Provident Bancorp, Inc. Reports Earnings of the March 31, 2017 Quarter

AMESBURY, Mass., April 20, 2017 /PRNewswire/ -- Provident Bancorp, Inc. (the "Company") (NasdaqCM: PVBC), the holding company for The Provident Bank (the "Bank"), reported net income for the three months ended March 31, 2017 of $1.8 million, or $.20 per diluted share, compared to $1.5 million, or $.16 per diluted share, for the three months ended March 31, 2016.

David P. Mansfield, Chief Executive Officer, said, "We have been very strategic with our direction this past quarter and have continued our commitment to delivering customized solutions to our business and private clients. Our goal, to be the best commercial bank in the region is being realized and our partnerships with state agencies and educators are just beginning to garner widespread attention. The expertise of our lending team has allowed us to provide innovative lending solutions. We are proud of these quarterly results, as they reflect our strength and the success of our initiatives and we anticipate continuing to build upon this success."

Net interest income before provision for loan losses increased by $1.0 million, or 16.7%, compared to the three months ended March 31, 2016. The growth in net interest income this quarter over the prior year's first quarter is primarily the result of an increase in our average interest earning assets of $74.4 million or 10.6% and an increase in net interest margin of 20 basis points to 3.79%.

Provision for loan losses of $563,000 were booked for the first quarter of 2017 compared to $111,000 for the same period in 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 1.38% as of March 31, 2017 compared to 1.36% as of December 31, 2016. The allowance for loan losses as a percent of non-performing loans was 662.73% as of March 31, 2017 compared to 542.98% as of December 31, 2016. Non-performing assets were $1.4 million, or 0.17%, to total assets as of March 31, 2017 compared to $1.8 million, or 0.25%, to total asset for the same period 2016.

Noninterest income increased $567,000, or 60.6% to $1.5 million for the three months ended March 31, 2017. The primary reason for the increase is increased gains on sales of securities and income from service fees.

Noninterest expense increased $697,000, or 14.2%, to $5.6 million for the three months ended March 31, 2017. The primary reasons for the increase were salary expense and occupancy expense. The increase in salary and employee benefits was $554,000, or 17.7%, and the increase in occupancy expense was $106,000, or 29.0%, for the three months ended March 31, 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 primary reason for the increase in occupancy expense was the purchase of the Portsmouth, NH building.

As of March 31, 2017, total assets have increased $37.4 million, or 4.7%, to $832.9 million compared to $795.5 million at December 31, 2016. The primary reasons for the increase is due to net loans with an increase of $26.4 million, or 4.2%, and an increase in investments of $6.0 million, or 5.1%. Deposits were $680.6 million as of March 31, 2017 representing an increase of $52.6 million, or 8.4%, compared to December 31, 2016. Borrowings decreased $17.0 million, or 34.1%, to $32.9 million as of March 31, 2017.

As of March 31, 2017, shareholders' equity was $111.2 million compared to $109.1 million at December 31, 2016 representing an increase of $2.1 million, or 1.9%. The increases are primarily due to year-to-date net income of $1.8 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.

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SOURCE Provident Bancorp, Inc.