Provident Bancorp(PVBC) - 2025 Q1 - Quarterly Report

Financial Performance - Net income for the quarter ended March 31, 2025, was $2.2 million, or $0.13 per diluted share, compared to $5.0 million, or $0.30 per diluted share, for the same quarter in 2024[149]. - Net interest and dividend income increased by $389,000, or 3.1%, to $12.9 million for the quarter ended March 31, 2025[150]. - Total interest and dividend income for Q1 2025 was $20.6 million, a decrease of $1.5 million, or 6.6%, from Q1 2024[156]. - Net interest income for Q1 2025 was $12.875 million, compared to $12.486 million in Q1 2024, reflecting an increase[157]. - Interest expense decreased to $7.7 million in Q1 2025, down $1.8 million, or 19.3%, from Q1 2024[157]. - The provision for credit losses was a benefit of $12,000 in Q1 2025, compared to a benefit of $5.6 million in Q1 2024[158]. - Noninterest expense decreased to $11.4 million in Q1 2025, a reduction of $1.3 million, or 10.2%, from Q1 2024[159]. - The effective tax rate for Q1 2025 was 23.5%, down from 25.5% in Q1 2024[160]. - The yield on interest-earning assets was 5.84% for Q1 2025, a decrease of 13 basis points from Q1 2024[156]. - The estimated net interest income for the next 12 months at current rates is projected to be $55.235 million[163]. Asset and Loan Management - Total assets decreased by $39.2 million, or 2.5%, to $1.55 billion as of March 31, 2025, from $1.59 billion at December 31, 2024[128]. - Cash and cash equivalents decreased by $44.2 million, or 26.1%, to $125.0 million at March 31, 2025, primarily due to a decrease in deposits[129]. - Net loans increased by $5.7 million, or 0.4%, to $1.31 billion at March 31, 2025, driven by commercial loan growth of $36.7 million, or 4.9%[131]. - Commercial real estate loans increased to $587.5 million, representing 44.1% of total loans, up from 42.2% at December 31, 2024[132]. - The enterprise value loan segment decreased by $47.3 million, or 15.3%, bringing it below 20.0% of the Bank's loan portfolio[131]. - Total past due loans increased by $15.3 million to $17.5 million at March 31, 2025, from $2.2 million at December 31, 2024[137]. - Non-accrual loans rose by $10.5 million, or 50.4%, to $31.4 million, representing 2.36% of total loans outstanding at March 31, 2025[141]. - Non-performing loans as a percent of total loans increased to 2.36% at March 31, 2025, from 1.57% at December 31, 2024[140]. - The allowance for credit losses for loans was $21.16 million as of March 31, 2025, compared to $21.09 million at December 31, 2024[132]. - The allowance for credit losses for loans increased to $21.16 million at the end of the period, representing 1.59% of total loans outstanding[143]. Deposits and Funding - Total deposits decreased by $124.4 million, or 9.5%, to $1.18 billion at March 31, 2025, from $1.31 billion at December 31, 2024[145]. - Total borrowings increased by $83.0 million, or 186.2%, to $127.5 million at March 31, 2025, due to a decrease in deposits[145]. - A significant decrease in deposits could lead the Company to seek alternative funding sources, potentially increasing funding costs[172]. - The Company maintains access to multiple liquidity sources, but elevated funding costs could adversely affect its net interest margin[173]. - Warehouse loans, totaling $235.1 million as of March 31, 2025, provide an additional source of liquidity[168]. - The Company had a borrowing capacity of $157.2 million with the Federal Home Loan Bank of Boston, with $35.0 million in short-term advances outstanding[169]. - The Company had $140.7 million in unadvanced funds to borrowers as of March 31, 2025, down from $156.5 million at December 31, 2024[171]. Capital and Risk Management - Shareholders' equity totaled $234.0 million, an increase of $2.9 million, or 1.3%, from December 31, 2024, with a book value per share of $13.16[147]. - The Bank's strategy to transform its balance sheet to that of a traditional community bank has positively impacted earnings power while reducing exposure to riskier segments[127]. - The Bank's credit risk management strategy includes well-defined credit policies and prompt attention to potential problem loans[133]. - The macroeconomic forecast, particularly the national unemployment rate, significantly impacts the calculated estimated credit losses[125]. - As of March 31, 2025, the Economic Value of Equity (EVE) is $289,559,000, with a decrease of 7.60% if interest rates rise by 300 basis points[164]. - The Company is considered "well capitalized" under regulatory guidelines, exceeding all applicable regulatory capital requirements as of March 31, 2025[174]. - The Company regularly reviews its investments in liquid assets based on expected loan demand and deposit flows[167].