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Provident Bancorp, Inc. /MD/ (PVBC)·Q1 2025 Earnings Summary

Executive Summary

  • EPS of $0.13 declined sequentially and year-over-year (Q4’24: $0.29; Q1’24: $0.30) and came in below S&P Global consensus of $0.22; “revenue” also missed ($14.27M actual vs $14.90M consensus). Net interest margin edged higher to 3.65% (Q4’24: 3.62%; Q1’24: 3.38%). The shortfall vs Street reflects a much smaller credit loss benefit vs prior periods and normalization of OpEx after a Q4 fee accrual reversal . Revenue and EPS estimates from S&P Global Market Intelligence: see asterisked table and disclaimer.
  • Deposits fell $124.4M (-9.5%) q/q as the bank intentionally reduced higher-cost brokered/listing and specialty deposits; PVBC used overnight borrowings to bridge liquidity at quarter-end (borrowings +$83.0M q/q), preserving optionality on terming out funding as needed .
  • Asset quality deteriorated: non-accrual loans rose to $31.4M (2.36% of loans) from $20.9M, driven by a $10.4M enterprise value (EV) relationship placed on non-accrual; ACL/loans remained 1.59% .
  • Strategy execution continued: EV balances fell $47.3M q/q to 19.7% of loans while commercial and mortgage warehouse grew; NIM/spread improved as funding costs declined with the rate backdrop and mix actions .

What Went Well and What Went Wrong

What Went Well

  • NIM and spread improved to 3.65% and 2.62%, respectively (Q4’24: 3.62%/2.53%; Q1’24: 3.38%/2.28%), aided by lower cost of interest-bearing deposits (3.25%; -28 bps q/q, -44 bps y/y) .
  • Mix shift on plan: “expanding our loan portfolio in the areas targeted for growth and reducing exposures in the enterprise value portfolio,” with EV down ~15% q/q; commercial and mortgage warehouse up .
  • Strong capital and book value: shareholders’ equity/total assets 15.1% (well-capitalized); BVPS $13.16, up from $12.99 in Q4’24 .

What Went Wrong

  • Earnings power compressed vs expectations: EPS $0.13 vs S&P Global consensus $0.22*, “revenue” $14.27M vs $14.90M*, primarily due to a de minimis credit loss benefit ($12K) vs sizable benefits in Q4’24 and Q1’24 and higher salaries/benefits after a Q4 accrual reversal . Revenue and EPS estimates from S&P Global Market Intelligence: see asterisked table and disclaimer.
  • Deposit outflows (-$124M q/q) required incremental overnight funding at quarter-end; while management frames this as deliberate de-risking (run-off high-cost channels), it temporarily elevated funding complexity .
  • Asset quality pressure: non-accrual loans rose to $31.4M (2.36% of loans), largely a $10.4M EV relationship entering non-accrual during the quarter .

Financial Results

P&L trend (oldest → newest)

MetricQ1 2024Q4 2024Q1 2025
Total interest & dividend income ($)$22.035M $23.121M $20.580M
Total interest expense ($)$9.549M $9.478M $7.705M
Net interest & dividend income ($)$12.486M $13.643M $12.875M
Noninterest income ($)$1.356M $1.325M $1.380M
Noninterest expense ($)$12.735M $10.114M $11.432M
Credit loss benefit (expense) ($)$5.581M benefit $1.567M benefit $0.012M benefit
Net income ($)$4.981M $4.882M $2.170M
Diluted EPS ($)$0.30 $0.29 $0.13

Profitability & efficiency (oldest → newest)

MetricQ1 2024Q4 2024Q1 2025
Net interest margin (%)3.38% 3.62% 3.65%
Interest rate spread (%)2.28% 2.53% 2.62%
Efficiency ratio (%)92.00% 67.57% 80.20%
ROAA (annualized, %)1.26% 1.22% 0.58%
ROAE (annualized, %)8.93% 8.54% 3.71%

Q1 2025 actual vs S&P Global consensus

MetricConsensusActual
EPS ($)0.22*0.13*
Revenue ($M)14.90*14.27*

Values marked with * retrieved from S&P Global Market Intelligence.

Funding & credit KPIs (oldest → newest)

MetricQ1 2024Q4 2024Q1 2025
Cost of interest-bearing deposits (%)3.69% 3.53% 3.25%
Yield on interest-earning assets (%)5.97% 6.14% 5.84%
Non-accrual loans ($)$12.352M $20.887M $31.419M
NPLs / total loans (%)0.91% 1.57% 2.36%
ACL / total loans (%)1.18% 1.59% 1.59%
Period-end deposits ($)—$1.3089B $1.1845B
Period-end borrowings ($)—$44.563M $127.529M

Loan mix snapshot (mix shift focus)

Loans ($)Dec 31, 2024Mar 31, 2025
Enterprise value$309.786M $262.445M
Commercial real estate$559.325M $587.541M
Mortgage warehouse$259.181M $276.069M
Commercial$163.927M $168.087M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
———No specific quantitative financial guidance provided in Q1 materials (press release/8-K/10-Q) —

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Deposit mix & funding costsBuilding core retail deposits, running off listing/brokered; cost of interest-bearing deposits reduced into Fed easing Intentional reduction in specialty, listing, and brokered deposits drove -$124M q/q; used overnight borrowings to preserve optionality Mixed: cost down; balances down; temporary borrowings up
Enterprise value (EV) de-riskingReclassification out of EV; reserves on specific EV relationships increased; EV declining EV balances -15.3% q/q; one $10.4M EV relationship moved to non-accrual; ACL/loans steady at 1.59% Structural de-risking, near-term credit volatility
Asset qualityQ3 spike from a construction loan NPA; Q4 workout reduced NPAs Non-accruals rose to $31.4M (2.36% of loans) on EV non-accrual; evaluating workout Worsened this quarter
Mortgage warehouseGrowth resumed in Q3 & Q4 +$16.9M q/q (+6.5%) Improving
Regulatory/legal—SEC Wells Notice regarding prior crypto-mining loan disclosures; discussions ongoing Ongoing
Liquidity & capitalWell-capitalized; equity/assets up Well-capitalized; CBLR 13.80% under CBLR framework Stable/strong

Management Commentary

  • “We are pleased to report financial results consistent with expectations, despite the uncertainties presented by the current macroeconomic environment… We remain focused on the execution of our strategic plan and continuing to build strong, lasting relationships within our markets.” — CEO Joseph Reilly .
  • “The Bank has been successful in expanding our loan portfolio in the areas targeted for growth and reducing exposures in the enterprise value portfolio… While we are disappointed to place an additional enterprise value relationship on non-accrual at quarter end, it illustrates the importance of remaining focused on reducing the exposure in this portfolio…” — CEO Joseph Reilly .

Q&A Highlights

  • An earnings call transcript for Q1 2025 was not available in our document set; no Q&A themes or guidance clarifications to report [ListDocuments returned no earnings-call-transcript].

Estimates Context

  • S&P Global consensus for Q1 2025: EPS $0.22 (1 estimate) vs actual $0.13; “revenue” $14.90M (1 estimate) vs actual $14.27M — both misses. Given the single-analyst coverage, intra-quarter estimate dispersion was negligible. Potential estimate changes likely center on credit costs (smaller benefit than prior periods), deposit outflows and funding mix, and NIM trajectory [GetEstimates Q1’25: EPS/Revenue and # of estimates].
  • Values marked with * in tables are retrieved from S&P Global Market Intelligence.

Key Takeaways for Investors

  • Earnings miss driven by the collapse in credit loss benefit (essentially flat this quarter vs sizable benefits in Q4’24 and Q1’24) and normalization of OpEx after a Q4 fee accrual reversal; core NIM dynamics were incrementally positive .
  • Strategic de-risking intact: EV portfolio shrinking below 20% of loans; however, EV asset quality volatility remains a key watch item (new $10.4M EV non-accrual driving NPL ratio up to 2.36%) .
  • Funding is a near-term swing factor: management deliberately shrank higher-cost deposits; the quarter-end borrowing build signals tactical liquidity management. Monitor the pace/mix of core deposit rebuild and any migration from overnight to term funding .
  • Capital remains a buffer (CBLR 13.80%); BVPS rose to $13.16. This provides flexibility to weather credit/liquidity noise while executing the mix shift .
  • Forward NIM: deposit cost trajectory is favorable, but lower asset yields and funding mix changes could cap upside; watch loan growth in targeted categories and mortgage warehouse velocity .
  • Regulatory overhang (SEC Wells Notice) is unchanged; resolution timing/terms remain uncertain and bear monitoring .
  • Near-term trading lens: focus on NPL developments in the EV book, deposit trend inflections, and any clarity on funding mix; medium-term thesis hinges on completing the shift to traditional community banking with stabilized credit costs and sustained core deposit funding .