UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2024

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

For the transition period from _______________ to ______________________

Commission File No. 001-39090

Provident Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland	84-4132422
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)
5 Market Street, Amesbury, Massachusetts	01913
(Address of Principal Executive Offices)	Zip Code

(978) 834-8555

(Registrant’s telephone number)

N/A

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

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock	PVBC	The NASDAQ Stock Market LLC

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

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

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

Large Accelerated Filer	o	Accelerated Filer	o
Non-accelerated Filer	x	Smaller Reporting Company	x
Emerging Growth Company	o

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

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

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

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2

Provident Bancorp, Inc.

Form 10-Q

Part I.	Financial Information	Page
Item 1.	Interim Financial Statements	4
	Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023	4
	Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 (unaudited)	5
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2024 and 2023 (unaudited)	6
	Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2024 and 2023 (unaudited)	7
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (unaudited)	8
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39
Item 4.	Controls and Procedures	39
Part II.	Other Information	39
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	41
Signatures		42

3

Part I.Financial Information

Item 1.Financial Statements

PROVIDENT BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

	At		At
	March 31,		December 31,
(Dollars in thousands)	2024		2023
Assets	(Unaudited)
Cash and due from banks	$	21,341	$	22,200
Short-term investments		169,510		198,132
Cash and cash equivalents		190,851		220,332
Debt securities available-for-sale (at fair value)		27,912		28,571
Federal Home Loan Bank stock, at cost		3,605		4,056
Total loans		1,356,580		1,342,729
Allowance for credit losses on loans		(16,006)		(21,571)
Net loans		1,340,574		1,321,158
Bank owned life insurance		45,037		44,735
Premises and equipment, net		12,835		12,986
Accrued interest receivable		5,921		6,090
Right-of-use assets		3,739		3,780
Deferred tax asset, net		13,048		14,461
Other assets		15,236		14,140
Total assets	$	1,658,758	$	1,670,309
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing	$	310,343	$	308,769
Interest-bearing		1,021,735		1,022,453
Total deposits		1,332,078		1,331,222
Borrowings:
Short-term borrowings		80,000		95,000
Long-term borrowings		9,663		9,697
Total borrowings		89,663		104,697
Operating lease liabilities		4,142		4,171
Other liabilities		5,632		8,317
Total liabilities		1,431,515		1,448,407
Shareholders' equity:
Preferred stock; $.01 par value, 50,000 shares authorized: no shares issued and outstanding		—		—
Common stock, $0.01 par value, 100,000,000 shares authorized; 17,659,146 and 17,677,479 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		177		177
Additional paid-in capital		124,415		124,129
Retained earnings		111,266		106,285
Accumulated other comprehensive loss		(1,602)		(1,496)
Unearned compensation - ESOP		(7,013)		(7,193)
Total shareholders' equity		227,243		221,902
Total liabilities and shareholders' equity	$	1,658,758	$	1,670,309

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

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4

PROVIDENT BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
	March 31,		March 31,
(Dollars in thousands, except per share data)	2024		2023
Interest and dividend income:
Interest and fees on loans	$	20,069	$	20,006
Interest and dividends on debt securities available-for-sale		237		238
Interest on short-term investments		1,729		383
Total interest and dividend income		22,035		20,627
Interest expense:
Interest on deposits		9,340		3,901
Interest on short-term borrowings		178		824
Interest on long-term borrowings		31		86
Total interest expense		9,549		4,811
Net interest and dividend income		12,486		15,816
Credit loss (benefit) expense - loans		(5,543)		2,935
Credit loss benefit - off-balance sheet credit exposures		(38)		(1,156)
Total credit loss (benefit) expense		(5,581)		1,779
Net interest and dividend income after credit loss (benefit) expense		18,067		14,037
Noninterest income:
Customer service fees on deposit accounts		674		979
Service charges and fees - other		309		451
Bank owned life insurance income		302		266
Other income		71		251
Total noninterest income		1,356		1,947
Noninterest expense:
Salaries and employee benefits		8,145		8,544
Occupancy expense		443		421
Equipment expense		152		144
Deposit insurance		333		278
Data processing		413		361
Marketing expense		18		83
Professional fees		1,314		1,403
Directors' compensation		174		200
Software depreciation and implementation		543		417
Insurance expense		301		452
Service fees		242		236
Other		657		672
Total noninterest expense		12,735		13,211
Income before income tax expense		6,688		2,773
Income tax expense		1,707		670
Net income	$	4,981	$	2,103
Earnings per share:
Basic	$	0.30	$	0.13
Diluted	$	0.30	$	0.13
Weighted Average Shares:
Basic		16,669,451		16,530,627
Diluted		16,720,653		16,531,266

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

5

PROVIDENT BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended March 31,
(In thousands)	2024		2023
Net income	$	4,981	$	2,103
Other comprehensive (loss) income:
Unrealized holding (losses) gains arising during the period on debt securities available-for-sale		(139)		819
Unrealized (loss) gain		(139)		819
Income tax effect		33		(188)
Total comprehensive (loss) income		(106)		631
Comprehensive income	$	4,875	$	2,734

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

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6

PROVIDENT BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

	For the three months ended March 31, 2024 and 2023
								Accumulated
	Shares of			Additional				Other		Unearned
	Common	Common		Paid-in		Retained		Comprehensive		Compensation
(In thousands, except share data)	Stock	Stock		Capital		Earnings		(Loss) Income		ESOP		Total
Balance, December 31, 2022	17,669,698	$	177	$	122,847	$	94,630	$	(2,200)	$	(7,912)	$	207,542
Cumulative effect of change in accounting principle	—		—		—		696		—		—		696
Net income	—		—		—		2,103		—		—		2,103
Dividends forfeited	—		—		—		3		—		—		3
Other comprehensive income	—		—		—		—		631		—		631
Stock-based compensation expense, net of forfeitures	—		—		319		—		—		—		319
Restricted stock award grants, net	16,337		—		(2)		—		—		—		(2)
Stock options exercised, net	7,783		—		(27)		—		—		—		(27)
ESOP shares earned	—		—		7		—		—		180		187
Balance, March 31, 2023	17,693,818	$	177	$	123,144	$	97,432	$	(1,569)	$	(7,732)	$	211,452
Balance at December 31, 2023	17,677,479	$	177	$	124,129	$	106,285	$	(1,496)	$	(7,193)		221,902
Net income	—		—		—		4,981		—		—		4,981
Other comprehensive loss	—		—		—		—		(106)		—		(106)
Stock-based compensation expense, net of forfeitures	—		—		261		—		—		—		261
Restricted stock award grants, net	(18,333)		—		(20)		—		—		—		(20)
ESOP shares earned	—