Provident Bancorp, Inc. Reports First Quarter Net Income of $5.0 Million
- Significant increase in net income for the first quarter of 2024.
- Positive growth in return on average assets and equity.
- Successful efforts to improve asset quality, stabilize net interest margins, and reduce expenses.
- Strategic plan execution included exiting digital asset lending relationships and focusing on traditional lending segments.
- Credit loss benefit, decreasing non-performing assets, and efforts to lower noninterest expenses were notable achievements.
- Positive trends in net loans and total deposits.
- Shareholders' equity increased, leading to improved equity ratios.
- Company remains well capitalized according to regulatory standards.
- None.
Insights
In announcing these results, Joseph Reilly, Chief Executive Officer, said, "The banking industry continues to face pressure from a challenging interest rate environment, so we are excited to report earnings for the quarter of
For the quarter ended March 31, 2024, net interest and dividend income was
Total interest and dividend income was
Total interest expense was
Mr. Reilly noted, "The ongoing 'higher for longer' interest rate environment continues to drive heavy competition in attracting low-cost deposits to the Bank. In response, we have enhanced our connection to the local markets in which we operate, understanding that the long, successful history of the Bank has only been made possible by the support of these communities. This engagement has resulted in a market presence that cultivates our most valued relationships and opportunities, rooted in trust and mutual benefit, where the Bank has established itself as a leading reliable, local banking partner."
The Company recognized a credit loss benefit of
Net charge-offs totaled
Mr. Reilly noted "Management has been successful in reducing our exposure to non-performing assets, which decreased approximately
Noninterest income was
Noninterest expense was
Mr. Reilly noted, "We have focused on reducing our expenses by thoroughly analyzing recurring costs and eliminating unnecessary spend, through renegotiating contracts and reviewing the necessity of other expenses with a higher level of scrutiny. We will continue to review our processes to identify cost save opportunities and lower our recurring noninterest expenses."
The Company recorded a provision for income taxes of
Total assets were
Total deposits were
As of March 31, 2024, shareholders' equity increased
Mr. Reilly concluded, "The Company is executing its strategic plan into 2024, and has successfully done so through the first quarter, proving its resiliency in a difficult market. We will continue to work hard to reinforce the pillars of our strong foundation and face our challenges with the same resolve that has brought us almost 200 years of successfully serving our communities and stakeholders."
About Provident Bancorp, Inc.
Provident Bancorp, Inc. (NASDAQ:PVBC) is the holding company for BankProv, a full-service commercial bank headquartered in
Forward-looking statements
This news release may contain certain forward-looking statements, such as statements of the Company's or the Bank's plans, objectives, expectations, estimates and intentions. Forward-looking statements may be identified by the use of words such as, "expects," "subject," "believe," "will," "intends," "may," "will be" or "would." These statements are subject to change based on various important factors (some of which are beyond the Company's or the Bank's control), and actual results may differ materially. Accordingly, readers should not place undue reliance on any forward-looking statements (which reflect management's analysis of factors only as of the date on which they are given). These factors include: general economic conditions; interest rates; inflation; potential recessionary conditions; levels of unemployment; legislative, regulatory and accounting changes; monetary and fiscal policies of the
Provident Bancorp, Inc.
Joseph Reilly, 603-494-8552
President and Chief Executive Officer
jreilly@bankprov.com
Provident Bancorp, Inc. Consolidated Balance Sheets | |||||
At | At | ||||
March 31, | December 31, | ||||
(Dollars in thousands) | 2024 | 2023 | |||
Assets | (Unaudited) | ||||
Cash and due from banks | $ | 21,341 | $ | 22,200 | |
Short-term investments | 169,510 | 198,132 | |||
Cash and cash equivalents | 190,851 | 220,332 | |||
Debt securities available-for-sale (at fair value) | 27,912 | 28,571 | |||
Federal Home Loan Bank stock, at cost | 3,605 | 4,056 | |||
Loans: | |||||
Commercial real estate | 478,293 | 468,928 | |||
Construction and land development | 76,785 | 77,851 | |||
Residential real estate | 6,932 | 7,169 | |||
Mortgage warehouse | 212,389 | 166,567 | |||
Commercial | 164,789 | 176,124 | |||
Enterprise value | 407,233 | 433,633 | |||
Digital asset | 10,071 | 12,289 | |||
Consumer | 88 | 168 | |||
Total loans | 1,356,580 | 1,342,729 | |||
Allowance for credit losses on loans | (16,006) | (21,571) | |||
Net loans | 1,340,574 | 1,321,158 | |||
Bank owned life insurance | 45,037 | 44,735 | |||
Premises and equipment, net | 12,835 | 12,986 | |||
Accrued interest receivable | 5,921 | 6,090 | |||
Right-of-use assets | 3,739 | 3,780 | |||
Deferred tax asset, net | 13,048 | 14,461 | |||
Other assets | 15,236 | 14,140 | |||
Total assets | $ | 1,658,758 | $ | 1,670,309 | |
Liabilities and Shareholders' Equity | |||||
Deposits: | |||||
Noninterest-bearing demand deposits | $ | 310,343 | $ | 308,769 | |
NOW | 66,019 | 93,812 | |||
Regular savings | 258,776 | 231,593 | |||
Money market deposits | 450,596 | 456,408 | |||
Certificates of deposit | 246,344 | 240,640 | |||
Total deposits | 1,332,078 | 1,331,222 | |||
Borrowings: | |||||
Short-term borrowings | 80,000 | 95,000 | |||
Long-term borrowings | 9,663 | 9,697 | |||
Total borrowings | 89,663 | 104,697 | |||
Operating lease liabilities | 4,142 | 4,171 | |||
Other liabilities | 5,632 | 8,317 | |||
Total liabilities | 1,431,515 | 1,448,407 | |||
Shareholders' equity: | |||||
Preferred stock; authorized 50,000 shares: no shares issued and outstanding | — | — | |||
Common stock, | 177 | 177 | |||
Additional paid-in capital | 124,415 | 124,129 | |||
Retained earnings | 111,266 | 106,285 | |||
Accumulated other comprehensive loss | (1,602) | (1,496) | |||
Unearned compensation - ESOP | (7,013) | (7,193) | |||
Total shareholders' equity | 227,243 | 221,902 | |||
Total liabilities and shareholders' equity | $ | 1,658,758 | $ | 1,670,309 | |
Provident Bancorp, Inc. Consolidated Income Statements (Unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, | December 31, | March 31, | ||||||
(Dollars in thousands, except per share data) | 2024 | 2023 | 2023 | |||||
Interest and dividend income: | ||||||||
Interest and fees on loans | $ | 20,069 | $ | 20,000 | $ | 20,006 | ||
Interest and dividends on debt securities available-for-sale | 237 | 232 | 238 | |||||
Interest on short-term investments | 1,729 | 3,334 | 383 | |||||
Total interest and dividend income | 22,035 | 23,566 | 20,627 | |||||
Interest expense: | ||||||||
Interest on deposits | 9,340 | 9,905 | 3,901 | |||||
Interest on short-term borrowings | 178 | 64 | 824 | |||||
Interest on long-term borrowings | 31 | 32 | 86 | |||||
Total interest expense | 9,549 | 10,001 | 4,811 | |||||
Net interest and dividend income | 12,486 | 13,565 | 15,816 | |||||
Credit loss (benefit) expense - loans | (5,543) | (1,227) | 2,935 | |||||
Credit loss benefit - off-balance sheet credit exposures | (38) | (7) | (1,156) | |||||
Total credit loss (benefit) expense | (5,581) | (1,234) | 1,779 | |||||
Net interest and dividend income after credit loss (benefit) expense | 18,067 | 14,799 | 14,037 | |||||
Noninterest income: | ||||||||
Customer service fees on deposit accounts | 674 | 1,007 | 979 | |||||
Service charges and fees - other | 309 | 336 | 451 | |||||
Bank owned life insurance income | 302 | 298 | 266 | |||||
Other income | 71 | 6 | 251 | |||||
Total noninterest income | 1,356 | 1,647 | 1,947 | |||||
Noninterest expense: | ||||||||
Salaries and employee benefits | 8,145 | 6,837 | 8,544 | |||||
Occupancy expense | 443 | 421 | 421 | |||||
Equipment expense | 152 | 156 | 144 | |||||
Deposit insurance | 333 | 368 | 278 | |||||
Data processing | 413 | 432 | 361 | |||||
Marketing expense | 18 | 193 | 83 | |||||
Professional fees | 1,314 | 1,487 | 1,403 | |||||
Directors' compensation | 174 | 135 | 200 | |||||
Software depreciation and implementation | 543 | 596 | 417 | |||||
Insurance expense | 301 | 451 | 452 | |||||
Service fees | 242 | 365 | 236 | |||||
Other | 657 | 1,015 | 672 | |||||
Total noninterest expense | 12,735 | 12,456 | 13,211 | |||||
Income before income tax expense | 6,688 | 3,990 | 2,773 | |||||
Income tax expense | 1,707 | 1,066 | 670 | |||||
Net income | $ | 4,981 | $ | 2,924 | $ | 2,103 | ||
Earnings per share: | ||||||||
Basic | $ | 0.30 | $ | 0.18 | $ | 0.13 | ||
Diluted | $ | 0.30 | $ | 0.18 | $ | 0.13 | ||
Weighted Average Shares: | ||||||||
Basic | 16,669,451 | 16,639,142 | 16,530,627 | |||||
Diluted | 16,720,653 | 16,690,937 | 16,531,266 | |||||
Provident Bancorp, Inc. Net Interest Income Analysis (Unaudited) | ||||||||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||||||||
March 31, | December 31, | March 31, | ||||||||||||||||||||||
2024 | 2023 | 2023 | ||||||||||||||||||||||
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) | $ | 1,323,260 | $ | 20,069 | 6.07 % | $ | 1,328,658 | $ | 20,000 | 6.02 % | $ | 1,391,941 | $ | 20,006 | 5.75 % | |||||||||
Short-term investments | 123,546 | 1,729 | 5.60 % | 216,722 | 3,334 | 6.15 % | 40,931 | 383 | 3.74 % | |||||||||||||||
Debt securities available-for-sale | 28,234 | 205 | 2.90 % | 25,968 | 192 | 2.96 % | 28,727 | 193 | 2.69 % | |||||||||||||||
Federal Home Loan Bank stock | 1,783 | 32 | 7.18 % | 1,507 | 40 | 10.62 % | 2,639 | 45 | 6.82 % | |||||||||||||||
Total interest-earning assets | 1,476,823 | 22,035 | 5.97 % | 1,572,855 | 23,566 | 5.99 % | 1,464,238 | 20,627 | 5.63 % | |||||||||||||||
Non-interest earning assets | 98,890 | 100,634 | 117,178 | |||||||||||||||||||||
Total assets | $ | 1,575,713 | $ | 1,673,489 | $ | 1,581,416 | ||||||||||||||||||
Liabilities and shareholders' equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Savings accounts | $ | 244,148 | $ | 1,961 | 3.21 % | $ | 219,162 | $ | 1,588 | 2.90 % | $ | 142,457 | $ | 111 | 0.31 % | |||||||||
Money market accounts | 454,883 | 4,238 | 3.73 % | 518,511 | 4,935 | 3.81 % | 313,077 | 1,913 | 2.44 % | |||||||||||||||
NOW accounts | 82,831 | 183 | 0.88 % | 100,653 | 239 | 0.95 % | 127,124 | 146 | 0.46 % | |||||||||||||||
Certificates of deposit | 230,616 | 2,958 | 5.13 % | 247,206 | 3,143 | 5.09 % | 185,470 | 1,731 | 3.73 % | |||||||||||||||
Total interest-bearing deposits | 1,012,478 | 9,340 | 3.69 % | 1,085,532 | 9,905 | 3.65 % | 768,128 | 3,901 | 2.03 % | |||||||||||||||
Borrowings | ||||||||||||||||||||||||
Short-term borrowings | 12,181 | 178 | 5.85 % | 6,011 | 64 | 4.26 % | 69,647 | 824 | 4.73 % | |||||||||||||||
Long-term borrowings | 9,675 | 31 | 1.28 % | 9,708 | 32 | 1.32 % | 18,307 | 86 | 1.88 % | |||||||||||||||
Total borrowings | 21,856 | 209 | 3.83 % | 15,719 | 96 | 2.44 % | 87,954 | 910 | 4.14 % | |||||||||||||||
Total interest-bearing liabilities | 1,034,334 | 9,549 | 3.69 % | 1,101,251 | 10,001 | 3.63 % | 856,082 | 4,811 | 2.25 % | |||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||||
Noninterest-bearing deposits | 306,349 | 338,712 | 495,067 | |||||||||||||||||||||
Other noninterest-bearing liabilities | 12,041 | 14,212 | 20,469 | |||||||||||||||||||||
Total liabilities | 1,352,724 | 1,454,175 | 1,371,618 | |||||||||||||||||||||
Total equity | 222,989 | 219,314 | 209,798 | |||||||||||||||||||||
Total liabilities and equity | $ | 1,575,713 | $ | 1,673,489 | $ | 1,581,416 | ||||||||||||||||||
Net interest income | $ | 12,486 | $ | 13,565 | $ | 15,816 | ||||||||||||||||||
Interest rate spread (2) | 2.28 % | 2.36 % | 3.38 % | |||||||||||||||||||||
Net interest-earning assets (3) | $ | 442,489 | $ | 471,604 | $ | 608,156 | ||||||||||||||||||
Net interest margin (4) | 3.38 % | 3.45 % | 4.32 % | |||||||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 142.78 % | 142.82 % | 171.04 % | |||||||||||||||||||||
(1) | Interest earned/paid on loans includes |
(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, | |||||||
2024 | 2023 | 2023 | |||||||
Performance Ratios: | |||||||||
Return (Loss) on average assets (1) | 1.26 % | 0.70 % | 0.53 % | ||||||
Return (Loss) on average equity (1) | 8.93 % | 5.33 % | 4.01 % | ||||||
Interest rate spread (1) (2) | 2.28 % | 2.36 % | 3.38 % | ||||||
Net interest margin (1) (3) | 3.38 % | 3.45 % | 4.32 % | ||||||
Non-interest expense to average assets (1) | 3.23 % | 2.98 % | 3.34 % | ||||||
Efficiency ratio (4) | 92.00 % | 81.88 % | 74.37 % | ||||||
Average interest-earning assets to | |||||||||
average interest-bearing liabilities | 142.78 % | 142.82 % | 171.04 % | ||||||
Average equity to average assets | 14.15 % | 13.11 % | 13.27 % | ||||||
At | At | At | ||||||
March 31, | December 31, | March 31, | ||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | |||||
Asset Quality | ||||||||
Non-accrual loans: | ||||||||
Commercial real estate | $ | — | $ | — | $ | 55 | ||
Residential real estate | 357 | 376 | 224 | |||||
Commercial | 1,923 | 1,857 | 193 | |||||
Enterprise value | — | 1,991 | 4,397 | |||||
Digital asset | 10,071 | 12,289 | 26,602 | |||||
Consumer | 1 | 4 | — | |||||
Total non-accrual loans | 12,352 | 16,517 | 31,471 | |||||
Total non-performing assets | $ | 12,352 | $ | 16,517 | $ | 31,471 | ||
Asset Quality Ratios | ||||||||
Allowance for loan losses as a percent of total loans (5) | 1.18 % | 1.61 % | 1.84 % | |||||
Allowance for loan losses as a percent of non-performing loans | 129.58 % | 130.60 % | 78.84 % | |||||
Non-performing loans as a percent of total loans (5) | 0.91 % | 1.23 % | 2.33 % | |||||
Non-performing loans as a percent of total assets | 0.74 % | 0.99 % | 1.85 % | |||||
Capital and Share Related | ||||||||
Stockholders' equity to total assets | 13.7 % | 13.3 % | 12.4 % | |||||
Book value per share | $ | 12.87 | $ | 12.55 | $ | 11.95 | ||
Market value per share | $ | 9.10 | $ | 10.07 | $ | 6.84 | ||
Shares outstanding | 17,659,146 | 17,677,479 | 17,693,818 | |||||
(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. |
(5) | Loans are presented before the allowance but include deferred costs/fees. |
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SOURCE Provident Bancorp, Inc.
FAQ
What was Provident Bancorp, Inc.'s net income for the first quarter of 2024?
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What was the company's credit loss benefit for the first quarter of 2024?
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