EX-99.1 2 pvbc-20230127xex99_1.htm EX-99.1 EX-991 Earnings Release

Provident Bancorp, Inc. Reports Results  for the December 31, 2022 Quarter 

Company Release – 01/27/2023



Amesbury, Massachusetts — Provident Bancorp, Inc. (the “Company”) (NasdaqCM: PVBC), the holding company for BankProv (the “Bank”), reported net income for the quarter ended December 31,  2022 of $2.7 million, or $0.16 per diluted share, compared to  a net loss of  $35.3 million, or ($2.15) per diluted share, for the quarter ended September 30, 2022 and net income of $3.6 million, or $0.21 per diluted share, for the quarter ended December 31, 2021. Net loss for the year ended December 31, 2022 was $21.5 million, or ($1.30) per diluted share, compared to net income of  $16.1 million, or $0.93 per diluted share, for the year ended December 31, 2021.



In announcing these results, Carol Houle, Interim Co-President and Co-Chief Executive Officer and Chief Financial Officer said, “As we reflect on 2022, we are eager to take its lessons and emerge a better, stronger bank. Despite our 2022 losses, we enter 2023 well capitalized and well diversified. During the fourth quarter, we took decisive action to reduce our exposure to loans secured by cryptocurrency mining rigs. Not only are we no longer originating these types of loans, we have also reduced that portfolio to nearly half what it was at September 30, 2022. The remaining sectors of our loan portfolio continue to perform in accordance with our historical experience, and it is in large part due to our long-term strategy of portfolio diversification that we have been able to weather recent volatility and losses.” 



“The Bank will continue the tradition of providing a full suite of commercial products and banking solutions,” said Joe Reilly, Interim Co-President and Co-Chief Executive Officer. “We will continue to leverage new technology and to utilize the infrastructure we’ve developed to service new and existing Banking as a Service (“BaaS”) customers. Additionally, I am personally excited to make use of my experience in community banking to further deepen the Bank’s connection to our local markets and communities.”



Income Statement Results



Quarter Ended December 31, 2022 Compared to Quarter Ended September 30, 2022



For the quarter ended December 31, 2022,  net interest and dividend income was $18.7 million, which represents a decrease of  $1.0 million, or 5.1%, when compared to the quarter ended September 30,  2022.  Net interest and dividend income was negatively impacted by an increase in interest expense of $1.3  million, or 138.8%, to $2.3 million compared to $952,000 for the quarter ended September 30, 2022. Interest expense increased primarily due to an increase in the cost of interest-bearing deposits coupled with an increase in the average balance of interest-bearing deposits. The cost of interest-bearing deposits increased 48 basis points to 0.92% for the quarter ended December 31, 2022 compared to 0.44% for the quarter ended September 30, 2022, primarily due to rising interest rates and a larger proportion of the portfolio consisting of higher-cost certificates of deposit and money market accounts.  The average balance of interest-bearing deposits increased $18.4 million, or 2.4%, for the quarter ended December 31, 2022, primarily due to an increase in brokered certificates of deposit and money market accounts, partially offset by decreases in NOW and savings accounts.  



Net interest and dividend income for the quarter ended December 31, 2022 benefitted from an increase in interest and dividend income of $311,000, or 1.5%, to $21.0 million compared to $20.7 million for the quarter ended September 30, 2022. The increase was primarily due to an increase in the yield on interest-earning assets. The yield on interest-earning assets increased 43 basis points to 5.51% for the quarter ended December 31, 2022 compared to 5.08% for the quarter ended September 30, 2022, which was primarily driven by rising interest rates and the origination of higher-yielding loans. The increase in the yield was partially offset by a decrease in average interest-earning assets of $104.5 million, or 6.4%. This decrease was primarily due to  a decrease in the average balance of loans of $82.7 million, or 5.4%, and a decrease in average short-term investments of $20.5 million, or 29.2%.



A  negative provision for loan losses of $970,000 was recognized for the quarter ended December 31, 2022 compared to a provision of $56.3 million for the quarter ended September 30, 2022, which represents a decrease of $57.3 million, or 101.7%.  The negative provision for the quarter ended December 31, 2022 was primarily the result of a decrease in loans as of December 31, 2022 when compared to September 30, 2022. The provision for the quarter ended September 30, 2022 was primarily driven by the need to replenish the allowance due to net charge-offs which totaled $46.2 million for the quarter ended September 30, 2022 compared to $7,000 for the quarter ended December 31, 2022.  The $46.2 million in net charge-offs for the quarter ended September 30, 2022 was primarily driven by our portfolio of loans secured by cryptocurrency mining rigs.



For the quarter ended December 31, 2022,  noninterest income was $1.9 million, which represents an increase of  $599,000, or 44.7%, when compared to the quarter ended September 30, 2022. The increase was  primarily due to increases in other service charges and fees and customer service fees on deposit accounts. Other service charges and fees increased $498,000, or 224.3%, primarily due to late charges and fees on commercial and commercial real estate loans.  Customer service fees on deposit accounts increased $153,000, or 19.4%, primarily due to fees generated from cash vault services for our customers who operate Bitcoin ATMs as well as implementation and activity fees charged to Banking as a Service (“BaaS”) customers. 



For the quarter ended December 31, 2022, noninterest expense was $17.2 million, which represents an increase of $5.2 million, or 42.8%, when compared to the quarter ended September 30, 2022. The increase was primarily due to an increase in salaries and employee

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benefits,  professional fees, other expense and deposit insurance. Salaries and employee benefits increased $1.9 million, or 25.1%, primarily due to $1.5 million in expenses related to an agreement between the Bank and the Company and the former President and Chief Executive Officer entered into upon his separation from employment. Also contributing to the increase in salaries and employee benefits was an increase in staff to support the development and implementation of new technologies and products.  Professional fees increased $1.8 million, or 242.7%, primarily due to increased legal, audit and compliance costs resulting from a review of the Company’s digital asset lending practices following the events that caused the losses recorded in the third quarter. Other expense increased $971,000, or 70.0%, primarily due to costs related to repossessed assets and insurance premiums. The increase in deposit insurance of $396,000, or 246.0%, was due to an increase in the Federal Deposit Insurance Corporation’s (“FDIC’s”) insurance assessment rate schedules.



Quarter Ended December 31, 2022 Compared to Quarter Ended December 31, 2021



For the quarter ended December 31, 2022, net interest and dividend income was $18.7 million, which represents an increase of $2.3 million, or 14.2%, from the quarter ended December 31, 2021.  The primary reason for the increase was an increase in interest and dividend income of $4.0 million, or 23.2%. Interest and dividend income increased primarily due to rising interest rates, which resulted in an increased yield on interest-earning assets. The yield on interest-earning assets increased 124 basis points to 5.51% for the quarter ended December 31, 2022 compared to 4.27% for the quarter ended December 31, 2021. The increase interest and dividend income caused by the increase in yield was partially offset by a decrease in the average balance of interest-earning assets of $73.6 million, or 4.6%. This decrease was primarily due to a decrease in the average balance of short-term investments of $155.3 million, or 75.8%, partially offset by an increase in the average balance of loans of $86.2 million, or 6.3%.



The increase in net interest and dividend income for the quarter ended December 31, 2022 was negatively impacted by  an increase in interest expense of $1.6 million, or 251.3%, to $2.3 million compared to  $647,000 for the quarter ended December 31, 2021. Interest expense increased primarily due to rising interest rates and a larger proportion of higher-cost certificates of deposit in the portfolio, which resulted in an increase in the cost of interest-bearing deposits of 65 basis points to 0.92% for the quarter ended December 31, 2022 compared to 0.27% for the quarter ended December 31, 2021. The increase in interest expense was partially offset by a decrease in the average balance of interest-bearing deposits of $55.9 million, or 6.7%.



A  negative provision for loan losses of $970,000 was recognized for the quarter ended December 31, 2022 compared to a provision of  $1.2 million for the quarter ended December 31, 2021, which represents a decrease of $2.2 million, or 178.7%. The negative provision for the quarter ended December 31, 2022 was primarily the result of a decrease in loans during the fourth quarter of 2022. The $1.2 million provision for the quarter ended December 31, 2021 was primarily the result of an increase in loans during the fourth quarter of 2021. The changes in the provision were based on management’s assessment of various factors affecting the loan portfolio, including outstanding balance, 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 December 31, 2022, noninterest income was $1.9 million, which represents an increase of $716,000, or 58.6%, when compared to the quarter ended December 31, 2021. The increase was primarily due to increases in customer service fees on deposit accounts and other services charges and fees. Customer service fees on deposit accounts increased $407,000, or 76.1%, which was primarily attributable to fees generated from cash vault services for our customers who operate Bitcoin ATMs as well as implementation and activity fees charged to BaaS customers.  Other service charges and fees increased  $323,000, or 81.4%, primarily due to late charges and fees on commercial and commercial real estate loans.



For the quarter ended December 31, 2022, noninterest expense was $17.2 million, which represents an increase of  $5.4 million, or 45.7%, when compared to the quarter ended December 31, 2021. The increase in noninterest expense was primarily due to an increase in professional fees, other expense, salaries and employee benefits, deposit insurance and insurance expense. Professional fees increased $1.7 million, or 226.3%, primarily due to increased legal fees and audit and compliance costs resulting primarily from a review of the Company’s digital asset lending practices following the events that caused the losses recorded in the third quarter.  Other expense increased $1.5 million, or 174.9%, primarily due to costs related to repossessed assets, insurance premiums, loan customer referral fees, and costs paid for employees to attend trainings and conferences. The increase of $1.1 million, or 13.1%, in salary and employee benefits was primarily due to $1.5 million in expenses related to an agreement between the Bank and the Company and the former President and Chief Executive Officer entered into upon his separation from employment, partially offset by a decrease in bonus expense.  The increase in deposit insurance of $416,000, or 295.0%, was due to an increase in the FDIC’s insurance assessment rate schedules. The increase in insurance expense of $406,000 was due to a renewal and reassessment that incorporates consideration of our digital asset product strategies. 



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Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021



For the year ended December 31, 2022, net interest and dividend income was $75.0 million, which represents an increase of $13.6 million, or 22.1%, when compared to the year ended December 31, 2021.  The primary reason for the increase was an increase in interest and dividend income of $14.5 million, or 22.4%. Interest and dividend income increased due to an increase in the average balance of interest-earning assets of $114.1 million, or 7.5%, when compared to the year ended December 31, 2021. The increase in average interest-earnings assets was primarily due to an increase in the average balance of loans of $156.2 million, or 11.8%, partially offset by a decrease in short-term investments of $40.9 million, or 25.6%. The increase in interest and dividend income was further supported by an increase in the yield on interest-earning assets of 59 basis points to 4.87% for the year ended December 31, 2022 compared to 4.28%  for the year ended December 31, 2021 due to the rising interest rate environment and a greater percentage of the portfolio consisting of higher-yielding loans. 



The increase in net interest and dividend income for the year ended December 31, 2022 was negatively impacted by an increase in interest expense of $927,000, or 27.5%, to $4.3 million compared to $3.4 million for the year ended December 31, 2021. Interest expense increased primarily due to an increase in the cost of interest-bearing deposits which increased eight basis points to 0.45% for the year ended December 31, 2022 compared to 0.37% for the year ended December 31, 2021 due to rising interest rates and a larger proportion of higher-cost certificates of deposit in the portfolio. The increase in the cost of interest-bearing deposits was partially offset by a decrease in the average balance of interest-bearing deposits of $54.2 million, or 6.4%, for the year ended December 31, 2021.



A  provision for loan losses of $56.4 million was recognized for the year ended December 31, 2022 compared to a provision of  $3.9 million for the year ended December 31, 2021, which represents an increase of $52.5 million.  The increased provision for the year ended December 31, 2022 was primarily driven by the need to replenish the allowance due to net charge-offs which totaled $47.9 million for the year ended December 31, 2022 compared to $2.9 million for the year ended December 31, 2021. The $47.9 million in net charge-offs for the year ended December 31, 2022 was primarily driven by our portfolio of loans secured by cryptocurrency mining rigs



For the year ended December 31, 2022, noninterest income was $6.1 million, which represents an increase of $983,000, or 19.0%, from the year ended December 31, 2021. The increase was primarily due to an increase in customer service fees on deposit accounts of $1.1 million, or 60.0%, and an increase of $225,000 in net gains on loans sold. The increase in customer service fees on deposit accounts was primarily attributable to fees generated from cash vault services for our customers who operate Bitcoin ATMs as well as implementation and activity fees charged to BaaS customers. The increase in net gains on loans sold was primarily due to the sale of residential mortgage loans in June 2022. The increase in noninterest income was partially offset by a decrease in other service charges and fees of $233,000, or 11.6%, which was primarily due to decreased prepayment penalty income.



For the year ended December 31, 2022, noninterest expense was $52.0 million, which represents an increase of  $11.4 million, or 28.0%, when compared to the year ended December 31, 2021. The increase in noninterest expense was primarily due to increases in salaries and employee benefits, professional fees, other expenses, insurance expense and deposit insurance. The increase of $3.0 million, or 10.3%, in salary and employee benefits includes $1.5 million in expenses related to an agreement between the Bank and the Company and the former President and Chief Executive Officer entered into upon his separation from employment. The remaining increase is primarily due to an increase in staff to support the development and implementation of new technologies and specialty lending products. The increase in professional fees of $2.6 million, or 125.4%, was primarily due to increased legal fees and audit and compliance costs resulting primarily from a review of the Company’s digital asset lending practices following the events that caused the losses recorded in the third quarter,  as well as fees paid for contracted employees and fees paid to external consultants. Other expense increased $2.9 million, or 87.9%, primarily due to costs related to repossessed assets, receivables, loan customer referrals,  recruitment, and trainings and conferences. The increase in insurance expense of $1.6 million was due to a renewal and reassessment that incorporates consideration of our digital asset product strategies. The increase in deposit insurance of $541,000, or 112.2%, was due to an increase in FDIC’s insurance assessment rate schedules.



Balance Sheet Results



December 31, 2022 Compared to September 30, 2022



Total assets decreased $137.3 million, or 7.7%, to $1.64 billion at December 31, 2022 compared to $1.77 billion at September 30, 2022 primarily due to  a decrease in cash and cash equivalents and net loans. Cash and cash equivalents decreased  $75.3 million, or 48.3%, primarily due to decreased deposit balances. Net loans decreased $62.4 million, or 4.2%, primarily due to a decrease in commercial loans of $66.0 million, or 8.6%, and a decrease in mortgage warehouse loans of $4.3 million, or 2.0%, partially offset by an increase in commercial real estate loans of $9.8 million, or 2.2%. The decrease in our commercial loan portfolio included a decrease in our digital asset portfolio of $41.4 million, or 50.1% and a decrease in our renewable energy portfolio of $10.9 million, or 16.8%, partially offset by an increase in our enterprise value portfolio of $20.6 million, or 5.1%. The decrease in our digital asset loan portfolio was primarily driven by the sale of a portion of our impaired loans secured by cryptocurrency mining rigs as well as the paydown of an outstanding line of credit. Our digital asset portfolio totaled $41.2 million as of December 31, 2022, which included $26.7 million in loans secured

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by cryptocurrency mining rigs. The portfolio of loans secured by cryptocurrency mining rigs will continue to decline as the Bank is no longer originating this type of loan.



Total liabilities decreased $140.9 million, or 9.0%, from September 30, 2022 primarily due to decreased deposits offset by an increase in short-term borrowings. Deposits were $1.28 billion as of December 31, 2022, representing a decrease of $191.9 million, or 13.0%, compared to September 30,  2022.  The decrease in deposits was driven primarily by decreases in deposits from digital asset and BaaS customers, resulting from the competitive rate environment.  The decreases in deposits were offset by an increase in certificates of deposit of $64.2 million, or 81.6%, which was primarily driven by an increase in brokered deposits, which increased $61.1 million, or 103.4%, and were $120.1 million at December 31, 2022. Short-term borrowings increased  $41.5 million, or 61.9%, due to an increase in overnight borrowings.



As of December 31, 2022, shareholders’ equity was $207.5 million compared to $204.0 million at September 30,  2022, representing an increase of $3.6 million, or 1.7%. The increase was primarily due to net income of $2.7 million, stock-based compensation expense of $461,000, other comprehensive income of $234,000, and employee stock ownership plan shares earned of $227,000.  



December 31, 2022 Compared to December 31, 2021



Total assets decreased $92.9 million, or 5.4%, to $1.64 billion at December 31, 2022 compared to $1.73 billion at December 31, 2021.  The primary reasons for the decrease were decreases in cash and cash equivalents, loans held for sale, net loans, and debt securities available-for-sale (at fair value), offset by increases in other assets, net deferred tax asset, and other repossessed assets. Cash and cash equivalents decreased $72.5 million, or 47.3%, primarily due to decreased deposit balances. Loans held for sale decreased $22.8 million, due to the sale of residential mortgage loans in June 2022 and the reclassification of the remaining unsold loans to held for investment. 



Net loans decreased $17.8 million, or 1.2%, and were $1.42 billion as of December 31, 2022 compared to $1.43 billion at December 31, 2021.  The decrease in net loans was primarily due to an increase in the allowance for loan losses of $8.6 million, or 44.0%. The increase in the allowance was primarily due to charge-offs in the third quarter related to the portfolio of loans collateralized by cryptocurrency mining rigs, which resulted in an increase to the general pool reserve based on our allowance for loan loss methodology. Also contributing to the decrease in net loans was a decrease in total loans of $7.5 million, or 0.5%. This decrease was primarily driven by decreases in mortgage warehouse loans of $40.4 million, or 15.9%, commercial loans of $24.8 million, or 3.4%, and consumer loans of $1.1 million, or 74.3%, partially offset by increases in construction and land development loans of $26.9 million, or 62.9%, commercial real estate loans of $24.5 million, or 5.7%, and residential loans of $7.4 million, or 915.5%. The decrease in our commercial loan portfolio was primarily related to decreases in our digital asset, paycheck protection program (“PPP”) and renewable energy loan portfolios, offset by an increase in our enterprise value loan portfolio. Our digital asset loan portfolio decreased $79.3 million, or $65.8%, which was primarily driven by paydowns on outstanding lines of credit, the partial charge-off and repossession of cryptocurrency mining rigs in exchange for the forgiveness of a $27.4 million loan relationship, the partial charge-off and subsequent sale of impaired loans secured by cryptocurrency mining rigs during the fourth quarter.  The portfolio of loans secured by cryptocurrency mining rigs will continue to decline as the Bank is no longer originating this type of loan. Our PPP loan portfolio decreased $12.1 million, or 97.3%, as these loans continue to paydown or be forgiven. Our renewable energy portfolio decreased $8.4 million, or 13.5%, primarily due to the payoff of one larger relationship. Our enterprise value loan portfolio increased $87.9 million, or 25.8%, primarily due to new loan originations in excess of paydowns/payoffs.



Debt securities available-for-sale (at fair value) decreased $8.2 million, or 22.4%, primarily due to principal payments and market depreciation. Other assets increased $11.0 million, primarily due to a tax credit incentivized investment in  a low-income housing project in Portsmouth, New Hampshire, and an increase in accrued taxes. The net deferred tax asset increased $6.8 million, or 68.7%, primarily due to the net loss recorded for the year ended December 31, 2022. Other repossessed assets increased $6.1 million due to the repossession of cryptocurrency mining rigs during 2022.  



Total liabilities decreased $66.7 million, or 4.5%, to $1.43 billion at December 31, 2022 compared to $1.50 billion at December 31, 2021 primarily due to a decrease in deposits offset by an increase in short-term borrowings.  Deposits were $1.28 billion as of December 31, 2022, representing a decrease of $180.3 million, or 12.4%, compared to December 31, 2021. The decrease in deposits was primarily related to a $96.4 million, or 8.5%, decrease in retail deposits, a $34.6 million, or 57.7%, decrease in deposits from BaaS customers, a $22.2 million, or 22.3%, decrease in deposits from digital asset customers, a $13.4 million, or 31.1%, decrease in mortgage warehouse deposits, a $9.6 million, or 8.5%, decrease in enterprise value deposits, and a $4.2 million, or 51.4%, decrease in renewable energy deposits. The decrease in deposits was partially offset by an increase in borrowings of $113.3 million primarily driven by an increase in overnight borrowings. 



As of December 31, 2022, shareholders’ equity was $207.5 million compared to $233.8 million at December 31, 2021, representing a decrease of $26.2 million, or 11.2%. The decrease was primarily due to net loss of $21.5 million, other comprehensive loss of $2.8 million, the repurchase of 180,434 shares of common stock for $2.9 million, and $2.0 million from dividends paid, partially offset by stock-based compensation expense of $1.9 million and employee stock ownership plan shares earned of $1.3 million.  



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About Provident Bancorp, Inc.



BankProv, a subsidiary of Provident Bancorp, Inc. (NASDAQ: PVBC),  is a future-ready commercial bank for corporate clients, specializing in offering adaptive and technology-first banking solutions to niche markets. We are committed to offering state-of-the-art APIs (application programming interfaces) for all business clients and BaaS 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 impact of the COVID-19 pandemic or any other pandemic on our operations and financial results and those of our customers; global and national war and terrorism; trends in interest rates; inflation; potential recessionary conditions; levels of unemployment; legislative, regulatory and accounting changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve Bank; deposit flows; changes in consumer spending, borrowing and savings habits; competition; real estate values in the market area; loan demand; the adequacy of our allowance for loan losses, changes in the quality of our loan and securities portfolios; the ability of our borrowers to repay their loans; an unexpected adverse financial, regulatory or bankruptcy event experienced by our cryptocurrency, digital asset or financial technology (“fintech”) customers; our ability to retain key employees; failures or breaches of our IT systems, including cyberattacks; the failure to maintain current technologies; 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

Interim Co-President and Co-Chief Executive Officer,

and Chief Financial Officer

choule@bankprov.com













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Provident Bancorp, Inc.

Consolidated Balance Sheet

(Unaudited)







 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



At

 

At

 

At



December 31,

 

September 30,

 

December 31,

(Dollars in thousands)

2022

 

2022

 

2021

Assets

 

 

 

 

 

 

 

 

Cash and due from banks

$

 42,923 

 

$

 40,870 

 

$

 22,470 

Short-term investments

 

 37,706 

 

 

 115,044 

 

 

 130,645 

Cash and cash equivalents

 

 80,629 

 

 

 155,914 

 

 

 153,115 

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

 

 28,600 

 

 

 29,168 

 

 

 36,837 

Federal Home Loan Bank stock, at cost

 

 4,266 

 

 

 3,413 

 

 

 785 

Loans held for sale

 

 —

 

 

 —

 

 

 22,846 

Loans, net of allowance for loan losses of $28,069, $29,046 and $19,496 as of

 

 

 

 

 

 

 

 

December 31, 2022, September 30, 2022, and December 31, 2021, respectively

 

 1,416,047 

 

 

 1,478,451 

 

 

 1,433,803 

Bank owned life insurance

 

 43,615 

 

 

 43,347 

 

 

 42,569 

Premises and equipment, net

 

 13,580 

 

 

 13,767 

 

 

 14,258 

Other repossessed assets

 

 6,051 

 

 

 10,451 

 

 

 —

Accrued interest receivable

 

 6,597 

 

 

 5,973 

 

 

 5,703 

Right-of-use assets

 

 3,942 

 

 

 3,981 

 

 

 4,102 

Deferred tax asset, net

 

 16,793 

 

 

 18,637 

 

 

 9,957 

Other assets

 

 16,261 

 

 

 10,582 

 

 

 5,308 

Total assets

$

 1,636,381 

 

$

 1,773,684 

 

$

 1,729,283 



 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest-bearing

$

 520,226 

 

$

 662,291 

 

$

 626,587 

Interest-bearing

 

 759,356 

 

 

 809,218 

 

 

 833,308 

Total deposits

 

 1,279,582 

 

 

 1,471,509 

 

 

 1,459,895 

Borrowings:

 

 

 

 

 

 

 

 

Short-term borrowings

 

 108,500 

 

 

 67,000 

 

 

 —

Long-term borrowings

 

 18,329 

 

 

 13,500 

 

 

 13,500 

Total borrowings

 

 126,829 

 

 

 80,500 

 

 

 13,500 

Operating lease liabilities

 

 4,282 

 

 

 4,308 

 

 

 4,387 

Other liabilities

 

 18,146 

 

 

 13,389 

 

 

 17,719 

Total liabilities

 

 1,428,839 

 

 

 1,569,706 

 

 

 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;

 

 

 

 

 

 

 

 

17,669,698, 17,738,957 and 17,854,649 shares issued and outstanding

 

 

 

 

 

 

 

 

at December 31, 2022, September 30, 2022, and December 31, 2021, respectively

 

 177 

 

 

 177 

 

 

 179 

Additional paid-in capital

 

 122,847 

 

 

 122,412 

 

 

 123,498 

Retained earnings

 

 94,630 

 

 

 91,915 

 

 

 118,087 

Accumulated other comprehensive (loss) income

 

 (2,200)

 

 

 (2,434)

 

 

 649 

Unearned compensation - ESOP

 

 (7,912)

 

 

 (8,092)

 

 

 (8,631)

Total shareholders' equity

 

 207,542 

 

 

 203,978 

 

 

 233,782 

Total liabilities and shareholders' equity

$

 1,636,381 

 

$

 1,773,684 

 

$

 1,729,283 















6

 

 





Provident Bancorp, Inc.

Consolidated Income Statements

(Unaudited)







 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Year Ended



December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

(Dollars in thousands, except per share data)

2022

 

2022

 

2021

 

2022

 

2021

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

 20,336 

 

$

 20,147 

 

$

 16,794 

 

$

 77,253 

 

$

 63,873 

Interest and dividends on debt securities available-for-sale

 

 221 

 

 

 203 

 

 

 184 

 

 

 797 

 

 

 722 

Interest on short-term investments

 

 461 

 

 

 357 

 

 

 87 

 

 

 1,277 

 

 

 208 

Total interest and dividend income

 

 21,018 

 

 

 20,707 

 

 

 17,065 

 

 

 79,327 

 

 

 64,803 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 1,801 

 

 

 846 

 

 

 575 

 

 

 3,578 

 

 

 3,085 

Interest on short-term borrowings

 

 388 

 

 

 34 

 

 

 —

 

 

 422 

 

 

 —

Interest on long-term borrowings

 

 84 

 

 

 72 

 

 

 72 

 

 

 297 

 

 

 285 

Total interest expense

 

 2,273 

 

 

 952 

 

 

 647 

 

 

 4,297 

 

 

 3,370 

Net interest and dividend income

 

 18,745 

 

 

 19,755 

 

 

 16,418 

 

 

 75,030 

 

 

 61,433 

Provision for loan losses

 

 (970)

 

 

 56,310 

 

 

 1,233 

 

 

 56,428 

 

 

 3,887 

Net interest and dividend income (loss) after provision for loan losses

 

 19,715 

 

 

 (36,555)

 

 

 15,185 

 

 

 18,602 

 

 

 57,546 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees on deposit accounts

 

 942 

 

 

 789 

 

 

 535 

 

 

 2,931 

 

 

 1,832 

Service charges and fees - other

 

 720 

 

 

 222 

 

 

 397 

 

 

 1,770 

 

 

 2,003 

Bank owned life insurance income

 

 268 

 

 

 264 

 

 

 244 

 

 

 1,046 

 

 

 1,195 

(Loss) gain on loans sold, net

 

 —

 

 

 (12)

 

 

 38 

 

 

 272 

 

 

 47 

Other income

 

 8 

 

 

 76 

 

 

 8 

 

 

 130 

 

 

 89 

Total noninterest income

 

 1,938 

 

 

 1,339 

 

 

 1,222 

 

 

 6,149 

 

 

 5,166 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 9,573 

 

 

 7,653 

 

 

 8,465 

 

 

 31,737 

 

 

 28,782 

Occupancy expense

 

 415 

 

 

 450 

 

 

 409 

 

 

 1,702 

 

 

 1,687 

Equipment expense

 

 154 

 

 

 147 

 

 

 137 

 

 

 582 

 

 

 514 

Deposit insurance

 

 557 

 

 

 161 

 

 

 141 

 

 

 1,023 

 

 

 482 

Data processing

 

 348 

 

 

 347 

 

 

 370 

 

 

 1,374 

 

 

 1,325 

Marketing expense

 

 149 

 

 

 66 

 

 

 125 

 

 

 412 

 

 

 279 

Professional fees

 

 2,522 

 

 

 736 

 

 

 773 

 

 

 4,695 

 

 

 2,083 

Directors' compensation

 

 250 

 

 

 255 

 

 

 218 

 

 

 1,026 

 

 

 992 

Software depreciation and implementation

 

 431 

 

 

 398 

 

 

 272 

 

 

 1,450 

 

 

 1,014 

Insurance expense

 

 448 

 

 

 448 

 

 

 42 

 

 

 1,791 

 

 

 152 

Other

 

 2,359 

 

 

 1,388 

 

 

 858 

 

 

 6,217 

 

 

 3,309 

Total noninterest expense

 

 17,206 

 

 

 12,049 

 

 

 11,810 

 

 

 52,009 

 

 

 40,619 

Income (loss) before income tax expense (benefit)

 

 4,447 

 

 

 (47,265)

 

 

 4,597 

 

 

 (27,258)

 

 

 22,093 

Income tax expense (benefit)

 

 1,750 

 

 

 (11,956)

 

 

 1,008 

 

 

 (5,790)

 

 

 5,954 

Net income (loss)

$

 2,697 

 

$

 (35,309)

 

$

 3,589 

 

$

 (21,468)

 

$

 16,139 

Earnings (Loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

 0.16 

 

$

 (2.15)

 

$

 0.22 

 

$

 (1.30)

 

$

 0.96 

Diluted

$

 0.16 

 

$

 (2.15)

 

$

 0.21 

 

$

 (1.30)

 

$

 0.93 

Weighted Average Shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 16,496,543 

 

 

 16,456,274 

 

 

 16,481,684 

 

 

 16,482,623 

 

 

 16,772,628 

Diluted

 

 16,607,719 

 

 

 16,456,274 

 

 

 17,180,466 

 

 

 16,482,623 

 

 

 17,302,007 















7

 

 

Provident Bancorp, Inc.

Net Interest Income Analysis

(Unaudited)













 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



For the Three Months Ended



December 31,

 

September 30,

 

 

December 31,



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)

$

 1,444,239 

 

$

 20,336 

 

 5.63% 

 

$

 1,526,917 

 

$

 20,147 

 

 5.28% 

 

 

$

 1,358,086 

 

$

 16,794 

 

 4.95% 

Short-term investments

 

 49,711 

 

 

 461 

 

 3.71% 

 

 

 70,178 

 

 

 357 

 

 2.03% 

 

 

 

 205,000 

 

 

 87 

 

 0.17% 

Debt securities available-for-sale

 

 28,654 

 

 

 198 

 

 2.76% 

 

 

 30,950 

 

 

 190 

 

 2.46% 

 

 

 

 35,068 

 

 

 180 

 

 2.05% 

Federal Home Loan Bank stock

 

 2,718 

 

 

 23 

 

 3.38% 

 

 

 1,752 

 

 

 13 

 

 2.97% 

 

 

 

 785 

 

 

 4 

 

 2.04% 

Total interest-earning assets

 

 1,525,322 

 

 

 21,018 

 

 5.51% 

 

 

 1,629,797 

 

 

 20,707 

 

 5.08% 

 

 

 

 1,598,939 

 

 

 17,065 

 

 4.27% 

Non-interest earning assets

 

 120,009 

 

 

 

 

 

 

 

 97,342 

 

 

 

 

 

 

 

 

 80,895 

 

 

 

 

 

          Total assets

$

 1,645,331 

 

 

 

 

 

 

$

 1,727,139 

 

 

 

 

 

 

 

$

 1,679,834 

 

 

 

 

 

Liabilities and shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

$

 148,358 

 

$

 64 

 

 0.17% 

 

$

 157,096 

 

$

 80 

 

 0.20% 

 

 

$

 150,340 

 

$

 39 

 

 0.10% 

Money market accounts

 

 342,228 

 

 

 1,079 

 

 1.26% 

 

 

 299,214 

 

 

 428 

 

 0.57% 

 

 

 

 439,619 

 

 

 292 

 

 0.27% 

NOW accounts

 

 178,834 

 

 

 142 

 

 0.32% 

 

 

 243,426 

 

 

 171 

 

 0.28% 

 

 

 

 179,265 

 

 

 132 

 

 0.29% 

Certificates of deposit

 

 114,397 

 

 

 516 

 

 1.80% 

 

 

 65,689 

 

 

 167 

 

 1.02% 

 

 

 

 70,504 

 

 

 112 

 

 0.64% 

Total interest-bearing deposits

 

 783,817 

 

 

 1,801 

 

 0.92% 

 

 

 765,425 

 

 

 846 

 

 0.44% 

 

 

 

 839,728 

 

 

 575 

 

 0.27% 

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 38,901 

 

 

 388 

 

 3.99% 

 

 

 5,564 

 

 

 34 

 

 2.44% 

 

 

 

 —

 

 

 —

 

—%

Long-term borrowings

 

 16,705 

 

 

 84 

 

 2.01% 

 

 

 13,500 

 

 

 72 

 

 2.13% 

 

 

 

 13,500 

 

 

 72 

 

 2.13% 

Total borrowings

 

 55,606 

 

 

 472 

 

 3.40% 

 

 

 19,064 

 

 

 106 

 

 2.22% 

 

 

 

 13,500 

 

 

 72 

 

 2.13% 

Total interest-bearing liabilities

 

 839,423 

 

 

 2,273 

 

 1.08% 

 

 

 784,489 

 

 

 952 

 

 0.49% 

 

 

 

 853,228 

 

 

 647 

 

 0.30% 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 580,013 

 

 

 

 

 

 

 

 681,681 

 

 

 

 

 

 

 

 

 573,059 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 17,603 

 

 

 

 

 

 

 

 17,343 

 

 

 

 

 

 

 

 

 20,045 

 

 

 

 

 

Total liabilities

 

 1,437,039 

 

 

 

 

 

 

 

 1,483,513 

 

 

 

 

 

 

 

 

 1,446,332 

 

 

 

 

 

Total equity

 

 208,292 

 

 

 

 

 

 

 

 243,626 

 

 

 

 

 

 

 

 

 233,502 

 

 

 

 

 

Total liabilities and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

equity

$

 1,645,331 

 

 

 

 

 

 

$

 1,727,139 

 

 

 

 

 

 

 

$

 1,679,834 

 

 

 

 

 

Net interest income

 

 

 

$

 18,745 

 

 

 

 

 

 

$

 19,755 

 

 

 

 

 

 

 

$

 16,418 

 

 

Interest rate spread (3)

 

 

 

 

 

 

 4.43% 

 

 

 

 

 

 

 

 4.59% 

 

 

 

 

 

 

 

 

 3.97% 

Net interest-earning assets (4)

$

 685,899 

 

 

 

 

 

 

$

 845,308 

 

 

 

 

 

 

 

$

 745,711 

 

 

 

 

 

Net interest margin (5)

 

 

 

 

 

 

 4.92% 

 

 

 

 

 

 

 

 4.85% 

 

 

 

 

 

 

 

 

 4.11% 

Average interest-earning assets to interest-bearing liabilities

 

 181.71% 

 

 

 

 

 

 

 

 207.75% 

 

 

 

 

 

 

 

 

 187.40% 

 

 

 

 

 

(1)

Interest earned/paid on loans includes fee income related to SBA loan fee accretion of $5,000,  $9,000 and $592,000 for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively. Interest earned/paid on loans also includes mortgage warehouse loan origination fee income of $205,000,  $260,000, and $371,000 for the three months ended December 31, 2022, September 30, 2022, and December  31, 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.







8

 

 





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



For the Year Ended December 31,



2022

 

2021



 

 

 

Interest

 

 

 

 

 

 

Interest

 

 



Average

 

Earned/

 

Yield/

 

Average

 

Earned/

 

Yield/

(Dollars in thousands)

Balance

 

Paid

 

Rate

 

Balance

 

Paid

 

Rate

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)(2)

$

 1,476,426 

 

$

 77,253 

 

 5.23% 

 

$

 1,320,222 

 

$

 63,873 

 

 4.84% 

Short-term investments

 

 118,726 

 

 

 1,277 

 

 1.08% 

 

 

 159,656 

 

 

 208 

 

 0.13% 

Debt securities available-for-sale

 

 32,005 

 

 

 753 

 

 2.35% 

 

 

 34,022 

 

 

 708 

 

 2.08% 

Federal Home Loan Bank stock

 

 1,667 

 

 

 44 

 

 2.64% 

 

 

 827 

 

 

 14 

 

 1.69% 

          Total interest-earning assets

 

 1,628,824 

 

 

 79,327 

 

 4.87% 

 

 

 1,514,727 

 

 

 64,803 

 

 4.28% 

Non-interest earning assets

 

 98,049 

 

 

 

 

 

 

 

 72,995 

 

 

 

 

 

          Total assets

$

 1,726,873 

 

 

 

 

 

 

$

 1,587,722 

 

 

 

 

 

Liabilities and shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

$

 152,964 

 

 

 235 

 

 0.15% 

 

$

 151,586 

 

 

 196 

 

 0.13% 

Money market accounts

 

 341,324 

 

 

 1,968 

 

 0.58% 

 

 

 406,392 

 

 

 1,680 

 

 0.41% 

NOW accounts

 

 219,743 

 

 

 531 

 

 0.24% 

 

 

 162,618 

 

 

 416 

 

 0.26% 

Certificates of deposit

 

 74,995 

 

 

 844 

 

 1.13% 

 

 

 122,619 

 

 

 793 

 

 0.65% 

Total interest-bearing deposits

 

 789,026 

 

 

 3,578 

 

 0.45% 

 

 

 843,215 

 

 

 3,085 

 

 0.37% 

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 11,421 

 

 

 422 

 

 3.69% 

 

 

 3 

 

 

 —

 

 0.00% 

Long-term borrowings

 

 14,308 

 

 

 297 

 

 2.08% 

 

 

 13,500 

 

 

 285 

 

 2.11% 

Total borrowings

 

 25,729 

 

 

 719 

 

 2.79% 

 

 

 13,503 

 

 

 285 

 

 2.11% 

Total interest-bearing liabilities

 

 814,755 

 

 

 4,297 

 

 0.53% 

 

 

 856,718 

 

 

 3,370 

 

 0.39% 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 661,368 

 

 

 

 

 

 

 

 476,743 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 18,881 

 

 

 

 

 

 

 

 18,895 

 

 

 

 

 

Total liabilities

 

 1,495,004 

 

 

 

 

 

 

 

 1,352,356 

 

 

 

 

 

Total equity

 

 231,869 

 

 

 

 

 

 

 

 235,366 

 

 

 

 

 

Total liabilities and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

equity

$

 1,726,873 

 

 

 

 

 

 

$

 1,587,722 

 

 

 

 

 

Net interest income

 

 

 

$

 75,030 

 

 

 

 

 

 

$

 61,433 

 

 

Interest rate spread (3)

 

 

 

 

 

 

 4.34% 

 

 

 

 

 

 

 

 3.89% 

Net interest-earning assets (4)

$

 814,069 

 

 

 

 

 

 

$

 658,009 

 

 

 

 

 

Net interest margin (5)

 

 

 

 

 

 

 4.61% 

 

 

 

 

 

 

 

 4.06% 

Average interest-earning assets to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  interest-bearing liabilities

 

 199.92% 

 

 

 

 

 

 

 

 176.81% 

 

 

 

 

 



(1)

Interest earned/paid on loans includes fee income related to SBA loan fee accretion of $482,000 and $2.4 million for the years ended December 31, 2022 and December 31,  2021, respectively. Interest earned/paid on loans also includes mortgage warehouse loan origination fee income of $1.0 million and $1.4 million for the years ended December 31, 2022 and December 31, 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.

9

 

 

Provident Bancorp, Inc.

Select Financial Highlights

(Unaudited)







 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

For the nine



Three Months Ended

 

Year Ended



December 31,

 

September 30,

 

December 31,

 

December 31,



2022

 

2022

 

2021

 

2022

 

 

2021

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Return on average assets (1)

 

 0.66% 

 

 

 (8.18%)

 

 

 0.85% 

 

 (1.24%)

 

 

 1.02% 

(Loss) Return on average equity (1)

 

 5.18% 

 

 

 (57.97%)

 

 

 6.15% 

 

 (9.26%)

 

 

 6.86% 

Interest rate spread (1) (2)

 

 4.43% 

 

 

 4.59% 

 

 

 3.97% 

 

 4.34% 

 

 

 3.89% 

Net interest margin (1) (3)

 

 4.92% 

 

 

 4.85% 

 

 

 4.11% 

 

 4.61% 

 

 

 4.06% 

Non-interest expense to average assets (1)

 

 4.18% 

 

 

 2.79% 

 

 

 2.81% 

 

 3.01% 

 

 

 2.56% 

Efficiency ratio (4)

 

 83.19% 

 

 

 57.12% 

 

 

 66.95% 

 

 64.07% 

 

 

 60.99% 

Average interest-earning assets to

 

 

 

 

 

 

 

 

 

 

 

 

 

average interest-bearing liabilities

 

 181.71% 

 

 

 207.75% 

 

 

 187.40% 

 

 199.92% 

 

 

 176.80% 

Average equity to average assets

 

 12.66% 

 

 

 14.11% 

 

 

 13.90% 

 

 13.43% 

 

 

 14.82% 





































 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



At

 

At

 

At



December 31,

 

September 30,

 

December 31,

(Dollars in thousands)

2022

 

2022

 

2021

Asset Quality

 

 

 

 

 

 

 

 

Non-accrual loans:

 

 

 

 

 

 

 

 

Commercial real estate

$

 —

 

$

 57 

 

$

 —

Commercial

 

 5,262 

 

 

 21,210 

 

 

 2,080 

Residential real estate

 

 297 

 

 

 300 

 

 

 812 

Construction and land development

 

 —

 

 

 —

 

 

 —

Consumer

 

 —

 

 

 —

 

 

 —

Mortgage warehouse

 

 —

 

 

 —

 

 

 —

Total non-accrual loans

 

 5,559 

 

 

 21,567 

 

 

 2,892 

Accruing loans past due 90 days or more

 

 —

 

 

 —

 

 

 —

Other repossessed assets

 

 6,051 

 

 

 10,451 

 

 

 —

Total non-performing assets

$

 11,610 

 

$

 32,018 

 

$

 2,892 

Asset Quality Ratios

 

 

 

 

 

 

 

 

Allowance for loan losses as a percent of total loans (5)

 

 1.94% 

 

 

 1.93% 

 

 

 1.34% 

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

 

 504.93% 

 

 

 134.68% 

 

 

 674.14% 

Non-performing loans as a percent of total loans (5)

 

 0.38% 

 

 

 1.43% 

 

 

 0.20% 

Non-performing loans as a percent of total assets

 

 0.34% 

 

 

 1.22% 

 

 

 0.17% 

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

 

 0.71% 

 

 

 1.81% 

 

 

 0.17% 

Capital and Share Related

 

 

 

 

 

 

 

 

Stockholders' equity to total assets

 

 12.7% 

 

 

 11.5% 

 

 

 13.5% 

Book value per share

$

 11.75 

 

$

 11.50 

 

$

 13.09 

Market value per share

$

 7.28 

 

$

 14.31 

 

$

 18.60 

Shares outstanding

 

 17,669,698 

 

 

 17,738,957 

 

 

 17,854,649 



(1)

Annualized where appropriate.

(2)

Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of interest-bearing liabilities.

(3)

Represents net interest income as a percent of average interest-earning assets.

(4)

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.

(6)

Non-performing assets consists of non-accrual loans plus loans accruing but 90 days overdue and other repossessed assets.





10

 

 









 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



At

 

At

 

At



December 31,

 

September 30,

 

December 31,



2022

 

2022

 

2021

(Dollars in thousands)

Amount

 

Percent

 

Amount

 

Percent

 

Amount

 

Percent

Commercial real estate

$

 456,747 

 

 31.50% 

 

$

 446,977 

 

 29.57% 

 

$

 432,275 

 

 29.66% 

Commercial (1)(2)

 

 701,434 

 

 48.38% 

 

 

 767,426 

 

 50.76% 

 

 

 726,241 

 

 49.83% 

Residential real estate

 

 8,246 

 

 0.57% 

 

 

 8,902 

 

 0.59% 

 

 

 812 

 

 0.06% 

Construction and land development

 

 69,739 

 

 4.81% 

 

 

 70,212 

 

 4.64% 

 

 

 42,800 

 

 2.94% 

Consumer

 

 391 

 

 0.03% 

 

 

 562 

 

 0.04% 

 

 

 1,519 

 

 0.10% 

Mortgage warehouse

 

 213,371 

 

 14.71% 

 

 

 217,653 

 

 14.40% 

 

 

 253,764 

 

 17.41% 



 

 1,449,928 

 

 100.00% 

 

 

 1,511,732 

 

 100.00% 

 

 

 1,457,411 

 

 100.00% 

Allowance for loan losses

 

 (28,069)

 

 

 

 

 (29,046)

 

 

 

 

 (19,496)

 

 

Deferred loan fees, net

 

 (5,812)

 

 

 

 

 (4,235)

 

 

 

 

 (4,112)

 

 

Net loans

$

 1,416,047 

 

 

 

$

 1,478,451 

 

 

 

$

 1,433,803 

 

 



(1)

Includes $330,000,  $434,000, and $12.4 million in PPP loans at December 31, 2022, September 30, 2022 and December 31, 2021, respectively.

(2)

Includes $41.2 million,  $82.5 million, and $120.5 million in digital asset loans at December 31, 2022, September 30, 2022 and December 31, 2021, respectively. Included in the digital asset loan balance is $26.7 million, $47.5 million, and $49.5 million in loans secured by cryptocurrency mining rigs at December 31, 2022, September 30, 2022 and December 31, 2021, respectively.











 

 

 

 

 

 

 

 



At

 

At

 

At



December 31,

 

September 30,

 

December 31,

(Dollars in thousands)

2022

 

2022

 

2021

Noninterest-bearing:

 

 

 

 

 

 

 

 

Demand

$

 520,226 

 

$

 662,291 

 

$

 626,587 

Interest-bearing:

 

 

 

 

 

 

 

 

NOW

 

 145,533 

 

 

 212,823 

 

 

 197,884 

Regular savings

 

 141,802 

 

 

 153,602 

 

 

 155,267 

Money market deposits

 

 318,417 

 

 

 354,252 

 

 

 419,625 

Certificates of deposit:

 

 

 

 

 

 

 

 

Certificate accounts of $250,000 or more

 

 10,661 

 

 

 9,808 

 

 

 5,078 

Certificate accounts less than $250,000

 

 142,943 

 

 

 78,733 

 

 

 55,454 

Total interest-bearing

 

 759,356 

 

 

 809,218 

 

 

 833,308 

Total deposits (1)(2)

$

 1,279,582 

 

$

 1,471,509 

 

$

 1,459,895 



(1)

Includes $77.5 million, $214.4 million, and $99.7 million in digital asset deposits at December 31, 2022, September 30, 2022, December 31, 2021, respectively.

(2)

Includes $25.3 million, $57.8 million, and $59.9 million in BaaS deposits at December 31, 2022, September 30, 2022 and December  31, 2021, respectively.













11