. Due to their short-term nature, these loans are assessed at a lower credit risk and do not carry the same allocation as traditional loans. These decreases were partially offset by a $1.3 million loan relationship that was placed on nonaccrual status in the second quarter of 2021 with specific reserves of $1.2 million. Included in total loans is $12.4 million and $41.8 million at December 31, 2021 and 2020, respectively, in PPP loans originated as part of the CARES Act that we believe have no credit risk due to a government guarantee; therefore we have not provided for losses for these loans. Excluding PPP loans, the allowance for loan losses as a percentage of total loans was 1.35% as of December 31, 2021 compared to 1.43% at December 31, 2020. The allowance for loan losses as a percentage of non-performing loans was 674.14% as of December 31, 2021 compared to 341.72% as of December 31, 2020. Non-performing loans were $2.9 million, or 0.17% of total assets as of December 31, 2021 compared to $5.4 million, or 0.36% of total assets as of December 31, 2020. As of December 31, 2021, the largest non-performing loan relationships consisted of two commercial relationship totaling $1.8 million. These loan relationships were evaluated for impairment and specific reserves of $1.6 million were allocated as of December 31, 2021.
Noninterest income increased $304,000, or 33.1%, to $1.2 million for the three months ended December 31, 2021 compared to $918,000 for the three months ended December 31, 2020. The increase is primarily due to an increase in customer service fees on deposit accounts of $202,000, or 60.7%, an increase in other service charges and fees of $48,000, or 13.8%, and an increase of $35,000, or 318.2% in other income. The increase in customer service fees on deposit accounts is primarily due to fees generated from cash vault services for our customers who operate Bitcoin ATMs, which totaled $102,000. The increase in other service charges and fees was primarily due to increased overdraft fee income. Other income increased primarily due to gains recognized on commercial loans sold. For the year ended December 31, 2021, noninterest income increased $1.6 million, or 45.8%, to $5.2 million compared to $3.5 million for the year ended December 31, 2020. This was primarily due to an increase in other service charges and fees of $681,000, or 51.5%, an increase in customer service fees on deposit accounts of $501,000 or 37.6%, and an increase in bank owned life insurance income of $386,000, or 47.7%. The increase in other service charges and fees was primarily due to increased late fee charges as well as income from loan prepayment penalties related to two commercial loan relationships. Customer service fees on deposit accounts increased primarily due to fees generated from cash vault services for our customers who operate Bitcoin ATMs, which totaled $274,000. In addition, 2021 fees reflect higher income compared to 2020 due to fees being waived for customers impacted by COVID-19. The increase in bank owned life insurance income is primarily due to the receipt of a death benefit payout during the third quarter of 2021 as well as the purchase of additional insurance policies in the second quarter of 2020.
Noninterest expense increased $2.4 million, or 24.9%, to $11.8 million for the three months ended December 31, 2021 compared to $9.5 million for the three months ended December 31, 2020. The increase is primarily due to an increase in salaries and employee benefits expense, professional fees, and other expense, partially offset by a decrease in write downs of other assets and receivables. The increase of $2.4 million, or 40.0%, in salary and employee benefits was primarily due to increased stock-based compensation expense and an increase in staff to support the development and implementation of new technologies and specialty lending products. Also included in salaries and employee benefit expense is a $984,000 expense relating to an agreement entered into on November 1, 2021 between the Bank and the President and Chief Lending Officer upon his retirement. Professional fees increased $122,000, or 18.7%, primarily due to an increase in audit and compliance costs. The increase of $105,000, or 13.2%, in other expense was primarily due to increased loan workout expenses, as well as costs associated with conferences and training which were largely canceled during 2020 because of the COVID-19 pandemic. These increases were partially offset by a decrease of $400,000 in write downs of other assets and receivables. In the fourth quarter of 2020, a write-down of other assets was completed after the Company evaluated the collectability and determined $400,000 was impaired and uncollectible.
For the year ended December 31, 2021, noninterest expense increased $4.8 million, or 13.4%, to $40.6 million compared to $35.8 million for the year ended December 31, 2020. The increase is primarily due to an increase in salaries and employee benefits expense, data processing fees, directors' compensation, other expense, and professional fees, partially offset by a decrease in write downs of other assets and receivables. The increase of $5.6 million, or 24.2%, for the year ended December 31, 2021 when compared to 2020 in salary and employee benefits was primarily due to stock-based compensation expense for new grants awarded and an increase in staff to support the development and implementation of new technologies and specialty lending products. Also included in salaries and employee benefit expense is a $984,000 expense relating to the agreement entered into on November 1, 2021 between the Bank and the President and Chief Lending Officer. Data processing fees increased $325,000 or 32.5%, primarily due to new contracts for deposit services. Directors' compensation increased $242,000, or 32.3%, primarily due to increase stock-based compensation expense. The increase of $287,000, or 9.7%, in other expense was primarily due to increased costs related to third-party services for both marketing and information technology, as well as increased costs associated with conferences and training which were largely canceled during 2020 due to the COVID-19 pandemic. Professional fees increased $215,000, or 11.5%, primarily due to an increase in audit and compliance costs. These increases were offset by a decrease in write downs of other assets and receivables of $2.0 million. In the first quarter of 2020 a write-down of a notes receivable balance was completed after the Company evaluated the collectability and determined that $500,000 was uncollectible and in the third quarter of 2020 a write-down of an SBA receivable balance was completed after the Company evaluated the collectability and determined $1.3 million was uncollectible. In the fourth quarter of 2020 a write down of other assets was also completed after the Company evaluated the collectability and determined $400,00 was impaired and uncollectible. The decrease in the write-downs was partially offset by a write-down of an SBA receivable in the third quarter of 2021 after the Company evaluated the collectability and determined $195,000 was uncollectible.
As of December 31, 2021, total assets have increased $223.5 million, or 14.8%, to $1.73 billion compared to $1.51 billion at December 31, 2020. The primary reasons for the increase are increases in cash and cash equivalents and net loans. The increase in cash and cash equivalents of $69.3 million, or 82.7% is primarily due to an increase in deposits. Net loans increased $119.0 million, or 9.1%, and were $1.43 billion as of December 31, 2021 compared to $1.31 billion at December 31, 2020. The increase in net loans was due to an increase in commercial loans of $160.3 million, or 28.3% and construction and land development loans of $13.9 million, or 48.0%, partially offset by decreases in commercial real estate loans of $6.7 million, or 1.5%, mortgage warehouse loans of $11.6 million, or 4.4%, residential real estate loans of $32.0 million, or 97.5%, and consumer loans of $4.0 million, or 72.6%. Our commercial loan growth was primarily due to an increase in our loans to digital asset companies of $105.5 million, or 703.1% to $120.4 million compared to $15.0 million at December 31, 2020, an increase in enterprise value loans of $54.2 million, or 18.9%, to $340.3 million compared to $286.1 million at December 31,2020, and an increase in renewable energy loans of $25.2 million, or 67.7%, to $62.3 million compared to $37.2 million at December 31, 2020. The increase was partially offset by a decrease in PPP loans of $29.4 million, or 70.2%, to $12.4 million compared to $41.8 million as of December 31, 2020. Residential real estate loans decreased primarily due to the transfer of the portfolio to loans held for sale. As of December 31, 2021, the Company determined they will no longer originate or service residential real estate loans. As such, the Company valued the portfolio at the lower of cost or market and transferred them to loans held for sale.
Total liabilities increased $225.6 million, or 17.8%, due to increased deposits. Deposits were $1.46 billion as of December 31, 2021, representing an increase of $222.5 million, or 18.0%, compared to December 31, 2020. The increase in deposits was due to an increase of $270.4 million, or 48.8%, in NOW and demand deposits, an increase of $65.8 million, or 18.6% in money market accounts, an increase of $3.9 million, or 2.6%, in savings accounts, partially offset by a decrease of $117.7 million, or 66.0%, in time deposits. NOW and demand deposits and money market deposits increased primarily due to new and expanded relationships with traditional, digital asset, and banking as a service ("BaaS") customers. As of December 31, 2021, deposit relationships with digital asset customers increased $68.7 million, or 222.3%, to $99.7 million compared to $30.9 million at December 31, 2020. In 2021, the Company began offering deposit services to BaaS customers. BaaS is an end-to-end solution that allows financial technology companies ("FinTechs") or other third parties to connect to banks' systems directly via application programming interfaces so they can build banking offerings on top of the providers' regulated infrastructure. As of December 31, 2021, deposits with BaaS customers totaled $59.9 million. The increase in savings accounts is primarily caused by increased consumer savings. The decrease in time deposits is primarily due to roll-off of brokered certificates of deposit. In addition, the Bank has increased its focus on growing noninterest-bearing deposit balances and as of December 31, 2021 noninterest-bearing deposits represented 42.9% of total deposits compared to 31.0% at December 31, 2020.
As of December 31, 2021, shareholders' equity was $233.8 million compared to $235.9 million at December 31, 2020, representing a decrease of $2.1 million, or 0.9%. The decrease was primarily due to the repurchase of 1,272,607 shares of common stock for $19.0 million, $3.6 million from dividends paid, and a decrease in other comprehensive income of $409,000, partially offset by net income of $16.1 million, stock-based compensation expense of $2.5 million and employee stock ownership plan shares earned of $1.4 million.
About Provident Bancorp, Inc.
BankProv, legally operating as The Provident Bank, is a subsidiary of Provident Bancorp, Inc. (NASDAQ: PVBC). BankProv is a future-ready commercial bank for corporate clients, specializing in offering adaptive and technology-first banking solutions to niche markets, including cryptocurrency, renewable energy, fin-tech and search fund lending. We are committed to offering state-of-the-art APIs (application programming interfaces) for all business clients and BaaS (Bank as a Service) 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 effects of any pandemic; trends in interest rates; the ability of our borrowers to repay their loans; 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, 603-334-1253 Executive Vice President/CFO choule@bankprov.com
Provident Bancorp, Inc. Consolidated Balance Sheet
Loans, net of allowance for loan losses of $19,496 and $18,518
as of December 31, 2021 and 2020, respectively
1,433,803
1,314,810
Bank owned life insurance
42,569
36,684
Premises and equipment, net
14,258
14,716
Accrued interest receivable
5,703
6,371
Right-of-use assets
4,102
4,258
Other assets
15,265
12,013
Total assets
$
1,729,283
$
1,505,781
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing
$
626,587
$
383,079
Interest-bearing
833,308
854,349
Total deposits
1,459,895
1,237,428
Long-term borrowings
13,500
13,500
Operating lease liabilities
4,387
4,488
Other liabilities
17,719
14,509
Total liabilities
1,495,501
1,269,925
Shareholders' equity:
Preferred stock; authorized 50,000 shares:
no shares issued and outstanding
—
—
Common stock, $0.01 par value, 100,000,000 shares authorized;
17,854,649 and 19,047,544 shares issued and outstanding
at December 31, 2021 and 2020, respectively
179
191
Additional paid-in capital
123,498
139,450
Retained earnings
118,087
104,508
Accumulated other comprehensive income
649
1,058
Unearned compensation - ESOP
(8,631)
(9,351)
Total shareholders' equity
233,782
235,856
Total liabilities and shareholders' equity
$
1,729,283
$
1,505,781
Provident Bancorp, Inc. Consolidated Income Statements (Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
(Dollars in thousands, except per share data)
2021
2020
2021
2020
Interest and dividend income:
Interest and fees on loans
$
16,794
$
16,268
$
63,873
$
59,391
Interest and dividends on debt securities available- for-sale
184
196
722
913
Interest on short-term investments
87
18
208
99
Total interest and dividend income
17,065
16,482
64,803
60,403
Interest expense:
Interest on deposits
575
1,039
3,085
5,203
Interest on borrowings
72
73
285
728
Total interest expense
647
1,112
3,370
5,931
Net interest and dividend income
16,418
15,370
61,433
54,472
Provision for loan losses
1,233
866
3,887
5,597
Net interest and dividend income after provision for loan losses
15,185
14,504
57,546
48,875
Noninterest income:
Customer service fees on deposit accounts
535
333
1,832
1,331
Service charges and fees - other
397
349
2,003
1,322
Bank owned life insurance income
244
225
1,195
809
Other income
46
11
136
81
Total noninterest income
1,222
918
5,166
3,543
Noninterest expense:
Salaries and employee benefits
8,465
6,045
28,782
23,175
Occupancy expense
409
430
1,687
1,684
Equipment expense
137
145
514
577
Deposit insurance
141
174
482
416
Data processing
370
300
1,325
1,000
Marketing expense
125
42
279
223
Professional fees
773
651
2,083
1,868
Directors' compensation
218
208
992
750
Software depreciation and implementation
272
265
1,014
959
Write down of other assets and receivables
—
400
225
2,207
Other
900
795
3,236
2,949
Total noninterest expense
11,810
9,455
40,619
35,808
Income before income tax expense
4,597
5,967
22,093
16,610
Income tax expense
1,008
1,665
5,954
4,625
Net income
$
3,589
$
4,302
$
16,139
$
11,985
Earnings per share:
Basic
$
0.22
$
0.24
$
0.96
$
0.66
Diluted
$
0.21
$
0.24
$
0.93
$
0.66
Weighted Average Shares:
Basic
16,481,684
17,912,975
16,772,628
18,090,229
Diluted
17,180,466
18,007,580
17,302,007
18,131,025
Provident Bancorp, Inc. Net Interest Income Analysis (Unaudited)
For the Three Months Ended December 31,
2021
2020
Interest
Interest
Average
Earned/
Yield/
Average
Earned/
Yield/
(Dollars in thousands)
Balance
Paid
Rate (4)
Balance
Paid
Rate (4)
Assets:
Interest-earning assets:
Loans
$
1,357,838
$
16,794
4.95%
$
1,290,973
$
16,268
5.04%
Short-term investments
205,000
87
0.17%
82,969
18
0.09%
Debt securities available-for-sale
35,068
180
2.05%
33,546
187
2.23%
Federal Home Loan Bank stock
785
4
2.04%
895
9
4.02%
Total interest-earning assets
1,598,691
17,065
4.27%
1,408,383
16,482
4.68%
Non-interest earning assets
81,143
66,170
Total assets
$
1,679,834
$
1,474,553
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts
$
150,340
39
0.10%
$
143,725
57
0.16%
Money market accounts
439,619
292
0.27%
337,814
477
0.56%
NOW accounts
179,265
132
0.29%
159,428
151
0.38%
Certificates of deposit
70,504
112
0.64%
188,084
354
0.75%
Total interest-bearing deposits
839,728
575
0.27%
829,051
1,039
0.50%
Borrowings
13,500
72
2.13%
14,885
73
1.96%
Total interest-bearing liabilities
853,228
647
0.30%
843,936
1,112
0.53%
Noninterest-bearing liabilities:
Noninterest-bearing deposits
573,059
371,290
Other noninterest-bearing liabilities
20,045
17,286
Total liabilities
1,446,332
1,232,512
Total equity
233,502
242,041
Total liabilities and
equity
$
1,679,834
$
1,474,553
Net interest income
$
16,418
$
15,370
Interest rate spread (1)
3.97%
4.15%
Net interest-earning assets (2)
$
745,463
$
564,447
Net interest margin (3)
4.11%
4.37%
Average interest-earning assets to
interest-bearing liabilities
187.37%
166.88%
(1)
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.
(2)
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(3)
Net interest margin represents net interest income divided by average total interest-earning assets.
(4)
Annualized.
For the Year Ended December 31,
2021
2020
Interest
Interest
Average
Earned/
Yield/
Average
Earned/
Yield/
(Dollars in thousands)
Balance
Paid
Rate
Balance
Paid
Rate
Assets:
Interest-earning assets:
Loans
$
1,320,160
$
63,873
4.84%
$
1,209,736
$
59,391
4.91%
Short-term investments
159,656
208
0.13%
38,048
99
0.26%
Investment securities
34,022
708
2.08%
37,320
830
2.22%
Federal Home Loan Bank stock
827
14
1.69%
1,582
83
5.25%
Total interest-earning assets
1,514,665
64,803
4.28%
1,286,686
60,403
4.69%
Non-interest earning assets
73,057
62,741
Total assets
$
1,587,722
$
1,349,427
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts
$
151,586
196
0.13%
$
137,679
314
0.23%
Money market accounts
406,392
1,680
0.41%
295,483
2,159
0.73%
NOW accounts
162,618
416
0.26%
136,613
518
0.38%
Certificates of deposit
122,619
793
0.65%
163,032
2,212
1.36%
Total interest-bearing deposits
843,215
3,085
0.37%
732,807
5,203
0.71%
Borrowings
13,503
285
2.11%
43,682
728
1.67%
Total interest-bearing liabilities
856,718
3,370
0.39%
776,489
5,931
0.76%
Noninterest-bearing liabilities:
Noninterest-bearing deposits
476,743
319,451
Other noninterest-bearing liabilities
18,895
16,293
Total liabilities
1,352,356
1,112,233
Total equity
235,366
237,194
Total liabilities and
equity
$
1,587,722
$
1,349,427
Net interest income
$
61,433
$
54,472
Interest rate spread (1)
3.89%
3.93%
Net interest-earning assets (2)
$
657,947
$
510,197
Net interest margin (3)
4.06%
4.23%
Average interest-earning assets to
interest-bearing liabilities
176.80%
165.71%
(1)
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.
(2)
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(3)
Net interest margin represents net interest income divided by average total interest-earning assets.
Provident Bancorp, Inc. Select Financial Highlights
Three Months Ended
Year Ended
December 31,
December 31,
(unaudited)
2021
2020
2021
2020
Performance Ratios:
Return on average assets (1)
0.85%
1.17%
1.02%
0.89%
Return on average equity (1)
6.15%
7.11%
6.86%
5.05%
Interest rate spread (1) (3)
3.97%
4.15%
3.89%
3.93%
Net interest margin (1) (4)
4.11%
4.37%
4.06%
4.23%
Non-interest expense to average assets (1)
2.81%
2.56%
2.56%
2.65%
Efficiency ratio (5)
66.95%
58.05%
60.99%
61.72%
Average interest-earning assets to
average interest-bearing liabilities
187.37%
166.88%
176.80%
165.71%
Average equity to average assets
13.90%
16.41%
14.82%
17.58%
At
At
December 31,
December 31,
2021
2020
Asset Quality
Non-accrual loans:
Commercial real estate
$
—
$
—
Commercial
2,080
4,198
Residential real estate
812
1,156
Construction and land development
—
—
Consumer
—
65
Mortgage warehouse
—
—
Total non-accrual loans
2,892
5,419
Accruing loans past due 90 days or more
—
—
Other real estate owned
—
—
Total non-performing assets
$
2,892
$
5,419
Asset Quality Ratios
Allowance for loan losses as a percent of total loans (2)
1.34%
1.39%
Allowance for loan losses as a percent of non-performing loans
674.14%
341.72%
Non-performing loans as a percent of total loans (2)
0.20%
0.41%
Non-performing loans as a percent of total assets
0.17%
0.36%
Non-performing assets as a percent of total assets (6)
0.17%
0.36%
Capital and Share Related
Stockholders' equity to total assets
13.5%
15.7%
Book value per share
$
13.09
$
12.38
Market value per share
$
18.60
$
12.00
Shares outstanding
17,854,649
19,047,544
(1)
Annualized where appropriate.
(2)
Loans are presented before the allowance but include deferred costs/fees.
(3)
Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of interest-bearing liabilities.
(4)
Represents net interest income as a percent of average interest-earning assets.
(5)
Represents noninterest expense divided by the sum of net interest income and noninterest income, excluding gains on securities available for sale, net.
(6)
Non-performing assets consists of non-accrual loans plus loans accruing but 90 days overdue and OREO.
Provident Bancorp, Inc. Select Financial Highlights
Loans
At
At
At
December 31,
September 30,
December 31,
2021
2021
2020
(Dollars in thousands)
Amount
Percent
Amount
Percent
Amount
Percent
Commercial real estate
$
432,275
29.66%
$
423,526
31.47%
$
438,949
32.82%
Commercial (1)(2)
726,241
49.83%
609,638
45.31%
565,976
42.31%
Residential real estate
812
0.06%
25,100
1.87%
32,785
2.46%
Construction and land development
42,800
2.94%
34,800
2.59%
28,927
2.16%
Consumer
1,519
0.10%
2,389
0.18%
5,547
0.41%
Mortgage warehouse
253,764
17.41%
250,048
18.58%
265,379
19.84%
1,457,411
100.00%
1,345,501
100.00%
1,337,563
100.00%
Allowance for loan losses
(19,496)
(18,142)
(18,518)
Deferred loan fees, net
(4,112)
(4,874)
(4,235)
Net loans
$
1,433,803
$
1,322,485
$
1,314,810
Deposits
At
At
At
December 31,
September 30,
December 31,
(In thousands)
2021
2021
2020
NOW and demand
$
824,471
$
662,200
$
554,095
Regular savings
155,267
152,633
151,341
Money market deposits
419,625
454,104
353,793
Total non-certificate accounts (3)(4)
1,399,363
1,268,937
1,059,229
Certificate accounts of $250,000 or more
5,078
4,654
5,167
Certificate accounts less than $250,000
55,454
87,528
173,032
Total certificate accounts
60,532
92,182
178,199
Total deposits
$
1,459,895
$
1,361,119
$
1,237,428
(1)
Includes $12.4 million, $27.4 million, and $41.8 million in PPP loans at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
(2)
Includes $120.4 million, $56.0 million, and $15.0 million in digital asset loans at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
(3)
Includes $99.7 million, $63.2 million, and $30.9 million in digital asset deposits at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.
(4)
Includes $59.9 million, $25.6 million, and $145,000 in banking as a service deposits at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.
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