Provident Bancorp, Inc. Reports Fourth Quarter Net Income of $4.9 Million

, /PRNewswire/ -- Provident Bancorp, Inc. (the "Company") (NasdaqCM: PVBC), the holding company for BankProv (the "Bank"), reported net income for the quarter ended December 31, 2024 of $4.9 million, or $0.29 per diluted share, compared to net income of $716,000, or $0.04 per diluted share, for the quarter ended September 30, 2024, and net income of $2.9 million, or $0.18 per diluted share, for the quarter ended December 31, 2023. For the year ended December 31, 2024, net income was $7.3 million, or $0.43 per diluted share, compared to $11.0 million, or $0.66 per diluted share, for the year ended December 31, 2023. The Company's return on average assets was 1.22% for the quarter ended December 31, 2024, compared to 0.18% for the quarter ended September 30, 2024, and 0.70% for the quarter ended December 31, 2023. For the year ended December 31, 2024, the Company's return on average assets was 0.46%, compared to 0.66% for the year ended December 31, 2023. The Company's return on average equity was 8.54% for the quarter ended December 31, 2024, compared to 1.27% for the quarter ended September 30, 2024, and 5.33% for the quarter ended December 31, 2023. For the year ended December 31, 2024, the Company's return on average equity was 3.21%, compared to 5.10% for the year ended December 31, 2023. In announcing these results, Joseph Reilly, Chief Executive Officer, said, "We are pleased to report net income of $4.9 million for the fourth quarter of 2024. These earnings reflect the success we have seen in the execution of our strategic plan, which is focused on repositioning our balance sheet to reduce risk as well as strengthening our ties with, and providing financing to, the communities we serve. We believe these efforts have resulted in a more efficient operation with improved asset quality and liquidity, and we are confident our proactive management of funding costs and operating expenses will set the foundation for a strong 2025." For the quarter ended December 31, 2024, net interest and dividend income was $13.6 million, an increase of $1.2 million, or 9.9%, from the quarter ended September 30, 2024, and an increase of $78,000, or 0.6%, compared to the quarter ended December 31, 2023. The interest rate spread and net interest margin were 2.53% and 3.62%, respectively, for the quarter ended December 31, 2024, compared to 2.19% and 3.38%, respectively, for the quarter ended September 30, 2024, and 2.36% and 3.45%, respectively, for the quarter ended December 31, 2023. The increases in net interest income and margin during the fourth quarter of 2024 are primarily reflective of the Company's improved liquidity position, as well as decreases in interest expenses the Bank realized by proactively seeking opportunities to reduce its cost of funds during the period the Federal Reserve Bank was easing rates. For the year ended December 31, 2024, net interest and dividend income was $50.5 million, a decrease of $7.7 million, or 13.2%, compared to $58.2 million for the year ended December 31, 2023. The interest rate spread and net interest margin were 2.27% and 3.42%, respectively, for the year ended December 31, 2024, compared to 2.63%, and 3.71%, respectively, for the year ended December 31, 2023. Total interest and dividend income was $23.1 million for the quarter ended December 31, 2024, an increase of $692,000, or 3.1%, from the quarter ended September 30, 2024, and a decrease of $445,000, or 1.9%, from the quarter ended December 31, 2023. The Company's yield on interest-earning assets was 6.14% for the quarter ended December 31, 2024, an increase of three basis points from the quarter ended September 30, 2024, and an increase of 15 basis points from the quarter ended December 31, 2023. For the year ended December 31, 2024, total interest and dividend income was $89.5 million, a decrease of $840,000, or 0.9%, from the year ended December 31, 2023. The Company's yield on interest-earning assets was 6.05% for the year ended December 31, 2024, an increase of 29 basis points from the year ended December 31, 2023. Total interest expense was $9.5 million for the quarter ended December 31, 2024, a decrease of $542,000, or 5.4%, from the quarter ended September 30, 2024, and a decrease of $523,000, or 5.2%, from the quarter ended December 31, 2023. Interest expense on deposits was $8.7 million for the quarter ended December 31, 2024, a decrease of $405,000, or 4.5%, from the quarter ended September 30, 2024, and a decrease of $1.2 million, or 12.5%, from the quarter ended December 31, 2023. The decrease in interest expense on deposits from the prior quarter was primarily driven by a 30-basis point decrease in the cost of interest-bearing deposits to 3.53%. The decrease in interest expense on deposits from the prior year quarter was primarily driven by a decrease in the average balance of interest-bearing deposits of $103.5 million, or 9.5%, and a 12-basis point decrease in the average cost of interest-bearing deposits. The Bank has been successful in replacing its high-cost deposits from wholesale markets with lower-cost core deposits generated from its retail base, as reflected by the decrease in interest expense on deposits during the fourth quarter of 2024 despite an increase in the average balance of interest-bearing deposits over the same period. Interest expense on borrowings totaled $815,000 for the quarter ended December 31, 2024, a decrease of $137,000, or 14.4%, from the prior quarter, and an increase of $719,000, or 749.0%, over the prior year quarter. The decrease in interest expense on borrowings from the prior quarter was driven by a $7.1 million, or 9.3%, decrease in the average balance of borrowings and a 28-basis point reduction in the cost of borrowings. The increase in interest expense on borrowings from the prior year quarter was primarily due to a $53.5 million, or 340.3%, increase in the average balance of borrowings used to fund increases in the mortgage warehouse portfolio, and a 227-basis point increase in the cost of borrowings. The Company's total cost of interest-bearing liabilities was 3.61% for the quarter ended December 31, 2024, which is a decrease of 31 basis points, from 3.92%, for the quarter ended September 30, 2024, and a decrease of two basis points from 3.63% for the quarter ended December 31, 2023. Total interest expense increased $6.8 million, or 21.3%, to $39.0 million for the year ended December 31, 2024, compared to $32.1 million for the year ended December 31, 2023. Interest expense on deposits was $36.7 million for the year ended December 31, 2024, an increase of $6.1 million, or 19.9%, from the year ended December 31, 2023. This increase was driven by an increase in the average cost of interest-bearing deposits of 62 basis points, to 3.73%. For the year ended December 31, 2024, interest expense on borrowings increased $751,000, or 48.9%, due to an increase in the average balance of borrowings of $8.3 million, or 20.5% and an increase in the cost of borrowings of 89 basis points, to 4.69%. The Company's total cost of interest-bearing liabilities was 3.78% for the year ended December 31, 2024, which is an increase of 65 basis points, from 3.13% for the year ended December 31, 2023. Mr. Reilly noted, "The improvement in our net interest margin in the fourth quarter of 2024 was realized by generating significant core deposit growth from our retail banking operation, while simultaneously reducing funding costs as the Federal Reserve Bank began to ease rates in late 2024." The Company recognized a $1.6 million credit loss benefit for the quarter ended December 31, 2024, compared to a $1.7 million provision for credit losses for the quarter ended September 30, 2024, and a $1.2 million credit loss benefit recognized for the quarter ended December 31, 2023. The credit loss benefit for the quarter ended December 31, 2024 was primarily driven by an $880,000 recovery related to a previously charged-off enterprise value loan, reductions in the general allowance due to updated loss rates resulting from the annual refresh of our current expected credit loss model, and changes in the loan portfolio mix. The benefit for the quarter was partially offset by an additional $1.3 million reserve on a $17.6 million enterprise value relationship, which, as of December 31, 2024, carried a total reserve of $10.1 million. For the year ended December 31, 2024, the Company recognized a $1.0 million provision for credit losses, compared to a $678,000 benefit for the year ended December 31, 2023. Net recoveries totaled $867,000 for the quarter ended December 31, 2024, compared to net charge-offs of $84,000 for the quarter ended September 30, 2024, and net charge-offs of $1.2 million for the quarter ended December 31, 2023. For the year ended December 31, 2024, net charge-offs totaled $1.4 million, compared to $4.8 million for the year ended December 31, 2023. Charge-offs for the year ended December 31, 2024 were primarily related to the settlement and partial charge-off of the last remaining loan in the digital asset portfolio, partially offset by an $880,000 recovery on a previously charged-off enterprise value loan. Non-accrual loans were $20.9 million, or 1.31% of total assets, as of December 31, 2024, compared to $37.2 million, or 2.25% of total assets, as of September 30, 2024 and $16.5 million, or 0.99% of total assets, as of December 31, 2023. The decrease in non-accrual loans as of December 31, 2024 was primarily due to the successful workout of a $16.2 million construction loan, which included a partial payoff of the loan and the financing of the remaining $12.7 million with a short-term commercial real estate loan to a new borrower. The increase in non-accrual loans from December 31, 2023, was primarily related to the addition of two enterprise value loans, partially offset by the settlement and partial charge-off of the Bank's last remaining digital asset loan relationship during 2024. Mr. Reilly noted, "I am pleased to announce the successful workout of the $16.2 million construction loan relationship placed on non-accrual status in the third quarter of 2024. This required a noteworthy effort by our credit and workout teams to complete this with a timely, favorable outcome for the Bank. We remain focused on maintaining strong credit management practices, with a continued commitment to improving asset quality." Noninterest income was $1.3 million for the quarter ended December 31, 2024, compared to $1.7 million for the quarter ended September 30, 2024, and $1.6 million for the quarter ended December 31, 2023. For the year ended December 31, 2024, noninterest income decreased $1.2 million, or 16.3%, to $5.9 million, from $7.1 million for the year ended December 31, 2023. The decrease in noninterest income over the prior year was primarily due to decreases in fees generated by business lines that have been deemphasized by the Bank. Noninterest expense was $10.1 million for the quarter ended December 31, 2024, compared to $11.6 million for the quarter ended September 30, 2024, and $12.5 million for the quarter ended December 31, 2023. The decrease in noninterest expense from the prior quarter of $1.5 million, or 12.6%, was primarily due to decreases in salaries and employee benefits of $304,000, or 4.2%, professional fees of $215,000, or 26.9%, and a $750,000 management fee accrual that was reversed in conjunction with the execution of a loan modification in the fourth quarter of 2024. The decrease in noninterest expense from the prior year quarter of $2.3 million, or 18.8%, was primarily due to a decrease in professional fees of $902,000, or 60.7%, and the $750,000 fee accrual reversal included in other expense. The decreases noted in all periods presented largely reflect the impact of the Bank successfully lowering its risk appetite and realizing the associated reduction in the level of resources required to run traditional banking operations. Noninterest expense was $46.0 million for the year ended December 31, 2024, a decrease of $5.1 million, or 10.0%, from $51.1 million for the year ended December 31, 2023 primarily due to decreases in salaries and employee benefits of $1.6 million, or 5.1%; professional fees of $1.2 million, or 24.0%; insurance expenses of $594,000, or 32.9%; and other expenses of $1.6 million, or 47.6%. Mr. Reilly noted, "The reduction in our noninterest expenses is illustrative of the efforts we have made to align our operations with our current strategy and risk appetite. We have experienced meaningful reductions in professional services, including legal, audit and consulting costs, as well as a reduction in salaries and employee benefits. Our focus remains on driving efficiencies to reduce operating costs, and we are eager to maintain the positive momentum in 2025." The Company recorded an income tax provision of $1.5 million for the quarter ended December 31, 2024, compared to $132,000 for the quarter ended September 30, 2024, and $1.1 million for the quarter ended December 31, 2023. For the year ended December 31, 2024, the Company recorded a provision for income tax of $2.1 million, reflecting an effective tax rate of 22.5%, compared to $3.8 million, or an effective tax rate of 25.9%, for the year ended December 31, 2023. Total assets were $1.59 billion at December 31, 2024, a decrease of $55.0 million, or 3.3%, from $1.65 billion at September 30, 2024, and a decrease of $77.1 million, or 4.6%, from $1.67 billion at December 31, 2023. Cash and cash equivalents totaled $169.1 million at December 31, 2024, an increase of $30.5 million, or 22.0%, from September 30, 2024, primarily due to a decrease in net loans and an increase in total deposits, partially offset by a decrease in borrowings. Cash and cash equivalents decreased $51.2 million, or 23.2%, from December 31, 2023, primarily due to decreases in deposits and borrowings, partially offset by a decrease in net loans. Net loans were $1.31 billion at December 31, 2024, a decrease of $81.2 million, or 5.9%, from September 30, 2024 and $15.7 million, or 1.2%, from December 31, 2023. The decrease in net loans over the prior quarter was primarily due to decreases in enterprise value loans of $38.4 million, or 11.0%, mortgage warehouse loans of $33.7 million, or 11.5%, and construction and land development loans of $13.3 million, or 32.1%, partially offset by an increase in commercial real estate loans of $10.3 million, or 1.9%. These changes reflect the continued effort to reduce our exposure in the enterprise value portfolio and the $16.2 million construction loan workout that resulted in the financing of a new $12.7 million commercial real estate loan during the quarter ended December 31, 2024. The decrease in net loans from December 31, 2023 was primarily due to decreases in enterprise value loans of $123.8 million, or 28.6%, construction and land development loans of $49.8 million, or 63.9%, and the $12.3 million decrease resulting from the closure of the digital asset loan portfolio, partially offset by increases in mortgage warehouse loans of $92.6 million, or 55.6%, and commercial real estate loans of $90.4 million, or 19.3%. These changes reflect $47.4 million in construction and land development loans that converted to permanent commercial real estate loans during 2024, the reclassification of approximately $33.8 million in loans from the enterprise value to the commercial portfolio, and the strategic shift in our loan portfolio mix illustrating our strategy to reduce credit risk. The allowance for credit losses on loans was $21.1 million, or 1.59% of total loans, as of December 31, 2024, compared to $21.9 million, or 1.56% of total loans, as of September 30, 2024, and $21.6 million, or 1.61% of total loans, as of December 31, 2023. The decrease in the allowance for credit losses from September 30, 2024 of $836,000, or 3.8%, was primarily driven by reductions in the general allowance due to updated loss rates resulting from the annual refresh of our current expected credit loss model, and changes in the loan portfolio mix. These reductions were partially offset by an additional $1.3 million reserve on a $17.6 million enterprise value relationship which, as of December 31, 2024, carried a total reserve of $10.1 million. The decrease in the allowance for credit losses from December 31, 2023 was $484,000, or 2.2%. Total deposits were $1.31 billion at December 31, 2024, an increase of $20.5 million, or 1.6%, from $1.29 billion at September 30, 2024, and a decrease of $22.3 million, or 1.7%, from $1.33 billion at December 31, 2023. The increase in deposits from September 30, 2024 was primarily driven by an increase in retail deposits of $22.2 million, or 2.8%, and a $17.2 million, or 16.1%, increase in specialty deposits, partially offset by a decrease in brokered deposits of $14.8 million or, 9.0%, and a decrease in deposits obtained through listing services of $12.6 million, or 21.0%. The decrease in deposits from December 31, 2023 was primarily driven by a decrease in deposits obtained through listing services of $89.2 million, or 65.2%, and a decrease in brokered deposits of $45.3 million, or 23.2%, partially offset by an increase in retail deposits of $74.7 million, or 10.1%. Total borrowings were $44.6 million at December 31, 2024, a decrease of $80.0 million, or 64.2%, from September 30, 2024, and a decrease of $60.1 million, or 57.4%, from December 31, 2023, reflecting our improved liquidity position and decreased need for short-term funding. As of December 31, 2024, shareholders' equity totaled $231.1 million, an increase of $4.9 million, or 2.2%, from September 30, 2024, and an increase of $9.2 million, or 4.1%, from December 31, 2023. The increases include the Company's net income, which totaled $4.9 million and $7.3 million for the three and twelve months ended December 31, 2024, respectively. Shareholders' equity to total assets was 14.5% at December 31, 2024, compared to 13.7% at September 30, 2024, and 13.3% at December 31, 2023. Book value per share was $12.99 at December 31, 2024, an increase from $12.76 at September 30, 2024, and $12.55 at December 31, 2023. Market value per share increased to $11.40 at December 31, 2024, an increase of 5.7% from $10.79 at September 30, 2024, and an increase of 13.2% from $10.07 at December 31, 2023. As of December 31, 2024, the Bank was categorized as well capitalized under the Federal Deposit Insurance Corporation regulatory framework for prompt corrective action. Mr. Reilly concluded, "The fourth quarter marked a significant milestone in the progress of our strategic objectives and I am excited to see our efforts gaining momentum and delivering positive results. As always, I am incredibly proud of the dedication and hard work of our employees, who remain committed to both our institution and the communities we serve." About Provident Bancorp, Inc. Provident Bancorp, Inc. (NASDAQ:PVBC) is the holding company for BankProv, a full-service commercial bank headquartered in Massachusetts. With retail branches in the Seacoast Region of Northeastern Massachusetts and New Hampshire, as well as commercial banking offices in the Manchester/Concord market in Central New Hampshire, BankProv delivers a unique combination of traditional banking services and innovative financial solutions to its markets. Founded in Amesbury, Massachusetts in 1828, BankProv holds the honor of being the 10th oldest bank in the nation. The Bank 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, visit bankprov.com. Forward-Looking Statements This news release may contain certain forward-looking statements, such as statements of the Company's or the Bank's plans, objectives, expectations, estimates and intentions. Forward-looking statements may be identified by the use of words such as, "expects," "subject," "believe," "will," "intends," "may," "will be" or "would." These statements are subject to change based on various important factors (some of which are beyond the Company's or the Bank's control), and actual results may differ materially. Accordingly, readers should not place undue reliance on any forward-looking statements (which reflect management's analysis of factors only as of the date on which they are given). These factors include: general economic conditions; interest rates; inflation; 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; our ability to access cost-effective funding; changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; changes in consumer spending, borrowing and savings habits; competition; the imposition of tariffs or other domestic or international governmental policies impacting the value of the products of our borrowers; a potential government shutdown; our ability to successfully shift the balance sheet to that of a traditional community bank; real estate values in the market area; loan demand; the adequacy of our level and methodology for calculating our allowance for credit 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; the ability of the Company or the Bank to effectively manage its growth; global and national war and terrorism; the impact of the COVID-19 pandemic or any other pandemic on our operations and financial results and those of our customers; 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 that 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. Investor contact:Joseph ReillyPresident and Chief Executive OfficerProvident Bancorp, Inc.[email protected] Provident Bancorp, Inc. Consolidated Balance Sheet (Unaudited) (Dollars in thousands) At December 31, 2024 At September 30, 2024 At December 31, 2023 Assets Cash and due from banks $ 27,536 $ 29,555 $ 22,200 Short-term investments 141,606 109,110 198,132 Cash and cash equivalents 169,142 138,665 220,332 Debt securities available-for-sale (at fair value) 25,693 27,426 28,571 Federal Home Loan Bank stock, at cost 2,697 3,619 4,056 Loans: Commercial real estate 559,325 549,029 468,928 Construction and land development 28,097 41,401 77,851 Residential real estate 6,008 6,517 7,169 Mortgage warehouse 259,181 292,866 166,567 Commercial 163,927 170,514 176,124 Enterprise value 309,786 348,171 433,633 Digital asset — — 12,289 Consumer 271 94 168 Total loans 1,326,595 1,408,592 1,342,729 Allowance for credit losses on loans (21,087) (21,923) (21,571) Net loans 1,305,508 1,386,669 1,321,158 Bank owned life insurance 46,017 45,683 44,735 Premises and equipment, net 10,188 10,343 12,986 Accrued interest receivable 5,296 5,247 6,090 Right-of-use assets 3,429 3,467 3,780 Deferred tax asset, net 13,808 14,805 14,461 Other assets 11,392 12,280 14,140 Total assets $ 1,593,170 $ 1,648,204 $ 1,670,309 Liabilities and Shareholders' Equity Deposits: Noninterest-bearing demand deposits $ 351,528 $ 318,475 $ 308,769 NOW 83,270 92,349 93,812 Regular savings 132,198 140,979 231,593 Money market deposits 463,687 468,099 456,408 Certificates of deposit 278,277 268,593 240,640 Total deposits 1,308,960 1,288,495 1,331,222 Borrowings: Short-term borrowings 35,000 115,000 95,000 Long-term borrowings 9,563 9,597 9,697 Total borrowings 44,563 124,597 104,697 Operating lease liabilities 3,862 3,891 4,171 Other liabilities 4,698 5,063 8,317 Total liabilities 1,362,083 1,422,046 1,448,407 Shareholders' equity: Preferred stock, $0.01 par value, 50,000 shares authorized; no shares issued and outstanding — — — Common stock, $0.01 par value, 100,000,000 shares authorized; 17,788,543, 17,730,843, and 17,677,479 shares issued and outstanding at December 31, 2024, September 30, 2024, and December 31, 2023, respectively 178 177 177 Additional paid-in capital 125,446 125,056 124,129 Retained earnings 113,561 108,679 106,285 Accumulated other comprehensive loss (1,625) (1,101) (1,496) Unearned compensation - ESOP (6,473) (6,653) (7,193) Total shareholders' equity 231,087 226,158 221,902 Total liabilities and shareholders' equity $ 1,593,170 $ 1,648,204 $ 1,670,309 Provident Bancorp, Inc. Consolidated Income Statements (Unaudited) Three Months Ended Year Ended (Dollars in thousands, except per share data) December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Interest and dividend income: Interest and fees on loans $ 21,541 $ 21,257 $ 20,000 $ 83,178 $ 79,469 Interest and dividends on debt securities available-for-sale 267 240 232 987 949 Interest on short-term investments 1,313 932 3,334 5,292 9,879 Total interest and dividend income 23,121 22,429 23,566 89,457 90,297 Interest expense: Interest on deposits 8,663 9,068 9,905 36,678 30,589 Interest on short-term borrowings 789 916 64 2,164 1,314 Interest on long-term borrowings 26 36 32 124 223 Total interest expense 9,478 10,020 10,001 38,966 32,126 Net interest and dividend income 13,643 12,409 13,565 50,491 58,171 Credit loss (benefit) expense - loans (1,703) 1,666 (1,227) 887 863 Credit loss expense (benefit) - off-balance sheetcredit exposures 136 27 (7) 116 (1,541) Total credit loss (benefit) expense (1,567) 1,693 (1,234) 1,003 (678) Net interest and dividend income after credit loss(benefit) expense 15,210 10,716 14,799 49,488 58,849 Noninterest income: Customer service fees on deposit accounts 661 813 1,007 2,813 3,658 Service charges and fees - other 325 486 336 1,469 1,825 Bank owned life insurance income 334 327 298 1,282 1,120 Other income 5 82 6 348 458 Total noninterest income 1,325 1,708 1,647 5,912 7,061 Noninterest expense: Salaries and employee benefits 6,963 7,267 6,837 29,668 31,266 Occupancy expense 364 452 421 1,666 1,692 Equipment expense 139 159 156 610 599 Deposit insurance 319 334 368 1,307 1,514 Data processing 404 416 432 1,635 1,545 Marketing expense 43 57 193 194 640 Professional fees 585 800 1,487 3,683 4,843 Directors' compensation 198 233 135 782 677 Software depreciation and implementation 614 614 596 2,355 2,005 Insurance expense 303 303 451 1,210 1,804 Service fees 248 405 365 1,129 1,154 Other (66) 536 1,015 1,780 3,394 Total noninterest expense 10,114 11,576 12,456 46,019 51,133 Income before income tax expense 6,421 848 3,990 9,381 14,777 Income tax expense 1,539 132 1,066 2,110 3,823 Net income $ 4,882 $ 716 $ 2,924 $ 7,271 $ 10,954 Earnings per share: Basic $ 0.29 $ 0.04 $ 0.18 $ 0.43 $ 0.66 Diluted $ 0.29 $ 0.04 $ 0.18 $ 0.43 $ 0.66 Weighted average shares: Basic 16,783,976 16,748,404 16,639,142 16,727,370 16,586,180 Diluted 16,864,240 16,811,614 16,690,937 16,782,893 16,594,685 Provident Bancorp, Inc. Net Interest Income Analysis (Unaudited) For the Three Months Ended December 31, 2024 September 30, 2024 December 31, 2023 Interest Interest Interest Average Earned/ Yield/ Average Earned/ Yield/ Average Earned/ Yield/ (Dollars in thousands) Balance Paid Rate (5) Balance Paid Rate (5) Balance Paid Rate (5) Assets: Interest-earning assets: Loans (1) $ 1,372,245 $ 21,541 6.28 % $ 1,359,712 $ 21,257 6.25 % $ 1,328,658 $ 20,000 6.02 % Short-term investments 104,385 1,313 5.03 % 78,925 932 4.72 % 216,722 3,334 6.15 % Debt securities available-for-sale 26,871 194 2.89 % 27,367 201 2.94 % 25,968 192 2.96 % Federal Home Loan Bank stock 3,609 73 8.09 % 3,476 39 4.49 % 1,507 40 10.62 % Total interest-earning assets 1,507,110 23,121 6.14 % 1,469,480 22,429 6.11 % 1,572,855 23,566 5.99 % Non-interest earning assets 94,795 94,258 100,634 Total assets $ 1,601,905 $ 1,563,738 $ 1,673,489 Liabilities and shareholders' equity: Interest-bearing liabilities: Savings accounts $ 158,626 $ 777 1.96 % $ 155,726 $ 898 2.31 % $ 219,162 $ 1,588 2.90 % Money market accounts 469,922 4,363 3.71 % 479,276 4,823 4.03 % 518,511 4,935 3.81 % NOW accounts 80,645 340 1.69 % 79,527 311 1.56 % 100,653 239 0.95 % Certificates of deposit 272,803 3,183 4.67 % 231,373 3,036 5.25 % 247,206 3,143 5.09 % Total interest-bearing deposits 981,996 8,663 3.53 % 945,902 9,068 3.83 % 1,085,532 9,905 3.65 % Borrowings Short-term borrowings 59,641 789 5.29 % 66,727 916 5.49 % 6,011 64 4.26 % Long-term borrowings 9,574 26 1.09 % 9,607 36 1.50 % 9,708 32 1.32 % Total borrowings 69,215 815 4.71 % 76,334 952 4.99 % 15,719 96 2.44 % Total interest-bearing liabilities 1,051,211 9,478 3.61 % 1,022,236 10,020 3.92 % 1,101,251 10,001 3.63 % Noninterest-bearing liabilities: Noninterest-bearing deposits 312,382 305,124 338,712 Other noninterest-bearing liabilities 9,779 10,377 14,212 Total liabilities 1,373,372 1,337,737 1,454,175 Total equity 228,533 226,001 219,314 Total liabilities and equity $ 1,601,905 $ 1,563,738 $ 1,673,489 Net interest income $ 13,643 $ 12,409 $ 13,565 Interest rate spread (2) 2.53 % 2.19 % 2.36 % Net interest-earning assets (3) $ 455,899 $ 447,244 $ 471,604 Net interest margin (4) 3.62 % 3.38 % 3.45 % Average interest-earning assets to interest-bearing liabilities 143.37 % 143.75 % 142.82 % (1) Interest earned/paid on loans includes $833,000, $796,000, and $649,000 in loan fee income for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively. (2) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities. (3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (4) Net interest margin represents net interest income divided by average total interest-earning assets. (5) Annualized. For the Year Ended December 31, 2024 December 31, 2023 Interest Interest Average Earned/ Yield/ Average Earned/ Yield/ (Dollars in thousands) Balance Paid Rate Balance Paid Rate Assets: Interest-earning assets: Loans (1) $ 1,346,076 $ 83,178 6.18 % $ 1,348,425 $ 79,469 5.89 % Short-term investments 102,255 5,292 5.18 % 188,572 9,879 5.24 % Debt securities available-for-sale 27,487 806 2.93 % 27,576 769 2.79 % Federal Home Loan Bank stock 2,688 181 6.73 % 2,072 180 8.69 % Total interest-earning assets 1,478,506 89,457 6.05 % 1,566,645 90,297 5.76 % Non-interest earning assets 98,063 105,187 Total assets $ 1,576,569 $ 1,671,832 Liabilities and shareholders' equity: Interest-bearing liabilities: Savings accounts $ 193,263 5,282 2.73 % $ 174,110 3,128 1.80 % Money market accounts 465,213 17,923 3.85 % 474,845 16,605 3.50 % NOW accounts 78,195 1,058 1.35 % 111,809 767 0.69 % Certificates of deposit 246,569 12,415 5.04 % 223,585 10,089 4.51 % Total interest-bearing deposits 983,240 36,678 3.73 % 984,349 30,589 3.11 % Borrowings Short-term borrowings 39,129 2,164 5.53 % 27,018 1,314 4.86 % Long-term borrowings 9,625 124 1.29 % 13,442 223 1.66 % Total borrowings 48,754 2,288 4.69 % 40,460 1,537 3.80 % Total interest-bearing liabilities 1,031,994 38,966 3.78 % 1,024,809 32,126 3.13 % Noninterest-bearing liabilities: Noninterest-bearing deposits 307,491 415,222 Other noninterest-bearing liabilities 10,676 16,955 Total liabilities 1,350,161 1,456,986 Total equity 226,408 214,846 Total liabilities and equity $ 1,576,569 $ 1,671,832 Net interest income $ 50,491 $ 58,171 Interest rate spread (2) 2.27 % 2.63 % Net interest-earning assets (3) $ 446,512 $ 541,836 Net interest margin (4) 3.42 % 3.71 % Average interest-earning assets to interest-bearing liabilities 143.27 % 152.87 % (1) Interest earned/paid on loans includes $3.0 million and $3.7 million in loan fee income for the year ended December 31, 2024 and 2023, respectively. (2) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities. (3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (4) Net interest margin represents net interest income divided by average total interest-earning assets. Provident Bancorp, Inc. Select Financial Highlights (Unaudited) Three Months Ended Year Ended December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Performance Ratios: Return on average assets (1) 1.22 % 0.18 % 0.70 % 0.46 % 0.66 % Return on average equity (1) 8.54 % 1.27 % 5.33 % 3.21 % 5.10 % Interest rate spread (1) (2) 2.53 % 2.19 % 2.36 % 2.27 % 2.63 % Net interest margin (1) (3) 3.62 % 3.38 % 3.45 % 3.42 % 3.71 % Non-interest expense to average assets (1) 2.53 % 2.96 % 2.98 % 2.92 % 3.06 % Efficiency ratio (4) 67.57 % 82.00 % 81.88 % 81.59 % 78.39 % Average interest-earning assets to average interest-bearing liabilities 143.37 % 143.75 % 142.82 % 143.27 % 152.87 % Average equity to average assets 14.27 % 14.45 % 13.11 % 14.36 % 12.85 % (Dollars in thousands) At December 31, 2024 At September 30, 2024 At December 31, 2023 Asset Quality Non-accrual loans: Commercial real estate $ 57 $ 58 $ — Construction and land development — 16,212 — Residential real estate 366 347 376 Commercial 1,543 1,553 1,857 Enterprise value 18,920 18,990 1,991 Digital asset — — 12,289 Consumer 1 1 4 Total non-accrual loans 20,887 37,161 16,517 Total non-performing assets $ 20,887 $ 37,161 $ 16,517 Asset Quality Ratios Allowance for credit losses on loans as a percent of total loans (5) 1.59 % 1.56 % 1.61 % Allowance for credit losses on loans as a percent of non-performing loans 100.96 % 58.99 % 130.60 % Non-performing loans as a percent of total loans (5) 1.57 % 2.64 % 1.23 % Non-performing loans as a percent of total assets 1.31 % 2.25 % 0.99 % Capital and Share Related Shareholders' equity to total assets 14.50 % 13.72 % 13.29 % Book value per share $ 12.99 $ 12.76 $ 12.55 Market value per share $ 11.40 $ 10.79 $ 10.07 Shares outstanding 17,788,543 17,730,843 17,677,479 (1) Annualized where appropriate. (2) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities. (3) Net interest margin represents net interest income as a percent of average interest-earning assets. (4) The efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income, excluding gains on securities available for sale, net (if applicable). (5) Loans are presented at amortized cost. SOURCE Provident Bancorp, Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Provident Bancorp, Inc. Reports Fourth Quarter Net Income of $4.9 Million

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