AMESBURY, Mass., July 20, 2017 (GLOBE NEWSWIRE) -- Provident Bancorp, Inc. (the “Company”) (Nasdaq:PVBC), the holding company for The Provident Bank (the “Bank”), reported net income for the three months ended June 30, 2017 of $1.6 million, or $.17 per diluted share, compared to $1.4 million, or $.15 per diluted share, for the three months ended June 30, 2016. Net income for the six months ended June 30, 2017 was $3.4 million, or $.37 per diluted share, compared to $2.9 million, or $.31 per diluted share, for the six months ended June 30, 2016.

David P. Mansfield, Chief Executive Officer, said, "Our success this quarter was the result of planned strategic initiatives. With our unique niche lending and high level of service, we attained a significant amount of new loan growth. As we continue toward our goal of being the top commercial bank in our region, we listen carefully to our customers, and by doing so, we were motivated to place significant resources within our international lending niche. Our new Senior Vice President, Leanne Spees, will spearhead our International Banking division. With more than 30 years of international trade finance experience, Leanne can leverage The Provident’s distinction of being the delegated US Export-Import bank in the region. This distinction combined with the mutual partnerships we have established with various state agencies allows The Provident to offer significant benefits to our commercial customers engaged in or interested in international trade."

Net interest income before provision for loan losses increased by $1.6 million, or 25.1%, compared to the three months ended June 30, 2016 and increased by $2.6 million, or 20.9%, compared to the six months ending June 30, 2016. The growth in net interest income this quarter over the prior year’s second quarter is primarily the result of an increase in our average interest earning assets of $104.2 million or 14.8% and an increase in net interest margin of 32 basis points to 3.94%. The growth in net interest income for the six months ended June 30, 2017 compared to the six months ended in the same period 2016 is primarily the result of an increase in average interest earning assets of $89.4 million or 12.8% and an increase of the net interest margin of 26 basis points to 3.86% for the six months ended June 30, 2017.

Provision for loan losses of $892,000 were booked for the second quarter of 2017 compared to $210,000 for the same period in 2016. For the six months ended June 30, 2017 $1.5 million of provisions were recognized compared to $321,000 for the six months ended June 30, 2016. The provisions were primarily due to an increase in our loan portfolio as we apply loan provisions to newly originated loans based on historical loss ratios, which, absent other factors, results in an increase in the allowance for loan loss. The allowance for loan losses as a percentage of total loans was 1.40% as of June 30, 2017 compared to 1.36% as of December 31, 2016. The allowance for loan losses as a percent of non-performing loans was 235.05% as of June 30, 2017 compared to 542.98% as of December 31, 2016. Non-performing assets were $4.2 million, or 0.48%, to total assets as of June 30, 2017 compared to $1.4 million, or 0.18%, to total asset for the same period 2016.

Noninterest income increased $103,000, or 10.7% to $1.1 million for the three months ended June 30, 2017. For the six months ended June 30, 2017, noninterest income increased $669,000, or 35.2%, to $2.6 million. The primary reasons for the increases in both periods presented are due to increased gains on sales of securities and income from service fees.

Noninterest expense increased $795,000, or 15.6%, to $5.9 million for the three months ended June 30, 2017. For the six months ended June 30, 2017, noninterest expense increased $1.5 million, or 14.9%, to $11.5 million. The primary reasons for the increase were salary expense, marketing expense, and other expense. The increase in salary and employee benefits was $568,000, or 18.0%, for the three months ended June 30, 2017 and $1.1 million, or 17.9%, for the six months ended June 30, 2017. The primary reason for the increase in salary and employee benefits was a higher head count and stock based compensation expense compared to the prior year. The increase in marketing expense was $49,000, or 96.1%, for the three months ended June 30, 2017 and $42,000, or 38.9%, for the six months ended June 30, 2017. The primary reason for the increase in marketing expense was due to strategic target marketing within the Company’s footprint. The increase in other expense was $262,000, or 36.6%, for the three months ended June 30, 2017 and $351,000, or 24.6%, for the six months ended June 30, 2017. The primary reason for the increase in the other expense category was directors stock based compensation expense and increased software expense. The noninterest expense increases were partially offset by a decrease in professional fees and the FDIC assessment expense. The decrease in professional fees was $98,000, or 31.3%, for the three months ended June 30, 2017 and $149,000, or 25.8%, for the six months ended June 30, 2017. The primary reason for the decrease in professional fees was due to onetime services incurred in 2016. The decrease in the FDIC assessment expense was $23,000, or 24.0%, for the three months ended June 30, 2017 and $49,000, or 25.8%, for the six months ended June 30, 2017. The decrease was related to a change in the FDIC reserve calculation.

As of June 30, 2017, total assets have increased $87.6 million, or 11.0%, to $883.1 million compared to $795.5 million at December 31, 2016. The primary reason for the increase is due to net loans with an increase of $77.7 million, or 12.4%, an increase in investments available-for-sale securities of $5.3 million, or 4.4%, and an increase in premises and equipment of $2.9 million, or 24.8%. The increase in net loans was due to an increase in commercial loans of $50.1 million, or 30.1%, an increase in construction and development loans of $15.0 million, or 31.2%, and an increase in consumer loans of $5.8 million, or 93.3%. Deposits were $701.4 million as of June 30, 2017 representing an increase of $73.4 million, or 11.7%, compared to December 31, 2016. The primary reason for the increase in deposits was due to an increase in time deposits of $35.9 million, or 39.5%, an increase of $19.8 million, or 13.7%, in money market deposits, and an increase of $11.7 million, or 4.2%, in NOW deposits. Borrowings increased $10.2 million, or 20.5%, to $60.1 million as of June 30, 2017.

As of June 30, 2017, shareholders’ equity was $114.0 million compared to $109.1 million at December 31, 2016 representing an increase of $4.9 million, or 4.4%. The increases are primarily due to year-to-date net income of $3.4 million and an increase in accumulated other comprehensive income of $1.1 million.

About Provident Bancorp, Inc.
Provident Bancorp, Inc. is a Massachusetts corporation that was formed in 2011 by The Provident Bank to be its holding company. Approximately 52.2% of Provident Bancorp, Inc. outstanding shares are owned by Provident Bancorp, a Massachusetts corporation and a mutual holding company. The Provident Bank is an innovative, commercial bank that finds solutions for our business clients. We are committed to strengthening the economic development of the regions we serve, by working closely with businesses and delivering superior products and high-touch services to meet their banking needs. The Provident has offices in Massachusetts and New Hampshire. All deposits are insured in full through a combination of insurance provided by the Federal Deposit Insurance Corporation (FDIC) and the Depositors Insurance Fund (DIF).For more information about The Provident Bank please visit our website www.theprovidentbank.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,” “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, trends in interest rates, the ability of our borrower to repay their loans, 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 Current Reports on Form 8-K.

Provident Bancorp, Inc.
Carol Houle, 978-834-8534
Executive Vice President/CFO
choule@theprovidentbank.com

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