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Provident Bancorp (PVBC) reported a net income of $5.6 million ($0.33 per diluted share) for Q2 2022, a slight increase from $5.5 million in Q1 2022 and significantly up from $3.2 million in Q2 2021. For the first half of 2022, net income was $11.1 million ($0.66 per diluted share), up from $7.5 million YOY. The company declared a $0.04 per share dividend, payable August 26, 2022. Key metrics include a 3.8% rise in net interest income to $18.6 million due to increased interest rates and higher yields, and a 17.6% rise in noninterest income to $1.6 million.
Positive
Net income increased by 1.8% quarter-over-quarter and 75% year-over-year.
Net interest income rose 3.8% to $18.6 million, primarily due to higher interest rates.
Noninterest income increased by 17.6%, driven by gains on loans sold and service fees.
Provision for loan losses decreased year-over-year, indicating improved asset quality.
Dividend declared at $0.04 per share, demonstrating financial stability.
Negative
Average loan balance decreased by $4.3 million (0.3%) compared to Q1 2022.
Total assets decreased by $4.0 million (0.2%) from March 31, 2022.
Deposits dropped by $82.4 million (5.4%) due to reduced digital asset customer deposits.
AMESBURY, Mass., July 28, 2022 /PRNewswire/ -- Provident Bancorp, Inc. (the "Company") (NasdaqCM: PVBC), the holding company for The Provident Bank (the "Bank"), reported net income for the quarter ended June 30, 2022 of $5.6 million, or $0.33 per diluted share, compared to $5.5 million, or $0.32 per diluted share for the quarter ended March 31, 2022 and $3.2 million, or $0.18 per diluted share, for the quarter ended June 30, 2021. Net income for the six months ended June 30, 2022 was $11.1 million, or $0.66 per diluted share, compared to $7.5 million, or $0.43 per diluted share, for the six months ended June 30, 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 August 26, 2022 to stockholders of record as of August 12, 2022.
In reporting these results, Dave Mansfield, Chief Executive Officer said, "I am pleased by the momentum we are seeing at BankProv. We are partnering with some of the most innovative Fintech companies in the nation, and when the crypto market is experiencing a downturn, it provides digital asset companies with the opportunity to build a better experience for their clients. Because of this, we are experiencing an increased demand for Banking as a Service related service offerings and have positioned the Company as the premier Banking as a Service bank for the digital asset industry. We are onboarding clients to our BankProv APIs in collaboration with our technology partners and have increased adoption of the ProvXchange network. We continue to advance our goals and strategic initiatives in the most safe and sound manner."
Income Statement Results
Quarter Ended June 30, 2022 Compared to Quarter Ended March 31, 2022
For the quarter ended June 30, 2022, net interest and dividend income was $18.6 million, which represents an increase of $680,000, or 3.8%, when compared to the quarter ended March 31, 2022. This increase was primarily attributable to rising interest rates which resulted in increased yields on loans and short-term investments. The yield on loans increased 11 basis points to 5.07% for the quarter ended June 30, 2022 compared to 4.96% for the quarter ended March 31, 2022. The yield on short-term investments increased 56 basis points to 0.73% for the quarter ended June 30, 2022 compared to 0.17% for the quarter ended March 31, 2022. Net interest and dividend income was further supported by an increase in average interest earning assets of $75.8 million, or 4.6%, which was primarily due to an increase in average short-term investments of $82.6 million, or 60.3%, partially offset by a decrease in the average loan balance of $4.3 million, or 0.3%. The increase in net interest and dividend income for the quarter ended June 30, 2022 was partially offset by an increase in interest expense of $22,000, or 4.2%, to $547,000 compared to $525,000 for the quarter ended March 31, 2022. Interest expense increased primarily due to an increase in average interest-bearing deposits of $8.2 million, or 1.0% when compared to the quarter ended March 31, 2022. The increase in interest-bearing deposits was the result of an increase in NOW accounts.
Provision for loan losses of $1.0 million were recognized for the quarter ended June 30, 2022 compared to $83,000 for the quarter ended March 31, 2022. The changes in the provision were based on management's assessment of various factors affecting the loan portfolio, including loan growth, portfolio composition, delinquent and non-accrual loans, national and local business and economic conditions and loss experience as well as an overall evaluation of the quality of the underlying collateral. The primary reason for the increase in the provision for the quarter ended June 30, 2022 is an increase in total loans of $76.5 million, or 5.25%, when compared to March 31, 2022.
For the quarter ended June 30, 2022, noninterest income was $1.6 million, which represents an increase of $232,000, or 17.6%, when compared to the quarter ended March 31, 2022. The increase is primarily due to an increase in net gains on loans sold, other service charges and fees and customer service fees on deposit accounts. Net gains on loans sold increased $90,000, or 92.8%, primarily due to the sale of residential mortgage loans in June. Other service charges and fees increased $76,000, or 20.2%, primarily due to late charges and fees on commercial and commercial real estate loans. Customer service fees on deposit accounts increased $38,000, or 6.5%, primarily due to fees generated from cash vault services for our customers who operate Bitcoin ATMs as well as implementation fees charged to Banking as a Service ("BaaS") customers.
For the quarter ended June 30, 2022, noninterest expense was $11.3 million, which represents a decrease of $68,000, or 0.6%, when compared to the quarter ended March 31, 2022. The decrease was primarily due to a decrease in write downs of other assets and receivables, partially offset by an increase in other expenses and salaries and employee benefits. There was a write down of an SBA receivable in the first quarter of 2022 after the Company evaluated the collectability and determined that $395,000 was uncollectible; there were no write downs of other assets and receivables in the second quarter of 2022. Salaries and employee benefits increased $133,000, or 1.9% primarily due to an increase in staff to support business growth, including the development and implementation of new technologies and specialty lending products. Other expense increased $247,000, or 27.0%, primarily due to costs related to referral fees for digital asset loans, recruitment expenses, and costs paid for employees to attend trainings and conferences.
Quarter Ended June 30, 2022 Compared to Quarter Ended June 30, 2021
For the quarter ended June 30, 2022, net interest and dividend income was $18.6 million, which represents an increase of $4.0 million, or 27.4% from the quarter ended June 30, 2021. The primary reason for the increase was an increase in interest and dividend income of $3.6 million, or 23.5%. Interest and dividend income increased due to an increase in average interest earning assets of $240.3 million when compared to the quarter ended June 30, 2021. The increase in average interest earnings assets was primarily due to an increase in the average loan balances of $162.3 million, or 12.5% and an increase in short term investments of $78.6 million, or 55.7%. The increase in interest and dividend income was further supported by an increase in the yield on interest earning assets of 26 basis points to 4.46% for the quarter ended June 30, 2022 compared to 4.20% for the quarter ended June 30, 2021. Also contributing to the increase in net interest and dividend income for the quarter ended June 30, 2022 was a decrease in interest expense of $363,000, or 39.9%, to $547,000 compared to $910,000 for the quarter ended June 30, 2021. Interest expense decreased primarily due to a decrease in average interest-bearing deposits of $19.2 million, or 2.3%, which was the result of strategic initiatives of the Bank. Also contributing to the decrease in interest expense was a decrease in the cost of interest-bearing deposits of 17 basis points to 0.24% for the quarter ended June 30, 2022 when compared to the same quarter in 2021.
Provision for loan losses of $1.0 million were recognized for the quarter ended June 30, 2022 compared to $1.7 million for the quarter ended June 30, 2021. The changes in the provision were based on management's assessment of various factors affecting the loan portfolio, including loan growth, portfolio composition, delinquent and non-accrual loans, national and local business and economic conditions and loss experience as well as an overall evaluation of the quality of the underlying collateral.
For the quarter ended June 30, 2022, noninterest income was $1.6 million, which represents an increase of $449,000, or 40.7%, when compared to the quarter ended June 30, 2021. The increase is primarily due to an increase in net gains on loans sold and customer service fees on deposit accounts. Net gains on loans sold totaled $187,000 for the quarter ended June 30, 2022 and were primarily due to the sale of residential mortgage loans; there were no gains on loans sold for the quarter ended June 30, 2021. Customer service fees on deposit accounts increased $186,000, or 43.0%, which is primarily attributable to fees generated from cash vault services for our customers who operate Bitcoin ATMs, as well as growth in our business accounts related to our expanded product offerings to digital asset and BaaS customers.
For the quarter ended June 30, 2022, noninterest expense was $11.3 million, which represents an increase of $1.8 million, or 19.0% when compared to the quarter ended June 30, 2021. The increase in noninterest expense is primarily due to an increase in salaries and employee benefits, insurance expense, other expense and professional fees. The increase of $618,000, or 9.2%, in salary and employee benefits was primarily due to an increase in staff to support business growth, including the development and implementation of new technologies and specialty lending products. The increase in insurance expense of $410,000, or 1,078.9%, is due to a renewal and reassessment that incorporates consideration of our digital asset product strategies. Other expense increased $396,000, or 51.8%, primarily due to costs related to the onboarding of new lending customers in the digital asset space, recruitment expenses, and costs paid for employees to attend trainings and conferences. Professional fees increased $240,000, or 51.2%, primarily due to increased legal fees, audit and compliance, and fees paid for contracted employees.
Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021
For the six months ended June 30, 2022, net interest and dividend income was $36.5 million, which represents an increase of $7.0 million, or 23.8% from the six months ended June 30, 2021. The primary reason for the increase was an increase in interest and dividend income of $6.2 million, or 19.7%. Interest and dividend income increased due to an increase in average interest earning assets of $210.7 million when compared to the six months ended June 30, 2021. The increase in average interest earnings assets was primarily due to an increase in the average loan balances of $157.0 million, or 12.0% and an increase in short term investments of $51.8 million, or 40.9%. The increase in interest and dividend income was further supported by an increase in the yield on interest earning assets of 20 basis points to 4.47% for the six months ended June 30, 2022 compared to 4.27% for the six months ended June 30, 2021. Also contributing to the increase in net interest and dividend income for the six months ended June 30, 2022 was a decrease in interest expense of $819,000, or 43.3%, to $1.1 million compared to $1.9 million for the six months ended June 30, 2021. Interest expense decreased primarily due to a decrease in average interest-bearing deposits of $32.9 million, or 3.9%, which was the result of strategic initiatives of the Bank. Also contributing to the decrease in interest expense was a decrease in the cost of interest-bearing deposits of 19 basis points to 0.23% for the six months ended June 30, 2022 when compared to the same period in 2021.
Provision for loan losses of $1.1 million were recognized for the six months ended June 30, 2022 compared to $2.4 million for the six months ended June 30, 2021. The changes in the provision were based on management's assessment of economic conditions, 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 1.24% as of June 30, 2022 compared to 1.43% as of June 30, 2021. The allowance for loan losses provided 31.20 times coverage of non-performing loans as of June 30, 2022 compared to 4.16 times as of June 30, 2021. Non-performing loans were $608,000, or 0.03%, of total assets as of June 30, 2022 compared to $4.7 million, or 0.29%, of total assets as of June 30, 2021.
For the six months ended June 30, 2022, noninterest income was $2.9 million, which represents an increase of $751,000, or 35.4% from the six months ended June 30, 2021. The increase was primarily due to an increase in customer service fees on deposit accounts of $388,000, or 47.8%, an increase of $275,000, or 3,055.6% in net gains on sold loans, and an increase in bank owned life insurance income of $72,000, or 16.3%. The increase in customer service fees on deposit accounts is attributable to fees generated from cash vault services for our customers who operate Bitcoin ATMs, as well as growth in our business accounts related to our expanded product offerings to digital asset and BaaS customers. The increase in net gains on sold loans was primarily due to the sale of residential mortgage loans in June. The increase in bank owned life insurance income is primarily due to the purchase of additional insurance policies in the fourth quarter of 2021.
For the six months ended June 30, 2022, noninterest expense was $22.8 million, which represents an increase of $4.0 million, or 21.4% when compared to the six months ended June 30, 2021. The increase in noninterest expense is primarily due to an increase in salaries and employee benefits, insurance expense, professional fees and other expenses well as a write down of a receivable balance in the first half of 2022. The increase of $1.3 million, or 10.1%, in salary and employee benefits was primarily due to an increase in staff to support business growth, including the development and implementation of new technologies and specialty lending products. The increase in insurance expense of $823,000, or 1,143.1%, is due to a renewal and reassessment that incorporates consideration of our digital asset product strategies. The increase in professional fees of $537,000, or 59.7%, was primarily due to increased legal fees, audit and compliance, and fees paid for contracted employees. The increase in other expenses of $537,000, or 34.9%, was primarily due to costs related to the onboarding of new lending customers in the digital asset space, recruitment expenses, and costs paid for employees to attend trainings and conferences. Also contributing to the increase in noninterest expense was the write down of an SBA receivable in the first quarter of 2022 that occurred after the Company evaluated the collectability and determined that $395,000 was uncollectible.
Balance Sheet Results
June 30, 2022 Compared to March 31, 2022
As of June 30, 2022, total assets have decreased $4.0 million, or 0.2%, to $1.788 billion compared to $1.792 billion at March 31, 2022. The primary reasons for the decrease were decreases in cash and cash equivalents and loans held for sale, partially offset by an increase in net loans. The decrease in cash and cash equivalents of $61.3 million, or 28.4% is primarily due to a decrease in deposits. The decrease in loans held for sale is due to the sale of residential mortgages in June of 2022 and the reclassification of the unsold loans to held for investment. Net loans increased $76.8 million, or 5.3%, and were $1.51 billion as of June 30, 2022 compared to $1.44 billion at March 31, 2022. The increase in net loans was due to an increase in commercial loans of $43.1 million, or 5.7%, mortgage warehouse loans of $16.2 million, or 7.2%, and construction and land development loans of $16.1 million, or 31.2%, and residential loans of $9.5 million, or 2,357.1%, due to the reclassification noted above. These increases were partially offset by decreases in commercial real estate loans of $7.7 million, or 1.8% and consumer loans of $302,000, or 29.5%. Our commercial loan growth was primarily due to growth in our digital asset and enterprise value portfolios offset by a decrease in our renewable energy portfolio. The digital asset portfolio increased $26.7 million, or 23.9%, and the enterprise value portfolio increased $24.0 million, or 6.7%, while our renewable energy portfolio decreased $2.8 million, or 4.4%. Residential loans previously held for sale were reclassified back to held for investment as of June 30, 2022 resulting in a $9.5 million increase in our residential portfolio.
Total liabilities decreased $7.3 million, or 0.5%, from March 31, 2022 primarily due to decreased deposits offset by an increase in short-term borrowings. Deposits were $1.44 billion as of June 30, 2022, representing a decrease of $82.4 million, or 5.4%, compared to March 31, 2022. The decrease in deposits is primarily attributable to a $74.7 million, or 41.6%, decrease in deposits related to digital asset customers. This decrease is primarily related to two customer accounts that were closed after they were deemed to fall outside of the Bank's risk tolerance related to the war in Ukraine. Short-term borrowings increased due to overnight borrowings used to fund loan growth.
As of June 30, 2022, shareholders' equity was $239.9 million compared to $236.5 million at March 31, 2022, representing an increase of $3.4 million, or 1.4%. The increase was primarily due to net income of $5.6 million, stock based compensation expense of $468,000 and employee stock ownership plan shares earned of $349,000, partially offset by the repurchase of 85,205 shares of common stock for $1.3 million, other comprehensive loss of $1.0 million, and $668,000 from dividends paid.
June 30, 2022 Compared to December 31, 2021
As of June 30, 2022, total assets have increased $58.7 million, or 3.4%, to $1.79 billion compared to $1.73 billion at December 31, 2021. The primary reason for the increase was an increase in net loans, partially offset by a decrease in loans held for sale. Net loans increased $80.4 million, or 5.6%, and were $1.51 billion as of June 30, 2022 compared to $1.43 billion at December 31, 2021. The increase in net loans was primarily due to an increase in commercial loans of $70.1 million, or 9.7%, and construction and land development loans of $24.7 million, or 57.8%, and residential loans of $9.1 million, or 1,119.5%, partially offset by decreases in mortgage warehouse loans of $14.0 million, or 5.5%, and commercial real estate loans of $10.1 million, or 2.3%. Our commercial loan growth was primarily due to growth in our enterprise value portfolio of $39.5 million, or 11.6%, and our digital asset loan portfolio of $18.1 million, or 15.0%. These increases in commercial loan growth were offset by a decrease in PPP loans of $11.9 million, or 96.0%, as these loans continue to be forgiven, and a decrease in our renewable energy portfolio of $713,000, or 1.1%. Loans held for sale decreased due to the sale of residential mortgage loans in June and the reclassification of the unsold loans to held for investment.
Total liabilities increased $52.6 million, or 3.5%, from December 31, 2021 primarily due to an increase in short-term borrowings, offset by a decrease in deposits. Short-term borrowings increased $78.0 million due to overnight borrowings used to fund loan growth. Deposits were $1.44 billion as of June 30, 2022, representing a decrease of $20.0 million, or 1.4%, compared to December 31, 2021. The decrease in deposits was primarily related to a decrease in traditional deposits of $37.1 million, or 3.3%, and a $14.0 million decrease in deposits from enterprise value customers. These decreases were partially offset by an increase in deposits from our BaaS customers of $37.0 million, or 61.8%, and a $5.1 million, or 5.1%, increase in our deposits related to digital asset customers. Deposit relationships with BaaS customers totaled $96.9 million and deposit relationships with digital asset customers totaled $104.7 million at June 30, 2022. In addition, the Bank has increased its focus on growing noninterest-bearing deposit balances and as of June 30, 2022 noninterest-bearing deposits represented 46.9% of total deposits compared to 42.9% at December 31, 2021.
As of June 30, 2022, shareholders' equity was $239.9 million compared to $233.8 million at December 31, 2021, representing an increase of $6.1 million, or 2.6%. The increase was primarily due to net income of $11.1 million, stock based compensation expense of $913,000 and employee stock ownership plan shares earned of $732,000, partially offset by the repurchase of 180,434 shares of common stock for $2.9 million, other comprehensive loss of $2.3 million, and $1.3 million from dividends paid.
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 (Banking 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; global and national war and terrorism; 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
Loans, net of allowance for loan losses of $18,972, $19,296 and $19,496 as of
June 30, 2022, March 31, 2022 and December 31, 2021, respectively
1,514,245
1,437,429
1,433,803
Bank owned life insurance
43,083
42,825
42,569
Premises and equipment, net
13,890
14,062
14,258
Accrued interest receivable
5,765
6,400
5,703
Right-of-use assets
4,022
4,062
4,102
Other assets
17,305
15,123
15,265
Total assets
$
1,788,026
$
1,792,010
$
1,729,283
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing
$
675,411
$
747,194
$
626,587
Interest-bearing
764,461
775,075
833,308
Total deposits
1,439,872
1,522,269
1,459,895
Borrowings:
Short-term borrowings
78,000
—
—
Long-term borrowings
13,500
13,500
13,500
Total borrowings
91,500
13,500
13,500
Operating lease liabilities
4,335
4,361
4,387
Other liabilities
12,410
15,335
17,719
Total liabilities
1,548,117
1,555,465
1,495,501
Shareholders' equity:
Preferred stock; authorized 50,000 shares:
no shares issued and outstanding
—
—
—
Common stock, $0.01 par value, 100,000,000 shares authorized;
17,718,522, 17,796,542 and 17,854,649 shares issued and outstanding
at June 30, 2022, March 31, 2022 and December 31, 2021, respectively
177
178
179
Additional paid-in capital
121,770
122,504
123,498
Retained earnings
127,890
122,939
118,087
Accumulated other comprehensive (loss) income
(1,656)
(625)
649
Unearned compensation - ESOP
(8,272)
(8,451)
(8,631)
Total shareholders' equity
239,909
236,545
233,782
Total liabilities and shareholders' equity
$
1,788,026
$
1,792,010
$
1,729,283
Provident Bancorp, Inc.
Consolidated Income Statements
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
(Dollars in thousands, except per share data)
2022
2022
2021
2022
2021
Interest and dividend income:
Interest and fees on loans
$
18,558
$
18,212
$
15,298
$
36,770
$
30,995
Interest and dividends on debt securities available-for-sale
194
179
186
373
355
Interest on short-term investments
400
59
29
459
52
Total interest and dividend income
19,152
18,450
15,513
37,602
31,402
Interest expense:
Interest on deposits
476
455
839
931
1,750
Interest on long-term borrowings
71
70
71
141
141
Total interest expense
547
525
910
1,072
1,891
Net interest and dividend income
18,605
17,925
14,603
36,530
29,511
Provision for loan losses
1,005
83
1,669
1,088
2,422
Net interest and dividend income after provision for loan losses
17,600
17,842
12,934
35,442
27,089
Noninterest income:
Customer service fees on deposit accounts
619
581
433
1,200
812
Service charges and fees - other
452
376
438
828
788
Bank owned life insurance income
258
256
223
514
442
Gain on loans sold, net
187
97
—
284
9
Other income
36
10
9
46
70
Total noninterest income
1,552
1,320
1,103
2,872
2,121
Noninterest expense:
Salaries and employee benefits
7,322
7,189
6,704
14,511
13,181
Occupancy expense
398
439
417
837
829
Equipment expense
143
138
127
281
249
Deposit insurance
154
151
111
305
217
Data processing
344
335
314
679
635
Marketing expense
70
127
81
197
118
Professional fees
709
728
469
1,437
900
Directors' compensation
267
254
261
521
515
Software depreciation and implementation
327
294
241
621
487
Write down of other assets and receivables
—
395
—
395
—
Insurance expense
448
447
38
895
72
Other
1,161
914
765
2,075
1,538
Total noninterest expense
11,343
11,411
9,528
22,754
18,741
Income before income tax expense
7,809
7,751
4,509
15,560
10,469
Income tax expense
2,190
2,226
1,343
4,416
3,006
Net income
$
5,619
$
5,525
$
3,166
$
11,144
$
7,463
Earnings per share:
Basic
$
0.34
$
0.33
$
0.19
$
0.68
$
0.44
Diluted
$
0.33
$
0.32
$
0.18
$
0.66
$
0.43
Weighted Average Shares:
Basic
16,460,248
16,517,952
16,778,698
16,488,941
17,019,889
Diluted
16,882,933
17,028,057
17,338,662
16,957,186
17,442,411
Provident Bancorp, Inc.
Net Interest Income Analysis
(Unaudited)
For the Three Months Ended
June 30,
March 31,
June 30,
2022
2022
2021
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)
$
1,465,000
$
18,558
5.07 %
$
1,469,268
$
18,212
4.96 %
$
1,302,699
$
15,298
4.70 %
Short-term investments
219,555
400
0.73 %
136,954
59
0.17 %
140,985
29
0.08 %
Debt securities available-for-sale
32,687
190
2.33 %
35,820
175
1.95 %
33,798
183
2.17 %
Federal Home Loan Bank stock
1,388
4
1.15 %
785
4
2.04 %
843
3
1.42 %
Total interest-earning assets
1,718,630
19,152
4.46 %
1,642,827
18,450
4.49 %
1,478,325
15,513
4.20 %
Non-interest earning assets
88,932
85,542
70,357
Total assets
$
1,807,562
$
1,728,369
$
1,548,682
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts
$
152,932
$
51
0.13 %
$
153,480
$
40
0.10 %
$
151,381
$
56
0.15 %
Money market accounts
331,998
211
0.25 %
392,874
250
0.25 %
375,537
447
0.48 %
NOW accounts
264,038
135
0.20 %
192,564
83
0.17 %
157,845
89
0.23 %
Certificates of deposit
58,781
79
0.54 %
60,627
82
0.54 %
142,258
247
0.69 %
Total interest-bearing deposits
807,749
476
0.24 %
799,545
455
0.23 %
827,021
839
0.41 %
Borrowings
Short-term borrowings
857
—
— %
—
—
—
—
Long-term borrowings
13,500
71
2.10 %
13,500
70
2.07 %
13,500
71
2.10 %
Total borrowings
14,357
71
1.98 %
13,500
70
13,500
71
Total interest-bearing liabilities
822,106
547
0.27 %
813,045
525
0.26 %
840,521
910
0.43 %
Noninterest-bearing liabilities:
Noninterest-bearing deposits
726,623
657,784
452,766
Other noninterest-bearing liabilities
19,568
21,064
18,731
Total liabilities
1,568,297
1,491,893
1,312,018
Total equity
239,265
236,476
236,664
Total liabilities and
equity
$
1,807,562
$
1,728,369
$
1,548,682
Net interest income
$
18,605
$
17,925
$
14,603
Interest rate spread (3)
4.19 %
4.23 %
3.77 %
Net interest-earning assets (4)
$
896,524
$
829,782
$
637,804
Net interest margin (5)
4.33 %
4.36 %
3.95 %
Average interest-earning assets to interest-bearing liabilities
209.05 %
202.06 %
175.88 %
(1)
Interest earned/paid on loans includes fee income related to SBA loan fee accretion of $96,000, $373,000 and $614,000 for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021, respectively. Interest earned/paid on loans also includes mortgage warehouse loan origination fee income of $239,000, $342,000, and $290,000 for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021, respectively.
(2)
Includes loans held for sale.
(3)
Net interest rate spread represents the difference between the weighted average yield on interest-bearing assets and the weighted average rate of interest-bearing liabilities.
(4)
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(5)
Net interest margin represents net interest income divided by average total interest-earning assets.
(6)
Annualized.
For the Six Months Ended June 30,
2022
2021
Interest
Interest
Average
Earned/
Yield/
Average
Earned/
Yield/
(Dollars in thousands)
Balance
Paid
Rate (6)
Balance
Paid
Rate (6)
Assets:
Interest-earning assets:
Loans (1)(2)
$
1,467,122
$
36,770
5.01 %
$
1,310,127
$
30,995
4.73 %
Short-term investments
178,483
459
0.51 %
126,671
52
0.08 %
Debt securities available-for-sale
34,245
365
2.13 %
32,578
348
2.14 %
Federal Home Loan Bank stock
1,088
8
1.47 %
869
7
1.61 %
Total interest-earning assets
1,680,938
37,602
4.47 %
1,470,245
31,402
4.27 %
Non-interest earning assets
87,247
68,269
Total assets
$
1,768,185
$
1,538,514
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts
$
153,205
$
91
0.12 %
$
151,378
$
111
0.15 %
Money market accounts
362,268
460
0.25 %
375,309
924
0.49 %
NOW accounts
228,498
218
0.19 %
155,582
187
0.24 %
Certificates of deposit
59,699
162
0.54 %
154,256
528
0.68 %
Total interest-bearing deposits
803,670
931
0.23 %
836,525
1,750
0.42 %
Borrowings
Short-term borrowings
431
—
—
—
Long-term borrowings
13,500
141
13,500
141
Total borrowings
13,931
141
2.02 %
13,500
141
2.09 %
Total interest-bearing liabilities
817,601
1,072
0.26 %
850,025
1,891
0.44 %
Noninterest-bearing liabilities:
Noninterest-bearing deposits
692,394
432,670
Other noninterest-bearing liabilities
20,312
18,361
Total liabilities
1,530,307
1,301,056
Total equity
237,878
237,458
Total liabilities and
equity
$
1,768,185
$
1,538,514
Net interest income
$
36,530
$
29,511
Interest rate spread (3)
4.21 %
3.83 %
Net interest-earning assets (4)
$
863,337
$
620,220
Net interest margin (5)
4.35 %
4.01 %
Average interest-earning assets to
interest-bearing liabilities
205.59 %
172.96 %
(1)
Interest earned/paid on loans includes fee income related to SBA loan fee accretion of $468,000 and $1.2 million for the six months ended June 30, 2022 and June 30, 2021, respectively. Interest earned/paid on loans also includes mortgage warehouse loan origination fee income of $580,000 and $678,000 for the six months ended June 30, 2022 and June 30, 2021, respectively.
(2)
Includes loans held for sale.
(3)
Net interest rate spread represents the difference between the weighted average yield on interest-bearing assets and the weighted average rate of interest-bearing liabilities.
(4)
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(5)
Net interest margin represents net interest income divided by average total interest-earning assets.
(6)
Annualized.
Provident Bancorp, Inc.
Select Financial Highlights
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
2022
2022
2021
2022
2021
Performance Ratios:
Return on average assets (1)
1.24 %
1.28 %
0.82 %
1.26 %
0.97 %
Return on average equity (1)
9.39 %
9.35 %
5.35 %
9.37 %
6.29 %
Interest rate spread (1) (3)
4.19 %
4.23 %
3.76 %
4.21 %
3.83 %
Net interest margin (1) (4)
4.33 %
4.36 %
3.95 %
4.35 %
4.01 %
Non-interest expense to average assets (1)
2.51 %
2.64 %
2.46 %
2.57 %
2.44 %
Efficiency ratio (5)
56.27 %
59.29 %
60.66 %
57.75 %
59.25 %
Average interest-earning assets to
average interest-bearing liabilities
209.05 %
202.06 %
175.88 %
205.59 %
172.96 %
Average equity to average assets
13.24 %
13.68 %
15.28 %
13.45 %
15.43 %
At
At
At
June 30,
March 31,
December 31,
2022
2022
2021
Asset Quality
Non-accrual loans:
Commercial real estate
$
—
$
—
$
—
Commercial
301
1,569
2,080
Residential real estate
303
306
812
Construction and land development
—
—
—
Consumer
4
6
—
Mortgage warehouse
—
—
—
Total non-accrual loans
608
1,881
2,892
Accruing loans past due 90 days or more
—
—
—
Other real estate owned
—
—
—
Total non-performing assets
$
608
$
1,881
$
2,892
Asset Quality Ratios
Allowance for loan losses as a percent of total loans (2)
1.24 %
1.32 %
1.34 %
Allowance for loan losses as a percent of non-performing loans
3120.39 %
1025.84 %
674.14 %
Non-performing loans as a percent of total loans (2)
0.04 %
0.13 %
0.20 %
Non-performing loans as a percent of total assets
0.03 %
0.10 %
0.17 %
Non-performing assets as a percent of total assets (6)
0.03 %
0.10 %
0.17 %
Capital and Share Related
Stockholders' equity to total assets
13.4 %
13.2 %
13.5 %
Book value per share
$
13.54
$
13.29
$
13.09
Market value per share
$
15.70
$
16.22
$
18.60
Shares outstanding
17,718,522
17,796,542
17,854,649
(1)
Annualized.
(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.
At
At
At
June 30,
March 31,
December 31,
2022
2022
2021
(In thousands)
Amount
Percent
Amount
Percent
Amount
Percent
Commercial real estate
$
422,162
27.48 %
$
429,842
29.44 %
$
432,275
29.66 %
Commercial (1)(2)
796,345
51.83 %
753,276
51.61 %
726,241
49.83 %
Residential real estate
9,902
0.64 %
403
0.03 %
812
0.06 %
Construction and land development
67,525
4.39 %
51,474
3.53 %
42,800
2.94 %
Consumer
720
0.05 %
1,022
0.07 %
1,519
0.10 %
Mortgage warehouse
239,791
15.61 %
223,593
15.32 %
253,764
17.41 %
1,536,445
100.00 %
1,459,610
100.00 %
1,457,411
100.00 %
Allowance for loan losses
(18,972)
(19,296)
(19,496)
Deferred loan fees, net
(3,228)
(2,885)
(4,112)
Net loans
$
1,514,245
$
1,437,429
$
1,433,803
(1)
Includes $501,000, $2.1 million, and $12.4 million in PPP loans at June 30, 2022, March 31, 2022 and December 31, 2021, respectively.
(2)
Includes $138.6 million, $111.9 million, and $120.5 million in digital asset loans at June 30, 2022, March 31, 2022 and December 31, 2021, respectively.
At
At
At
June 30,
March 31,
December 31,
(In thousands)
2022
2022
2021
Noninterest-bearing:
Demand (1)(2)
$
675,411
$
747,194
$
626,587
Interest-bearing:
NOW
267,333
192,800
197,884
Regular savings
158,593
154,995
155,267
Money market deposits (3)
289,802
366,277
419,625
Certificates of deposit:
Certificate accounts of $250,000 or more
5,515
5,084
5,078
Certificate accounts less than $250,000
43,218
55,919
55,454
Total interest-bearing
764,461
775,075
833,308
Total deposits
$
1,439,872
$
1,522,269
$
1,459,895
(1)
Includes $104.7 million, $179.4 million, and $99.7 million in digital asset deposits at June 30, 2022, March 31, 2022, December 31, 2021, respectively.
(2)
Includes $96.9 million, $94.3 million, and $59.9 million in banking as a service deposits at June 30, 2022, March 31, 2022 and June 30, 2021, respectively.
(3)
Includes $10.1 million in digital asset deposits at December 31, 2021, there were no interest-bearing digital asset deposits at June 30 or March 31, 2022.
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