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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ______________________

Commission File No. 001-39090

Provident Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland

84-4132422

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification Number)

5 Market Street, Amesbury, Massachusetts

01913

(Address of Principal Executive Offices)

Zip Code

(978) 834-8555

(Registrant’s telephone number)

N/A

(Former name, former address, and former fiscal year if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock

PVBC

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.  YES  x  NO  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   YES  x  NO  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

o

 

Accelerated Filer

o

Non-accelerated Filer

x

 

Smaller Reporting Company

x

Emerging Growth Company

o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES  o  NO  x

As of May 3, 2024, there were 17,656,412 shares of the Registrant’s common stock, $0.01 par value per share, outstanding.


2


Provident Bancorp, Inc.

Form 10-Q

Part I.

Financial Information

Page

 

 

Item 1.

Interim Financial Statements

4

 

 

 

Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023

4

 

 

 

Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 (unaudited)

5

 

 

 

Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2024 and 2023 (unaudited)

6

 

Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2024 and 2023 (unaudited)

7

 

 

 

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (unaudited)

8

 

 

 

Notes to Consolidated Financial Statements (unaudited)

9

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

30

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

39

 

 

Item 4.

Controls and Procedures

39

 

 

Part II.

Other Information

39

 

 

Item 1.

Legal Proceedings

39

 

 

Item 1A.

Risk Factors

39

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

39

 

 

Item 3.

Defaults upon Senior Securities

39

 

 

Item 4.

Mine Safety Disclosures

39

 

 

Item 5.

Other Information

39

 

 

Item 6.

Exhibits

41

 

 

Signatures

 

42

3


Part I.Financial Information

Item 1.Financial Statements

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 

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

$

310,343 

$

308,769 

Interest-bearing

1,021,735 

1,022,453 

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; $.01 par value, 50,000 shares authorized: no shares issued and outstanding

Common stock, $0.01 par value, 100,000,000 shares authorized; 17,659,146 and 17,677,479 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

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 

The accompanying notes are an integral part of the unaudited consolidated financial statements.


4


PROVIDENT BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended

March 31,

March 31,

(Dollars in thousands, except per share data)

2024

2023

Interest and dividend income:

Interest and fees on loans

$

20,069

$

20,006

Interest and dividends on debt securities available-for-sale

237

238

Interest on short-term investments

1,729

383

Total interest and dividend income

22,035

20,627

Interest expense:

Interest on deposits

9,340

3,901

Interest on short-term borrowings

178

824

Interest on long-term borrowings

31

86

Total interest expense

9,549

4,811

Net interest and dividend income

12,486

15,816

Credit loss (benefit) expense - loans

(5,543)

2,935

Credit loss benefit - off-balance sheet credit exposures

(38)

(1,156)

Total credit loss (benefit) expense

(5,581)

1,779

Net interest and dividend income after credit loss (benefit) expense

18,067

14,037

Noninterest income:

Customer service fees on deposit accounts

674

979

Service charges and fees - other

309

451

Bank owned life insurance income

302

266

Other income

71

251

Total noninterest income

1,356

1,947

Noninterest expense:

Salaries and employee benefits

8,145

8,544

Occupancy expense

443

421

Equipment expense

152

144

Deposit insurance

333

278

Data processing

413

361

Marketing expense

18

83

Professional fees

1,314

1,403

Directors' compensation

174

200

Software depreciation and implementation

543

417

Insurance expense

301

452

Service fees

242

236

Other

657

672

Total noninterest expense

12,735

13,211

Income before income tax expense

6,688

2,773

Income tax expense

1,707

670

Net income

$

4,981

$

2,103

Earnings per share:

Basic

$

0.30

$

0.13

Diluted

$

0.30

$

0.13

Weighted Average Shares:

Basic

16,669,451

16,530,627

Diluted

16,720,653

16,531,266

The accompanying notes are an integral part of the unaudited consolidated financial statements.

 

5


PROVIDENT BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Three Months Ended March 31,

(In thousands)

2024

2023

Net income

$

4,981

$

2,103

Other comprehensive (loss) income:

Unrealized holding (losses) gains arising during the period on debt securities available-for-sale

(139)

819

Unrealized (loss) gain

(139)

819

Income tax effect

33

(188)

Total comprehensive (loss) income

(106)

631

Comprehensive income

$

4,875

$

2,734

The accompanying notes are an integral part of the unaudited consolidated financial statements.


6


PROVIDENT BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

For the three months ended March 31, 2024 and 2023

Accumulated

Shares of

Additional

Other

Unearned

Common

Common

Paid-in

Retained

Comprehensive

Compensation

(In thousands, except share data)

Stock

Stock

Capital

Earnings

(Loss) Income

ESOP

Total

Balance, December 31, 2022

17,669,698 

$

177 

$

122,847 

$

94,630 

$

(2,200)

$

(7,912)

$

207,542 

Cumulative effect of change in accounting principle

696 

696 

Net income

2,103 

2,103 

Dividends forfeited

3 

3 

Other comprehensive income

631 

631 

Stock-based compensation expense, net of forfeitures

319 

319 

Restricted stock award grants, net

16,337 

(2)

(2)

Stock options exercised, net

7,783 

(27)

(27)

ESOP shares earned

7 

180 

187 

Balance, March 31, 2023

17,693,818 

$

177 

$

123,144 

$

97,432 

$

(1,569)

$

(7,732)

$

211,452 

Balance at December 31, 2023

17,677,479 

$

177 

$

124,129 

$

106,285 

$

(1,496)

$

(7,193)

221,902 

Net income

4,981 

4,981 

Other comprehensive loss

(106)

(106)

Stock-based compensation expense, net of forfeitures

261 

261 

Restricted stock award grants, net

(18,333)