EX-99.1 2 pvbc-20201022xex99_1.htm EX-99.1 EX-991 Earnings Release

Provident Bancorp, Inc. Reports Earnings for the September 30, 2020 Quarter and Continues Payment of Quarterly Cash Dividends of $0.03 per Share

Company Release – 10/22/2020



Amesbury, Massachusetts — Provident Bancorp, Inc. (the “Company”) (NasdaqCM: PVBC), the holding company for The Provident Bank (the “Bank”), reported net income for the three months ended September 30, 2020 of $3.2 million, or $0.18 per diluted share, compared to $3.5 million, or $0.19 per diluted share, for the three months ended September 30, 2019. Net income for the nine months ended September 30, 2020 was $7.7 million, or $0.42 per diluted share, compared to $8.3 million, or $0.44 per diluted share, for the nine months ended September 30, 2019. As a result of the completion of the second-step conversion and related stock offering in October 2019, all historical share and per share information has been restated to reflect the 2.0212-to-one exchange ratio.



The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.03 per share, which will be paid on November 19, 2020 to stockholders of record as of November 5, 2020.



In announcing these results, Dave Mansfield, Chief Executive Officer said, “Although uncertainty surrounding the U.S. economy continues, we are encouraged by the strength of our customers and communities. During the third quarter, many businesses were able to implement adjustments to adapt to the COVID-19 environment, enabling them to fully or partially re-open and service customers. As a result we have seen fewer requests for new or extended modifications, with many borrowers who had modified their loan during the height of the pandemic able to resume normal loan repayments.”  Mansfield added, “Ensuring our clients receive an exceptional banking experience remains our top priority. During these unprecedented times, I am especially thankful for the energy and dedication of our employees who go above and beyond every single day to deliver on that promise.” Mansfield continued, “We are also pleased to announce the payment of another quarterly cash dividend. We believe that the payment of dividends, coupled with our recently announced stock repurchase program, evidence our financial strength during difficult economic times.”



COVID–19 Response



The Company’s market area has implemented a phased reopen plan and has not seen a significant spike in cases since the implementation began. The continued progression has allowed businesses to reopen and service customers with restrictions in place. Many companies have been able to make adjustments to their operations to adapt to the COVID-19 environment during the second and third quarters of 2020. There remains significant uncertainty about COVID-19, including concerns of a second wave of the pandemic and potential challenges caused by the colder winter months. While it is not possible to know the full extent that the impact of COVID-19 will have on the Company’s operations, the Company will continue to disclose potentially material items of which it is aware.



During the third quarter of 2020 the Company has continued to take steps to resume normal operations, which includes the collection of service and other fees on deposit accounts, and the reopening of most of our retail branch lobbies. The Company also continues to focus on meeting the needs of its customer base during the pandemic. The Company has maintained close communication with commercial customers and allowed for deferral extensions on an as-needed and case-by-case basis. During the third quarter there were 24 loan modifications completed, 12 of these were new modifications on loans totaling $17.6 million and 12 were extensions of existing modifications for loans totaling $8.2 million. Of the 24 loan modifications completed 14 were interest only modifications for loans totaling $19.0 million and 10 were full payment deferrals on loans totaling $6.9 million. Many loans under modification have been able to resume normal repayment and as of September 30, 2020 loan modifications made under the CARES Act totaled $175.4 million, or 12.9% of total loans, compared to $264.2 million, or 20.6% of totals loans as of June 30, 2020. The Company has $86.8 million in loan modifications set to resume normal repayment in October 2020. We are currently working with borrowers to determine their ability to resume the scheduled repayments or their need for a deferral extension. In addition to loan modifications, the Company continues to work with customers who received loans under the Small Business Administration’s (“SBA’s”) 7(a) Paycheck Protection Program (“PPP”) on applying for loan forgiveness.



Financial Results



Net interest and dividend income before provision for loan losses increased by $2.9 million, or 26.6%, compared to the three months ended September 30, 2019 and increased by $7.3 million, or 22.9%, compared to the nine months ended September 30,  2019. The growth in net interest and dividend income for the three months ended September 30, 2020 compared to the three months ended September 30, 2019 is primarily the result of an increase in our average interest-earning assets of $341.9 million, or 34.3%, offset by an increase in average interest-bearing liabilities of $105.6 million, or 15.3%, and a decrease in net interest margin of 26 basis points to 4.18%. The growth in net interest and dividend income for the nine months ended September 30, 2020 compared to the same period in 2019 is primarily the result of an increase in average interest-earning assets of $291.4 million, or 30.5%, offset by an increase in average interest-bearing liabilities of $88.5 million, or 13.3%, and a  decrease in the net interest margin of 26 basis points to 4.18%. 



Provision for loan losses of $760,000 were recognized for the three months ended September 30, 2020 compared to $833,000 for the same period in 2019. For the nine months ended September 30, 2020, a provision of $4.7 million was recognized compared to $3.6 million for the nine months ended September 30, 2019.  The changes in the provision were based on management’s assessment of loan

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portfolio growth and composition changes, historical charge-off trends, levels of problem loans and other asset quality trends. The Company has reviewed certain qualitative factors in light of significant economic deterioration due to COVID-19. Due to the continued uncertainty caused by COVID-19, including concerns of a second wave of the pandemic and potential challenges caused by the colder winter months, continued provisions were recognized.



The allowance for loan losses as a percentage of total loans was 1.31% as of September 30, 2020 compared to 1.42% as of December 31, 2019.  Included in total loans is $78.0 million 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 these loans, the allowance for loan losses as a percentage of total loans was 1.39% as of September 30, 2020.  The allowance for loan losses as a percentage of non-performing loans was 70.57% as of September 30, 2020 compared to 237.58% as of December 31, 2019. Non-performing loans were $25.2 million, or 1.68% of total assets as of September 30, 2020, compared to $5.8 million, or 0.52% of total assets, as of December 31, 2019.  As of September 30, 2020, non-performing loans consist primarily of two commercial relationships and one commercial real estate relationship. These loan relationships were evaluated for impairment and specific reserves of $1.4 million were allocated as of September 30, 2020. The commercial real estate loan relationship totaling $19.8 million was restructured during the first quarter of 2020. The relationship has been paying as agreed in accordance with the restructured terms.



Noninterest income decreased $129,000, or 12.4%, to $911,000 for the three months ended September 30, 2020 compared to $1.0 million for the same period in 2019. The decrease is primarily due to a decrease in other service charges fee and customer service fees on deposit accounts, partially offset by an increase in bank owned life insurance and other income. Other service charges and fees decreased  $198,000, or 44.0%, and customer service fees on deposit accounts decreased $22,000, or 5.4%, primarily due to decreased consumer spending, which resulted in decreased overdraft fees and service charges. Bank owned life insurance income increased $59,000, or 33.7%, due to the purchase of additional insurance. Other income increased $32,000, or 290.0%, primarily due to fee income for SBA PPP loan referrals.  For the nine months ended September 30, 2020, noninterest income decreased $517,000, or 16.5%, to $2.6 million compared to $3.1 million for the nine months ended September 30, 2019. The decrease is primarily due to a decrease in gains on sales of securities, other service charges fee, and customer service fees on deposit accounts, partially offset by an increase in bank owned life insurance and other income.  Gains on sales of securities were zero for the nine months ended September 30, 2020 compared to $113,000 for the nine months ended September 30, 2019 as we repositioned our investment portfolio in debt securities available for sale. Other service charges and fees decreased  $395,000, or 28.9%, and customer service fees on deposit accounts decreased  $91,000, or 8.4%, primarily due to waived service charges and fees during the second quarter for customers impacted by COVID-19 and decreased consumer spending. Bank owned life insurance income increased $59,000, or 11.2%, due to the purchase of additional insurance. Other income increased $23,000 or 48.9%, primarily due to fee income on SBA PPP loan referrals.



Noninterest expense increased $3.2 million, or 49.9%, to $9.7 million for the three months ended September 30, 2020 compared to $6.5 million for the three months ended September 30, 2019. The increase is primarily due to an increase in salaries and employee benefits expense, professional fees and write-downs of assets receivable. The increase of $1.5 million, or 32.4%, for the three months ended September 30, 2020 in salary and employee benefits was primarily due to a higher number of sales and operations positions compared to the same period in 2019 and the addition of staff from the mortgage warehouse lending purchase. A write-down of an SBA receivable balance was completed after the Company evaluated the collectability and determined that $1.3 million is likely uncollectible though collection efforts are still being made. Professional fees increased $344,000, or 286.7%, primarily due to decreased legal expenses in 2019 relating to an insurance settlement that was received in the third quarter. For the nine months ended September 30, 2020, noninterest expense increased $6.3 million, or 31.2%, to $26.4 million compared to $20.1 million for the nine months ended September 30, 2019. The increase is primarily due to an increase in salaries and employee benefits, other expense and professional fees and write-downs on receivables, partially offset by a decrease in occupancy expense. The increase of $4.1 million, or 31.3%, for the nine months ended September 30, 2020 in salary and employee benefits was primarily due to a higher number of sales and operations positions compared to the same period in 2019, the addition of staff from the mortgage warehouse operations and ESOP expense, which increased due to the acquisition of additional shares from our second-step conversion and related stock offering in October 2019.  In addition to the $1.3 million write-down of an SBA receivable as noted above, a write-down of a notes receivable balance of $500,000 was completed in the first quarter after the Company evaluated the collectability and determined it was uncollectible. Other expense increased $211,000, or 9.3%, due to increased loan workout expenses and professional fees increased $179,000 or 17.2%, due to the 2019 insurance settlement noted above as well as increased audit and compliance costs. Occupancy expense decreased $313,000, or 20.0%, primarily due to the acceleration of our leasehold improvements amortization related to the closure of our Hampton, New Hampshire branch in 2019.



As of September 30, 2020,  total assets have increased $376.2 million, or 33.5%, to $1.50 billion compared to $1.12 billion at December 31, 2019. The primary reasons for the increase are increases in net loans, bank owned life insurance and accrued interest receivable, partially offset by a decrease in cash and cash equivalents and in investments in debt securities available-for-sale. Net loans increased $382.1 million, or 39.8%, to $1.34 billion as of September 30, 2020 compared to $959.3 million at December 31, 2019. The increase in net loans was due to an increase in commercial loans of $131.0 million, or 29.0%, the acquisition and growth of mortgage warehouse loans to $275.8 million, and an increase in commercial real estate loans of $7.8 million, or 1.9%, partially offset by decreases in construction and land development loans of $11.0 million, or 23.5%, residential real estate loans of $8.8 million, or 19.2%, and consumer loans of $5.7 million, or 44.9%. The increase in commercial loans was primarily due to the origination of $78.0 million in

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SBA PPP loans. The increase in bank owned life insurance of $9.5 million, or 39.8%, was primarily due to the purchase of additional insurance. The increase in accrued interest receivable of $3.3 million, or 114.4%, was primarily due to deferred interest on loan modifications as part of the CARES Act. The decrease in cash and cash equivalents of $12.2 million, or 20.5%, resulted from the purchase of the mortgage warehouse loans, partially offset by an increase in deposits. The decrease in debt securities available-for-sale of $7.4 million, or 17.6%, resulted primarily from principal pay downs on government mortgage-backed securities.



Total liabilities increased $367.7 million, or 41.3%, due to increased deposits and an increase in borrowings. Deposits were $1.17 billion as of September 30, 2020, representing an increase of $318.3 million, or 37.5%, compared to December 31, 2019. The increase in deposits was due to an increase of $140.0 million, or 37.9%, in NOW and demand deposits, an increase of $55.5 million, or 20.5% in money market accounts, $88.6 million, or 93.9%, in time deposits, and an increase of $34.2 million, or 29.6%, in savings accounts. Money market deposits and NOW and demand deposits increased due to funds from the origination of PPP loans and strategic deposit growth strategy. The increase in time deposits is primarily due to increases in brokered certificates of deposit of $66.6 million, or 137.0%, and an increase of $34.5 million, or 399.0%, from Qwickrate deposits, where we gather certificates of deposit nationwide by posting rates we will pay on these deposits.  The increase in savings accounts is primarily caused by decreased consumer spending which resulted in increased consumer savings. Borrowings increased $48.5 million, or 194.0%, to $73.5 million as of September 30, 2020 primarily due to increased overnight borrowings to fund the mortgage warehouse loan growth.



As of September 30, 2020, shareholders’ equity was $239.4 million compared to $230.9 million at December 31, 2019, representing an increase of $8.5 million, or 3.7%. The increase was primarily due to year-to-date net income of $7.7 million, stock-based compensation expense of $760,000, other comprehensive income of $601,000 and employee stock ownership plan shares earned of $621,000, partially offset by a decrease of $1.2 million from dividends declared.



About Provident Bancorp, Inc.



Provident Bancorp, Inc. is a Maryland corporation that was formed in 2019 to be the successor corporation to Provident Bancorp, Inc., a Massachusetts corporation, and the holding company for The Provident Bank, which also operates under the name BankProv. The Provident Bank is an innovative, commercial bank that finds solutions for our business and private clients. We are committed to strengthening the economic development of the regions we serve, by working closely with businesses and private clients and delivering superior products and high-touch services to meet their banking needs. The Provident has offices in Massachusetts and New Hampshire. All deposits are insured in full through a combination of insurance provided by the Federal Deposit Insurance Corporation (FDIC) and the Depositors Insurance Fund (DIF). For more information about The Provident Bank 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















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Provident Bancorp, Inc.

Consolidated Balance Sheet







 

 

 

 

 



At

 

At



September 30,

 

December 31,



2020

 

2019

(Dollars in thousands)

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Cash and due from banks

$

13,486 

 

$

11,990 

Short-term investments

 

33,958 

 

 

47,668 

Cash and cash equivalents

 

47,444 

 

 

59,658 

Debt securities available-for-sale (at fair value)

 

34,421 

 

 

41,790 

Federal Home Loan Bank stock, at cost

 

895 

 

 

1,416 

Loans, net of allowance for loan losses of $17,788 and $13,844 as of

 

 

 

 

 

September 30, 2020 and December 31, 2019, respectively

 

1,341,341 

 

 

959,286 

Bank owned life insurance

 

36,459 

 

 

26,925 

Premises and equipment, net

 

14,700 

 

 

14,728 

Accrued interest receivable

 

6,118 

 

 

2,854 

Right-of-use assets

 

4,297 

 

 

3,713 

Other assets

 

12,307 

 

 

11,418 

Total assets

$

1,497,982 

 

$

1,121,788 



 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

Deposits:

 

 

 

 

 

Noninterest-bearing

$

361,091 

 

$

222,088 

Interest-bearing

 

807,143 

 

 

627,817 

Total deposits

 

1,168,234 

 

 

849,905 

Borrowings

 

73,500 

 

 

24,998 

Operating lease liabilities

 

4,512 

 

 

3,877 

Other liabilities

 

12,305 

 

 

12,075 

Total liabilities

 

1,258,551 

 

 

890,855 

Shareholders' equity:

 

 

 

 

 

Preferred stock; authorized 50,000 shares:

 

 

 

 

 

no shares issued and outstanding

 

 —

 

 

 —

Common stock, $0.01 par value, 100,000,000 shares authorized;

 

 

 

 

 

19,472,310 and 19,473,818 shares issued and outstanding

 

 

 

 

 

at September 30, 2020 and December 31, 2019, respectively

 

195 

 

 

195 

Additional paid-in capital

 

147,032 

 

 

146,174 

Retained earnings

 

100,675 

 

 

94,159 

Accumulated other comprehensive income

 

1,059 

 

 

458 

Unearned compensation - ESOP

 

(9,530)

 

 

(10,053)

Total shareholders' equity

 

239,431 

 

 

230,933 

Total liabilities and shareholders' equity

$

1,497,982 

 

$

1,121,788 











4

 


 





Provident Bancorp, Inc.

Consolidated Income Statements







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

 

Nine Months Ended



September 30,

 

 

September 30,



2020

 

2019

 

 

2020

 

 

2019

(Dollars in thousands, except per share data)

(unaudited)

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

14,972 

 

$

12,841 

 

$

43,123 

 

$

36,810 

Interest and dividends on securities

 

200 

 

 

406 

 

 

717 

 

 

1,230 

Interest on short-term investments

 

 

 

69 

 

 

81 

 

 

136 

Total interest and dividend income

 

15,178 

 

 

13,316 

 

 

43,921 

 

 

38,176 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

1,075 

 

 

1,691 

 

 

4,164 

 

 

4,659 

Interest on borrowings

 

108 

 

 

568 

 

 

655 

 

 

1,701 

Total interest expense

 

1,183 

 

 

2,259 

 

 

4,819 

 

 

6,360 

Net interest and dividend income

 

13,995 

 

 

11,057 

 

 

39,102 

 

 

31,816 

Provision for loan losses

 

760 

 

 

833 

 

 

4,731 

 

 

3,649 

Net interest and dividend income after provision for loan losses

 

13,235 

 

 

10,224 

 

 

34,371 

 

 

28,167 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

Customer service fees on deposit accounts

 

382 

 

 

404 

 

 

998 

 

 

1,089 

Service charges and fees - other

 

252 

 

 

450 

 

 

973 

 

 

1,368 

Gain on sale of securities, net

 

 —

 

 

 —

 

 

 —

 

 

113 

Bank owned life insurance income

 

234 

 

 

175 

 

 

584 

 

 

525 

Other income

 

43 

 

 

11 

 

 

70 

 

 

47 

Total noninterest income

 

911 

 

 

1,040 

 

 

2,625 

 

 

3,142 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

5,929 

 

 

4,478 

 

 

17,130 

 

 

13,046 

Occupancy expense

 

384 

 

 

373 

 

 

1,254 

 

 

1,567 

Equipment expense

 

151 

 

 

105 

 

 

432 

 

 

320 

Data processing

 

227 

 

 

188 

 

 

623 

 

 

542 

Marketing expense

 

46 

 

 

115 

 

 

181 

 

 

239 

Professional fees

 

464 

 

 

120 

 

 

1,217 

 

 

1,038 

Directors' compensation

 

177 

 

 

188 

 

 

542 

 

 

557 

Software depreciation and implementation

 

256 

 

 

173 

 

 

694 

 

 

518 

Write-downs of assets receivable

 

1,307 

 

 

 —

 

 

1,807 

 

 

 —

Other

 

745 

 

 

720 

 

 

2,473 

 

 

2,262 

Total noninterest expense

 

9,686 

 

 

6,460 

 

 

26,353 

 

 

20,089 

Income before income tax expense

 

4,460 

 

 

4,804 

 

 

10,643 

 

 

11,220 

Income tax expense

 

1,258 

 

 

1,295 

 

 

2,960 

 

 

2,962 

Net income

$

3,202 

 

$

3,509 

 

$

7,683 

 

$

8,258 

Earnings per share: (1)

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.18 

 

$

0.19 

 

$

0.42 

 

$

0.44 

Diluted

$

0.18 

 

$

0.19 

 

$

0.42 

 

$

0.44 

Weighted Average Shares: (1)

 

 

 

 

 

 

 

 

 

 

 

Basic

 

18,185,995 

 

 

18,786,692 

 

 

18,149,745 

 

 

18,758,905 

Diluted

 

18,222,766 

 

 

18,965,924 

 

 

18,184,550 

 

 

18,874,800 



 

 

 

 

 

 

 

 

 

 

 

(1) Amounts related to periods prior to the date of the Conversion (October 16, 2019) have been restated to give the retroactive

recognition to the exchange ratio applied in the Conversion (2.0212-to-one).

















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Provident Bancorp, Inc.

Net Interest Income Analysis

(Unaudited)













 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



For the Three Months Ended September 30,



2020

 

2019



 

 

 

Interest

 

 

 

 

 

 

Interest

 

 



Average

 

Earned/

 

Yield/

 

Average

 

Earned/

 

Yield/



Balance

 

Paid

 

Rate

 

Balance

 

Paid

 

Rate

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans 

$

1,269,970 

 

$

14,972 

 

4.72% 

 

$

930,115 

 

$

12,841 

 

5.52% 

Short-term investments

 

30,720 

 

 

 

0.08% 

 

 

14,459 

 

 

69 

 

1.91% 

Investment securities

 

36,251 

 

 

186 

 

2.05% 

 

 

47,302 

 

 

346 

 

2.93% 

Federal Home Loan Bank stock

 

962 

 

 

14 

 

5.82% 

 

 

4,101 

 

 

60 

 

5.85% 

          Total interest-earning assets

 

1,337,903 

 

 

15,178 

 

4.54% 

 

 

995,977 

 

 

13,316 

 

5.35% 

Non-interest earning assets

 

68,244 

 

 

 

 

 

 

 

64,622 

 

 

 

 

 

          Total assets

$

1,406,147 

 

 

 

 

 

 

$

1,060,599 

 

 

 

 

 

Liabilities and shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

$

155,865 

 

 

74 

 

0.19% 

 

$

137,121 

 

 

138 

 

0.40% 

Money market accounts

 

306,196 

 

 

460 

 

0.60% 

 

 

232,149 

 

 

717 

 

1.24% 

NOW accounts

 

136,466 

 

 

100 

 

0.29% 

 

 

97,323 

 

 

76 

 

0.31% 

Certificates of deposit

 

169,583 

 

 

441 

 

1.04% 

 

 

132,593 

 

 

760 

 

2.29% 

Total interest-bearing deposits

 

768,110 

 

 

1,075 

 

0.56% 

 

 

599,186 

 

 

1,691 

 

1.13% 

Borrowings

 

28,024 

 

 

108 

 

1.54% 

 

 

91,356 

 

 

568 

 

2.49% 

Total interest-bearing liabilities

 

796,134 

 

 

1,183 

 

0.59% 

 

 

690,542 

 

 

2,259 

 

1.31% 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

354,820 

 

 

 

 

 

 

 

221,409 

 

 

 

 

 

Other noninterest-bearing liabilities

 

16,483 

 

 

 

 

 

 

 

14,553 

 

 

 

 

 

Total liabilities

 

1,167,437 

 

 

 

 

 

 

 

926,504 

 

 

 

 

 

Total equity

 

238,710 

 

 

 

 

 

 

 

134,095 

 

 

 

 

 

Total liabilities and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

equity

$

1,406,147 

 

 

 

 

 

 

$

1,060,599 

 

 

 

 

 

Net interest income

 

 

 

$

13,995 

 

 

 

 

 

 

$

11,057 

 

 

Interest rate spread (1)

 

 

 

 

 

 

3.95% 

 

 

 

 

 

 

 

4.04% 

Net interest-earning assets (2)

$

541,769 

 

 

 

 

 

 

$

305,435 

 

 

 

 

 

Net interest margin (3)

 

 

 

 

 

 

4.18% 

 

 

 

 

 

 

 

4.44% 

Average interest-earning assets to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

interest-bearing liabilities

 

168.05% 

 

 

 

 

 

 

 

144.23% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.











































6

 


 

















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



For the Nine Months Ended September 30,



2020

 

2019



 

 

 

Interest

 

 

 

 

 

 

Interest

 

 



Average

 

Earned/

 

Yield/

 

Average

 

Earned/

 

Yield/



Balance

 

Paid

 

Rate

 

Balance

 

Paid

 

Rate

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans 

$

1,182,459 

 

$

43,123 

 

4.86% 

 

$

892,189 

 

$

36,810 

 

5.50% 

Short-term investments

 

22,965 

 

 

81 

 

0.47% 

 

 

9,262 

 

 

136 

 

1.96% 

Investment securities

 

38,586 

 

 

643 

 

2.22% 

 

 

49,078 

 

 

1,084 

 

2.94% 

Federal Home Loan Bank stock

 

1,813 

 

 

74 

 

5.44% 

 

 

3,875 

 

 

146 

 

5.02% 

Total interest-earning assets

 

1,245,823 

 

 

43,921 

 

4.70% 

 

 

954,404 

 

 

38,176 

 

5.33% 

Non-interest earning assets

 

61,590 

 

 

 

 

 

 

 

62,913 

 

 

 

 

 

          Total assets

$

1,307,413 

 

 

 

 

 

 

$

1,017,317 

 

 

 

 

 

Liabilities and shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

$

135,649 

 

 

256 

 

0.25% 

 

$

121,471 

 

 

324 

 

0.36% 

Money market accounts

 

281,270 

 

 

1,681 

 

0.80% 

 

 

229,079 

 

 

2,083 

 

1.21% 

NOW accounts

 

128,952 

 

 

368 

 

0.38% 

 

 

107,353 

 

 

305 

 

0.38% 

Certificates of deposit

 

154,621 

 

 

1,859 

 

1.60% 

 

 

119,889 

 

 

1,947 

 

2.17% 

Total interest-bearing deposits

 

700,492 

 

 

4,164 

 

0.79% 

 

 

577,792 

 

 

4,659 

 

1.08% 

Borrowings

 

53,351 

 

 

655 

 

1.64% 

 

 

87,556 

 

 

1,701 

 

2.59% 

Total interest-bearing liabilities

 

753,843 

 

 

4,819 

 

0.85% 

 

 

665,348 

 

 

6,360 

 

1.27% 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

302,045 

 

 

 

 

 

 

 

205,004 

 

 

 

 

 

Other noninterest-bearing liabilities

 

15,959 

 

 

 

 

 

 

 

15,050 

 

 

 

 

 

Total liabilities

 

1,071,847 

 

 

 

 

 

 

 

885,402 

 

 

 

 

 

Total equity

 

235,566 

 

 

 

 

 

 

 

131,915 

 

 

 

 

 

Total liabilities and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

equity

$

1,307,413 

 

 

 

 

 

 

$

1,017,317 

 

 

 

 

 

Net interest income

 

 

 

$

39,102 

 

 

 

 

 

 

$

31,816 

 

 

Interest rate spread (1)

 

 

 

 

 

 

3.85% 

 

 

 

 

 

 

 

4.06% 

Net interest-earning assets (2)

$

491,980 

 

 

 

 

 

 

$

289,056 

 

 

 

 

 

Net interest margin (3)

 

 

 

 

 

 

4.18% 

 

 

 

 

 

 

 

4.44% 

Average interest-earning assets to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  interest-bearing liabilities

 

165.26% 

 

 

 

 

 

 

 

143.44% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.





















7

 


 

Provident Bancorp, Inc.

Select Financial Highlights





 

 

 

 

 

 

 

 

 

 

 



 

 

 



Three Months Ended

 

Nine Months Ended



September 30,

 

September 30,



2020

 

2019

 

2020

 

2019

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

0.91% 

 

 

1.32% 

 

 

0.78% 

 

 

1.08% 

Return on average equity (1)

 

5.37% 

 

 

10.47% 

 

 

4.35% 

 

 

8.35% 

Interest rate spread (1) (3)

 

3.94% 

 

 

4.04% 

 

 

3.85% 

 

 

4.06% 

Net interest margin (1) (4)

 

4.18% 

 

 

4.44% 

 

 

4.18% 

 

 

4.44% 

Non-interest expense to average assets (1)

 

2.76% 

 

 

2.44% 

 

 

2.69% 

 

 

2.63% 

Efficiency ratio (5)

 

64.98% 

 

 

53.40% 

 

 

63.16% 

 

 

57.65% 

Average interest-earning assets to

 

 

 

 

 

 

 

 

 

 

 

average interest-bearing liabilities

 

168.05% 

 

 

144.23% 

 

 

165.26% 

 

 

143.44% 

Average equity to average assets

 

16.98% 

 

 

12.64% 

 

 

18.02% 

 

 

12.97% 























 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



At

 

At

 

At



September 30,

 

December 31,

 

September 30,



2020

 

2019

 

2019

Asset Quality

 

 

 

 

 

 

 

 

Non-accrual loans:

 

 

 

 

 

 

 

 

Real estate:

 

 

 

 

 

 

 

 

Commercial

$

19,834 

 

$

1,701 

 

$

1,123 

Residential

 

1,166 

 

 

969 

 

 

1,049 

Construction and land development

 

 -

 

 

165 

 

 

216 

Commercial

 

4,155 

 

 

2,955 

 

 

3,519 

Consumer

 

51 

 

 

37 

 

 

80 

Warehouse

 

 —

 

 

 —

 

 

 —

Total non-accrual loans

 

25,206 

 

 

5,827 

 

 

5,987 

Accruing loans past due 90 days or more

 

 —

 

 

 —

 

 

 —

Other real estate owned

 

 —

 

 

 —

 

 

1,740 

Total non-performing assets

$

25,206 

 

$

5,827 

 

$

7,727 

Asset Quality Ratios

 

 

 

 

 

 

 

 

Allowance for loan losses as a percent of total loans (2)

 

1.31% 

 

 

1.42% 

 

 

1.32% 

Allowance for loan losses as a percent of non-performing loans

 

70.57% 

 

 

237.58% 

 

 

207.73% 

Non-performing loans as a percent of total loans (2)

 

1.85% 

 

 

0.60% 

 

 

0.64% 

Non-performing loans as a percent of total assets

 

1.68% 

 

 

0.52% 

 

 

0.56% 

Non-performing assets as a percent of total assets (6)

 

1.68% 

 

 

0.52% 

 

 

0.72% 

Capital and Share Related (7)

 

 

 

 

 

 

 

 

Stockholders' equity to total assets

 

16.0% 

 

 

20.6% 

 

 

12.6% 

Book value per share

$

12.30 

 

$

11.86 

 

$

6.99 

Market value per share

$

7.79 

 

$

12.45 

 

$

11.89 

Shares outstanding

 

19,472,310 

 

 

19,473,818 

 

 

19,447,627 



 

 

 

 

 

 

 

 

(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.

(7) Amounts related to periods prior to the date of the Conversion (October 16, 2019) have been restated to give the

retroactive recognition to the exchange ratio applied in the Conversion (2.0212-to-one).





8