Provident Bancorp, Inc. Reports Fourth Quarter Net Income of $4.9 Million (Form 8-K)

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

Company Release

1/23/2025

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, 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 Reilly

President and Chief Executive Officer

Provident 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 sheet credit 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.

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